NOVA LICENSING OF PHARMATEC BRAIN DELIVERY TECHNOLOGY

Executive Summary

NOVA LICENSING OF PHARMATEC BRAIN DELIVERY TECHNOLOGY could bring four drugs to clinicals as early as 1987, according to an Aug. 27 press release. Initially, the agreement covers two steroidal anti-inflammatory agents, hydrocortisone and dexamethasone, and two anticancer agents, chlorambucil and nitrosoureas. "Under the terms of the license, Nova will pay Pharmatec to synthesize at least two carrier-drug combinations for treating brain tumors and at least two carrier-steroid combinations for treating brain inflammation, and for the animal studies to demonstrate enhanced brain delivery," the release states. "Nova will fund all development costs and clinical trials and will have worldwide marketing rights. Pharmatec will have the right to manufacture the products for Nova under certain conditions." Contingent on Nova's spending "at least $1.4 mil." in development and testing and on "other conditions," Nova will receive warrants to purchase 3.75%, or 120,000 shares, of Pharmatec's common stock "at a significant premium to the current price of stock" exercisable until Aug. 12, 1991, the release explains. Approximately 10% of Pharmatec is currently owned by Chicago invester Marvin Loeb, who bought into the company earlier this year ("The Pink Sheet" Jan. 13, T&G-6). Nova is the second company to license the Gainesville, Florida-based firm's patented carrier technology for delivery of drugs to the brain. In 1984, Pharmatec entered into an agreement with Smith Labs covering three off-patent central nervous system drugs. Pharmatec licenses the carrier system from the University of Florida.