LA JOLLA, Calif.—October 4, 2006—TorreyPines Therapeutics announced it had completed its merger with Axonyx to become a publicly traded biopharmaceutical firm focused on CNS diseases, with primary attention to migraine and cognitive disorders. Of the newly combined shares, TorreyPines stockholders own about 58 percent, with Axonyx stockholders owning the rest.
SAN DIEGO—Axonyx Inc. and TorreyPines Therapeutics Inc., announced in June that they are merging to form a biopharmaceutical company for discovering and developing central nervous system (CNS) treatments. The new entity will retain the TorreyPines name and combine the companies' assets to focus on Alzheimer's disease, migraine and chronic pain.
Neil Kurtz, president and CEO of TorreyPines, says the merger gives TorreyPines "an opportunity to gain access to the public markets [and] improves our balance sheet through an acquisition that takes us public." Kurtz believes Axonyx's assets are undervalued, noting "they are in an area that is highly complementary to what we are doing."
The combined portfolios of TorreyPines and Axonyx cover a spectrum of treatments for Alzheimer's disease, from mild and moderate afflictions to "symptomatic treatment of severe Alzheimer's disease," says Gosse Bruinsma, president and CEO of Axonyx. Both companies, Bruinsma says, "bring to the table compounds that could potentially address the underlying pathology" of the illness, which he called the "holy grail" of Alzheimer's disease.
Axonyx's failed Phase III trial of Phenserine, an Alzheimer's disease compound, was a catalyst for the merger, says Bruinsma, because it "really caused us to consider the strategy of expanding the portfolio" to mitigate CNS drug discovery risks. Axonyx reviewed in-licensing and other CNS portfolios, he says, and "came to the rather conclusive idea that TorreyPines was really ideally suited for Axonyx, both with regard to its Alzheimer's disease portfolio as well as the migraine compounds that could be developed for chronic pain." After the merger, TorreyPines will have eight drug candidates: five from TorreyPines and three from Axonyx. Six target Alzheimer's disease; two target pain.
TorreyPines has 28 of its 45 employees working in discovery, says Kurtz, those efforts funded in full through collaborations with a corporate partner, Eisai Co.
Kurtz believes "Eisai's collaboration and confidence in our discovery operation has provided a strong validity for the quality and excellence of [the drug discovery] group." Eisai holds right of negotiation and right of final offer on validated targets or candidates generated in the joint programs.
The Eisai collaboration, Kurtz says, results in sustainability and homegrown candidates, with one molecule, NGX555, a gamma-secretase modulator now in preclinical studies, coming "directly out of our discovery operation." One TorreyPines-Eisai discovery program identifies small molecules that modulate gamma-secretase; the other investigates the genetics of Alzheimer's disease. Other TorreyPines pipeline drugs came through licensing agreements.
Joint discovery operations will continue after the merger, and TorreyPines assays could find utility in evaluating compounds from the Axonyx portfolio.
Axonyx's candidates and technologies came through licensing deals, says Bruinsma. Axonyx also owns 34 percent of Oxis International, a company with antioxidant expertise; Axonyx's shares will become part of TorreyPines, says Bruinsma.
The merger for TorreyPines, should close during the fourth quarter of 2006. A prepared statement says TorreyPines stockholders will own approximately 58 percent of the new entity, with Axonyx shareholders owning the remainder. Those figures could change if either company outlicenses a candidate before the deal closes.