West Coast Editor

Almost exactly a year after AstraZeneca plc quit its deal with NicOx SA for COX-inhibiting nitric oxide-donating (CINOD) drugs, NicOx said it expects to net about €24 million (US$29.8 million) through a private placement that will be used mainly to advance a lead compound from that program.

Cash on hand after the placement should take the company into 2006, said Jonathan Birt, spokesman for Sophia-Antipolis, France-based NicOx. "The expectation is that, by then, progress on [a pair of lead products] will increase the valuation quite considerably," he said.

NicOx issued about 9.4 million new shares to 15 international institutional investors, including many in the U.S. Delivery of the shares is slated for Oct. 4. The company will apply to list the new shares on the Nouveau Marche of Euronext Paris, and a prospectus has been submitted to French regulatory authorities for approval.

Subscription price of the new shares - €2.75 each - was fixed on Sept. 29 following a special shareholder meeting in June.

NicOx has two main drug candidates: HCT 3012 for osteoarthritis and NCX 4016 for peripheral arterial diseases. HCT 3012, which has completed Phase II trials, was part of the deal with London-based AstraZeneca, which the pharmaceutical firm backed away from in September 2003.

"A key endpoint for AstraZeneca [in the Phase II trials] was to show cardiovascular benefit," Birt said, and AstraZeneca claimed no such statistically significant benefit was shown, although results disclosed in June 2004 did result in osteoarthritis patients experiencing pain relief after six weeks of treatment that was equivalent to the pain reliever rofecoxib.

NicOx has disputed the way the study was done.

"Their analysis of the AstraZeneca trial was that it was badly put together and AstraZeneca was putting people in who were not properly vetted," Birt said. NicOx said the trial did show cardiovascular benefit, and the company last month launched more Phase II trials to prove as much, with results expected in the first quarter of 2005.

Meanwhile, rofecoxib made news the same day NicOx disclosed its private placement - and it made news because of cardiovascular concerns. Rofecoxib is the active ingredient in Vioxx, which Whitehouse Station, N.J.-based Merck & Co. Inc. said Thursday it was withdrawing from worldwide markets following three-year clinical data showing an increased risk of heart attack and stroke in patients treated with the compound for 18 months or more.

Vioxx, a COX-2 inhibitor, sold $2.5 billion last year, and is the largest-selling prescription drug ever pulled from the market.

There was other fallout. NitroMed Inc., of Lexington, Mass., said Merck halted the Phase II trial of its lead candidate in nitric oxide-enhancing COX-2 inhibitors, which is composed of a rofecoxib derivative, although the three-year exclusive, worldwide licensing and research collaboration begun in January 2003 between NitroMed and Merck to develop nitric oxide COX-2 inhibitors remains in effect.

Merck's stock (NYSE:MRK) dropped 26.8 percent, or $12.07 on Thursday, to close at $33. Another COX-2 inhibitor is the arthritis painkiller Celebrex (celecoxib), from Pfizer Inc., of New York. Pfizer's stock (NYSE:PFE) rose 42 cents Thursday to close at $30.60. Celebrex sells about $2.6 billion per year, according to IMS Health.

This could all bode well for NicOx, even with Pfizer's drug (which the company reiterated Thursday is safe to use) stepping in to fill the Vioxx gap. NicOx not only has full rights to HCT 3012 - which might prove to have the benefits of Vioxx without the drawbacks (and even with benefit) - but also has in hand "an enormous amount of Phase II data [NicOx] didn't actually pay for," Birt said, adding that NicOx plans to take HCT 3012 to market itself.

The other lead drug, NCX 4016, is a nitric oxide derivative of acetylsalicylic acid, or aspirin, also in Phase II trials and as yet unpartnered.

"After AstraZeneca dropped out of the CINOD program, [NicOx] focused on these two products because they are closest to market," Birt said.

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