Peptech announced that it will acquire the totality of EvoGenix' shares to form a new company which will operate under a new name starting from the end of August. The merger was first announced in May.
"Consistent with our previously announced strategy, this transaction creates a combined entity, which is poised to be a major player on the worldwide antibody stage," said John Chiplin, CEO of Peptech.
"We have genuinely built critical mass in this Australian merger to compete aggressively in the fastest growing sector of the international human therapeutic market."
Like the two firms, the new entity will specialise in the development of antibody- and protein-based therapeutic drugs for the treatment of inflammatory diseases, bone disease and cancer.
Antibodies are the fastest growing class of drugs, in particular to treat cancer, arthritis and infections, and are gaining an increasing level of interest from the biopharma industry worldwide.
The merged company will have more than AU$167m in cash to move forward its product pipeline and will receive on-going revenue streams from Abbott and Johnson & Johnson in relation to blockbuster anti-inflammatory antibody drugs Humira (adalimumab) and Remicade (infliximab) as Peptech owns some of the drugs' patents.
Revenues from royalties for the first six months of the 2007 financial year were AU$8.2m - almost half of the company's total revenue for the period.
"EvoGenix and Peptech are an excellent strategic fit at all levels," said Chiplin.
"EvoGenix has revenue-generating technology with proven capabilities and linkages that blend ideally with our own product development activities to deliver more rapid company growth and delivery of products to the clinic."
Chiplin will become the CEO of the merged company, while a restructured board will oversee the next stage of its development.
The management and scientific staff of EvoGenix will remain with the new company, while Dr Merilyn Sleigh, CEO of EvoGenix, will be retained in a senior advisory role, the companies said in a statement.
Peptech recently started Phase I clinical trials for its lead compound, PN0621, which targets inflammatory diseases.
PN0621 is a next generation anti-TNF (tumour necrosis factor) molecule based on domain antibodies. Domain antibodies (dAbs) are the smallest functional binding units of antibodies and are less than one-tenth the size of a full antibody.
They are related to monoclonal antibodies (mAbs), but they are significantly smaller, which brings with it the advantages of lower cost and greater ease of manufacture, the firm claims.
The drug was the first dAb-based compound to be administered to humans.
PN0621, which was originally co-developed with Domantis, is expected to progress through Phases II and III of clinical development between 2007 and 2011, at which time the company plans to file for marketing approval.
Last December, GlaxoSmithKline (GSK) acquired Domantis for AU$575m, yielding Peptech a net gain of AU$136.1m.
Peptech said the market for PN0621 is predicted to grow to over AU$20bn over the next 5 to 10 years.
Meanwhile, EvoGenix, which was created in 2001, acquired US firm Absalus in 2005 and listed on the Australian Stock Exchange in the same year. The firm has operations in Australia and in the US, and has a technology platform for converting research stage antibodies into products suitable for human testing.
Australia is becoming a hub for antibody-based drug development. The country is soon to boast the largest monoclonal antibody production facility in the Southern Hemisphere.
Australia's Monash University recently announced it has joined forces with Switzerland-based Tecan, a provider of automation and detection systems for industries including biopharma, and together they will create one of the largest, most sophisticated monoclonal antibody production systems in the world, which is to be fitted at the university's Clayton campus. The facility is expected to be up and running at the end of next year.
