Prima Biomed sells anti-inflammatory program

Prima Biomed (ASX: PRR) has entered into an agreement to sell all the assets of its subsidiary Arthron to Toronto-based private company Trillium Therapeutics. Under the agreement, Prima will receive an upfront cash payment of US$500,000 (AUD$760,000) and 1.2 million Trillium shares comprising 7 per cent of the Trillium shares currently on issue.

"We get cash and shares which will provide an immediate commercial benefit of AUD$1.3 million which can be diverted into our core oncology strategy," said Prima CEO Marcus Clark.

Prima will be issued further Trillium shares as Trillium achieves milestones specified in the agreement.

"It gives us the potential to build up a 19 per cent equity holding in Trillium within four years as the key commercial milestones of the deals Arthron had with ZymoGenetics and AstraZeneca are achieved," he said.

The first of these milestone payments is US$75,000 which is due in November on the commencement of the 2nd year of the research program to develop recombinant forms of the Fc gamma RIIa recepetor with ZymoGenetics, followed by another tranche of shares in November 2006.

Trillium's strategy is to build on its core immunology expertise and IP, through acquisition and licensing, to create a significant portfolio of promising therapeutic candidates in the areas of autoimmune and inflammatory diseases. In addition to two core programs involving the CD200 immunoregulatory protein, the company has several early-stage programs under development as part of its pipeline.

"The deal has potentially leveraged the value of Arthron's technology by positioning it in a company that is focused in the inflammatory area, located in a North American market and which already has a significant deal with a major biotech company in Genetech. It is also well cashed to execute the development of these programs.

"The biotechnology sector requires rationalisation and consolidation, and this sale demonstrates the Prima is successfully pursuing this strategy by developing IP attractive as acquisition targets," he continued in a statement.

Trillium also has commercial agreements with academic institutions including the University Health Network, Toronto. Prima stated its intention to divest Arthron and focus on its oncology programs, primarily its phase IIa clinical trial of its immunotherapy treatment for ovarian cancer, in August this year.