On September 20, announced DexTech Medical that an agreement has been signed with EY Corporate Finance to identify potential licensees of the company's research portfolio, especially for OsteoDex, the company's drug candidate for advanced prostate cancer, so-called CRPC or castration-resistant prostate cancer. BioStock contacted DexTech's CEO Anders R Holmberg to learn more about the collaboration with EY, which has a global organization and a strong brand, but also sector-specialized teams of employees with a focus on Life Science.
OsteoDex Phase IIb study is being conducted in Sweden, Finland, Estonia and Latvia and will enter the final phase this fall. The interim results have shown to be very promising and enlisting the help of EY with its global coverage of potential stakeholders looks on paper like a well-timed move.
»We are very pleased to have contracted EY and have strong confidence in their ability to find the right stakeholders«
– CEO Anders R. Holmberg
The most interesting thing about OsteoDex, one of the company's four drug candidates, unlike other cytostatics, for example, is that it has been shown to have few and mild side effects, which is very important since patients suffering from CRPC (castration-resistant prostate cancer) are often fragile and sensitive to treatment side effects. DexTech's preclinical studies have also clearly shown that OsteoDex has potential for the treatment of advanced breast cancer with bone metastases. In addition, there have been indications that the candidate gives rise to significant activity against soft tissue tumors, despite tumors in the bone being a primary target.
»OsteoDex can be an important complement to existing drugs, and our substance may also prove to have a synergistic effect together with some of these existing treatment options« – CEO Anders R Holmberg
Early in the study, which is being conducted in four Nordic countries, a trend has been seen that shows that the patients' values that reflect the course of the disease in the skeleton remain normal or, in cases where they are abnormal, gradually normalize. As late as August 17, the company was able to announce interim results from the phase IIb study that show a sustained and strengthened positive trend regarding the patients' bone markers. The study is expected to be fully recruited in December, with continued satisfactory financial budget.
Market potential CRPC
The market for prostate cancer drugs is expected to grow significantly in the coming years. According to a forecast from GlobalData, the market value for prostate cancer in the nine largest markets is predicted to increase from USD 2,6 billion to USD 8,3 billion between 2013 and 2023. The annual growth rate is estimated at 12,4 percent.
Licensing and acquisitions
British Abzena recently licensed its prostate-specific membrane antigen (PSMA) antibodies to Australian Telix Pharmaceuticals in a deal that could be worth up to $65 million. The deal gives Telix exclusive rights to use the antibodies to direct radioactive substances to tumors, a concept similar to OsteoDex's "targeted" mechanism of action. DexTech has also, using the company's technology platform GuaDex developed a new PSMA-binding compound, with unique properties in that it has multiple PSMA-binding moieties and can carry a larger load of cell-killing substances than has been possible with previously produced PSMA-specific molecules.
Earlier this year acquired Taiwanese OBI Pharma the drug candidate TH-3424 from Threshold Pharmaceuticals as a potential treatment for cancers that overexpress the enzyme AKR1C3, a news that is interesting in relation to DexTech Pharma since AKR1C3 is adaptively upregulated in response to castration, which has led OBI to draw the logical conclusion that CRPC represents another unmet need population where the drug candidate should be tested. Although the active substances in the two companies' drug candidates are not directly comparable, the deal demonstrates that the commercial interest in this disease indication remains strong, and also the continued great need to bring more effective treatments to market.
The dream store Algeta – with connections to DexTech
In November 2013, the German pharmaceutical group Bayer a bid worth $2,4 billion for the Norwegian prostate cancer company AlgaeTogether with Bayer, Algeta had developed Xofigo, a drug for the treatment of severe prostate cancer. A month later, the deal was completed and the price tag had increased significantly to $2,9 billion or 26 billion Swedish kronor after some bidding war. One of the engineers behind the clinical studies with Xofigo was Sten Nilsson – professor of oncology and board member and co-founder of DexTech Medical. Anders R Holmberg, CEO of DexTech, believes that there are clear parallels between Algeta and DexTech. A link to more reading on this can be found below.
Outsourcing work is strengthened in the EY collaboration
Typically, smaller companies primarily meet potential licensees at partnering conferences where they book a long series of meetings, if there is interest, with larger pharmaceutical companies to explore the possibilities of collaboration. From the initial contact to the signing of an agreement – if it happens at all – is a process that can easily take up to a year or more.
The fact that DexTech Medical has now chosen to shift this work to EY is therefore positive and can save both time and costs, as the identification of licensing partners is often a burdensome activity for small companies with a mainly virtual organization. Whether the licensing work will bear fruit faster is of course difficult to predict in advance, but it is BioStock's assessment that DexTech and OsteoDex now have a greater chance of better exposure, compared to if this work were to be conducted solely in-house.
In a previous interview with BioStock, CEO Anders R Holmberg said that DexTech's general requirement is that a future partner should have the resources and the determination and willingness to prioritize that are required to further develop OsteoDex to concrete patient benefit, i.e. to a drug approved for the indication. BioStock contacted the company to follow up on how the licensing work is progressing.
Anders R Holmberg, CEO of DexTech Medical, it may not be clear to everyone why you are looking for licensees for what you consider to be groundbreaking technology. What are the most important reasons why you choose the licensing track for your drug candidates?
– We do this, like most other smaller companies in the industry, because DexTech simply does not have the necessary resources to take a candidate through Phase III, where a significantly larger patient base is usually required and where costs thus increase significantly.
What specific benefits do you see in hiring EY for the assignment of identifying suitable license partners? Is it just time and money or are there other reasons why you don't do this work entirely in-house?
– I believe that it is best to concentrate on your own expertise and do what you do best. Outsourcing is a specialist area all its own and with full respect for that, we have engaged EY, who we know have both the necessary expertise and a strong global presence.
You are now entering the final phase of the important ongoing Phase II trial with OsteoDex in prostate cancer with metastatic spread to the bone. If you compare your drug candidate to others at the same stage of development and for the same indication, how does OsteoDex stand out?
– My assessment is that OsteoDex has several distinctive properties. As a drug candidate for the treatment of a serious disease such as CRPC, osteodex, for example, has few and mild side effects, which is an important property in this context. Its demonstrated effect on the process in the skeleton that we have seen in our studies so far is of course highly interesting. In addition, our candidate has a comparatively very competitive manufacturing cost, especially in relation to various biological drugs that are often very complicated and expensive to manufacture.
What characteristics do you think a licensee specifically looks for when they choose to enter into a license agreement within the CRPC?
– The most important characteristics are undoubtedly that the drug candidate has a significant effect on the disease, combined with low toxicity and a reasonable side effect profile, so I believe we have a good starting point there.
Licensing negotiations can be a lengthy process from start to finish. How do you view the timeframes for your licensing work?
– With a partner like EY, we follow global “entrances” to relevant and important companies in the context, which I believe gives us the conditions to work effectively with the licensing work on several fronts. This is not to say that it is necessarily possible to speed up the process, the mills often grind slowly in the organizations of the large players and you have to adapt to that.
Finally, what can you tell us about the status of the company's other projects that are part of DexTech's asset portfolio?
– Without being able to go into any specific details at this time, I can say that research and development work continues continuously and tirelessly, all the while with the intention of creating additional added value in the company and for our shareholders.
Read more: “There are clear parallels between DexTech Medical and Algeta”
The content of Biostock's news and analysis is independent, but Biostock's operations are to some extent financed by companies in the industry. This post refers to a company from which BioStock has received funding.
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