News | August 27, 1998

Proligo, NeXstar/SKW Joint Venture, Will Focus on Oligonucleotide Chemistry

NeXstar Pharmaceuticals, Inc. (Boulder, CO) and SKW Trostberg AG (Trostberg, Germany) have formed a new joint venture company, Proligo LLC, to focus on the emerging chemical supply market for oligonucleotide-based products and related nucleic acid technologies. Based in Boulder, Proligo will be the successor to the NeXstar Products Technology division of NeXstar Pharmaceuticals. The new company was established partly through the sale of 51 percent of the new company by NeXstar to SKW Americas, a subsidiary of SKW Trostberg AG, which has annual revenues of more than $3 billion.

In exchange for its 51 % interest in Proligo, SKW Americas paid NeXstar $15 million in cash, will pay an additional $3 million in guaranteed payments, and up to $20.5 million in performance-based milestone payments over the next five years. SKW Americas will also transfer to NeXstar Pharmaceuticals a 49% interest in Proligo Biochemie GmbH, the former PerSeptive Biosystems GmbH, Hamburg, Germany.

To complete the formation of Proligo, SKW Americas and NeXstar Pharmaceuticals will contribute Proligo Biochemie GmbH to the newly formed company. With the addition of Proligo Biochemie GmbH's 58,000 square foot ISO-certified manufacturing facility in Hamburg, Proligo will enter immediately into the market for nucleoside phosphoramidite monomers, the basic building blocks of oligonucleotides. The manufacture of these products is enabled by the Koster patent and rights to the Caruthers patents, which were acquired by NeXstar Technology Products in January 1998.

Proligo will consist of the assets of NeXstar Technology Products, a specialty chemicals and process technologies business unit; Proligo Biochemie GmbH; and $10 million in cash.

"We are very enthusiastic about our partnership with SKW and the formation of Proligo LLC," said Patrick J. Mahaffy, president and chief executive officer of NeXstar Pharmaceuticals. "We originally formed NeXstar Technology Products last December to leverage our proprietary technology and offset certain of our research and development expenses. Through the formation of Proligo, each of these goals will now be achieved in a more substantial and immediate manner than NeXstar Pharmaceuticals could have achieved independently. SKW's commitment to Proligo's business plan combined with their financial resources and expertise as a specialty chemical manufacturer provides Proligo with significant advantages and further allows NeXstar Pharmaceuticals to focus on our core pharmaceutical business."

Proligo's mission will be to serve as an integrated manufacturer and marketer of products and manufacturing services to the growing oligonucleotide marketplace. With the combination of Proligo Biochemie GmbH and the former NeXstar Technology Products, Proligo LLC is committed to providing customers a full range of nucleic acid-based products, from reagents and building blocks to bulk GMP oligonucleotide manufacturing. Proligo's products and services include:

  • custom manufacture of bulk, active oligonucleotides to GMP specifications
  • chemical building blocks for oligonucleotides
  • novel process reagents for the efficient assembly of oligonucleotides
  • new synthetic linking technologies for modulating the activity of oligonucleotides
  • cost-effective processes for large quantity (scale-up) production of such compounds, including the PASS technology

PASS (Product Anchored Sequential Synthesis) technology, invented by scientists at NeXstar Pharmaceuticals, is being developed for the manufacture of oligonucleotide-based drugs. This technology will be positioned to meet the demand for cost-effective supply of bulk oligonucleotide supply for pharmaceutical and diagnostic customers. Proligo intends to develop the PASS technology to support contract manufacturing of oligonucleotide-based products.

"The addition of the Hamburg manufacturing plant will enhance our ability to provide our customers with standard and specialty monomers and reagents for oligonucleotide synthesis," said Wolfgang Pieken, newly appointed chief executive officer of Proligo. "The expertise and capability of the manufacturing team in Hamburg uniquely complements the technology portfolio created by Proligo's development team in Boulder. In this new configuration, Proligo is the only supplier of a truly integrated line of products and manufacturing services in nucleic acid chemistry."

As part of the transaction, Proligo and NeXstar Pharmaceuticals have entered into a supply agreement in which Proligo will manufacture aptamers for NeXstar Pharmaceuticals' use in its drug discovery and development programs. In addition, NeXstar Pharmaceuticals will retain certain rights to the PASS technology for its own internal uses.

NeXstar Pharmaceuticals has agreed to provide certain transitional services to Proligo for a period of up to nine months. Approximately 27 employees of NeXstar Pharmaceuticals will become Proligo employees as part of the transaction.

By Angelo DePalma

For more information: Anna Sussman, Manager, Investor Relations, NeXstar Pharmaceuticals, Inc., 2860 Wilderness Place, Boulder, CO 80301. Tel: 303- 444-5893.