Avantogen and Hawaii Biotech to combine vaccine businesses

Australian company Avantogen and Hawaii Biotech have entered into a definitive agreement to combine their respective vaccine businesses. The transaction, which is contingent on approval of both Avantogen and Hawaii Biotech shareholders, is expected to close in late April, 2006.

The combined business, as yet unnamed, will be 50% owned each by Hawaii Biotech's current shareholders and Avantogen and will focus exclusively on prophylactic and therapeutic vaccine development. It will incorporate both Avantogen's and Hawaii Biotech's complementary technologies, and will maintain the existing vaccine development laboratories in Oahu, Hawaii, with corporate headquarters in Southern California.

This new agreement builds upon a previously executed license agreement between the two companies in which Hawaii Biotech successfully evaluated Avantogen's proprietary immunostimulatory adjuvant, GPI-0100, for use in its West Nile vaccine.

Under terms of the agreement, Avantogen will contribute US$3.5m in cash, its vaccine adjuvant programme (currently in Phase I human trials) and Pentrys vaccine program (currently in Phase II human trials), and its senior management team, while Hawaii Biotech will contribute its vaccine research and development team, its preclinical vaccine programmes and facilities, its vaccine grant funding, and US$1m in cash.

Dr Leonard Firestone, current ceo of Avantogen, will become ceo of the newly combined company, while Carolyn Weeks-Levy, current vp of research, development, and regulatory affairs and leader of Hawaii Biotech's vaccine programmes, will become its chief scientific officer.

David G. Watumull will remain ceo of Hawaii Biotech's current anti-inflammatory small molecule development business, which will be spun out into a new entity, Cardax Pharmaceuticals, to be wholly owned by current Hawaii Biotech shareholders.

"Our vision is to create a world leader in the development of recombinant vaccines for prevention of common, deadly, incurable diseases using our proprietary, state-of-the-art manufacturing methods," said new board chairman Dr Richard Opara, who is also chairman of Avantogen.

"These methods will allow us to lead the marketplace by rapidly delivering the quality and quantity of vaccine product needed to address worldwide pandemic diseases such as influenza. We also see worldwide potential for the development of the West Nile and Dengue Fever vaccines."

Hawaii Biotech's vaccine development platform is based on production of proprietary antigens that, when appropriately adjuvanted, provoke immune responses equivalent to, or better than, traditional live or inactivated viral vaccines - with a significantly improved safety profile.

Avantogen's GPI-0100 product is currently under license to Pfizer Animal Health, Inc., Endocyte, Inc., University of Alabama, and Memorial-Sloan Kettering Cancer Center, to boost immune responses to their respective vaccine-based products under development.

During the past three years, Hawaii Biotech received funding commitments of more than $30m from the US National Institutes of Health and other governmental agencies, to develop vaccines to prevent human infection by the West Nile virus, Dengue Fever virus, pandemic and annual Influenza viruses, and other serious incurable diseases including hepatitis C, malaria, Tick-borne and Japanese encephalitis, Ebola, and Eastern equine encephalitis.