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Friday, Sep 22, 2023

BIOTECH — Dura Pharmaceuticals Attempts to Buy Back Spiros

Cytovia Collaborates With San Francisco Firm On Cancer Treatments

Dura Pharmaceuticals, Inc. announced it entered into a definitive merger agreement to buy back its Spiros Development Corp. unit for $100.8 million, or $15.75 per share of Spiros common stock.

Dura’s chairman and chief executive Cam L. Garner said in a written statement dated March 20 that Dura wants to buy back its Spiros unit to “bring clarity to both Dura’s operating results and product pipeline.”

Dura set up Spiros in 1997 as a separate entity to minimize the financial effect of developing its Spiros inhaler, a pulmonary drug delivery system for respiratory medications.

Dura developed the inhaler, but the cost was reflected on Spiros’ books.

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Some critics contend the financing technique artificially inflated Dura’s earnings.

“The consolidation of SDCII (Spiros) into Dura will eliminate the future after-tax earnings impact of contract revenue received from SDCII,” Garner said. “We believe the acquisition of SDCII will enhance Dura stockholder value for the long-term.”

In February, Dura offered to buy Spiros for about $79 million, or $12.50 per share, in cash.

Closing of the deal is subject to federal clearance and Spiros stockholder approval, Dura reported.

Dura said that it would continue its development of two steroid drug products for the treatment of inflammation associated with asthma , Beclomethasone Spiros and Budesonide Spiros.

Provided the acquisition of Spiros is successful and clinical trials and regulatory reviews run smoothly, the two steroid product candidates should add significantly to Dura’s revenues beginning 2002 or 2003, Garner said.

Under the agreement, Spiros shareholders would receive $13.25 per share in cash and one five-year warrant to buy part of a Dura share at $17.94 per share, Dura reported.

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New Partners: San Diego-based Cytovia Inc., a biotech firm developing small-molecule therapeutics involved in programmed cell death, said March 22 it struck a deal with a South San Francisco-based biotech firm to develop anti-cancer agents that induce cell death.

Financial details of the deal weren’t disclosed.

Under the collaborative agreement, Axys Pharmaceuticals Inc. in South San Francisco will provide compounds from its 700,000 combinatorial chemistry library to Cytovia, which in turn will screen the compounds for potential drug candidates, the company reported.

Both companies hope the collaborative effort will produce multiple new drug candidates that could be useful to treat different forms of cancers, Cytovia said.

Under the agreement, each company will fund its own research, Cytovia said.

Axys will provide up-front equity to Cytovia and in return get the first right to develop and sell any drug candidates resulting from the collaboration. Axys would pay Cytovia a royalty on sales, Cytovia reported.

Cytovia may exercise a profit share option at a predetermined point during development in place of royalties on sales, the firm said.

New Listing: Avanir Pharmaceuticals announced March 23 that shareholders agreed the company stock will start trading on the American Stock Exchange starting April 6 under the symbol AVN.

“Listing on the AMEX should make Avanir’s stock more readily accessible to a larger group of investors and will provide greater visibility for our company as we report our progress towards milestones,” said Gerald Y. Yakatan, Avanir’s chief executive officer and president.

Webb’s biotech column appears every other week. E-mail her with possible column items at mwebb@sdbj.com or call (858) 277-6359.


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