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Our Bureau

Chennai , July 31

Orchid Chemicals and Pharmaceuticals on Monday announced that it would raise its stake in Bexel Pharmaceuticals from 74 per cent to 100 per cent.

The Orchid Managing Director, Mr K. Raghavendra Rao, told Business Line today that there the move was only "a change in form and not in substance." He said that instead of Orchid keeping on injecting small doses of capital to fund Bexel's new drug discovery activities, Orchid thought it was better to take over the company entirely and compensate the other Bexel shareholders, most of whom are scientists working for the company.

This compensation is being done in three ways.

First, there is a cash consideration of $3 million.

Second, the founders and key employees of Bexel will be granted 6,50,000 stock options "as per standard Orchid ESOP guidelines."

Third, in the event of Bexel's anti-diabetes molecule-in-the-making, BLX-1002, completes all trials and is licenced out within a prescribed timeframe, the principal founder of Bexel will get additional payments.

Mr Rao said that the Phase-I human trials, for safety and tolerability studies, had been completed without any adverse side effects. Besides glucose lowering in diabetic patients, BLX-1002 also showed an additional benefit of lowering triglycerides and hypertension.

Now, the effort towards conducting Phase-I I trials has begun. These trails will be conducted by the Investigational Medicinal Product Dossier (IMPD) procedure in Europe.

First, a 28-day human clinical trial will be conducted. If this process generates adequate and convincing data Orchid will get on to licensing, for which "we are talking to 3-4 people". If not, a 90-day trial will follow.

"If things go well, we could be licensing the molecule by December," Mr Rao said.

More Stories on : Mergers & Acquisitions | Pharmaceuticals

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