Addrenex Gets $29M Buyout
Morrisville-based drug development firm Addrenex has converted start-up loan help from the North Carolina Biotechnology Center into a $29 million buy-out.
Founded in 2006 with the help of $160,000 in loans from the Biotechnology Center, Addrenex has been purchased by Atlanta-based Sciele Pharma, a subsidiary of Osaka, Japan's Shionogi pharmaceutical company.
Last July Sciele bought a $6 million equity stake in Addrenex -- and the right to increase that share by 10 percent. Sciele also agreed in that deal to make regulatory milestone payments of up to $11 million, and royalty payments to Addrenex on product sales, for an experimental treatment for attention deficit and hyperactivity disorder.
Addrenex said the total value of the sale of its outstanding shares is approximately $29 million, excluding those previously owned by Sciele. Addrenex has only nine employees, though company officials said the firm expects to remain in North Carolina despite the new ownership.
'Designed to be Nimble'
"The company was designed to be small and nimble, and to move quickly on a limited budget through the development and regulatory process," said Addrenex CEO Moise Khayrallah, Ph.D.
"Our approach was to leverage our expert team of employees and consultants to identify and develop drug candidates for indications with a high probability of technical success and a clear development and regulatory path to approval."
In less than three years, Addrenex put four products into clinical trials and collected more than 400 compounds for future development to treat hypertension, ADHD, narcolepsy, procedural sedation, insomnia, menopausal flushing and dermatologic indications.
'A Great Opportunity'
"From the beginning, we saw a great opportunity with Addrenex. The company is a tremendous success story for the state," said John Richert, vice president of Business and Technology Development for the Biotechnology Center.
"The company's leadership is experienced and pragmatic, focusing on minimizing risk as much as possible while rapidly progressing through regulatory approvals. Their virtual business model requires the right mix of experience - from science to commercialization."
In the wake of the sale, the company has repaid the Biotechnology Center $203,511.39 in principal and interest -- $7,477.62 interest on a $25,000 loan and $36,033.77 on a $135,000 loan.
The Biotechnology Center also took warrants in the company as part of the loan agreements. With Addrenex's sale, those warrants generated a cash payout of $289,323.70 that can help fund such loans to other budding biotech companies around the state.