Gastrotech Pharma, a spinout from the University of Gothenberg, Sweden, is specialized in the development of treatments for gastro-intestinal conditions such as irritable bowel syndrome. It said it has received €2.3 million in funding from venture fund 123Multinova Europe. Nordic Biotech, a specialized biotech venture capital fund focusing primarily on Nordic countries and the EU, has invested in Gastrotech since its inception in March 2003. BioPartner, a Scandinavian life science financial advisory firm, advised Gastrotech in the transaction.
The new investor comes onboard after DOR BioPharma, a US biotechnology firm, said on November 3 that it plans to buy the Copenhagen-based Gastrotech. The transaction, in DOR shares, gives Gastrotech a valuation of at least $9 million, and is aimed at building a bigger force in the market for gastro-intestinal medicines. The acquisition would cover Gastrotech’s ongoing clinical programs, as well as all intellectual property and facilities. The deal is pending for approvals from shareholders at both companies.
Florian Schönharting, a partner at Nordic Biotech, which is the significant majority shareholder of Grastrotech, said in an interview that the negotiation with 123 took place “a couple of months ago” before “the opportunities with DOR”. 123 now has a “double-digits” holding in Gastrotech, he said. No executive of Gastrotech could be reached for comment.
DOR also said last month its shares may be delisted by the American Stock Exchange, as the exchange says the company hasn’t met its requirements of maintaining more than $6 million of stockholders’ equity. The company said it is appealing, and that it may apply for a listing in Copenhagen. DOR said at the time that if it is delisted from AMEX, it expects that its shares will be eligible for quotation on the OTC Bulletin Board electronic market, which would still allow shareholders to trade their common shares in the future.
“It’s true they (DOR) might be delisted but that doesn’t mean they will not be a public company - just that it means they will be like hundreds of biotech companies to be listed on OTC,” said Schönharting. “We are actually very proud of DOR because they have a compound in phase III development and there is a hope that that will be approved by the FDA and will be launched in two years. We believe the company has been undervalued.”
DOR is focusing on gaining FDA approval for its lead therapeutic product, orBec, an oral formulation of beclomethasone dipropionate, which is a potent, locally-acting corticosteroid being developed to treat inflammation in the mucosal lining of the intestine and stomach that can occur following allogenic bone marrow and stem cell transplants, according to Schönharting. orBec has already completed a Phase III clinical trial.
DOR said last month that once the transaction with Grastrotech closes, two drug-development programs will enter its pipeline from Gastrotech. They include GTP-010, an analogue of glucagon-like peptide-1, to treat pain associated with irritable bowel syndrome. The other drug is GTP-200, Gastrotech’s wild type ghrelin compound, a naturally occurring peptide hormone produced in the stomach to stimulate appetite.
Gastrotech Pharma was founded in 2003 by Professor Olle Isaksson (Sahltech AB) , Professor John-Olov Jansson and Nordic Biotech K/S.
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