EP Vantage Interview - On top of market gains Bionor awaits trial results

Bionor Pharma has had a good run of late, touching an eight-year high of NKr4.43 on Friday as investors anticipate good news coming from a phase IIb trial of its lead product, a therapeutic HIV vaccine. Although shares have fallen back some in profit-taking in the last two days, the year’s gains, more than doubling in price, may put the company in good stead as it considers financing options next year.

The Norwegian company has financing for a year and will need to raise money again in the first half of 2011, its chief financial officer, Rolf Henning Lem, said in an interview with EP Vantage. In addition to considering turning to the markets, the company will consider partnership offers for Vacc-4X and also has the option of selling non-core nutritional brands. It has held preliminary discussions with potential partners, but the real talks will not take place until trial results are in, Mr Lem says.

Strengthening the immune system

Vacc-4X, a peptide-based immunotherapy candidate, invokes immune responses and decreases viral load. The treatment strategy so far has been to use it in conjunction with antiretroviral therapy (ART) and reduce patients' dependence on ART.

The double-blind phase IIb trial of Vacc-4X expected to report within a week pits the vaccine against placebo in 135 patients on ART, to test the percentage of patients that can remain off ART at 52 weeks after interrupting it at week 28.

In a previous phase II trial of 40 patients, the vaccine has shown that it can increase patients’ CD4 T-cell count, particularly in those with lower counts at baseline. After an ART interruption for three and a half months the patients who responded to Vacc-4X had significantly reduced viral loads, and better preserved CD4 counts.

Investigators followed patients after the trial and found a median treatment interruption of 31 months. Twenty-six responders have undergone a re-boost of Vacc-4X, and data released at the International AIDS Conference in July suggested that these patients have a long-term immunological memory.

Mr Lem says the company has targeted Vacc-4X for the population undergoing ART because of the side effects, which include neuropathy along with weight gain and redistribution of fat from the face and upper limbs to the abdominal organs (Theratechnologies defies doubts and gets OK from FDA adcom, May 28, 2010).

It is likely to be useful in combination therapy, according to Mr Lem, because Bionor believes it can help delay resistance and reduce background replication of the virus. However, the indication that is chosen for phase III trial and registration will be partly decided by potential partners, which Bionor will seek for Vacc-4X if the phase IIb trial is successful, he says.

“It might be the first (HIV) immune therapy to be in placebo controlled trials,” Mr Lem says.

Winding road

Should phase IIb results turn up positive and the company secure a partner, which it is planning on doing, it would be a long time coming. First trialled in 1999, research stalled after the phase IIa study in 2002-2003 because of a poor financial climate and scepticism over the lack of a placebo control in those first clinical tests.

However, Mr Lem says, the continuing positive data has softened investors’ hard line and the company attracted financing in 2007-2008 to start the placebo-controlled phase IIb study.

Bionor will definitely seek a partner for the phase III trial, Mr Lem says. Company executives have held preliminary discussions so far, but obviously serious deal-making cannot take place until the phase IIb results are in. “We do not intend to do this on our own,” Mr Lem says.

Strategic moves

Earlier this year the company’s antecedent, Bionor Immuno, was purchased by Nutri Pharma, which then changed its name to Bionor Pharma. Nutri Pharma owned dietary product brands.

The combined company finished the first half of the year with NKr69.6m ($11.8m) in cash, clearly demonstrating the need to partner the drug for phase III and to raise new funds for the remaining pipeline, which consists of one other therapeutic HIV vaccine, a preventive HIV vaccine, and vaccines for influenza, hepatitis C virus and human papilloma virus.

If ever there was an opportunity to strike, it might be now. Ending 2009 at NKr1.52 and spending most of 2010 under NKr2, Bionor shares have increased through most of September to reach an intraday high of NKr6.15 on September 24 before a sell-off brought prices back somewhat. In late trading today, shares were at NKr3.94, signalling some remaining uneasiness among shareholders, although should the results be positive, the trend would clearly put Bionor in a solid position for a new share offering, giving the company a chance to expand its NKr704m ($120m) market capitalisation.

As is the case with most similarly sized companies facing a pivotal event, success will give Bionor a number of options. Disappointment will leave it with fewer, of course, but investors for now appear to be cautiously optimistic about success.

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