Innovation Pharmaceuticals Inc (IPIX)

[TOB]

Article: Cubist acquisition made us look-like 'absolute geniuses'

Boston Business Journal

Below Text from the Article:Cellceutix CEO: Cubist acquisition made us look like 'absolute geniuses'

(Please click the above link to give the author reads, and leave comments below article. Also retweet and follow @BosBizDon This is the second time Mr Seiffert has written about Cellceutix.)

Dec 10, 2014, 1:43pm EST Updated: Dec 10, 2014, 2:38pm EST


Don Seiffert

BioFlash Editor- Boston Business Journal


You wouldn't expect the CEO of a company that last month issued a press release headlined "Cellceutix: December to Be Momentous Month in Company's History," to be shy about self-promotion.

And Leo Ehrlich, who heads the small Beverly biotech, does not disappoint. I spoke to Ehrlich earlier today about why his company's shares soared 32 percent to an all-time high Monday after the $9.5 billion acquisition of antibiotics-maker Cubist was announced.

His answer: "Because now it looks like we were absolute geniuses for purchasing our antibiotic from bankruptcy court a year ago for $5 million."

Ehrlich is referring to Brilacidin, a drug Cellceutix (OTC: CTIX) bought in September 2013 for a combination of cash and stock. The potential drug for acute skin infections finished Phase 2a trials by the time its former owner, PolyMedix of Radnor, Pa., went bankrupt in April 2013. Cellceutix, which at the time was testing it's experimental drug, Kevetrin, in various kinds of cancer, immediately announced plans to begin a Phase 2b trial of Brilacidin in acute bacterial skin and skin structure infections, a category of bacteria that includes methicillin-resistant S. aureus, an infection commonly known as MRSA.

The trial not only targeted the same infections for which Cubist's flagship antibiotic Cubicin was approved in 2003, but directly compared Cellceutix's Brilacidin to Cubicin. While full results from the 215-patient trial have not been published yet, the company announced in September that Brilacidin worked as well as Cubicin at treating the infection, which would mean likely approval if the data holds up in a larger, Phase 3 trial.

Ehrlich said he plans to meet with the U.S. Food and Drug Administration in coming days to discuss plans for Phase 3 trial upon which an approval for Brilacidin could be based, and declined to estimate when that trial might start pending the meeting. But he said that his company's drug has one distinct advantage: While Cubicin requires several subsequent days of intravenous administration, Brilacidin just requires a single IV, meaning no extended hospital stays would be required.

All that bodes very well for a 13-employee company that spent its first four years as a publicly-traded company — until November 2012 — as a penny stock, with shares priced below $1. For the past two years it has been above $2, and has more than doubled in the past three months to $4.39 as of 12:30 p.m. Wednesday. Cellceutix' market value today is more than $500 million, and Ehrlich said he plans to switch the company to the Nasdaq exchange very soon.

No doubt, that's far less than the $6 billion market cap of Cubist before Merck & Co. announced it plans to acquire it. But from Ehrlich's point of view, his company's current assets are based on assets he obtained for a tiny fraction of what Merck paid for the handful of approved and several potential drugs that Cubist has.

"I acquired PolyMedix for $5 million, not $5 billion," he said. "That's far less than the $9.5 billion Merck paid.