West Coast Editor

Specialty pharma firm Auxilium Pharmaceuticals Inc.'s $49.9 million, grabbed through a planned stock sale, will help with efforts to develop AA4500 - which the company calls a potential $1 billion product, now in Phase III trials for Dupuytren's contracture, a condition of thickened skin in the hand that can cause fingers to curl.

With $35.6 million in cash and equivalents as of March 31, Auxilium has agreements with institutional investors to sell about 3.6 million shares at $14.50 per share, on or before June 13.

The firm's stock (NASDAQ:AUXL) closed Friday at $15.59, up $1.08.

In February at the annual meeting of the American Academy of Orthopedic Surgeons in San Diego, Auxilium offered Phase III data showing that injectable collagenase enzyme is an effective therapy for Dupuytren's. Other Phase III trials were stopped in December because of manufacturing issues, but Auxilium said in its latest quarterly report that moisture in vials caused the problem, and those trials are expected to restart in the fourth quarter. (See BioWorld Today, Dec. 8, 2006.)

Currently the main option for Dupuytren's is surgery, which costs an average of $5,000, noted James Fickenscher, CFO of Malvern, Pa.-based Auxilium.

"We have a lot of work to do before we get to determining an exact price," he said. "But we've said that we think, as a benchmark, the price of surgery is a good thing to use." The average Dupuytren's patient needs about three vials of therapy, and the vials could be priced at $1,600 or $1,700 each. Auxilium's market research suggested about 1 million patients show up with the condition each year in the U.S. and Europe, and about 240,000 would be "great candidates" for AA4500, Fickenscher told BioWorld Today, adding that 150,000 of those are in the U.S.

Auxilium plans to file a biologics license application in 15 or 16 months, and the AA4500 has been designated an orphan drug, so the firm will seek an expedited review. Peyronie's disease, or fibrosis that causes pain and curvature of the penis, is another potential indication for AA4500. A Phase IIb study that will test dosing regimens is expected to begin in the first or second quarter of next year.

About 475,000 patients per year in the U.S. and Europe seek treatment for Peyronie's, and about 210,000 could benefit from AA4500, Fickenscher said.

"The [treatment] regimen is a bit different," he said. "We have a series of six to nine injections that we believe would be required." At the $1,600 to $1,700 price, "obviously the per-patient revenue would be higher, so the two [indications] kind of equalize themselves."

Auxilium has not provided guidance on how long the launch for Peyronie's might come after the approval for Dupuytren's, but Fickenscher said the firm is "probably looking at a year or two years" later.

At the Phase I stage, Auxilium has AA4010, a treatment for overactive bladder that deploys the firm's transmucosal film delivery system. Two pain products using the same system are in preclinical investigation, and Auxilium has rights to develop six others for pain.

"If you look at our P&L this year, we're basically falling short of profitability by the amount of R&D we're spending," Fickenscher said. "So we're breaking even" on Testim, the topical testosterone gel marketed for hypogonadism by Auxilium's sales force.

Assuming the burn rate stays more or less the same, Auxilium will have enough cash after the $49.9 million stock sale to last until the third or fourth quarter of 2009, he said. "There's a potential for an inflection point when we have top-line results of the Phase III trial [with AA4500 for Dupuytren's] in the second quarter of 2008," Fickenscher said. "We'd have been running on fumes at that point, had we not done a financing."

The company might do a licensing deal outside the U.S.

"It's not in the works - I would say it's just an opportunity, at this point," he said. "We're still debating that." A wider partnership is not out of the question, either. "If we could find a product we could get in return [for AA4500 rights], we're not opposed," Fickenscher said. No door is closed, really."