Novartis swoop on Neu Tec to boost Hospital superbug portfolio again

Professor James Burnie has spent 18 years in the research of infectious diseases and has been director of the University Department of Medical Microbiology, which serves the central Manchester teaching hospitals, since 1989. He formed NeuTec Pharma in 1997 with Professor Ruth Matthews who has been Professor of Infectious Diseases at the University of Manchester since 1998 and has been an honorary consultant medical microbiologist since 1987 with a special interest in the immunology of candidiasis.(www.neutecpharma.com) . NeuTec was listed for public subscription on the London AIM market (LSE : NTP) in February 2002 and have yet to make a profit. The intellectual property rights were transferred from The Victoria University of Manchester into the new company in 1997.The founders share a 7% holding probably worth around 20 Mn pounds.

They have specialised in the field of genetically recombinant antibodies, or "grabs," for treating especially resistant life-threatening infections. Naturally occurring potentially protective antibodies from recovering patients of fungal infections are isolated and identified which are used to generate recombinant antibodies to treat these infections.

NeuTec claim these compounds, "are likely to be intrinsically safer than antibiotics". The company has 23 employees. NeuTec was listed in February 2002 on the London AIM (NTP) market at around 200p they had risne to 500p and closed today at . They launched at 150p ( 2.5 Mn shares raising 10Mn for the company = Mkt cap at launch 34.5 Mn. ) and today closed up 115 @ 1080p after Swiss pharma co. Novartis said it was offering 10.50 pounds in cash per NeuTec share, valuing the business at 305 million pounds (US$569 Mn) which the Directors and 39% of shareholders have accepted. (There are 23 employees)

Last year Pfizer Inc. (PFE.N) paid US $1.9 billion -- an 84 % premium -- for anti-infectives firm Vicuron Pharmaceuticals and their interest in this bid may not be over.

NeuTec's two leading products are Mycograb®, which targets systemic candidiasis. It is currently awaiting European approval for the treatment of invasive candidiasis -- a life-threatening form of thrush. It is also investigating using the medicine as a breast cancer treatment. FDA submission is planned for 2009

Mycograb®, works by targeting an antigen known as heat shock protein 90, (hsp90) which is also thought to play a role in cancer. Mycograb®, will compete in the systemic mycoses segment of the antifungal market, which had sales of US$ 1.7 Bn. in 2005 in the top 7 countries amid increasing medical need among immuno-compromised patients.

Mycograb®, has been granted Orphan Drug status in Europe and the US for use against invasive fungal infections, including systemic candidiasis.

Aurograb®, http://www.neutecpharma.com/aurograb.html targets Staphylococcus aureus, including methicillin-resistant Staphylococcus aureus (“MRSA”) which occurs in at least 1.5 Mn cases per annum and is growing. Aurograb®, is in final Phase III tests for treating MRSA and is expected to be submitted for EU and US approval in 2010

Vancomycin is curently the antibiotic of last resort but can cuase dramatic side effects of nephrotoxicity, ototoxicity and bone marrow toxicity. Vancomycin hydrochloride has been developed by Eli Lilly under the trade name Vancocin®. Thepatent expired in the early 1980's and generic versions of the drug are now available internationally under various trade names. Vancomycin acts by inhibiting proper cell wall synthesis in Gram-positive bacteria. The mechanism inhibited, and various factors related to entering the outer membrane of Gram-negative organisms mean that vancomycin is not active against Gram-negative bacteria.

In a step change in resistance intermediate sensitivity to Vancomycin has recently been reported among MRSA strains in Japan in 1997 , the USA and Europe. The emergence of vancomycin intermediate Staphylococcus aureus (VISA) has been described by The Lancet as an “apocalypse now” scenario and highlights the need for new and more effective therapies. (vancomycin intermediate Staphylococcus aureus)

The company can now also license their proprietary Fabtec®, a NeuTec Pharma’s platform technology for the identification of new therapeutic antibody fragments. This 4 stage process cuts the time taking a disease from preliminary clinical investigation through to the creation of molecules ready for manufacturing for use in pre-clinical studies, to 3-6 months..

Novartis plans on Hospital acquired infections and drug resistance.

In March Novartis paid US$525 Mn for U.S. biotech company Idenix Pharmaceuticals for a experimental hepatitis C treatment. On Tuesday Novartis issued another bid of US$507-MN.deal to boost its antiviral-drug pipeline by buying rights to the hepatitis C drug Albuferon from U.S. biotech company Human Genome Sciences (HGSI.O)

In recently acquiring Chiron , Novartis gained the European rights to Cubicin® (daptomycin) for Europe and additional markets for treatment of complicated skin and soft-tissue infections (cSSTI) caused by Gram-positive bacteria. Cubicin is the first of a new class of antibiotics called cyclic lipopeptides.

In June 2005, Novartis signed a collaboration agreement with Arrow Therapeutics for its small molecule inhibitor A60444 for the treatment of Respiratory Syncytial Virus (RSV), another important hospital-based infection considered a serious threat to patient groups with poorly functioning or immature immune systems. A60444 is currently in Phase II trials.


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