Biota Pharmaceuticals said today it will acquire Anaconda Pharma for up to $38 million, in a deal designed to grow the buyer’s infectious disease pipeline with a Phase II antiviral indicated for two diseases caused by human papillomavirus (HPV).

Anaconda’s lead product AP611074 is being developed for the treatment of condyloma, also known as anogenital warts, as well as the orphan disease recurrent respiratory papillomatosis (RRP). Both are caused by HPV types 6 and 11.

In 2013, Anaconda completed a Phase IIa clinical trial that the company said showed AP611074 was safe and effective in removing or reducing anogenital warts when applied as a topical gel over six weeks of treatment.

“We are looking forward to the initiation of a randomized, placebo-controlled, double-blind, Phase IIb trial in patients with anogenital warts in the second half of 2015,” Joseph Patti, Ph.D., Biota’s president and CEO, said in a statement. “We're very enthusiastic about the global market opportunity for AP611074, and believe it is uniquely positioned to significantly improve the treatment paradigm for anogenital warts, the most frequent viral sexually transmitted disease worldwide, and RRP.”

Biota cited statistics showing approximately 1% to 2% of sexually active adults between ages 15–49 develop condyloma as the primary clinical manifestation of HPV infection, generating 385,000 initial visits to physician offices in 2008 and $200 million in direct costs annually in the U.S. Each year 2 million to 3 million new cases develop globally, according to a 1992 study cited in several more recent studies involving condyloma.

Biota is counting on AP611074 to ultimately attract patients who stay away from existing drugs. While topical therapies have generated mucosal toxicities manifesting as erosions and ulcerations, ablative treatments have been associated with pain, scarring and sexual dysfunction. Even without side effects, Biota contends, many current therapies lead to a high incidence of condyloma recurrence after successful primary treatment.

RRP typically requires removal of warts through surgery. Children with the disease undergo 19.7 surgical procedures over their lifetime—a number that jumps to 40 procedures in 20% of child and adult patients. It is estimated that 15,000 surgical procedures due to RRP are performed per year in the United States, at a total cost of $150 million, and lifetime costs per individual patient can reach up to $470,000.

“We believe that Biota's antiviral clinical development capabilities and experience, along with its financial resources, will enhance and accelerate the development of AP611074,” added Marta Blumenfeld, Ph.D., Anaconda Pharma’s CEO.

The deal is expected to close by the end of April 2015, subject to approval of the French Ministry of Finance and Economics since Anaconda is based in Paris, and other customary conditions. At closing, Biota said, it will acquire all of Anaconda Pharma's outstanding shares for 3.5 million shares of Biota common stock and $8 million in cash. Anaconda shareholders are also eligible for up to $30 million in payments tied to achieving clinical and regulatory milestones, plus royalties.