Oxigene Inc. reported a radical restructuring to conserve resources and focus on earlier stage programs. The company will conclude its Phase II trial of Zybrestat in non-small-cell lung cancer (NSCLC), and defer initiation of Phase III registration studies of the drug in anaplastic thyroid cancer due to lack of funding.
The South San Francisco-based firm will also reduce its work force by 11 full-time equivalents, or 61 percent, and consolidate its operations to smaller rented space. A Phase I trial of OXi4503 in AML and myelodysplastic syndrome and a Phase II trial of Zybrestat with bevacizumab in ovarian cancer will continue.
The restructuring is a consequence of an unsuccessful merger attempt with the South San Francisco-based shell company VaxGen Inc., which had cash of $33 million at the time. The balance would have been sufficient to float the Phase III trial, but VaxGen's shareholders voted against the merger. (See BioWorld Today, Feb. 5, 2010.)
"Weve been trying to raise money for confirmatory Phase III trial," Oxigene CEO Peter Langecker told BioWorld Today.
"It's been difficult. Our internal money is not enough to conduct a full Phase III trial. So we will in the meantime have to focus on our other programs," he said.
According to Langecker, the total cost to run the Phase III registration trial in anaplastic thyroid cancer, including ancillary costs like headcount, could be $40 million. The company only has about $13 million in cash on hand. "We could start, but couldn't see it through," Langecker added.
Zybrestat is a vascular disrupting agent designed to target and collapse tumor vasculature, resulting in the death of tumor cells due to lack of oxygen. Its mechanism is not to be confused with anti-angiogenic therapies, which prevent the growth of blood vessels.
Oxigene contended that a vascular disrupting agent like Zybrestat with an anti-angiogenic agent such as bevacizumab (Avastin) could be a powerful combination, and is studying the two together in its Phase II trial in ovarian cancer.
In June, Oxigene reported final results from its 80-patient Phase II/III study of Zybrestat (fosbretabulin tromethamine) in anaplastic thyroid cancer, which showed a median overall survival of 5.2 months for patients on Zybrestat plus chemotherapy compared to four months for patients on chemotherapy alone.
There was a 28 percent reduction in the risk of death for those in the Zybrestat arm. At one year, the likelihood of being alive was 26 percent for patients treated with Zybrestat and chemotherapy compared to 9 percent for patients treated with chemotherapy alone.
In spite of those positive results, Oxigene has not found outside funding for its Phase III trial, and it said that a company-sponsored trial was "not feasible."
Those efforts included a summer road show. But their presentations met with concern by potential investors that the indication was too rare and not very well known. It also suffers from a lack of established models, as exist in more common cancer indications like breast, lung and colorectal cancer.
Anaplastic thyroid cancer represents only about 0.5 percent to 1.5 percent of thyroid cancers, but cure rates are extremely low, and there is a strong need for new treatments. Although the indication was not ideal for landing financing, Langecker said that Oxigene was "somewhat trapped" because the early data for Zybrestat was generated for that indication.
Oxigene will continue to seek funding to advance Zybrestat, particularly through collaborations with disease advocacy groups.
Langecker expressed hope that Oxigene could secure National Cancer Institute (NCI) support for the trial. Under that scenario, Oxigene would only be responsible for the expense of manufacturing and shipping the drug.
In August 2010, Oxigene signed a cooperative research and development agreement (CRADA) with the U.S. Naval Medical Research Center for preclinical trials in the area of decompression sickness. It believes that CRADA experience and the strength of its data may help it land a contract with the NCI.
Meanwhile, it is consolidating its resources around earlier stage, potentially more fundable programs like its Phase I trial in ovarian cancer.
Oxigene's stock (NASDAQ: OXGN) plunged 27.7 percent, or 49 cents, in Thursday's trading, to close at $1.28. Roth Capital Partners adjusted its price target for Oxigene downward, from $1.80 to $1.20.
"We believe the company will remain on life support until it can define a path forward for Zybrestat and/or Oxi4503 as well as how it will fund its activities," wrote Roth analyst Joseph Pantginis.
Pantginis additionally pointed out that Oxigene may be considering selling itself. "If they are not, we believe this is an option that needs to be considered in order to pursue a broad and meaningful clinical strategy for Zybrestat and OXi4503."