Just under a month ago, WntResearch announced that it had not seen any clinically significant effect of Foxy-5 in the now completed NeoFox study. The work now revolves around securing as much value for the owners as possible. The company’s CEO, Per Norlén, recently provided a market update, and BioStock contacted him to get his thoughts on this.

The development of Foxy-5 has revolved around the endogenous protein WNT5A, which has been shown to counteract cancer cells’ ability to spread in the body. The drug candidate is designed to mimic WNT5A, with the hope of developing a treatment primarily for colon cancer.

In recent years, WntResearch has been working towards a clinical Proof-of-Concept, and in mid-2022, hope was kindled when promising findings were presented in an ad hoc analysis. The phase II study NeoFox has since been designed to follow up on these findings by measuring the candidate’s efficacy during the three weeks leading up to surgery in newly diagnosed colon cancer patients. Specifically, the ability to affect tumors and reduce local spread until surgery has been investigated.

Preliminary reading is an important milestone

After recruiting 27 patients, the company chose to examine preliminary results. These were needed to provide the market with guidance for future capital raising, specifically the exercise of the TO7 series warrants that will take place later in October.

The results were also important for potential partners with whom the company has been in contact during the journey. A clear effect on tumor size and lymph nodes, as shown by CT scans, was seen as crucial for them to be interested in jumping on the bandwagon.

Discouraging results

Of the 27 patients, 16 received Foxy-5 (of which 3 received a lower dose), while 11 were included in the control group. CT scans were used to examine the size of the tumor and lymph nodes, among other things. Furthermore, exploratory tissue analyses were performed regarding vascular and perineural invasion of cancer tissue. Overall, the safety profile was found to be favorable. However, no clinically significant effect could be demonstrated.

Does not see the opportunity to take the development further in colon cancer

The company would have needed to see the clear effects of CT scans in this preliminary reading to justify continued investments in the project. However,  the results are considered too weak to support further capital raises. Additionally, the company does not believe finding a partner willing to advance the development of Foxy-5 in colon cancer is feasible.

– It is possible that a different study design would provide better opportunities to demonstrate more pronounced effects, but this would require significantly greater financial resources than a small company like WntResearch can raise in the current financial climate,” writes the company’s chairman Christer Nordstedt in a statement.

Working to secure value

Therefore, WntResearch has now stepped on the brakes, stopped the study, and started working to reduce costs. The goal is to secure as much residual value for shareholders as possible. Discussions are also being held about getting a merger with another company. However, the exact forms of this have not yet been clarified.

Parallel to this, the company is exploring ways to extract value from the development put into the project and the patent portfolio. One route is to contact companies in segments beyond oncology, where WNT signaling could play a prominent role.

CEO tells us more

BioStock contacted CEO Per Norlén to find out more.

What results have you observed in the initial analysis, and how confident are you?

– The results from the CT analysis showed that the short treatment period did not have enough effect on tumor size or lymph nodes. Despite the few patients, we can comment on this with reasonable certainty because we would have needed to see major effects to attract potential partners’ interest.

– To give an example, chemotherapy has been shown to reduce colon cancer neoadjuvant treatment by up to 30 percent on average. Based on conversations with potential partners and experts in the field, we assess that a similar effect would have been required for neoadjuvant treatment with Foxy-5 to add decisive value.

– Unfortunately, Foxy-5’s effect on CT scans was minimal in the current patient base in NeoFox, and it was considered unlikely that continued patient recruitment could have led to a final outcome close to a 30 per cent reduction. This was the most important endpoint, so the study was stopped.

– However, the fact that the ad hoc observations reported from the first part of NeoFox could not be confirmed has not been decisive for the decision to stop the study. Tissue analysis compares the material removed during surgery at the group level, and here the variation is significant between patients, both in terms of tumor sizes and perineural and vascular invasion. I do not see it as relevant to comment on a possible difference between the groups in these exploratory tissue analyses since the number of patients who could be evaluated in each group was limited.

In the ongoing work, you are primarily working to achieve a merger, and some interest has been flagged. How are you doing in that work?

– I am very optimistic about this. We have had in-depth discussions with several companies within and outside the drug development field. There are good opportunities here to find a form of merger that will be attractive to our owners. In addition to the content of the business, we have a lot to offer, such as the fact that we are an established listed company with a large spread of ownership. Reverse acquisition or merger are some of the possibilities we are currently evaluating. The talks were very positive, which strengthened my belief that we would succeed in reaching such an agreement.

When is it reasonable to expect a deal to be communicated?

– Given how quickly the company discussions are progressing, I believe this could happen soon, but I cannot give a fixed timeline. Of course, as soon as we have a concrete offer for the owners to consider, we will communicate this to the market. A deal must be supported by our owners, which in that case takes place via an extraordinary general meeting.

You are also looking at the possibility of “realizing the remaining value of the drug substance and the patent portfolio.” What does this mean?

– We have had great interest in our drug candidate in the past based on our ad hoc observations. Several potential partners have explicitly stated that the ad hoc observations are interesting and want to see an effect on CT scans before negotiations.

– Of course, interest in Foxy-5 in colon cancer is decreasing now that we have stopped the NeoFox study, so we are now looking more broadly than before and have also initiated interactions outside the cancer field. However, we no longer expect to be able to enter into any agreements with large initial payments. Instead, we primarily hope to find a partner interested in further developing the product.

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