BioWorld Today Correspondent

LONDON – GlaxoSmithKline (GSK) plc has spun out a portfolio of ion channel products into a new private company, Convergence Ltd., following the decision in February to ax pain and depression research.

Convergence, led by Clive Dix who is a former head of research and development at GSK, has raised $35.4 million to fund Phase II proof-of-concept studies in the lead product CNV1014802, for treating neuropathic pain and a Phase I study of a second product CNV 2197944, for treating neuropathic and inflammatory pain, including that caused by osteoarthritis.

"The lead product is all ready to go into Phase II; now we have the money to start that immediately and take the second [product] to proof of concept between now and 2014," Dix told BioWorld Today.

In addition, the former GSK assets include six earlier-stage products, which Dix said will be progressed to lead optimization over the same time frame.

As yet, there are no firm plans on how the products will be commercialized, or how the investors will get to an exit.

CNV1014802 is a voltage-gated sodium channel blocker, while CNV2197944 blocks calcium channels. The company gets its name because these compounds exert their modulating effect at points of convergence in signaling pathways that are involved in chronic pain.

The funding for Convergence comes from three heavyweight venture capital investors: Apposite Capital, New Leaf Venture and SV Life Sciences. GSK has taken a minority stake – 18 percent in return for the assets it is putting into the Cambridge, UK-based company, but Dix said other than that GSK has not retained any rights to any of the products.

GSK reported it was stopping research in pain and depression in February as part of "additional action" in an ongoing restructuring of its research and development in which the company is aiming to boost the return on investment from 11 percent to 14 percent.

In 2007 neuroscience drugs represented the pharma company's second largest turnover by therapeutic area, with sales of £3.35 billion. But since then patents on five of six marketed neuroscience drugs have expired in the U.S. and Europe, and in 2009 sales from these products fell to £1.9 million.

Writing in GSK's 2009 annual report, CEO Andrew Witty said: "We are reducing R&D investment and associated infrastructure in therapy areas where we believe the prospects for successful registration and launch of differentiated medicines are low." In common with peers including AstraZeneca plc, which have also moved out of this area, GSK is reflecting the difficulty of achieving clinical endpoints in pain and depression trials, where there is a notoriously high placebo response. However, GSK is maintaining its interest in neurodegenerative and neuroinflammatory diseases.

According to Dix, GSK's stance does not imply that the assets going into Convergence are in any way inferior. Both of the lead products have demonstrated functional properties that differentiate them from existing treatments for chronic pain. "[GSK] has said it is getting out of pain and depression, but there are bound to be good nuggets in there. Three very high-class VCs looked at what we presented and are investing. That doesn't smack of poor quality," Dix said.

And Dix should know. As UK research director for GSK (then GlaxoWellcome), he sanctioned the company's move into ion channel research at the insistence of researcher Simon Tate, who is joining Convergence as chief scientific officer. Another former colleague, Brenda Reynolds, who worked with Dix at PowderMed, another company that he founded, has become chief operating officer of Convergence.

"Forming Convergence is very similar to what I did at PowderMed, forming a company around a stable technical base," Dix said.

In this case, the DNA vaccines assets came from PowderJect Pharmaceuticals plc following its sale to Chiron Corp. Dix set up PowderMed with £20 million of VC backing in May 2004, selling the company to Pfizer Inc., for more than $300 million in October 2006.

Dix is maintaining his position as chairman of two other biotech companies, Crescendo Biologics Ltd., which is developing a platform for generating fully human antibodies in transgenic mice; and Modern Biosciences plc. Handily, Convergence has chosen the Babraham Research campus in Cambridge – also home to Crescendo – as its base.

Meanwhile, London-based Modern Biosciences remains under a cloud after its lead product, rimcazole, caused an adverse drug reaction in all 12 healthy volunteers participating in Phase I. Three volunteers in the trial, taking place in August, in Cork, Ireland, were hospitalized. All 12 subjects recovered, and the Irish Medicines Board is investigating.

Dix said he could not comment while the IMB is carrying out its investigation, but did say, "It will probably kill the molecule." Rimcazole had previously been developed as an antipsychotic.

Based on evidence that the compound promotes apoptosis in tumor cells without damaging healthy cells, Modern Biosciences was attempting to re-purpose rimcazole as a cancer therapy.