Immune Pharmaceuticals plan Wall Street IPO

The drug development compamy planning a reverse merger with a Nasdaq or AMEX listed company at a company value of $100 million.

Sources inform ''Globes'' that Immune Pharmaceuticals Inc., founded just over a year ago by top Israeli and foreign pharmaceuticals industry executives, is planning a reverse merger with a Nasdaq or AMEX listed company at a company value of $100 million.

Immune CFO Serge Goldner told "Globes", "We're looking for a company to acquire or merge with, for example a company whose product development failed or has insufficient cash to reach its next target."

Goldner added, "We plan to raise $10 million for Immune and then find a company that already has $10 million in cash reserves. We already have pledges of $5 million from Israeli investors."

Immune yesterday secured a $2 million equity financing from private investors, and it wants to raise $3 million before any move on Wall Street, which means that the company plans to raise $25 million over the coming year, including funds from company that it will merge with.

"This is an aggressive plan, but we've met all our targets to date," said Goldner.

Immune was founded by CEO Dr. Danier Teper, who has held executive positions at Novartis AG (NYSE:NVS; LSE: NOV; SWX: NOVZ), GlaxoSmithKline plc (NYSE; LSE: GSK), and Sanofi-Aventis SA (NYSE; Euronext: SNY). He says that Immune built up its portfolio of monoclonal antibodies for the treatment of inflammatory diseases and cancer over the past year by buying drugs developed at universities or new companies.

One drug, Bertilimumab, is due to begin a Phase II clinical trial. The drug was originally developed by Cambridge Antibodies Inc. (since acquired by AstraZeneca plc (NYSE; LSE; OMX: AZN)) and licensed to Canada's iCo Therapeutics Inc. (TSX: ICO) which retains the rights for ophthalmology. Immune bought the rights to develop Bertilimumab for the treatment of inflammatory bowel disease (Crohn's disease and ulcerative colitis) and severe asthma, and will pay iCo $33 million in milestone payments, plus royalties on sales, if they materialize.

Immune has also bought a drug for the treatment of rare diseases from a Swiss company. The drug is scheduled to begin a clinical trial in 2012. Immune has also bought drugs in earlier development stages, including a drug that combines an antibody and chemotherapy, developed by Prof. Shimon Benita of the Hebrew University of Jerusalem and acquired through Yissum Technology Transfer Company of the Hebrew University.

Teper told "Globes", "We're building around this product a research laboratory that will pursue development. We're seeking partnerships with a pharma company that will provide an antibody for this effort."

Immune's ambitions go beyond finances. The company aims to become an incubator for the development of monoclonal antibodies, which are the basis for several successful cancer drugs, including Erbitux, Avastin, and Herceptin.

"This is a growing field, with a current turnover of $50 billion, which has had double-digit growth in the past 15 years," said Teper. "In the past few years, large independent companies in the field, such as Cambridge Antibodies, Genetech, and Medarex, have been acquired, so there is room for another independent.

"Furthermore, companies in this field that have not been acquired are traded at high market caps. For example, Seattle Genetics Inc. (Nasdaq: SGEN) has a market cap of $2.2 billion, and its product is only in a Phase III clinical trial. Alexion Pharmaceuticals Inc. (Nasdaq: ALXN) has a market cap of $8 billion, and it only has a niche product on the market. The market loves the field, but a critical mass of products has to reach market. We see Genentech as a model and we plan to emulate it."

"Globes": Is it possible to build such a company on the basis of drugs purchased here and there, without in-house science?

Teper: "Investors today expect much faster development, so there is no choice but to buy products from outside. After they create value for the company, they can be used as a foundation for building an internal research department. That's how Alexion works."

There are many companies in Israel with a similar operating model, but have not achieved the values you mention. What makes you special?

"We've assembled the right professional for each job at the company. Besides me and Serge, the company has Benita, who also founded France's Novagali SA (Euronext: NOVA) and which has a product on the market; Dr. David Naveh, who was a CTO at Bayer Biological Products; Prof. Dror Harats, the CEO of VBL Therapeutics Ltd.; Prof. Marc Rothenberg of the Children's Hospital in Cincinnati as chief science officer, and Adv. Yuval Horn as our legal counsel."

Goldner added, "I was involved in the merger of Swiss companies Evolva and Arpida, which was carried out in the same way, and succeeded. This is our model for Immune."

Published by Globes [online], Israel business news - - on May 31, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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