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Athenagen Inc. And Zapaq, Inc. To Merge


7/10/2006 12:01:27 PM

SOUTH SAN FRANCISCO, Calif. and OKLAHOMA CITY, July 10 /PRNewswire/ -- Athenagen, Inc. and Zapaq, Inc., both privately held biopharmaceutical companies, said today that they have signed a letter of intent to merge the two companies. The companies both have leading programs focused on neurological diseases, including several proprietary compounds targeting Alzheimer's disease. The merger is expected to be completed before the end of August.

"This merger creates a unique opportunity to advance our common goal of building a successful company based on a competitive, balanced pipeline focused on neurovascular diseases," stated W. Scott Harkonen, M.D., President and Chief Executive Officer of Athenagen. "In April we acquired GTS-21, a Phase II compound, and a suite of next generation alpha-7 agonists, for cognition enhancement in schizophrenia, Alzheimer's and ADHD. Now this merger with Zapaq adds their extensive beta-secretase inhibitor program for Alzheimer's disease to our clinical-stage pipeline. Together with ATG003, our topical, eye-drop therapy for AMD which is entering the clinic this summer, we now have multiple large-product opportunities and two strong technology platforms, providing a breadth and depth we believe positions us well for future success."

Zapaq was founded in 2001 by Jordan Tang, Ph.D., of the Oklahoma Medical Research Foundation, and Arun Ghosh, Ph.D., now at Purdue University, both experts in the field of aspartic proteases. In 2000, Dr. Tang's groundbreaking discovery of beta-secretase, an aspartic protease which is a critical enzyme in beta amyloid production, was published in Proceedings of the National Academy of Sciences. Together with Zapaq scientists, Drs. Tang and Ghosh have characterized beta-secretase and its role in Alzheimer's disease and have developed a portfolio of drug candidates designed to inhibit the activity of this enzyme. Inhibition of beta-secretase could reduce beta amyloid production and slow the progression of Alzheimer's disease. Zapaq's portfolio of potent beta secretase inhibitors include several compounds that are active in animal models of Alzheimer's disease, two of which are expected to start human testing early next year.

"Developing drugs that address one of the last major unmet medical needs will, in our opinion, result in a successful biopharmaceutical company," said Robert McNeil, Ph.D., managing director at Sanderling Ventures. "It is an opportune time for Zapaq to merge with Athenagen. We have been working on this merger for some time, to build a company that takes advantage of each party's strengths. Through this merger, Zapaq gains access to Athenagen's pipeline and their product development and clinical trial expertise. At the same time, Athenagen gains access to an important lead program in Alzheimer's disease."

Sanderling Ventures is the lead investor in both companies. Additional investors include Astellas Ventures at Zapaq and Charter Life Sciences and Life Science Angels at Athenagen. "We are pleased to have such committed and strong investors. Working with our investors has enabled Athenagen to become associated with programs that are the basis of important drugs not easily obtained through other channels," added Dr. Harkonen.

Athenagen has several compounds in development based on its pioneering work in nicotinic acetylcholine (nACh) receptors. GTS-21, a novel, small- molecule, orally active and selective alpha-7 nACh receptor agonist, has demonstrated memory and cognition enhancement activity in human clinical trials. It is now in a Phase II trial in patients with schizophrenia and is scheduled to begin a Phase II trial in Alzheimer's disease later this year. ATG003 is a proprietary topical (eye drop) formulation of mecamylamine that has shown efficacy in animal models and presents a possible alternative to current therapies for AMD which require frequent needle injections directly in the eye. The company has a third, pro-angiogenic product, ATG002, which has been shown to promote angiogenesis and tissue repair in wound healing models. ATG002 now has an active IND and the Athenagen is seeking a development partner for this program.

When the merger is completed, the combined company will be called Athenagen, Inc. and W. Scott Harkonen, M.D., will be President and Chief Executive Officer and Robert McNeil, Ph.D., will serve as the company's Executive Chairman. Drs. Tang and Ghosh, who currently serve as consultants to Zapaq, and John Cooke, M.D., Ph.D., co-founder and consultant to Athenagen, will continue their ongoing collaborations with the combined company. The company will have its headquarters in South San Francisco and will have research operations in both South San Francisco and Oklahoma City.

About Zapaq

Zapaq, Inc. is a privately held biopharmaceutical company focused on discovering and developing therapeutics that target aspartic proteases, a group of enzymes central to a variety of human diseases, including Alzheimer's disease. The company has robust intellectual property and compound libraries stemming from its discovery and development efforts around beta-secretase inhibitors, including several lead clinical candidates for Alzheimer's disease. Zapaq's lead compounds are on track to enter clinical trials next year. The company has research and development operations in Oklahoma City, OK.

About Athenagen

Athenagen, Inc., located in South San Francisco, is engaged in the development of small-molecule drugs that act on the nicotinic acetylcholine (nACh) receptor pathway based on technology licensed from Stanford. The company's lead nACh receptor agonists and antagonists are being developed to treat diseases associated with enhanced or impaired angiogenesis and in diseases where cognitive deficit plays a significant role. Athenagen currently has three product development programs acting on this pathway: ATG003, a topical (eye drop) anti-angiogenesis compound for neovascular AMD; ATG002, a topical (gel) pro-angiogenesis compound for diabetic foot ulcers; and GTS-21, an oral nACh receptor agonist for cognition enhancement. For more information: www.athenagen.com.

Athenagen, Inc.

CONTACT: W. Scott Harkonen, M.D., President and CEO, +1-650-869-7600 orpress@athenagen.com, for Athenagen, Inc.



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