France's BioAlliance Pharma is merging with Topotarget of Denmark to create "a leading orphan oncology company".

Under the terms of the agreement, Topotarget stockholders will receive two shares in the new entity for every 27 shares they owned. This represents one-third ownership in the merged company for Topotarget shareholders and two-thirds for BioAlliance's backers.

The Copenhagen-headquartered firm's lead candidate is belinostat for peripheral T-cell lymphoma, which has a Prescription Drug User Fee Act date for possible approval in the USA  of August 9. A green light would trigger a milestone payment of $25 million from Topotarget’s US partner, Spectrum Pharmaceuticals as well as a double-digit royalty, and the compound has potential in other rare cancer indications.

BioAlliance has two products in late-stage development. First up is Livatag (doxorubicin transdrug) which is in Phase III for primary liver cancer, which the French firm says has potential sales of 800 million euros and patent protection until 2032.

The second most advanced product is Validive (clonidine lauriad) which was granted fast-track designation in January by the US Food and Drug Administration for oral mucositis induced by anticancer treatments.

The partners say that the merger will result "in a broadened shareholder base with increased market capitalisation, and a strengthened value proposition for US and European based investors".