Abbott To Take Stake In Hungary's Biorex

US pharmaceutical group Abbott Laboratories is planning to take a stakein Biorex, a Hungarian biotechnology company, with a view to licensing its lead products. The deal, which has not been signed yet, involves a significant investment by Abbott, which will provide funding for at least the next two years.

Stock Market Listing On Hold The news means that plans to float Biorex, which is 63% owned by the Jersey-based First Hungary Fund, on the UK stock market have been put on hold, although managers of the fund added that it might still be considered in the longer term, or it may be sold to Abbott, which is paying a 40% premium over Biorex's value on First Hungary Fund's books, set at $65 million in a fund raising exercise last December.

Biorex' lead product Bimoclomol, its treatment for nerve damage in diabetics, is in Phase II patient trials and the Abbott deal will enable the company to take it through final clinical trials. Biorex, a specialist in developing molecules able to induce heat shock proteins, has developed 200 derivatives of Bimoclomol for which patents have either been sought or granted. The news follows other pharmaceutical deals in Hungary, including Bristol-Myers Squibb's takeover of Pharmavit (Marketletter August 12, 1996).