Biotech company Pharming Group N.V. has signed a Heads of Agreement to acquire the outstanding share capital of DNage B.V., a privately held company based in Rotterdam, The Netherlands, focused on discovery and development of products for ageing diseases and cancer.

The transaction is expected to be completed by the end of May 2006, pending finalization of due diligence and corporate approvals. Pharming will pay four million shares in several instalments to the existing DNage shareholders in addition to 600,000 warrants, future milestone payments, based on DNage-product development achievements, and royalties on future sales of DNage-products.

According to the company release, a combination of Pharming with DNage will generate important synergies. For instance, there is scientific evidence that lactoferrin, one of Pharming's current products undergoing regulatory review, may have a beneficial effect in the field of osteoporosis. In the area of immunology, where deterioration of the immune system is a major age related problem, there is strong clinical evidence that Pharming's lead product, a C1 inhibitor, plays an important role. In addition, there will be synergies in the area of business development and management expertise.

Dr. Rein Strijker, Chief Executive Officer of DNage, commented: "The scientific work of Professor Hoeijmakers and his team has given us novel insights into the relationship between ageing and common, serious and disabling medical conditions. These insights provide a solid foundation for a rich pipeline of truly novel products. The acquisition by Pharming allows for an expanded and accelerated program to bring these products to market. The integration of the DNage-business into Pharming will generate significant benefits for both the Pharming and DNage shareholders. I believe that the DNage business will contribute greatly to the value of Pharming, through the obvious synergies as well as through the identification of new product leads in important markets. Our business plan calls for the start of clinical studies next year, the identification of new product leads, the signing of collaborations with corporate partners and the application for several grants and subsidies. In all these valuable areas, we are optimistic about our chances of success."