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Oct 06, 2008
 |  BioCentury  |  Finance

Ebb & Flow

Symphony Capital went bottom fishing and came up last week with OxiGene. The deal could provide up to $40 million for OxiGene and a newco set up to develop two of the biotech's compounds - more than the $32.4 million OxiGene was valued at last Tuesday, the day before the deal was announced.

The newco, called Symphony ViDA, licensed ophthalmic uses of OxiGene's Zybrestat fosbretabulin vascular disrupting agent and OXi4503, a second-generation VDA currently in the clinic for cancer.

Symphony made an initial investment of $15 million in ViDA and can invest up to an additional $10 million in the newco in the first two years of the program. If the firm provides any additional funding, OxiGene will issue Symphony up to $1 million in common stock at the then-current market price, with the number of shares adjusted pro rata if the funding is less than $10 million.

OxiGene expects to submit an IND this quarter or next for a topical formulation of Zybrestat to begin Phase I testing for age-related macular degeneration (AMD). OXi4503 is in Phase I testing to treat advanced solid tumors.

OxiGene will continue to have operational responsibility for the out-licensed programs, and Zybrestat will remain within OxiGene for cancer. The A4 prodrug phosphatase-activated tumor vascular targeting agent is in Phase II/III testing to treat anaplastic thyroid cancer (ATC), Phase II testing to treat non-small cell lung cancer (NSCLC) and ovarian cancer, and Phase Ib testing to treat head and neck cancer.

OxiGene can acquire ViDA for twice Symphony's investment, less certain amounts. The biotech can pay cash or a combination of cash and OxiGene stock. In exchange for the purchase option, OxiGene issued 3.6 million shares to Symphony valued at $4 million. The option is exercisable from Oct. 2, 2009, through March 31, 2012.

Symphony also committed to invest $15 million directly in OxiGene through the purchase of 2.2 million shares at $1.11 and warrants to purchase 11.3 million shares at $1.11, which will be exercised following shareholder approval.

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