Dermatology specialist York Pharma has acquired fellow UK firm Rosanto Pharmaceuticals in a £2 million stock deal which gives it access to the development of a novel topical treatment for psoriasis and other inflammatory diseases.
In order to fund the acquisition, York Pharma is issuing over 1.6 million shares priced at almost £1.24, while separately another 4.4 new shares have been issued which has raised over £5.2 million “to provide additional working capital before its first products come to market and begin generating income”, the firm noted.
The lead compound at Rosanto, which has research operations located at the University of Rome in Italy, is RPL228, a small molecule to be developed initially for dermatological use as a novel topical anti-tumour necrosis factor-alpha product. The companies say that RPL228 “has the possibility of becoming a breakthrough product with blockbuster potential to treat mild to moderate psoriasis,” and further safety testing will precede Phase I studies.
York Pharma noted that a second product, RPL208, is showing significant promise in chemo-resistant cancers including malignant melanoma and Rosanto has also been working on a respiratory antiviral programme. Explaining the reasoning behind the deal, Terry Sadler, York Pharma ’s chief executive, said: “Opportunities to acquire intellectual property with this level of potential are limited. Rosanto has already expended many years of development and sizeable investment on its product pipeline [and] York Pharma is ideally placed to add the developmental impetus and commercial expertise necessary.”
Widened losses lower than expected
York Pharma also announced that its first-half loss widened to £3.24 million, or £0.13 per share, a 59.6% increase but still “lower than management expectations.” The firm said the figures reflect its “careful management of cash resources in the development of our pipeline of products” and in planning for the first commercialisation of Abasol (abafungin), a topical treatment for fungal infections of the skin. The company is expecting to get marketing approval for the treatment in the UK by mid-2007, followed by other key market markets in Europe, the USA and Japan.