Deal hopes revive Reneuron

After years in the wilderness, the UK cell therapy specialist Reneuron could be about to seal a deal with a big US player.

After years of plugging away, Reneuron could finally be about to catch a break. News that the UK company is in licensing talks with a mystery US speciality pharma group over its retinal stem cell programme sent its stock up 22% today, albeit from a very low base.

A deal has not yet been sealed, but the fact that the would-be partner has paid up to $5m for the privilege of a three-month exclusivity period is a good sign – if an agreement does emerge it will help validate Reneuron’s technology, as well as giving the company cash to progress its lead asset, ReN001, in stroke.

Bidding war?

The arrangement is unusual, and suggests that several groups were interested in Reneuron’s human retinal progenitor cell (hRPC) programme for retinitis pigmentosa, which is yet to report clinical efficacy data – something confirmed by Reneuron’s chief financial officer, Michael Hunt.

“They’re not the only party looking at it, and that also applies to the other programmes we’re running,” he told EP Vantage.

As for the unnamed suitor, Reneuron would only say that its potential partner has financial and commercial clout in ophthalmology – with the clear implication that it is a big player in the sector.

Allergan and Valeant are the first names that spring to mind, though the latter might not have the bandwidth to develop an advanced therapy while it battles with its mountain of debt.

In the frame for Reneuron's eye project?
Company Ophthalmology sales ($m) Market share
  2017 2024e CAGR 2017 2024e
Regeneron 3,702 4,216 +2% 18% 15%
Allergan 3,655 2,710 -4% 17% 10%
Aerie Pharmaceuticals - 1,102 - - 4%
Valeant 735 840 +2% 3% 3%
Source: EvaluatePharma.

Regeneron could also be in the frame, with a strong presence in ophthalmology with Eylea – but whether that company fits the description of a speciality pharma player is another question.

And Aerie Pharmaceuticals, although only an emerging name in eye care, has the necessary resources. The company received approval last year for its first product, Rhopressa, for glaucoma, and is awaiting the go-ahead for a follow-on combination project, Roclatan; with a sparse-looking pipeline it might want to pick up more assets.

Deal or no deal?

Whoever the US company is, it now has three months to carry out due diligence and agree a deal with Reneuron – but Mr Hunt hopes that any partnership can be hashed out sooner than this.

The initial $5m payment – in the form of $2.5m up front and $2.5m once due diligence has been completed – will be used for general purposes, he said. But cash from any licensing deal would make a big contribution to the development of Reneuron’s lead programme, ReN001 for stroke, as well as other projects.

ReN001 has not moved into late-stage trials as quickly as the company had hoped. After phase II success – of a kind – in 2016, the company had planned to start a phase IIb, sham-controlled study last year (Reneuron keeps faith with stem cell stroke project, December 5, 2016).

However, this has not yet begun enrolling. In March Reneuron said the first patient should be dosed in mid-2018. More information is due tomorrow at the company’s annual results presentation.

More clues on how the hRPC retinitis pigmentosa project is progressing should also emerge. An ongoing phase I/II trial was recently expanded, delaying data until next year.

Work to do

While Mr Hunt described the interest in Reneuron as a “vote of confidence” in the company’s technology, he was clear about the problems the group still faces, including struggles on the public market and a market cap of just £40m ($53m).

“We’ve been doing this for a long time. I think it’s probably fair to say there’s some fatigue among certain investors, and that’s probably reflected in the valuation,” Mr Hunt admitted.

Deals thus look like one of the few ways left for Reneuron to raise cash. It is also seeking a partner in China, not covered by the latest agreement, and this might cover other assets, Mr Hunt said.

He added that the renaissance of cell and gene therapy had "become more and more accepted as an approach. We’d like to benefit from that as well.”

After a long road, there is still more work for Reneuron to do, but if it can bag a big ophthalmology partner it would be a start.

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