GSK takes stake in biotech spin-out
pharmafile | October 5, 2010 | News story | Research and Development, Sales and Marketing | Convergence, GlaxoSmithKline, funding
GlaxoSmithKline has taken a stake in a newly-launched biotech company in return for handing it two clinical compounds.
The pharma giant has an 18% stake, worth $4.3 million, in Convergence Pharmaceuticals after selling it two compounds that target voltage-gated ion channels.
GSK, which has also given Convergence rights to a number of earlier stage compounds and contributions in kind, has an ‘observer’ role on the board and will be eligible to receive additional shares on completion of asset milestones.
The move was welcomed by the BioIndustry Association (BIA), whose chief executive Nigel Gaymond said: “It is great to see GSK spinning out assets and creating companies in the UK.
”We have seen how successful the spin-out model can be in other European countries and I certainly hope that this is one of many high profile, well-funded new companies to be spun out in this way in the UK,” he added.
BIA board member and former chairman Clive Dix has been appointed chief executive of Convergence. “Given market conditions, we are pleased to have raised such a significant amount of funding,” Dix said.
Convergence has been set up with $35.4 million (£22.4 million) in funding from European and US investors Apposite Capital, New Leaf Venture Partners and SV Life Sciences. It will focus on the development of new analgesic compounds.
There is a potentially lucrative market in chronic pain, with more than 270 million people worldwide suffering, according to the company, and sales expected to reach more than $47 billion by 2023.
The company is to immediately start phase II proof of concept studies in neuropathic pain with its sodium channel blocker CNV1014802 (formerly GSK1014802).
It will also begin a phase I study of calcium channel blocker CNV2197944 (GSK2197944) for the treatment of neuropathic and inflammatory pain including osteoarthritis.
“The lead compounds offer critical advantages for the development and commercialisation of novel analgesics to address the need for innovative treatments in the high value chronic pain market,” says Dix.
Convergence’s pipeline also contains six earlier stage compounds.
The new UK company will be based at the Babraham Research Campus in Cambridge.
Adam Hill
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