Astex buys metaGen for cancer research

UK drug discovery concern Astex Technology says that it has acquired German cancer development outfit metaGen, a spin-out from European drug major Schering AG, in an all-share transaction.

The deal significantly enhances Astex' cash position, boosting it by around £23 million (€34 million), and gives the company funds sufficient to see it through until 2006.

Schering and Astex​ already have a close relationship after they began a collaboration earlier this year on a major, four-year, multi-target drug discovery alliance worth up to £100 million to the latter firm. As well as the £23 million boost from metaGen​'s balance sheet, Astex has commitments from its existing investors for a further £8 million under the terms of the deal.

Astex chairman Peter Fellner, who also holds the same position at Vernalis and Celltech, has welcomed the wave of consolidation sweeping the UK biotechnology sector.

Commenting on the deal, Mr Fellner said: "this merger, and the linked financing, enables Astex to further develop its powerful and highly competitive drug discovery technologies and it will strengthen our valuable partnership with Schering."​

Astex specialises in fragment-based drug discovery, in which the ideal is to identify only that part of a molecule which is needed to bind to its target, minimising its size and molecular weight and, theoretically reducing the chances that issues such as ADME (absorption, distribution, metabolism and excretion).

The company uses high-throughput X-ray crystallography for its drug discovery approach, called Pyramid, that utilises protein crystal structures to detect the binding of drug fragments, which are then optimised into lead compounds.

Meantime, metaGen has developed a genomics approach to identify novel gene targets specifically up-regulated in solid tumour cells. The company combines expertise in microdissection of tumour samples with a DNA chip technology that allows 22,000 human genes to be tested in expression profiling studies.

Chief executive Tim Haines described the opportunity as "compelling"​ as it gives Astex, "the key assets to fuel the next stage of our growth, including cancer drug development capabilities and a broader cash basis."​ It is understood that the firm plans to turn to the market with an initial public offering before 2006.