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Dutch firm to ProBio Inc., the Honolulu firm formed in 1998 to finance and market mouse-cloning technology developed at the University of Hawaii, is being sold to an international firm based in the Netherlands in deal worth $12 million in stock and investment capital.
purchase ProBio
The deal is worth a
total of $12 millionBy Russ Lynch
Star-BulletinThe companies said today that Amsterdam-based Pharming Group N.V., will pump capital into ProBio, enabling it to move ahead with its discovery, licensing and marketing of proprietary techniques for such purposes as animal cloning, reproduction, gene transfer, and long-term DNA storage using freeze-dried sperm.
In a joint announcement, the companies said Pharming will issue $4 million worth of new stock to the shareholders of ProBio, which has only a handful of owners led by Chairman and CEO Laith Reynolds.
The acquisition is conditional on Pharming raising another $4 million to finance ProBio's operations in the coming years and Pharming agreed to make additional payments of up to $4 million in new Pharming shares to ProBio owners over the next two years.
The major shareholders of ProBio, who hold 75 percent of its stock, agreed to give Pharming 12 months to arrange the initial financing, meaning ProBio will not be sold to anyone else while that is happening.
Pharming said its business is the development, production and commercialization of human therapeutic proteins to be used in "highly innovative therapies." It has operations in Belgium, Finland, the Netherlands and the United States and employs more than 200 people.
Pharming said the acquisition of ProBio will enable it to expand its business and further develop its portfolio of biopharmaceutical products.
By acquiring ProBio, Pharming said it gets control of a number of technologies for which ProBio holds the licenses. ProBio has developed an active out-licensing program in which it sells permission to others to use certain technologies while keeping the licenses itself, Pharming said.
In addition, ProBio recently concluded a distribution deal with Eppendorf Scientific Inc., a U.S. company that sells German-made micro-injection equipment and other tools used in the specialized cloning techniques that ProBio owns. Eppendorf's wide customer base ensures exposure for ProBio's technology, Pharming said.
ProBio was founded as a venture capital provider called ProBio America Ltd., a subsidiary of Australia-based ForBio Ltd., an international agritech company.
Reynolds learned of the UH mouse-cloning research being done quietly by Prof. Ryuzo Yanagimachi and stepped in to obtain the licensing rights, finance, publicize and develop the operation.
Later the name was changed and ProBio Inc. was spun off as a separate company based in Honolulu. It acquired the rights to a number of other techniques, such as the UH development of a caffeine-free coffee bean.
Among ProBio's first customers was PPL Techniques, the British firm famed for cloning Dolly the sheep in 1996.
PPL was interested in the UH cloning method which was different from its own. ProBio expanded its range by acquiring other biotechnology licenses.
Last year, the marketing of the UH cloning team's work brought a lawsuit from one of the original team members Anthony Perry, who sued the university, claiming personal intellectual property rights to the cloning method and alleging that the university had no right to sell the patents to ProBio.
ProBio is not a party to the lawsuit but the value of the intellectual property rights conveyed to ProBio is at the core of the action. The university countersued, saying all research breakthroughs done in UH labs belong to the university, which has the right to sell the technology.
Perry's attorney Jeffrey Harris said a trial is scheduled for next fall. Perry, a British national who worked at the university under an overseas grant, claims that since he was not a university employee, he owns the rights to any discoveries he made there.
The university's view was that the results of research conducted on its property with its equipment.
With City Councilman John Henry Felix as a partner, Perry had set up his own firm, BiogeneSys International, to market the biotechnology but has been unable to do so.
The university referred calls to its general counsel, Walter Kirimitsu, who was unavailable for comment this morning.