India's Orchid buys out rest of Bexel

Chennai, India-based drugmaker Orchid Chemicals & Pharmaceuticals says that it was consolidating its new drug discovery research activities under a common umbrella, as part of which it will extend its ownership in US firm Bexel Pharmaceuticals from the current 74% to 100%. Both companies believe that bringing all drug discovery activities under a unified structure will provide seamless integration of the several drug discovery programs being pursued by each, while retaining the advantages of having a discovery front-end in the USA and a discovery cum-developmental back-end at Chennai. Orchid has already established a wholly-owned subsidiary, Orchid Research Laboratories, to channel its drug discovery.

The deal involves buy-out by Orchid of the shareholding of the US founders of Bexel for a cash consideration of $3.0 million. The founders and key employees of the firm would be granted 650,000 stock options, which they will subscribe at the grant price. In an independent arrangement, Bexel would be providing an earn-out to its principal founder in the event of an out-licensing accord for BLX-1002 materializing in a prescribed timeframe based on the Phase II clinical trials that are planned. The managerial and scientific organization of the US firm will continue as an integral part of the new structure, providing continuity and commitment to Orchid's broader drug discovery thrust, the Indian group says.

Differing R&D focus, progress