Oxford Biomedica To Acquire Oxxon Therapeutics

Acquisition adds melanoma cancer vaccine and extends immunotherapy platform

OXFORD, UK | Mar 12, 2007 |
Oxford BioMedica (LSE: OXB, ‘Oxford BioMedica’), the leading gene therapy company, announced today that it has entered into an agreement to acquire Oxxon Therapeutics Limited (‘Oxxon’), a privately held biotechnology company, based in Oxford, UK. Oxxon is focused on the development of novel therapeutic vaccines for the treatment of cancer and infectious diseases.

Key aspects of the acquisition are:

* Oxxon’s lead cancer vaccine has completed a Phase II trial in melanoma, the only solid tumour that cannot be treated with Oxford BioMedica’s TroVax;
* Oxxon’s technology has broad product applications in cancer and infectious diseases and will create new licensing opportunities;
* Transaction value of £16 million will be satisfied by the issue of Oxford BioMedica shares; and
* Assets acquired include net cash of approximately £3 million.

The acquisition of Oxxon provides Oxford BioMedica with a complementary cancer immunotherapy product candidate. The product, Hi-8® MEL, has successfully completed a Phase II trial for the treatment of advanced melanoma. Oxxon has other therapeutic programmes addressing infectious diseases, including hepatitis B and HIV. In addition, Oxxon has a strong intellectual property estate that broadens and complements Oxford BioMedica’s proprietary position in immunotherapy and gene-based medicines.

Professor Alan Kingsman, Chief Executive of Oxford BioMedica, commented, “We are very pleased to have been able to take this opportunity to acquire of Oxxon Therapeutics. The acquisition expands our immunotherapy pipeline and strengthens our intellectual property position in the field of immunology. Oxxon’s Hi-8® MEL vaccine has generated encouraging Phase II results as a treatment of advanced melanoma. The market opportunity for an effective melanoma vaccine is substantial and this is a cancer type where our immunotherapy, TroVax, cannot be developed because, unlike the vast majority of human tumours, melanomas do not have 5T4 on the surface of the tumour cells. This acquisition is part of the implementation of a plan for the development of our pipeline following finalisation of a licensing deal for TroVax.”

Iain Wilcock, Deputy Managing Director of Quester, a major investor in Oxxon, commented, "We are very pleased with this transaction, which combines the broad immunotherapy technology of Oxxon with one of the world’s leading companies in cancer vaccines and gene therapy. There is clear synergy in this combination and, given Oxford BioMedica’s technical and development expertise, we believe that the enlarged company can maximise the opportunity for Oxxon’s technology.”

Transaction details

The transaction is valued at £16 million, to be satisfied by the issue 27,551,628 Oxford BioMedica shares to Oxxon shareholders for the entire share capital of Oxxon and 4,219,618 shares for the repayment of a loan from Oxxon shareholders to Oxxon. The number of shares to be issued has been determined by a reference price of 50.36p per share, being the average closing price of Oxford BioMedica shares over the 30 days to 8 March 2007.

Oxxon’s key investors, who as a result of the transaction will have an interest in Oxford BioMedica shares, are the venture capital firms Quester, MVM Life Science Partners and US-based East Hill Management.

25,814,138 of the issued shares will be subject to a lock up agreement for six months followed by a period of orderly disposal through Oxford BioMedica’s corporate brokers. For the year ended 31 May 2006, Oxxon generated a loss before tax of £3.9 million. Oxxon’s gross assets at 31 May 2006 were £3.84 million.

Application will be made to the United Kingdom Listing Authority ("UKLA") for the newly issued ordinary shares in Oxford BioMedica to be admitted to the Official List of the UKLA and to the London Stock Exchange plc for admission to trading on its market for listed securities ("Admission"). Under the terms of the UKLA listing rules the acquisition is a Class 2 transaction, which does not require shareholder approval. The transaction is conditional upon Admission. Subject only to Admission the shares are expected to commence trading on 15 March 2007 .

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1. Oxford BioMedica

Oxford BioMedica (LSE: OXB) is a biopharmaceutical company specialising in the development of novel gene-based therapeutics with a focus on oncology and neurotherapy. The Company was established in 1995 as a spin out from Oxford University, and is listed on the London Stock Exchange.

Oxford BioMedica has core expertise in gene delivery, as well as in-house clinical, regulatory and manufacturing know-how. In oncology, the pipeline includes two clinical candidates and a preclinical targeted antibody therapy, which is being developed in collaboration with Wyeth. The Company has started Phase III development of its lead cancer immunotherapy product, TroVax, in renal cancer and has an ongoing Phase II programme in various cancer settings including renal, colorectal and prostate cancer. In neurotherapy, the Company’s lead product, ProSavin, is expected to enter clinical trials in Parkinson’s disease in 2007. The preclinical pipeline includes gene-based products for vision loss, motor neuron disease and nerve repair.

The Company is underpinned by over 80 patent families, which represent one of the broadest patent estates in the field. The Company has a staff of 72 split between its main facilities in Oxford and its wholly owned subsidiary, BioMedica Inc, in San Diego, California. Oxford BioMedica has corporate collaborations with Wyeth, Intervet, Sigma-Aldrich, Viragen, MolMed and VIRxSYS; and has licensed technology to a number of companies including Merck & Co, Biogen Idec, GlaxoSmithKline and Pfizer.
2. Oxxon Therapeutics

Oxxon Therapeutics is a private UK-based company developing innovative, antigen-specific immunotherapies to treat patients with cancer and chronic infectious diseases. The company’s product pipeline is based on its proprietary Hi-8® PrimeBoost immunotherapy platform, which is designed to stimulate potent cellular immune responses. Oxxon has successfully completed a Phase II trial in melanoma and has products candidates for the treatment of hepatitis B and HIV.

Oxxon's Hi-8® PrimeBoost therapy is a two-step approach whereby a ‘prime’ vector encoding a disease-specific antigen(s) stimulates the immune system to produce disease-specific T cells and is followed by a ‘boost’ containing the same antigen(s) delivered in a non-replicating viral vector. The boost amplifies the disease-specific T cells and creates a significant population of memory T cells to target and eliminate diseased cells. The company and its collaborators have demonstrated in published preclinical and human clinical studies that this approach yields extremely potent T cell responses against the disease antigens encoded in the Hi-8® PrimeBoost treatment as well as clinical benefit for patients. In addition, Hi-8® PrimeBoost regimens have been safe in over 30 clinical studies in more than 800 patients and healthy volunteers.

Oxxon has built a strong intellectual property estate around the Hi-8® PrimeBoost platform, vectors, antigens and products, which includes rights to 23 patent families resulting in over 100 issued patents or patent applications. The Hi-8® PrimeBoost platform has broad potential applications in preventative vaccines as well as therapeutic products.

Oxxon was founded in 1999 by a team of experts in immunology from Oxford University: Professor Adrian Hill, Wellcome Trust Principal Research Fellow and Director, The Jenner Institute, University of Oxford; Professor Andrew McMichael, Director of the Weatherall Institute of Molecular Medicine at the University of Oxford; Professor Geoffrey Smith, Wellcome Trust Principal Research Fellow, Imperial School of Medicine, and; Dr Joerg Schneider, Vice President of Research at Oxxon Therapeutics. Investors include MVM Life Science Partners (UK), Quester (UK), NIF Ventures (Japan) and East Hill Management (USA).

Further information is available at www.oxti.com
3. Oxxon's Hi-8™ MEL product candidate

Oxxon’s lead product candidate is Hi-8® MEL for the treatment of advanced (stage III/IV) melanoma. Hi-8® MEL encodes seven epitopes derived from five melanoma antigens delivered by a plasmid DNA prime followed by a recombinant vaccinia virus (MVA) boost. Oxxon has completed a Phase II dose-selection study of Hi-8® MEL product in 41 patients with non-resectable, HLA-A2 positive, stage III/IV melanoma. Hi-8™ MEL was well tolerated at all doses. Immunological responses were seen in 91% of patients receiving the highest dose. Eight patients showed tumour responses (one patient showed a partial response and seven showed disease stabilisation) for more than 6 months. All but one of the tumour responses had associated immune responses. Median time to progression was 16 weeks for immune responders and eight weeks for non responders (p<0.05). After 24 months follow-up, median survival was 100 weeks for immune responders versus 37 weeks for non-responders (p<0.001) and 42 weeks for a group of control patients that received standard therapy.
4. Melanoma

Malignant melanoma is the most serious form of skin cancer with a median survival of less than one year for Stage IV disease and less than five years for Stage III disease. There are over 15,000 new HLA-A2 positive cases annually in the developed world and the total treatment market is forecast to be in excess of US$775 million by 2010 (Datamonitor). Melanoma is increasing in incidence by more than 4% per year and its prevalence has doubled in the last 20 years. Existing treatments for stage III/IV metastatic melanoma offer limited efficacy and often have serious side-effects.

SOURCE: Oxford BioMedica

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