Norwood in bid to buy Dutch vaccine firm

Immune therapy developer and Norwood Abbey (ASX:NAL) subsidiary Norwood Immunology (AIM:NIM) has entered into an option to acquire all the share capital of Netherlands-based Bestewil Holding, the 100 per cent owner of Virosome Biologicals Group, for up to 25 million euros (AUD$40.5 million).

Virosome is developing and commercialising a proprietary platform enabling technology for vaccines. The technology -- based on the combination of an adjuvant with virosomes -- achieves a significantly enhanced immune response to an antigen challenge. The adjuvant specifically interacts with toll-like receptors (TLRs).

"If the option is exercised it would not be an acquisition of vaccines, rather it is an acquisition of technology designed to achieve an enhanced immune response," said Norwood Immunology director Ron Lewis. "Virosome Biologicals' technology is highly complementary to Norwood Immunology's core technology for rejuvenation of the adult immune system and could be applicable to a wide range of vaccine applications."

Preclinical studies undertaken by Virosome have shown an immune response to influenza vaccines up to 150 times grater than traditional non-adjuvanted virosome delivery technology.

A phase I trial of Virosome's adjuvant technology for intra-nasal flu is nearing completion, and the technology has already been licensed to an undisclosed European pharmaceutical group which is responsible for development and commercialisation of the vaccine. This licence agreement anticipates further milestones and royalties payable to Virosome. Unlike certain other nasal flu vaccines, this trial does not use live influenza virus.

"We see significant opportunities for further commercial licensing arrangements, especially in the fields of influenza and mass vaccination programs," said Lewis.

Virosome has already been talking with several would-be partners in relation to several vaccines, such as injectable influenza vaccines, respiratory syncytial virus (RSV) vaccines and pandemic influenza vaccines. In the case of pandemic influenza, the highly potent immune stimulatory ability of the Virosome technology is particularly important because the vaccine material is likely to be in short supply, according to the company. Lower unit doses could therefore be used for each patient treated.

Virosome has proprietary intellectual property concerning the combination of an adjuvant (immune response stimulator) in the membrane that targets the virosomes specifically to antigen presenting cells or B cells. The company has also developed a proprietary method of producing virosomes, which it claims is is both more efficient and results in excellent membrane fusion activity, which is a key component of the initial stimulation of the immune system.

The consideration for granting of the option is a subscription in newly issued Bestewil shares of 250,000 euros (AUD$404,482) on commencement, and up to 700,000 euros in monthly tranches over the course of 2006. The option is terminable by Norwood Immunology on a monthly basis not later than 31 December 2006. If the option is called by Norwood Immunology, the agreed consideration for the transaction will be up to 25 million euros (20 million euros in NIM shares and 5 million euros in cash), subject to achieving certain milestones.