Orexo has completed its acquisition of fellow Swedish firm Biolipox, a deal which the firms say will create “an innovative specialty pharma company”.

Under the terms of the deal, which was first announced just over a month ago, Orexo has acquired Biolipox through an issue of a maximum of just over 8.5 million of its shares, which values the purchase at around 856 million Swedish kronor, or about $137 million. The new entity, which will keep the Orexo name and have a market capitalisation of around 2.30 billion kronor, will be headed by Torbjoern Bjerke, Biolipox’ chief executive.

Biolipox develops new therapies for inflammatory and respiratory diseases and its lead product is BLX-NLA (ceterizine) nasal spray for the treatment of rhinitis, which is in Phase II. Also in its pipeline is BLX-914, for chronic obstructive pulmonary disease and asthma (also Phase II) and the preclinical BLX-MPI for inflammatory pain. The company says that the latter, which is partnered with Boehringer Ingelheim through a link-up that could be worth 250 million euros, fills a gap in the market previously held by COX-2 inhibitors.

Orexo specialises in reformulations of existing compounds and already gets revenues from a breath test used to diagnose the presence of Helicobacter pylori, the bacteria that cause gastric ulcers. It has high hopes for the cancer pain agent Rapinyl (sublingual fentanyl), which is in Phase III in the USA and in the registration stage in Europe. Licensing agreements for Rapinyl have been signed with Endo Pharmaceuticals (North America), ProStrakan (Europe) and Kyowa Hakko Kogyo for the Japanese market.

ProStrakan noted at the end of September that only 21 of the 25 European Union member states considered the product to be approvable and, because a unanimous vote is required for full clearance, Rapinyl has been referred for review by the European Medicines Agency’s Committee for Medicinal Products for Human Use, where a majority decision is sufficient to gain the regulatory nod.

Orexo’s outgoing chief executive Zsolt Lavotha, said that since the firm was listed in 2005, it has “actively been working on identifying and evaluating a number of acquisition candidates. We see this deal as an important step forward in achieving a broader product pipeline that will bring us closer to our vision of creating a formidable specialty pharma company". The cost synergies from the merger are expected to be in the region of 40 million kronor.