Amarin buys Israeli firm in €22m deal

IRISH pharmaceutical company Amarin is to buy an Israeli firm in a deal worth up to $32 million (€21.7m).

Amarin, which is backed by a number of former Elan executives, will initially pay €10.2m for Ester Neurosciences.

The Israeli firm is working on drugs to treat a range of neurodegenerative and inflammatory diseases.

A further €11.5m will be paid to Ester’s owners if the company meets certain targets.

Amarin chief financial officer Alan Cooke said: “The Ester acquisition achieves our stated objective of adding one more clinical stage programme with efficacy data to our pipeline, with the additional benefit of the valuable underlying technology platform.”

The upfront payment to Ester will not come from Amarin’s existing resources but through a financing agreement with lenders receiving Amarin shares. Company directors are expected to contribute $1.7m in financing. The shares are being issued at a 10% discount.

Amarin has also announced plans for a reverse share split. Their shares are listed on the Nasdaq but have been trading below the $1 level needed to keep the quote.

In April shares in the company plunged after it said that trials of a drug called Miraxion, to treat Huntington’s disease, had failed to show any significant benefits. That forced Amarin to write down the value of Miraxion.

Along with former senior executives of Elan, the Amarin board contains several heavyweights from the pharmaceutical industry including John Climax, founder of the clinical trials company ICON.

Former Elan directors on the board include John Groom, Tom Lynch and Alan Cooke.

In July 2006 Amarin raised $33m from investors to fund its drug development pipeline and the company is working on developing treatments for Parkinson’s disease and epilepsy seizures.