A Malvern start-up, Protez Pharmaceuticals Inc., is being acquired by Swiss drugmaker Novartis AG for up to $400 million in cash.
Protez is developing antibiotics and will become a wholly owned subsidiary of Novartis and maintain operations in Malvern.
The privately held Protez said it would receive an initial $100 million, and up to $300 million after achieving certain goals in clinical trials, regulatory approvals and product commercialization.
Protez's lead experimental medicine is a potent injectable antibiotic to fight infections in hospital patients. The compound, known as PZ-601, is in midstage, or Phase 2, development for patients with difficult-to-treat and life-threatening bacterial infections, such as MRSA.
In 2005, Protez licensed the compound from Dainippon Sumitomo Pharma Co. Ltd., of Osaka, Japan.
The acquisition will offer Protez research expertise, funds and global reach to develop and commercialize products.
Protez president and chief executive officer Christopher M. Cashman said the "growing presence of Novartis in the specialty field of hospital infections will provide Protez the support required to fully execute its vision, advance its product pipeline, and positively impact human health."
Cashman, who had held marketing, sales and management jobs at SmithKline Beecham P.L.C. and Pfizer Inc., founded Protez in 2003 after acquiring promising early-stage antibacterial technologies that emerged from research at the University of Illinois. The company has not yet brought any drug to market.
Last month, Protez began a 100-patient Phase 2 study in the United States to evaluate the safety and effectiveness of PZ-601 in patients with complicated skin infections.
Antibiotic resistance is a serious public health problem. The Centers for Disease Control and Prevention said two million people in the United States developed hospital-acquired infections each year, and that 90,000 die from them.
Novartis shares closed at $52.40 yesterday on the New York Stock Exchange, down 76 cents.