Tampa, FL & La Jolla, CA
By Jonathan Matsey

Sirion Therapeutics Inc., a drug development start-up, said that it has merged into a privately held shell operation called Tenby Pharma Inc., in a move that brings the newly combined company a $25 million investment from a hedge fund.

Under the deal, Sirion’s shareholders acquired Tenby, which has become the parent holding company for Sirion and its operations. Tenby also received a $25 million investment from hedge fund North Sound Capital.

Sirion had previously been backed by less than $10 million from Avalon Ventures and NovaQuest, who are now investors in Tenby, said Susan Benton, Sirion’s chief commercial officer.

Tenby is expected to change its name to Sirion Holdings Inc.

Benton said that Tenby is not publicly traded although it files public reports with the Securities and Exchange Commission. Its public status was necessary to getting an investment from North Sound, she said.

“We got all the worst out of the way now,” Benton said. “We’ll be filing, we’ll be Sarbanes-Oxley compliant.” Eventually, she said that the company would look to list on a stock exchange, perhaps as early as next year.

Based in Tampa, Sirion was founded in December 2005 by four former Bausch & Lomb Inc. executives, who left Bausch in 2001 when the company relocated its pharmaceutical operations from Tampa to Rochester, N.Y. For the next few years the four worked in various consulting capacities before joining Sirion, Benton said.

The person close to the deal said that the merger was a good one for Avalon, which has recouped most of its $4.5 million investment in Sytera. In addition to getting a stake in Sirion – and now Tenby – Avalon will receive milestone payments from the company’s compound, which Sirion is developing. This route was better for the firm, the person said, than continuing venture rounds for Sirion, which had the potential to dilute Avalon’s investment.

Sirion now has a staff of over 40 and an office in La Jolla, Calif. Sirion has a portfolio of three compounds: ST-601, an ophthalmic steroid that it licensed from Senju Pharmaceutical Co. in April 2006; ST-602, a product that aims to reduce the accumulation of lipofuscin in the eye, which was being developed by Sytera; and ST-603, a topical preparation of cyclosporine A., which was licensed from Laboratorios Sophia SA de CV in June 2006.

Benton said that ST-601 and ST-603 are poised to begin Phase III clinical trials in early 2007 while ST-602 will likely begin Phase II trials later this year.