Biota Acquires Antibacterial Assets of Prolysis

Biota Holdings has announced the acquisition of the key assets and programs of Prolysis, an antibacterial drug discovery company located in Oxford, England.

Prolysis has two primary projects that are focused on new antibiotics for multiple drug resistant infections. If successfully developed, they have the potential to manage the current wave of hospital superbugs that are prevalent in modern society. The two key programs acquired are:

· A Gyrase program targeting DNA supercoiling in gram positive bacteria; and

· A Cell Division Inhibitor (CDI) program targeting staphylococci, blocking assembly of the septum cell wall components prior to cell division. This program has received significant Wellcome Trust funding over recent years.

Under the terms of the agreement, Biota will acquire the key assets and programs for:

· · $A10.8 million (US$10.06 million) as Biota ordinary shares, of which 60 percent will be subject to a 12 month escrow period; and

· · The ability to receive up to a 15 percent share in all milestone and royalties earned on commercialization with Biota retaining all upfront payments on licensed programs.

Biota intends to retain all Prolysis staff and maintain activities at its current laboratory facilities in Oxford. The former is expected to invest A$25 million (US$23.3 million) over the next three years developing the key programs.