BioWorld Today Correspondent

Setting down a weighty marker for partnering deals elsewhere, 4SC AG is pocketing €6 million (US$8.7 million) up front and could earn another €127 million in milestones, for licensing Japanese rights to its oral pan-histone deacetylase (HDAC) inhibitor resminostat (4SC-201).

Tokyo-based Yakult Honsha Co. Ltd. gained exclusive rights to develop and commercialize the compound in all oncology indications in its home country.

It will focus initially on hepatocellular carcinoma (HCC), which has a relatively high prevalence in Asian populations, and on patients with colorectal carcinoma (CRC) who harbor KRAS mutations.

The Martinsried, Germany-based company is pursuing an aggressive development strategy, CEO Ulrich Dauer told BioWorld Today.

In Europe, resminostat is already undergoing a Phase II trial in HCC and Phase I/II trials in CRC and in Hodgkin lymphoma.

Few others, if any, are developing HDAC inhibitors in solid tumor indications, he said. Those that are already approved – Zolinza (vorinostat) and Istodax (romidepsin), marketed, respectively, by Whitehouse Station, N.J.-based Merck & Co. Inc., and Summit, N.J.-based Celgene Corp. – are limited to cutaneous T-cell lymphoma and are associated with dose-limiting cardiotoxicities.

"The molecules we've seen entering the market, they've really struggled with the activity required while showing a safe side-effect profile." Dauer said. "The unique selling point of our compound is really the safety profile, in combination with the high plasma levels we are able to achieve."

In Phase I studies, the company was able to administer doses of resminostat as high as 800 mg, without any apparent ill effects.

"We haven't reached a point in the Phase I where we achieved a definite dose-limiting toxicity," Dauer said.

That means that resminostat is able to saturate the target enzyme completely, whereas vorinostat, he said, is only able to achieve about 50 percent inhibition.

Data from the HCC and the Hodgkin lymphoma studies will become available in the second half of this year. "Intense" partnering discussions are already under way, Dauer said, and a deal could either precede or follow those results.

In the meantime, the company is expecting to report on a Phase IIb trial in rheumatoid arthritis of vidofludimus (4SC-101) in the current quarter.

The oral compound – which is unpartnered as yet – has a dual mechanism, with activity against the inflammatory cytokine interleukin-17 and the enzyme dihydroorotate dehydrogenase, which plays a role in pyrimidine biosynthesis.

The new injection of cash, combined with a recent €12 million capital increase, extends 4SC's cash runway to the end of 2012 without any additional income from milestones or new licensing deals.

The company is burning around €1.5 million per month, Dauer said, and it exited last year with about €18 million on its balance sheet.

The company's stock (FRANKFURT:VSC) gained 3.7 percent on the Xetra exchange Thursday, ending the day at €3.67, having earlier reached €3.72.