Evotec snaps up preclinical pharma firm, extends into US

By Mike Nagle

- Last updated on GMT

Evotec has taken its first real foray into the US through the
acquisition of a US speciality pharma company, as it continues to
move further away from a services business to a fully fledged
pharma company.

By splashing out $151.8m (€108.9m) on Renovis ($4.75 per share), Evotec has got its first US research facility - in California - and five new drug discovery programmes at the preclinical stage. Currently, its only US site is in a sales facility in Maryland. The combined company will have a market cap of around $472m and as part of the deal Evotec will now apply to be listed on NASDAQ. The move is the final step in Evotec's plan to divulge a lot of its services business and concentrate instead on its own internal research; it has sold Evotec Technologies to PerkinElmer, transferred its library synthesis business into a joint venture with Indian RSIL, and sold its chemical development business to Aptuit. A company spokesperson explained that Evotec is committed to continuing discovery services, such as screening and library synthesis services, and it will also use these areas to develop its own pipeline. Going forward, the company will concentrate on new partnerships and alliances to generate cash. The acquisition of Renovis has almost doubled the $88m cash on Evotec's balance sheet to around $175m, although this doesn't include any costs from the transaction nor does it include the $64m Evotec will receive from Aptuit. With three drugs already in clinical trials, and this latest deal could add two more by the end of next year, this extra cash is essential. Evotec CEO Jörn Aldag was keen to point out it is "now very well funded"​ to drive all the clinical programmes forward. Evotec's pipeline is currently aimed at central nervous system disorders (CNS), such as Alzheimer's, insomnia and neuropathic pain, but this acquisition adds inflammatory disease and different pain programmes. Aldag said: "By combining Evotec's drug discovery and development know-how with Renovis' medicinal chemistry and target validation expertise, we expect to form a global biopharmaceutical company with world class discovery capabilities, a strong pipeline in CNS disorders and several significant research partnerships with leading pharmaceutical companies such as Boehringer Ingelheim, Pfizer and Roche."​ Renovis' alliance with Pfizer was their lead programme and centred around finding small molecules to inhibit the vanilloid receptor (VR1), which could lead to a new class of drugs to treat inflammatory pain (such as osteoarthritis pain) and neuropathic pain. VR1 is an ion channel that mediates pain signalling. The research is expected to yield a candidate to enter clinical trials in the first half of 2008 and Evotec is now eligible to receive over $170m in milestone payments and royalties, should a drug be successfully marketed. A further set of targets on Renovis' books, which could potentially yield first-in-class drugs, are the purinergic receptors, P2X3 and P2X7. Molecules against the former could treat inflammatory or neuropathic pain and urinary disorders with initial human trials expected to in the first half of 2009, whereas P2X7 is thought to be involved in inflammatory diseases such as rheumatoid arthritis, irritable bowel syndrome, and chronic obstructive pulmonary disease. Phase I trials of compounds targeting P2X7 are expected to begin in 2008. Renovis have also collaborated with Genentech since 2003, to discover and develop protein therapeutics in the areas of nerve growth and new blood vessel growth (angiogenesis). For Renovis, this meant developing new approaches for treating central and peripheral nervous system disorders, such as spinal injury, while Genentech concentrated on cancer therapeutics. As Renovis were a small molecule company, the alliance was particularly useful as Genentech provided it with antibody reagents for its research. The new research site in California will continue to work on Renovis' targets VR1 and purinergic receptors, but will now also become home to Evotec's systems-based regenerative medicine research, which is in partnership with the US National Institutes of Health (NIH) among others.

Related topics: Preclinical Research, Preclinical

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