Microbix Biosystems Inc. has announced that it intends to spin off its Urokinase assets into a new private company, Klarogen Biotherapeutics Inc., which would become the sole commercial-scale manufacturer and supplier of the clot-busting drug after a proposed acquisition.
Microbix intends to transfer to Klarogen Biotherapeutics Inc., its Urokinase manufacturing facilities and equipment, worldwide commercial rights to all Urokinase therapeutic indications, and the associated staff and management.
Under the terms of a newly arranged letter of intent, Klarogen would purchase the Urokinase assets of ImaRx Therapeutics, Inc. of Tuscon, Arizona, for $17 million. These assets would include ImaRx' remaining Urokinase inventory, the NDA now known as Kinlytic and the sales and marketing infrastructure.
The boards of directors of both companies have approved a letter of intent to this effect. The benefits of acquiring the inventory, sales and marketing infrastructure and NDA from ImaRx include: Klarogen would have full control of parcelling out the existing inventory - ensuring a smooth transition to when its manufacturing plant becomes operational. Klarogen would be able to market directly to the pulmonary embolism customer base using its own sales and marketing infrastructure, which is far more profitable than through a partner. Working with an already FDA-approved product would accelerate the timeline to commercial scale production.
A tier-one health care fund in New York is providing the $17 million in financing for the ImaRx inventory, sales and marketing infrastructure and NDA acquisition. This same health care fund will be the lead investor for Klarogen, providing up to an additional $13 million in financing to the newly created company. Under the proposed financing structure, Microbix will retain a majority equity stake in the newly created company.
Microbix estimates that the market opportunity for Urokinase is at least US $500 million annually for indications including pulmonary embolism and catheter management, with growth in oncology and ophthalmology potentially larger than these first indications. Urokinase is an FDA-approved drug formerly marketed by Abbott under the brand name Abbokinase and is now called Kinlytic. The product has been used to treat patients in the United States for over 20 years. The drug is currently listed on over 700 US hospital formularies to treat pulmonary embolism and is also used by many oncology and dialysis clinics.
Klarogen will be seeking approval for catheter clearance and catheter prophylaxis. In 1998, Abbott had Abbokinase sales of US $300 million when it was approved for both catheter clearance and pulmonary embolism.
"Completing this deal will be a major step for Microbix. It will allow us to participate in the Urokinase opportunity with the least dilution to shareholders and the maximum upside potential in terms of return on our significant investment in this drug," said William J Gastle, CEO of Microbix. The most immediate important benefit to Microbix of the proposed spin-off would be to eliminate the expenditures caused by funding Urokinase directly. All future costs associated with the Urokinase project would become the responsibility of Klarogen, unburdening Microbix of the expensive clinical and development expenses required to complete this development. As well, Microbix would be generating revenue from the sales of required products and services to Klarogen.
The proposed acquisition of the ImaRx assets is contingent upon due diligence and the closing of the Klarogen financing.