XOMA ACQUIRING INGENE, CHIMERIC MONOCLONAL ANTIBODY TECHNOLOGY

XOMA ACQUIRING INGENE, CHIMERIC MONOCLONAL ANTIBODY TECHNOLOGY in a proposed $ 40 mil. stock swap merger announced Aug. 11. "We expect to apply Ingene's technology for the development of human-like antibodies to our already advanced immune-related disorders program," Xoma President Patrick Scannon, MD/PhD, commented. "We think this technology could accelerate the opportunity to commercialize additional autoimmune disease-related products." Under the proposed transaction, which could be finalized by October, each of the 7.8 mil. outstanding Ingene shares will be exchanged for 0.278 share of Xoma common stock within a price range of $ 16-$ 22 a share. The deal has a total value of $ 35-$ 48 mil. The operations of Xoma in Berkeley, Calif. and Ingene, which is based in Santa Monica, Calif., "are expected to be maintained essentially as presently organized" following the merger, the two companies said. Operations of the merged companies will be directed by a management committee consisting of Xoma Chairman and CEO Steven Mendell, who will assume the same position in the new company; Xoma's Scannon, who will be president of the new company; and Ingene founder and President Gary Wilcox, PhD, who will carry the title of vice chairman. "The company will retain the name Xoma Corp.," the release states. "It will continue to emphasize development of products in the areas of immune-related disorders and gram negative sepsis." Xoma's Xomen-E5 Product License Application for septic shock is currently pending at FDA, as is the company's XomaZyme-H65 PLA for graft versus host disease. Pfizer will market Xomen-E5 under an agreement with Xoma. Ingene's development of AIDS-related products will continue via Chimertech, a joint venture of Ingene, Green Cross and Alpha Therapeutics. Ingene will also continue its activities in the areas of cancer and bone repair factors, the latter developed through a joint venture with Biomet. In addition, Ingene has been developing the low-calorie protein sweetener thaumatin. "The company plans to pursue strategic partnering or licensing arrangements for the [Ingene] cancer related projects and for the thaumatin program," the release adds. However, Ingene's product development agreement with the monoclonal antibody R&D firm NeoRx, a potential competitor of Xoma, complicates the merger. Under that agreement, NeoRx provides mouse hybridoma cell lines and Ingene uses its chimeric technology to develop microorganisms that produce genetically engineered antibodies. NeoRx has worldwide rights to products resulting from the cooperative agreement. The Xoma/Ingene merger will be the second merger between biotech R&D firms in the past five months -- an indication that the long-predicted shakeout in the biotech area may finally be approaching. In April, two Boston-area biotech firms, Genzyme and Genetics Institute, announced plans to merge ("The Pink Sheet" April 24, T&G-5). Earlier, in February, Liposome Co. and Liposome Technology announced a merger; however, that deal was later called off. Xoma was represented by Dillon Read in the merger negotiations, while Ingene was represented by Bear Stearns.