EP Vantage Interview - Wilex biding its time as pivotal events build

Successful and fairly significant financings from a number of European drug developers in the last month, even an IPO from Movetis which concluded this week, have helped lift spirits across the sector recently and opinion now prevails that for those with promising prospects, cash can be found.

It was therefore surprising to see Wilex, proud owner of two phase III oncology candidates, both of which could be filed with regulators next year, and a promising phase IIa pancreatic cancer therapy, raise a modest €9m this week, giving the German company sufficient funds to last into the second half of 2010. This is not a particularly long runway and could be read as a signal that the company’s management team are confident funds will be rolling in from other directions in the not too distant future. Peter Llewellyn-Davies, Wilex’s finance director, tells EP Vantage that one potential cash source on the horizon is a licensing opportunity which is already attracting interest.

The asset is a pancreatic cancer therapy, Mesupron, a kinase inhibitor that targets the urokinase plasminogen activator enzyme system. Preliminary results from a phase II trial in pancreatic cancer, which recruited 95 patients, were announced at the end of September. Adding Mesupron to Gemzar substantially increased tumour response rates and one year survival rates, although a further 13 events are required, out of 72, before a full statistical analysis can be carried out.

Still, the early results were very encouraging and swiftly prompted interest from potential partners, according to Mr Llewellyn-Davies.

“We were contacted immediately after releasing the preliminary data, and we are already in initial discussions,” he says, adding that final data due early next year will provide the basis for a licensing deal.

With Mr Llewellyn-Davies estimating that deals typically take three to six months, Wilex could well be announcing a partner before the end of 2010.

Late-stage opportunities

The Mesupron opportunity was not the only reason Wilex restrained itself on the fundraising front; pivotal data due next year on two phase III candidates, antibody Rencarex and the prognostic biomarker Redectane, both in renal cell carcinoma, could also change the game for the company.

Rencarex is being trialled as an adjuvant therapy in non-metastatic clear cell renal cell carcinoma (ccRCC); ccRCC accounts for about 60-70% of all RCCs and is an agressive form of the disease. Currently, these patients have surgery to remove the tumour and kidney, but many are at a high risk of relapse. There is nothing available currently to prevent relapse, and Wilex is hoping to show that using Rencarex in this adjuvant setting, administered after surgery, can lower the risk of cancer recurring.

The trial, which pits Rencarex against placebo over 24 weeks, is fully recruited and 343 events, or relapses, are needed for a European data monitoring committee to perform an analysis; at the end of September 293 had occurred. This will then trigger a decision to either continue the trial or conclude that sufficient evidence has been gathered to file for the drug for approval in Europe, and hopes are high this will happen mid way through 2010.

The EMEA has determined a p value of 0.05 will indicate success, whereas the FDA has set a p value of 0.01. The company believes 512 events will have to happen for this to be achieved, so a filing in the US is likely to be further away.

Overall, the study has taken longer than anticipated, but many commentators believe this could mean that patients are living longer, raising hopes for a strong efficacy signal.

Diagnostic opportunity

The second product is a radiolabelled antibody that binds to a protein structure found on 90% of ccRCCs, allowing this malignant kidney tumour to be diagnosed much more reliably than is possible currently.

A preliminary read out from a phase III study announced earlier this week found that the primary endpoint of the trial, correctly diagnosing that ccRCC was not present, was met, whilst a secondary endpoint, correctly diagnosing its presence, just missed statistical significance.

Mr Llewellyn-Davies says that this conclusion may change in the final read out, due in the first quarter, as it could only take a different diagnosis for one or two patients to change this result.

Either way, the company is confident they have established that this technique is a valuable diagnostic, as does partner IBA, the radiopharmaceuticals group that bought global rights to Redectane in 2008.

“IBA confirmed to us yesterday that they are already setting up commercial structures for Redectane,” Mr Llewellyn-Davies says. Wilex will receive a healthy 45% royalty once sales exceed €7m, and retains co-promotion rights. Analysts believe this could be a $100m opportunity, and a filing should take place with the FDA next year.

Rencarex is potentially much more valuable, up to $500m some commentators believe, and Wilex still owns marketing rights, outside of Southern Europe, where a small deal has already been struck with Esteve. Although partnering activities are ongoing, the main focus at the moment is completing the phase III trial.

“Discussions are ongoing, but we’re not focused on that, we want to see the full data,” Mr Llewellyn-Davies says.

Risky strategy?

The imminent pivotal evidence for both Redectane and Rencarex and potential deal for Mesupron certainly suggest that if all goes well, these assets, and Wilex overall, could be considered much more valuable by next year.

“We are confident, based on earlier results, that we’ll be in a different situation once we have the final data,” Mr Llewellyn-Davies says.

This illustrates why Wilex chose to limit the fundraising. The new shares were sold at €4.10, only a marginal discount to the recent share price, which has traded between €4.22 and €5.0 in the last month, dropping below €4 today for the first time since June.

“We only wanted to raise cash that’s necessary at the moment, because of these approaching inflection points. We want to try to create value through our products, rather than increase our capital base continually,” Mr Llewellyn-Davies says.

This strategy means a lot is now hanging on the success of Rencarex in particular; if it fails further funds will be much harder to find, although the potential deal with Mesupron and the Redectane opportunity both provide cushions of safety. Still, the company is confident, and the data so far looks promising. With three products to follow, Wilex watchers are in for interesting 2010.

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