The board of BioGaia has decided to invest in the first phase of a long-term
project aimed at developing a drug with rigorous hygiene, analysis and
documentation requirements, to treat the highly fatal disease Necrotising
Enterocolitis (NEC), which affects premature infants.
BioGaia will invest SEK 42 million in the project over a two-year period. The
project will be driven by BioGaia’s subsidiary Infant Bacterial Therapeutics
(IBT), of which 9% is owned by the company’s President, Staffan Strömberg, and
its Research Director, Eamonn Connolly. The remaining 91% is owned by BioGaia.
IBT will develop a new formulation and a manufacturing process that are wholly
adapted to the stringent quality requirements placed by the FDA (the U.S. Food
and Drug Administration) for a biological drug and the product’s area of use in
neonatal intensive care units. The company’s assessment is that around SEK 26
million of the total of SEK 42 million will be capitalised in IBT, which will
result in costs of approximately SEK 8 million per year in 2014 and 2015. Should
the drug development not be completed it is BioGaia’s intention to market the
formulation under a different product category.
In August this year the company was granted “Orphan Drug Designation” for the
use of Lactobacillus reuteri in a drug to treat NEC. In addition to tax credits,
this qualifies the sponsor of the drug for various incentives from the US
government, seven-year exclusivity and certain support from FDA in the
application process leading to an approved drug. IBT has had a first meeting
with the FDA regarding the possible development of a drug. Parallel to this,
discussions are underway with other parties on financing of the drug development
project. A decision on the continued development of a drug will be made if and
when reasonable financing is obtained.
”We consider the NEC project very promising since we have already been granted
”Orphan Drug Designation” and, with a limited impact on earnings, can create
additional value in a project that can lead to a valuable drug with the
potential to save lives and become a very profitable product. If we don’t reach
all the way we will still have succeeded in developing a product that is ideally
adapted for use in neonatal intensive care units, which opens a new market for
our products,” says Peter Rothschild, President BioGaia.
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BioGaia has published this information in accordance with the Swedish Securities
Market Act. The information was issued for publication on 12 November 2013,
08:00 am CET.
For additional information please contact
Peter Rothschild, Chief Executive Officer, BioGaia: 46 8 555 293 00
BioGaia is a healthcare company that develops, markets and sells probiotic
products with documented health benefits. The products are primarily based on
the lactic acid bacterium Lactobacillus reuteri, which has probiotic, health
-enhancing effects. The class B share of the Parent Company BioGaia AB is quoted
on the Mid Cap list of the NASDAQ OMX Nordic Exchange Stockholm. www.biogaia.com
