Tuesday, February 5, 2008

Progen Pharmaceuticals to acquire CellGate

Progen Pharmaceuticals Limited announced that the company has executed a definitive agreement to acquire privately-held US oncology company CellGate, Inc.

The CellGate acquisition will expand Progen's product candidate portfolio through the addition of multiple pre-clinical and clinical oncology compounds focused on polyamine and epigenetic targets. CellGate's assets include a lead product candidate in phase 1 and multiple pre-clinical compounds, a Progen press release stated.

As a result of this acquisition, Progen will expand its cancer-focused clinical development portfolio by adding a novel phase 1 compound; leverage its core capabilities in late pre-clinical and early clinical development of oncology compounds; add more than ten compounds in pre-clinical development; gain platform technologies in the areas of epigenetics and polyamines that will form the foundation for new compound development.

Epigenetics, or the silencing of cancer related gene expression, is becoming a well-defined target in oncology and Progen is excited to be entering this new frontier of cancer treatment.

Progen's CEO, Justus Homburg, said "We are especially pleased that we have acquired such a large number of product candidates in very exciting and novel technology platforms. This transaction represents a minimally dilutive up-front investment by Progen and allows us to continue expanding our product pipeline, with limited risk, while focusing on building long term value for our shareholders. We are confident that we have the financial resources to drive this new portfolio of assets to the next decision points in the coming 18 months while continuing our development programs for PI-88, PG500 and heparanase inhibitors."

"The merger of the two companies represents an important opportunity for CellGate and its shareholders." said Chris Mirabelli of HealthCare Ventures. "The transaction will maximize the value of CellGate's assets by combining leading pre-clinical and clinical programs in oncology within a strong, diverse company with the resources to support ongoing discovery and development efforts."

Progen's near-term goals are to drive PI-88 towards commercialization, move the PG500 series into the clinic, create new pre-clinical heparanase inhibitor products from Progen's discovery platform, and continue growing the Company through acquisitions and in licensing. Progen's overriding objective is to expand its PI-88 platform and transform into a leader in the development of novel oncology products. This acquisition is a decisive step toward accomplishing that objective.

In addition to pipeline assets, Progen will also be gaining the extensive expertise of CellGate's Chief Scientific Officer, Dr. Laurence Marton. Dr. Marton is a leading polyamine expert with substantial experience in cancer drug development, and will be a strong addition to the Progen management team. Prior to Joining CellGate, Dr. Marton served as Dean of the University of Wisconsin-Madison Medical School; and before that was Chair of the Department of Laboratory Medicine at the University of California, San Francisco. Dr Marton has extensive experience in the field of cell growth. His research has resulted in more than 165 original publications, 60 scientific reviews and chapters, four books, and numerous patents.

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