Cryptome to acquire HealthLinx

Melbourne biopharma Cryptome Pharmaceuticals (ASX:CRP) has entered a non-binding terms sheet to acquire HealthLinx, a privately-held diagnostics specialist with lead candidates targeting ovarian cancer and complications in pregnancy.

If shareholders agree to the takeover, Cryptome will change its name to HealthLinx, and HealthLinx' CEO Nick Gatsio would take on the vacant Cryptome CEO role, replacing acting CEO Prof Matthew Vadas.

"The merger is a good strategic fit for Cryptome providing both greater scale and earlier stage revenue potentials as well as being able to raise critically needed capital," said Cryptome chairman Graham Kelly. "Key Cryptome scientific including the chief scientific officer will continue within the merged entity -- this means that synergies will be able to be developed in proteomic technologies." Under the agreement, Cryptome would acquire HealthLinx for scrip consideration of AUD$6 million at a deemed issue price of $0.05 per Cryptome share. The transaction would be accompanied by a capital raising of $3.2 million which would result in the merged business having over 2.7 million in cash on completion.

The transaction is subject to the parties entering a binding agreement, and a number of conditions being met, including Cryptome shareholder approval being received and the capital raising being completed. The shareholder meeting is anticipated to be held in late December 2005.

HealthLink was established in 2002 by senior researchers at the University of Melbourne and Royal Women's Hospital, who partnered with experts in commercialisation and biotechnologies. The company is focused on commercialising biomarkers and developing diagnostics. Its platform is based on classical separation proteomic technologies using 2D gel electrophoresis and mass spectrometry to identify differences between diseased and normal serum samples.

The merged business will five major areas of work -- three areas developing products with near term income prospects, one maximising the income potential from existing Cryptome assets and one developing the pipeline of projects and assets.

HealthLink is currently in the development phase of three products that have the potential to be income generating over the coming twelve to eighteen months. The lead product OvPlex is a blood test being developed to diagnose and monitor women going through their treatment regimes for mid to late-stage ovarian cancer. HealthLinx is currently waiting for ethics approval for OvPlex phase II biomarker trials which are planned to commence in February 2006 and are due for completion in November 2006. HealthLinx is also developing a new enabling technology called Clear-IT which is based on chicken antibodies and uses serum depletion technology. It is scheduled for release in late 2006.

HealthLinx has made discoveries in biomarkers for various pregnancy related issues. The product has completed phase I trials in collaboration with US clinical proteomics company Bruker Daltonics and phase II biomarker trials are expected to be completed by mid-2006.

The merged company would also continue Cryptome's peptide discovery platform. However, Cryptome said, it would give greater emphasis to cooperative research deals. As part of this focus Cryptome last week entered into a $900,000 agreement with Dairy Australia, whereby Dairy Australia will fund the researching of milk proteins to identify peptides with application for nutraceuticals and other health applications. Crypome will share IP rights with Dairy Australia.

The development of both companies' pipelines of projects will also continue.