A small Durham company developing new drugs to treat ailments such as ADHD, hypertension and insomnia has been acquired by an Atlanta pharmaceuticals firm for $29million.
Addrenex Pharmaceuticals was founded in 2006 by a drug researcher born in Lebanon and a Charlotte physician who connected through a mutual friend. Using $700,000 of their own money, funding from friends, family and angel investors, and $160,000 in loans from the N.C. Biotechnology Center, they began testing new treatments that control the overproduction of the stress hormone adrenaline.
Now the company with nine employees is being bought by its larger partner, Sciele Pharma. The companies have worked together on developing new medicines for about two years.
One of the most promising drugs is Clonicel, a new treatment for attention deficit hyperactivity disorder. Addrenex and Sciele filed for regulatory approval for that drug in October and expect to win the Food and Drug Administration's blessing next year.
The rapid rise of Addrenex and rich returns for its founders and investors are notable, even in an area like the Triangle, home to dozens of startup pharmaceutical and biotechnology firms.
"It's been a great ride," said CEO Moise Khayrallah, who added that he plans to stay with the company through a "transition period" but then likely will move on to other opportunities.
"I thrive on the chance to build something from scratch," said Khayrallah, 51, who previously worked at a predecessor to GlaxoSmithKline and several other large companies.
He started Addrenex with H. Joseph Horacek Jr., a Charlotte doctor who had been using a drug called clonidine since the early 1990s to treat his ADHD patients. He wanted to develop a longer-lasting version of that medicine.
Clonicel would offer an alternative for parents unhappy with the side effects of existing ADHD drugs.
Addrenex's founders always planned to find a buyer once they proved their drugs worked. They recently hired an investment bank to find other companies interested in buying Addrenex. "Sciele was the winning bidder," Khayrallah said, declining to comment on other offers.
Sciele initially partnered with Addrenex two years ago, promising millions of dollars to help fund clinical development of Clonicel and other drugs. The Atlanta company, founded in 1992, is a subsidiary of Japan's Shionogi & Co. Sciele employs about 1,000 people and sells products to treat high cholesterol, hypertension and ADHD.
Addrenex will operate as a subsidiary of Sciele, which plans to keep the nine full-time employees and about a dozen contract workers in Durham.
Shortly after they met and decided to work together in early 2006, Khayrallah and Horacek enrolled in a 12-week class on business planning at the Council for Entrepreneurial Development in RTP. Horacek commuted once a week from Charlotte. Khayrallah first lived in this area when he came to this country in 1983 to study at UNC-Chapel Hill.
The two then assembled a small team of drug-development experts but relied heavily on contract help, which kept costs down. "We did not spend money on extraneous activities, everything went to [research and development]," Khayrallah said.
The money included loans from the N.C. Biotechnology Center, which has more than tripled its initial investment of $160,000 with Addrenex's sale, said spokesman Jim Shamp. At least some of that return will be used to help fund other young biotech companies in the state, he added.
