With its lead product in pivotal trials for fracture repair, OrthoLogic Corp. is bringing in a preclinical program for treating smooth muscle relaxation indications.
The Tempe, Ariz.-based company agreed to acquire AzERx Inc.’s class of intracellular actin relaxing molecules (ICARMs) and related technology. The deal includes AzERx’s lead ICARM compound, AZX100, a 24-amino acid peptide that has shown promising results in preclinical development in vasospasm associated with subarachnoid hemorrhage, the prevention of keloid scarring and asthma, said James Pusey, OrthoLogic’ president and CEO.
"We have great bioassay data in multiple animals, including in vitro human smooth muscle tissue, showing that AZX100 relaxes smooth muscle," he said. "And we have positive animal data" in the vasospasm indication, suggesting that the drug could fill "a crucial unmet medical need."
Under the terms, OrthoLogic agreed to pay Phoenix, Ariz.-based AzERx $390,000 in cash up front, and issue about 1.35 million shares of OrthoLogic stock. Based on the Thursday’s closing share price of $5.67, the stock transaction is valued at about $7.7 million.
The company’s shares (NASDAQ:OLGC) closed Friday at $5.74, down 7 cents.
Pusey said OrthoLogic expects to provide a timeline for progressing AZX100 into the clinic during the company’s next conference call, but he hopes to begin clinical development "as quickly as possible."
Work initially will focus on the three indications investigated by AzERx, though OrthoLogic is considering other potential treatment opportunities for ICARMs, such as a topical formulation of AZX100 to treat spasms associated with anal fissures. There also is a potential use of the compound as an antifibrotic, Pusey said.
But a much-needed use would be in the area of vasospasm associated with brain bleeds, a condition that can result in stroke.
"As a physician, this is something I’ve seen," Pusey told BioWorld Today. About two-thirds of patients who suffer bleeding in the brain survive the initial event but face "a severe risk about a week after of their brain blood vessels going to vasospasm, constricting down and leading to infarction."
AZX100 is "designed to prevent that vasospasm," he added. "So it’s definitely something that’s been of great interest to neurosurgeons and, we believe, to the FDA."
The acquisition of AzERx’s ICARM portfolio is part of OrthoLogic’s overall collaboration strategy established last year following a review of the company’s resources. That strategy incorporates three types of collaborations: functional collaborations, which would include finding a European partner to expand development and commercialization of its products; therapeutic collaborations, which entail a traditional sort of licensing deal with big pharma or big biotech firms; and IND collaborations, transactions designed to access technology and compounds that are either one year beyond an investigational new drug application filing or one year before.
IND collaborations, such as the deal with AzERx, are aimed at broadening the company’s portfolio. Though the company has three products in development, all of them spawn from the same technology, the Chrysalin program for tissue repair.
From a risk standpoint, the company decided it was "better to have a broader set" of technologies, Pusey said.
Chrysalin, a synthetic 23-amino acid peptide, is being investigated in three different formulations. The first, an injectable, is in a pivotal Phase III study in distal radius fracture repair, with results expected before the end of April. A pivotal Phase IIb trial is ongoing in the same indication, with enrollment anticipated to be completed by the end of the year.
OrthoLogic also has a gel formulation that’s expected to enter Phase II development during the second half of the year in patients with diabetic foot ulcers. A controlled-release formulation of Chrysalin for cartilage defect repair is in early-stage development.
Late-stage work with Chrysalin was funded primarily by OrthoLogic’s 2003 sale of its bone-growth stimulation business to San Diego-based DJ Orthopedics Inc. for $93 million in cash. That deal marked OrthoLogic’s transformation into a company focused solely on drug development. (See BioWorld Today, Oct. 10, 2003.)
OrthoLogic reported a net loss of $7.5 million, or 20 cents per share, for the fourth quarter of 2005. As of Dec. 31, the company had cash, cash equivalents and investments totaling $86.3 million.