DUBLIN – The Heptares unit of Sosei Group Corp. is spinning out two drug development programs for narcolepsy into two standalone companies, Orexia Ltd. and Inexia Ltd., which have received aggregate funding commitments of up to €40 million (US$45.8 million) from the London-based venture capital fund Medicxi.

Each is developing orexin agonists to tackle the problem while employing divergent routes of administration. Orexia is focused on oral delivery, whereas Inexia will develop drugs for intranasal delivery. "They're both early. We have a number of promising molecules for both, but we're still in discovery," Mario Alberto Accardi, co-founder and CEO of both Inexia and Orexia, told BioWorld.

The orexin system plays a key role in the wake-sleep cycle by stimulating wakefulness through the action of two neuropeptides, orexin A and orexin B, on the receptors, each of which has a G protein-coupled receptor (GPCR) structure. Orexin receptor 1 (OX1R) selectively binds orexin A, while OX2R binds and recognizes both peptides.

Orexin antagonists now represent an established drug class for treating insomnia. Merck & Co. Inc., of Kenilworth, N.J., gained FDA approval in 2014 for Belsomra (suvorexant), which inhibits both receptors. It attained $260 million in sales last year. The drug's commercial performance has not matched initial expectations, however, because of a troubling side-effect profile that includes daytime somnolence, "sleep-driving" and other behaviors performed when users are not fully awake, as well as worsening of depression and suicidal ideation, compromised respiratory function, and sleep paralysis and hallucinations.

Several other firms are following in Merck's wake, with molecules that they hope have a superior safety and tolerability profile. Last month, Tokyo-based Eisai Co. Ltd. and its partner, Purdue Pharma LP, of Stamford, Conn., filed an NDA for lemborexant, a dual-acting inhibitor. Allschwil, Switzerland-based Idorsia Ltd., is in phase III with another dual receptor inhibitor, nemorexant.

Despite considerable effort, the development of orexin agonists to achieve the opposite effect remains at a much earlier stage. "It's not a very tractable system, and that's why it's still open," Malcolm Weir, chief research and development officer at Tokyo-based Sosei, told BioWorld. Osaka, Japan-based Takeda Pharmaceutical Co. Ltd. has conducted a phase I trial of the orexin agonist TAK-925, but its intravenous (I.V.) formulation is not very appropriate for a drug intended to modulate a 24-hour cycle. "I.V. administration is definitely a barrier to adoption," Accardi said.

Keeping options open

The market opportunity in narcolepsy is significant. Dublin-based Jazz Pharmaceuticals plc posted over $1 billion in sales from January to September last year for Xyrem (sodium oxybate), a sodium salt of gamma hydroxybutyrate, which is a metabolite of the inhibitory neurotransmitter gamma-amino butyric acid. The drug's precise mechanism in narcolepsy is unclear. It has, moreover, considerable drawbacks. Its FDA label carries a black-box warning because it suppresses respiratory and CNS function, and it is a controlled substance because of its potential for abuse or misuse. It is only available through a restricted distribution system.

Orexin agonists have long been considered the "holy grail" of narcolepsy therapy, Accardi said. "All of the major KOLs are waiting for someone to crack this nut." There is strong genetic and biochemical evidence linking orexin A loss to type 1 narcolepsy (NT1), which is characterized by excessive daytime sleepiness combined with episodes of cataplexy, a momentary collapse of muscle strength, typically triggered by an experience of emotion. About 90 percent of NT1 patients have extremely low or undetectable levels of orexin A in their cerebrospinal fluid. The genetic lesion underlining a well-known canine model of narcolepsy was identified two decades ago as a mutation in the gene encoding OX2R. The contribution of OX1R to the condition is, in contrast, less well-understood. "There's been a lot of focus on the OX2 receptor, especially on the antagonist side. This is something we'll need to explore as we move along. We're definitely keeping all of our options open," Accardi said.

Inexia has entered an additional licensing agreement with Yardley, Pa.-based Optinose Inc. to gain access to its exhalation delivery system (EDS) device, in return for an undisclosed up-front fee, plus up to $8 million in development milestones per product and up to $37 million more in sales milestones per product.

The EDS device involves the simultaneous insertion of a nozzle into one nostril and a mouthpiece into the mouth. Blowing through the mouthpiece momentarily raises the soft palette at the back of the mouth, which seals the nasal cavity from the mouth and the airways, while the user's breath propels the drug throughout the nasal cavity.

"It allows deep nasal delivery of the therapeutic into an area of the nose where it would be impossible to reach with a standard intranasal spray," Accardi said. The device may offer a means of bypassing the blood-brain barrier, by using the olfactory and trigeminal nerves for uptake and delivery of the drug into the CNS.

But it also offers access to a rich supply of blood vessels to allow for vascular delivery to the CNS as well.

Inexia and Orexia are both following Medicxi's asset-centric investment model, which involves a large degree of outsourcing. It will draw on the expertise of Sosei Heptares scientists as well as external experts with long experience in developing orexin-targeting drugs. Sosei will retain a minority equity stake in the two firms, it will receive research funding and it could receive additional milestone payments.

The early stage outsourcing of those two programs represent part of a balanced strategy, which entails partnering assets at different stages of maturity, while retaining others all the way through development.

The company raised $200 million in November 2017 to fund clinical development of Heptares-generated assets. The present deal is part of a wider "creative" financing strategy. "You can't finance everything out of equity; you can't finance everything out of revenues," said Weir.

Both Accardi and Medicxi co-founder and partner Francesco De Rubertis are joining Inexia's and Orexia's boards.