West Coast Editor

A week after finishing pivotal trials with its nausea drug, Hana Biosciences Inc. signed a letter of intent to double its pipeline of compounds by licensing worldwide rights to three targeted chemotherapeutics from Inex Pharmaceuticals Corp. in a stock-and-cash deal worth up to $42 million.

Hana’s stock (AMEX:HBX) closed Friday at $9.49, up 30 cents.

The compound farthest along is Marqibo (sphingosomal vincristine) for hematological malignancies.

"Our target [with Marqibo] is to huddle up, have an efficient transfer and prepare ourselves to go to the FDA," said Mark Ahn, president and CEO of South San Francisco-based Hana, adding that he hopes to start a pivotal trial later this year.

Ahn acknowledged Marqibo’s troubled history with Vancouver, British Columbia-based Inex. In December 2004, an FDA panel voted unanimously not to recommend approval of the compound and chided the company for filing based on single-arm Phase II data. Two weeks later, Inex cut two-thirds of its employees - 103 of 165 - and reduced expenses by 40 percent. (See BioWorld Today, Dec. 15, 2004.)

In January 2005, the FDA sent its non-approvable letter to Inex, and two months later, the firm’s Marqibo partner, Enzon Pharmaceuticals Inc., of Bridgewater, N.J., pulled out of the deal. In June, Inex sheared its staff down to 22 people. (See BioWorld Today, Jan. 20, 2005; March 18, 2005; and June 22, 2005.)

The deal with Hana was enough to double Inex’s stock price, such as it was, and shares (TSE:IEX) closed Friday at C40 cents (US34 cents), up C20 cents.

"The company was looking to divest all three drugs," Ahn said. "This constitutes the entire sphingosomal platform. We started talking about [getting] them from the beginning as a package."

Ahn compared Marqibo to Erbitux (cetuximab), the colorectal cancer drug from ImClone Systems Inc. and Bristol-Myers Squibb Co., both of New York.

Though ultimately approved, Erbitux met with serious regulatory difficulties. In November, the FDA accepted for filing ImClone’s supplemental biologics license application for epidermal growth factor inhibitor to treat squamous-cell carcinoma of the head and neck.

"It was good science and a clearly active drug," noted Ahn, about Erbitux, which needed - as Marqibo needs now - "a well-designed and more importantly, well-executed trial, and that’s what our team is built for. Our chief medical officer is a hematologist."

Ahn said he would seek a special protocol assessment from the FDA.

"We want [the agency] as a partner," he said.

The other two drugs in the Inex licensing deal, sphingosomal vinorelbine and sphingosomal topotecan, will enter the clinic this year and next, respectively. An investigational new drug application already has been cleared for the former drug in the U.S. and Canada.

"We’re looking to put [sphingosomal vinorelbine] into the clinic in solid tumors inside of six months after the close of the contract," Ahn said. "It will be a Phase I dose-finding study."

Under the terms of the arrangement, expected to close in the second quarter, Hana will pay Inex $11.5 million up front, consisting of cash and shares of Hana common stock, with as much as $30.5 million in Hana shares in milestone payments as the compounds move along.

The milestone payments are "split up between the three products proportionately," Ahn said, though they are "a little weighted toward Marqibo." A conference call to discuss the deal is slated for today.

Sphingosomal encapsulation puts an approved cancer agent into a lipid envelope, so that the payload is carried safely through the bloodstream to disease sites. The drugs not only circulate longer, but readily extravasate through the pores of leaky tumor vessels created during angiogenesis, thus accumulating in the tumor to fight it.

Vincristine, sold as Oncovin by Indianapolis-based Eli Lilly and Co., is a microtubule inhibitor approved for acute lymphoblastic leukemia. Vinorelbine, branded Navelbine by GlaxoSmithKline plc, of London, also is a microtubule inhibitor, approved for use as a single agent or in combination with cisplatin for the first-line treatment of unresectable, advanced non-small-cell lung cancer.

Topotecan, marketed under the name Hycamtin, also from GSK, is a topoisomerase I inhibitor approved for use in relapsed small-cell lung cancer and relapsed ovarian cancer.

Earlier this month, Hana completed all clinical trials of Zensana (ondansetron oral spray) required for FDA registration to treat chemotherapy-induced nausea and vomiting under section 505(b)(2). Pivotal studies confirmed 5HT3 inhibitor at the 8-mg dose is statistically bioequivalent to the current commercially available 8-mg ondansetron (GSK’s Zofran, which went generic this year).

Results also showed that Zensana delivers detectible ondansetron levels statistically faster than tablets of Zofran, and Hana plans to launch the product in the U.S. next year.

Any partnerships in the offing?

"We work for shareholders, so I never say never," Ahn said. The company has worldwide rights to all compounds except Zensana, and "ex-U.S. will be challenging for us to commercialize in the first phases of our company’s growth," he said, but he said Hana likely will wait until it gets a "clear efficacy signal" before considering partners in markets overseas.

"There’s no particular desire [now], and it’s not part of our ‘base case’ to partner," he said. "We want to build a company that’s integrated and scaleable."

Hana also has talotrexin, a new generation anti-folate therapy, which generated positive Phase I/II data against NSCLC and is being tested against solid tumors and acute lymphoblastic leukemia.

Talotrexin will be the subject of a poster session at the American Society of Clinical Oncology meeting in June in Atlanta, Ahn said.

Another compound, IPdR, is an oral radiation sensitizer and prodrug of IudR. Discovered at Yale University, IPdR is undergoing a Phase I study against gastric, pancreatic, colorectal and liver cancers.

"We’re trying to find the [right] dose there," he said.

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