Bionomics acquires American cancer stem cell company

Bionomics (ASX:BNO) has acquired US-based cancer stem cell drug development company Eclipse Therapeutics in a deal worth US$10 million ($9.5 million). The all-scrip deal will involve the allocation of 23.9 million Bionomics shares to Eclipse shareholders at a price of 41.76 US cents per share.

Following the transaction, Eclipse shareholders – including oncology franchise Biogen Idec – will own 6.5% of Bionomics share capital.

Eclipse was spun out from Biogen Idec in 2011 by three former Biogen scientists. The company is developing drug candidates to inhibit the growth of cancer stem cells.

Its lead compound is ET101, which the company expects to reach the human trial stage in 2014. Eclipse has this year signed a development and marketing agreement covering ET101 with Swiss life sciences giant Lonza Group.

Prior to the spin-out, Biogen Idec had been investing in cancer stem cell therapies since 2004.

Bionomics CEO Dr Deborah Rathjen said the acquisition complements Bionomics' own anti-cancer drug candidate, BNC105, a vascular disrupting agent in the advanced stages of clinical development for solid tumours including ovarian cancer and renal cell carcinoma.

“The Eclipse acquisition...also establishes Bionomics as a global leader at the forefront of cancer stem cell therapeutics [and] will provide Bionomics with an important strategic base in the US, the world’s largest pharmaceutical market,” she said.

According to Bionomics’ chairman, Chris Fullerton, establishing a meaningful US presence was a key corporate goal for the company.

Cancer stem cells are believed to play a pivotal role in tumour initiation and recurrence, and are resistant to conventional treatments such as chemotherapy. Companies developing alternative treatments have thus been attracting strong interest from investors and pharmaceutical companies.

Bionomics forecasts that the cancer stem cell market will be worth around $8 billion by 2018. The first approved product from this market, Erivedge (vismodegib) was approved in January 2012 for the treatment of basal cell carcinoma.

Besides its cancer program, Bionomics is developing drug candidates including BNC210, an anti-anxiety product licensed to Ironwood Pharmaceuticals in a deal worth up to US$345 million, and Kv1.3, a prospective treatment for immune diseases including MS, RA and proriasis.

Bionomics (ASX:BNC) shares were trading unchanged at $0.320 as of Monday’s close.