Bristol-Myers Squibb Co. (BMS) sought to up the ante in the heart failure market with its acquisition of Cardioxyl Pharmaceuticals Inc., providing the New York-based pharma with global rights to the second-generation nitroxyl (HNO) donor prodrug, CXL-1427, which is being readied for a phase IIb study in acute decompensated heart failure (ADHF). Data from the phase IIa study, completed earlier this year, served as a "critical lynchpin" to accelerate discussions between the companies, Chris Kroeger, Cardioxyl's president and CEO, told BioWorld Today.

"We've been talking with BMS for a number of years, mostly informally," Kroeger said. "As we passed through the phase I with '1427 and were moving into the phase IIa study, the interactions with them picked up significantly – and we were in discussions with a number of folks, as well."

BMS will make up-front and near-term milestone payments of up to $300 million for the privately held biotech. The deal includes up to $1.775 billion on the back end in development, regulatory and sales milestone payments.

CXL-1427 releases nitroxyl, a molecule that demonstrated beneficial effects on heart muscle and vascular function. Preclinical and early clinical data showed that CXL-1427 improved systolic and diastolic function without increasing heart rate or the demand for oxygen. In contrast, existing ADHF therapies that improve heart muscle function also produce an increase in heart rate and/or oxygen consumption and are associated with an increased risk for ischemia, arrhythmias and increased mortality.

Cardioxyl, of Chapel Hill, N.C., shunned the spotlight while it advanced its platform. The company raised a $14.5 million series A financing in 2006. About two years later, Kroeger took the helm as president and CEO. Kroeger came from Aurora Funds, which joined New Enterprise Associates (NEA) to fund the A round. (See BioWorld Today, July 14, 2009.)

The company's technology was in-licensed from Johns Hopkins University, where researchers discovered that Angeli's salt, a known HNO donor, appeared to have an effect in a heart failure model. Since Angeli's salt itself can't be given as a drug, the researchers designed a platform to develop a small-molecule nitroxyl prodrug.

In 2010, Cardioxyl reported that it met safety and tolerability endpoints in a U.S. phase I study of its first-generation ADHF compound, CXL-1020, which enrolled 36 patients with chronic stable heart failure and involved 67 exposures of sustained intravenous (I.V.) infusion across four cohorts. On the basis of the findings, Aurora and NEA provided another $15 million to the company.

In 2012, with a phase IIa study of CXL-1020 under way, Cardioxyl raised $28 million in a series B round that added lead investor Orbimed Advisors and Osage University Partners to the syndicate. The existing investors also joined the round.

"That compound paved the way, because it demonstrated that nitroxyl could produce this ideal suite of hemodynamic effects, causing vasodilation and also producing direct effects on the heart," Kroeger explained.

But '1020 had an issue, which Kroeger described as "trivial," with venous irritation.

"We couldn't work around that, so we ended up developing '1427 as a compound that obviated that issue and maintained all of the beneficial effects of CXL-1020," he explained.

Last year, Cardioxyl advanced CXL-1427 into a randomized, double-blind, placebo-controlled, ascending-dose phase I study evaluating the safety and tolerability of continuous I.V. infusions for up to 48 hours in 110 healthy volunteers, according to Cortellis Clinical Trials Intelligence.

Following success in that trial, the company swiftly moved the lead drug into a multicenter, phase IIa dose-ranging study that enrolled 48 hospitalized patients with systolic heart failure that was completed earlier this year. That study measured the effects of six-hour I.V. infusions of CXL-1427 on a composite of hemodynamic values, including pulmonary capillary wedge pressure, pulmonary artery diastolic pressure and cardiac index, to assess changes in indices of cardiac function before, during and for two hours following completion of infusion, according to Cortellis.

Cardioxyl already had laid the groundwork for a phase IIb study, but Kroeger declined to provide details, noting that "obviously, BMS will now take over."

Cardioxyl also presented data at the 2014 American Heart Association Scientific Sessions in Chicago showing that oral doses of another experimental HNO prodrug, CXL-1036, produced enhanced systolic pump function, diastolic relaxation and vasodilation while decreasing cardiac energy demand in animal models. The magnitude of hemodynamic effects following oral administration were equivalent to those observed following I.V. delivery, with no diminution of activity observed with repeat dosing.

Demonstration of orally active HNO prodrugs opened the opportunity to explore the utility of using HNO in treating heart failure in an outpatient setting – a stated desire of Cardioxyl but one that Kroeger previously maintained was "more of a wheelhouse of a big pharma partner."

The company has a number of preclinical oral HNO donors in the pipeline, he confirmed, with BMS now stepping into the driver's seat about the next steps on those assets, as well.

"The deal's primary focus was around '1427," Kroeger said, "but there's obviously a very large unmet need across the board in heart failure, both in acute decompensated heart failure – which is the target population for '1427 – and obviously also in chronic heart failure and other areas of heart failure. There's huge potential in the treatment of chronic heart failure, but the oral assets are earlier stage."

'DRUG DEVELOPMENT IS A VERY LONG PROCESS'

BMS spokesman Ken Dominski confirmed that CXL-1427 "is aligned with our focus in heart failure," citing its potential to address the underlying disease rather than to treat symptoms, which is the mechanism of most existing therapies, including diuretics, beta-blockers, angiotensin-converting enzyme, or ACE, inhibitors and mineralocorticoid receptor blockers.

"A primary focus of our R&D strategy in heart failure is to invest in novel targets, mechanisms and modalities that have potential to change the course of disease," Dominski told BioWorld Today, noting that BMS plans to leverage its experience in the hospital setting to address the unmet need in treating ADHF.

He pointed to another recent potential $2 billion-plus deal with Uniqure NV, of Amsterdam, to advance a gene therapy for congestive heart failure that would restore the heart's ability to synthesize S100A1, a calcium-binding protein which acts as a master regulator of myocardial function. (See BioWorld Today, April 7, 2015.)

Dominski declined to provide a timetable for the phase IIb study of CXL-1427 or to say where Cardioxyl's assets will be housed.

The Cardioxyl buy keeps BMS in the heart failure race after this year's approval of Corlanor (ivabradine), from Amgen Inc., of Thousand Oaks, Calif., and Entresto (sacubitril/valsartan), formerly LCZ696, a combination ACE/neprilysin inhibitor from Novartis AG, of Basel, Switzerland. (See BioWorld Today, April 17, 2015, and July 9, 2015.)

Corlanor's approval was limited to patients with stable, symptomatic chronic heart failure with left ventricular ejection fraction = 35 percent who are in sinus rhythm with a resting heart rate >/= 70 beats per minute and who are on maximally tolerated doses or have a contraindication to beta blockers. The drug isn't expected to reach blockbuster status, with a 2020 sales forecast of about $877 million. Amgen placed its bigger cardiovascular bet in the proprotein convertase subtilisin/kexin type 9, or PCSK9, inhibitor, Repatha (evolocumab), also approved this year but in vastly different populations – heterozygous and homozygous familial hypercholesterolemia – from heart failure. (See BioWorld Today, Aug. 28, 2015.)

Entresto's label describes its use for reduced ejection fracture heart failure patients whose conditions are classified as NYHA class II-IV – a population estimated at 2.2 million in the U.S. – generally for administration in conjunction with other heart failure therapies, replacing ACE inhibitors or other angiotensin receptor blockers. The drug is projected to reach sales of about $5.3 billion by 2020, according to Cortellis Competitive Intelligence.

Other companies advancing assets in ADHF include Cardiorentis Ltd., of Zug, Switzerland, a successor company to Cardiopep GmbH, which moved ularitide – a synthesized form of urodilatin – into a phase III program that was fully enrolled earlier this year. Ularitide, discovered by Pharma Bissendorf Peptide GmbH, passed through several hands and failed to move the needle in renal failure, asthma and congestive heart failure before Cardiorentis took it up in ADHF. (See BioWorld Today, Dec. 5, 2012.)

In addition, Trevena Inc. is advancing TRV027, an angiotensin II type I receptor, or AT1R, biased ligand in ADHF. The King of Prussia, Pa.-based company is running the phase IIb BLAST-AHF study, which is expected to enroll approximately 620 patients.

In 2013, Forest Laboratories Inc., now a unit of Dublin-based Allergan plc, made a $30 million equity investment in Trevena in exchange for an option to license worldwide rights to TRV027 following the phase IIb trial. (See BioWorld Today, May 10, 2013.)

As for Cardioxyl, the key to its take-out was "identifying an important area of unmet medical need and identifying a technology that solved the problem and can make a significant impact on the disease," Kroeger said. "Drug development is a very long process. It takes a lot of patience, skill and knowhow – and then just persevering."

BMS said the acquisition, approved by the boards of both companies, is expected to be dilutive to 2015 GAAP earnings per share (EPS) by approximately 12 cents, with minimal dilution to non-GAAP EPS this year and next. The transaction is expected to close during the fourth quarter.