Alliance Pharmaceutical to acquire Molecular Biosystems

In exchange for 770,000 shares of Alliance stock

Alliance Pharmaceutical Corp. (San Diego) has entered into an agreement to acquire Molecular Biosystems Inc. (MBI; San Diego) in exchange for 770,000 shares of Alliance stock. MBI is the developer of Optison, an intravenous ultrasound contrast agent marketed in the United States and Europe. Alliance is developing its own ultrasound contrast agent, Imavist (formerly known as Imagent), with partner Schering AG. On August 21, 2000, Alliance announced that the U.S. Food and Drug Administration found Imavist to be approvable, pending satisfactory responses from Alliance on issues identified during review.

"Alliance believes that the potential market for ultrasound contrast agents is just beginning to be realized, and the use of these products could grow significantly in the coming years," said Duane J. Roth, Alliance's chairman and CEO. "Ultrasound is a widely used, relatively inexpensive imaging technique, and contrast agents could improve its utility in providing rapid, real-time diagnostic information regarding blood flow and lesions in the vessels, heart, and other organs. More than 30 million scans of the heart, vasculature, and abdominal organs are performed annually in the U.S., some of which may benefit from contrast agents like Imavist and Optison."

Optison is marketed in the U.S. and Europe by Mallinckrodt for enhancing ultrasound images of the heart. Under a recent agreement, Mallinckrodt will co-market Optison with Nycomed Amersham plc and MBI will receive a 5% royalty on net sales of ultrasound contrast agents for all current and future approved indications in the United States and Europe.

Optison is being developed for marketing in Japan, South Korea, and Taiwan pursuant to an agreement with Chugai Pharmaceutical Co. Ltd., which is ushering the product through Phase 3 clinical studies in Japan. The Chugai agreement provides for potential milestone payments of up to $16 million to MBI related to regulatory approvals. Following approval, MBI will receive a net royalty of approximately 25% of sales of Optison in the Chugai territory.

"Alliance's acquisition of MBI is an investment in our future," noted Roth. "Sales of Optison are expected to increase in the U.S. and Europe as the anticipated co-promotion efforts with Nycomed get underway. We are particularly excited about the potential for the product in Japan, which is estimated to be the second largest market for contrast agents in the world. The Phase 3 studies being conducted by Chugai are evaluating the use of Optison for improved visualization of blood flow in the heart muscle (myocardial perfusion) and in the liver, which is regarded as the primary opportunity for a contrast agent in Japan. We believe that by having both Imavist and Optison, Alliance will be well-positioned to take advantage of the expected future market for these agents."

For more information, contact Gwen Rosenberg, VP of Alliance Pharmaceutical Corp., at 858-410-5275.

Edited by Angelo DePalma
Managing Editor, Pharmaceutical Online and Drug Discovery Online
Email: adepalma@vertical.net