Revenue Sharing and Co-Development Agreement with ERGOMED

Avlar Bioventures and Excalibur Fund Managers, the UK based life science venture capital groups and Ergomed, an international provider of drug development services announced today that they have entered an agreement to carry out a Phase II study with Oral BVT.115959 (“the Compound”) - a novel A2A agonist in diabetic neuropathic pain.  The study is planned to start later in 2011.

Avlar and Excalibur have formed a new virtual company called CBT Development Limited on behalf of their funds and other shareholders.  CBT Development owns all rights to the Compound and w ill work with Ergomed on the clinical development.  They will also lead the commercialisation of the product.

At the same time the parties have announced they have entered into a Revenue Sharing and Co-development Agreement (“the Agreement”) whereby the parties will collaborate on the clinical development and commercialisation of the Compound

Under the Agreement, CBT Development and Ergomed will work together with the goal of demonstrating that the Compound can provide sustained pain relief to improve treatment in diabetic neuropathic pain in patients on stable anti-hypertensive medication. If successful in this study the parties believe that the Compound can be tested in wider neuropathic pain patient groups.  Both parties will invest their respective expert internal resources.  Under the terms of the Agreement, Ergomed is entitled to a share of commercial revenues generated from the compound.

This study bu ilds on the previously successful clinical trial of the Compound in diabetic neuropathic pain, which revealed that patients taking certain medication to control hypertension experienced a large and significant benefit from dosing with the Compound. 

Alan Goodman and Mark Docherty, Directors of CBT Development commented: “We are very pleased to be commencing the next set of Phase II trials for Oral BVT.115959. There is a clear need for new treatments for neuropathic pain and the market is forecast to grow to at least $5 b illion by 2015.  The combined expertise of CBT Development, its shareholders and ERGOMED significantly increases the chances of Phase II trials being completed successfully.  The close relationship with a specialised clinical trials service provider such as Ergomed fits well with CBT Development’s virtual structure and the outsourcing business model and removes one of the biggest issues facing smaller biotech companies in managing their clinical trials programmes”.

Dr. Miroslav Reljanovic, Chief Executive of ERGOMED said, "We are delighted to invest in the development of Oral BVT.115959, which has shown promising potential in Phase II trials to date.  The clinical development plan which we have prepared jointly is flexible and comprehensive being based on our broad experience and expertise with these indications.  This co-development agreement is the third co-development deal we have signed to date and demonstrates again the attractive alternative it offers to sophisticated drug developers as they look to maximise investment returns in challenging markets.  ERGOMED strategy is to leverage our development expertise by taking a proprietary position in selected development candidates wh ilst continuing to run a profitable clinical research services organisation in parallel.”

About Avlar Bioventures

Avlar is a specialist biotechnology venture capital company and is the manager of Avlar BioVentures Fund I, Avlar BioVentures Fund II and The Cambridge Gateway Fund.  All three funds are focused on seed and early stage investments and are used to invest in emerging bioscience technologies.  Avlar's approach to investment is very much 'hands on', working intensively with companies in the critical stages of development from pre-formation to second round of financing, applying its strategic, entrepreneurial and biotech industry sk ills.

About Excalibur Fund Managers

Excalibur Fund Managers is a specialised venture investor in life sciences companies managing and advising two funds, Merlin Biosciences Fund and Merlin Biosciences Fund III.  Excalibur invests in companies that are bringing to market human medicines or medical devices with groundbreaking technology and significant commercial potential.  Since 1997, Excalibur has participated in the funding of 34 European biotechnology and life science companies on behalf of its investment partnerships.  Excalibur has bu ilt a reputation for being an exceptional partner for management teams who can create substantial value for investors.

About ERGOMED – www.ergomed-cro.com

 ERGOMED is a specialised international clinical development company offering contract clinical research and co-development partnerships to biotechnology and pharmaceutical companies worldwide in a wide variety of indications and medical devices including neurology, oncology and immunology. ERGOMED’s approach to clinical research ensures effective patient recruitment, reducing the time and costs of clinical trials and complementing the drug discovery capab ilities of its customers and partners. The Company has a dual business model offering standard clinical trial management contracts and also co-development partnerships to share the risks and rewards of clinical development. ERGOMED is headquartered in Frankfurt, Germany and also has offices in UK, Russia, Croatia, Poland, Spain, Dubai, Serbia, Italy and the USA. The collaboration with CBT Development represents the third co development agreement. The first was a collaboration with CeNeS (now Paion) regarding a novel NDMA receptor antagonist (CNS 5161) for the treatment of neuropathic pain and cancer pain. The second is with Genzyme Corporation on the co-development of tasidotin, a novel dolastatin analogue that has shown efficacy signals and a good safety prof ile in previous oncology clinical trials. Phase I trials of tasidotin are ongoing.

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