Avantogen, Hawaii Biotech to combine vaccine businesses, expand research in Hawaii

By Elaine Rigoli

Tampa, Fla., March 16 - Avantogen Ltd. and Hawaii Biotech, Inc. said they have entered into a definitive agreement to combine their vaccine businesses.

The combined business, as yet unnamed, will be 50% owned each by Hawaii Biotech's current shareholders and Avantogen and will focus exclusively on prophylactic and therapeutic vaccine development, according the companies' news release.

The transaction, which is contingent on Avantogen and Hawaii Biotech shareholder approval, is expected to close in late April.

The combined business will maintain the existing vaccine development laboratories in Oahu, Hawaii, with corporate headquarters in southern California.

Under terms of the agreement, Avantogen will contribute $3.5 million in cash, its vaccine adjuvant program, currently in phase 1 human trials, its Pentrys vaccine program, currently in phase 2 human trials, and its senior management team.

Hawaii Biotech will contribute its vaccine research and development team, its preclinical vaccine programs and facilities, its vaccine grant funding and $1 million in cash.

Under certain circumstances applicable to both Avantogen and Hawaii Biotech, equity ownership of the newly combined company can be adjusted to 60% to 40% in either direction, the companies said.

This new agreement builds upon a previously executed license agreement between Avantogen and Hawaii Biotech in which Hawaii Biotech evaluated Avantogen's proprietary immunostimulatory adjuvant, GPI-0100, for use in Hawaii Biotech's West Nile vaccine.

Leonard Firestone, Avantogen's chief executive officer, will become CEO of the newly combined company, and Carolyn Weeks-Levy, vice president of research, development and regulatory affairs and leader of Hawaii Biotech's vaccine programs, will become its chief scientific officer.

David G. Watumull will remain CEO of Hawaii Biotech's anti-inflammatory small molecule development business, which will be spun out into a new entity, Cardax Pharmaceuticals Inc., to be wholly owned by current Hawaii Biotech shareholders.

Hawaii Biotech develops vaccine platforms based on production of proprietary proteins. The company is based in Oahu, Hawaii.

Avantogen, which develops vaccine products, is based in San Diego.

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