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Bioniche to Get up to $130M in Urology Deal with Endo
By Catherine Hollingsworth
Staff Writer
Canadian biopharmaceutical firm Bioniche Life Sciences Inc. has entered a urology drug deal with U.S-based Endo Pharmaceuticals worth up to $130 million, essentially eliminating the company's cash burn for its bladder cancer program.
Belleville, Ontario-based Bioniche generates revenue from its animal health business, and on the human health side its cash burn "is pretty much, well, it is eliminated" for bladder cancer," Graeme McRae, chairman, president and CEO of Bioniche, told BioWorld Today.
The company's future cash burn would depend on whether Chadds Ford, Pa.-based Endo decides to develop additional indications beyond bladder cancer, he noted.
Under the deal, Endo will develop and market Bioniche's Phase III bladder cancer product, Urocidin, and make an up-front cash payment of $20 million and up to $110 million in potential milestone payments.
Bioniche will be responsible for manufacturing Urocidin, aimed at patients who have not responded or stopped responding to an existing treatment known as BCG, short hand for the vaccine bacilli Calmette-Guerin.
Originally developed in the 1920s for tuberculosis, the live BCG vaccine also is used to activate the immune system against bladder cancer. But treatment with BCG can be irritating to the bladder and, in a small number of cases, can result in TB infection.
The up-front payment will be used for working capital, as Bioniche seeks to reduce its bank debt and makes plans for the next potential indication using its Mycobacterial Cell Wall - DNA complex (MCC) technology. Urocidin is the product developed from the technology.
Under the agreement, Endo has the first right of refusal of other pelvic cancer indications based on that technology. Bioniche has done preliminary work in cervical and ovarian cancer and has completed Phase I testing in prostate cancer.
In addition, Bioniche has completed enrollment for the first Phase III trial of Urocidin, the results of which are expected in April 2010 and will be made publicly available in May 2010. That trial is in patients who are refractory to treatment with BCG.
A second trial of Urocidin is expected to start at the end of the year in patients with newly diagnosed bladder cancer who are at high risk of the disease progressing or recurring. The 800-patient study is expected to complete enrollment in two years, followed by a two-year observation period.
The indications being studied in those trials have been granted fast-track status by the FDA.
Cowen & Co. analyst Ian Sanderson, who tracks Endo, said in a research note that if the Phase III studies succeed, "we project a late 2011 filing and 2012 launch for Urocidin." But Sanderson said that Endo needs to make some more moves to offset the potential loss of its Lidoderm and Opana franchise sales to generic competition between 2012 and 2015.
Phase II results for Urocidin showed that 40 percent to 60 percent of patients who failed the existing therapy achieved a complete response. If Urocidin can achieve a 20 percent response rate in the refractory population, it "will probably be very well accepted" by the FDA, McRae said.
So far, the safety profile has been clean and study patients have not dropped out due to side effects. One reason no new treatments have emerged for bladder cancer is that it is difficult to treat without making the symptoms worse.
While chemotherapy has been tried off-label to treat bladder cancer, the process can be irritating to the bladder. The chemo requires a lengthy period of contact with a tumor to work, but urine in the bladder can dilute the chemo and maintaining the chemo in the bladder for more than hour is a challenge.
Urocidin, on the other hand, is designed to work in 30 minutes and can be maintained at an effective level even with the dilutive effect of urine, McRae explained.
He said only a handful of companies are working on new treatments for bladder cancer using chemotherapy or toxins bound to antibodies. But Bioniche's product candidate is the most advanced and has what McRae called the "crème de la crème of urologists" in its clinical program who hail from top medical institutions such as Memorial Sloan Kettering and Johns Hopkins.
Prior to the deal with Endo, Urocidin was the only advanced product in the urology area that still was unpartnered, McRae noted. Bioniche had been in discussion with multinational companies that claimed to be in the urology space, "but weren't really," he said, adding that he was surprised by the lack of understanding of the field.
Endo had purchased the urology company Indevus, a move that McRae said, "clearly steered Endo toward us." He said Endo and Bioniche had "a lot of synergy" between their clinical and research groups.
In August, Endo plans to launch Valstar for BCG-refractory bladder cancer, David Holveck, president and CEO of Endo said in a statement. "If successful in clinical development, Urocidin has the potential to extend and enhance our recent therapeutic expansion and strengthen the Valstar franchise," Holveck said.
About 70,000 patients in the U.S. are diagnosed with bladder cancer each year. In addition, the cancers of many previously-diagnosed patients remain unresolved, sometimes leading to cystectomy (bladder removal) or death.
About 70 percent of bladder cancer patients have the non-muscle-invasive form of bladder cancer at diagnosis and potentially could be eligible for multiple treatments with Urocidin, if approved, according to Bioniche.
Shares in Bioniche (TSX:BNC) were up C12 cents or 26 percent, closing at C58 cents. Shares in Endo (NASDAQ:ENDP) were down 25 cents, closing at $17.09.
Published July 13, 2009
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