Inex gives new company a go

05 December 2005 00:01  [Source: ICB Americas]

Inex pharmaceuticals Corp., based in Vancouver, B.C., is fighting for a foothold in the arena of targeted therapeutics after a challenging financial year in 2005. The company has decided to forge ahead with restructuring plans, including the spin-off of its targeted immunotherapy assets and the advancement of lead candidates into full clinical development. Inex says the restructuring is expected to improve stakeholder value and capture new market opportunities.

The hematological malignancies sector provides competitive opportunities for a host of new therapies. Many R&D projects are intensely focused in this area, with approximately 86 compounds in clinical development, says London, UK-based consultancy Datamonitor. Among the different classes of drugs being developed, targeted immunotherapeutics are a significant faction.

“Nonspecific immuno-adjuvants dominate the immunotherapy class of drugs, including Celgene’s Revlimid and Chiron’s Proleukin, which alongside other nonspecific immuno-adjuvants constitute 40 percent of the immunotherapy pipeline,” Datamonitor states.

Inex, a start-up biopharmaceutical firm, stands on the foundation of two technology platforms—targeted immunotherapy and targeted chemotherapy—which are in different stages of development. Inex expects to operate these platforms through two independent companies. The restructuring, meant to optimize value for all its shareholders, is a significant long-term strategy for Inex, which has been battling financial difficulties in the past year.

“2005 has been a very challenging year for us. We’ve been working throughout the year on some major initiatives, including the partnering of our assets in our chemotherapy pipeline, trying to come up with a solution for outstanding convertible debt, and most recently, determining the future of our immunotherapy assets,” states Ian Mortimer, chief financial officer of Inex.

This latest restructuring announcement follows on the heels of the British Columbia Supreme Court’s recent ruling in favor of Inex in a bankruptcy lawsuit. Stark Trading and Shepherd Investments International Ltd., the majority holder of certain Inex promissory notes, had filed a bankruptcy petition against the company. In October, the B.C. Supreme Court dismissed the petition.

The court victory frees up for progress Inex’s plans, which had previously been set in motion. The company appointed a new president and COO, Tim Ruane, under an earlier restructuring phase in June. “Clearly Inex is neither bankrupt nor in default of our no-holders agreement,” Ruane states.

Stark has filed an appeal, but “Inex believes the court will continue to rule in Inex’s favor, and this will not prevent us from advancing our business,” says Ruane. “We are moving the company forward by maximizing the value of the company’s two technology platforms to the benefit of all stakeholders,” he adds.

The targeted immunotherapy business is both promising and viable, Ruane says. As a separate company, it would also be debt-free and finance-able. The entity would start off with approximately six to 12 months of operating cash and would undertake equity financing in 2006 “in order to meet its development timelines,” says Ruane. “Given Inex’s current position [regarding the company’s convertible debt], we do not believe we can accomplish this financing otherwise.”

The new targeted immunotherapy company, spearheaded by a group of senior-level and experienced researchers and drug developers, will accelerate product candidates in the pipeline. In a field where a number of established companies have already made significant headway, including Sirna Therapeutics Inc., Idera Pharmaceuticals Inc. (formerly Hybridon Inc.) and Alnylam Pharmaceuticals, Inex’s spin-off company would be well positioned to advance a lead product candidate, INX-0167. Inex expects to file an investigational new drug application (IND) on INX-0167 in 2006 and plans to begin Phase I clinical trials in 2007.

Inex’s targeted immunotherapy platform is based on lipid-encapsulated oligonucleotides, a new class of drugs with the potential to treat a number of diseases by activating immune cells in the body. Inex has previously published preclinical data from studies using Rituxan (rituximab) and Herceptin (trastuzumab) that indicate INX-0167 can enhance anti-tumor activity of these currently marketed monoclonal antibodies.

Meanwhile, Inex will take a different route with its targeted chemotherapy platform, which the company has neither the financial nor personnel resources to further develop. As a result, it is looking to partner its lead targeted chemotherapy candidate Marqibo (sphingosomal vincristine).

But Inex may have a tougher uphill battle with Marqibo than expected. In January, the Food and Drug Administration (FDA) issued a nonapprovable letter for Marqibo. Last month, the Therapeutics Products Directorate of Health Canada issued a similar decision based on the lack of Phase III clinical data. Earlier this year, the company lost its development partner for Marqibo in North America when Enzon Pharmaceuticals Inc. terminated their agreement based on the FDA’s nonapprovable decision.

Inex has already reached an agreement in principle with the FDA on Phase III clinical trial designs, which will utilize complete response rate as the primary end point.

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