By Brady Huggett
Oxigene Inc., even as it released its third-quarter earnings that were ¿on track with estimates for the year,¿ announced that it has broken ties with Bristol-Myers Squibb Co. over the development of Oxigene¿s combretastatin family of vascular targeting agents, including CA4P, thus regaining full rights.
Having the family back in house, Oxigene also said it would discontinue clinical development of its benzamide-based product, Declopramide, to preserve finances for its vascular targeting efforts. The company had planned to look into initiating Phase II trials in the fourth quarter with Declopramide as a second-line therapy in colon cancer patients.
Oxigene¿s stock (NASDAQ:OXGN) dropped 42 cents Thursday, or about 17 percent, to close at $2.08.
¿Recently it became obvious to us that [Bristol-Myers¿] strategic profile had changed with several of the acquisitions it has made,¿ said Frederick Driscoll, president and chief financial officer of Watertown, Mass.-based Oxigene. ¿This generated discussions between both companies about our compound fitting into their profile going forward. There were various proposals put forward and we decided the best decision was to regain the rights back so we could aggressively move the compounds forward in clinical trials.
¿It was a very recent event. We had a board meeting [Wednesday] and they supported management¿s decision,¿ he added.
Bristol-Myers, of New York, in September entered one of biotechnology¿s most notable agreements when it signed a deal worth up to $2 billion with ImClone Systems Inc., of New York, concerning ImClone¿s anticancer drug, IMC-225. In June, Bristol-Myers formed an agreement to purchase DuPont Pharmaceuticals Co., a wholly owned subsidiary of DuPont, of Wilmington, Del., for $7.8 billion in cash. (See BioWorld Today, Sept. 20, 2001.)
The head of the combretastatin family is the Combretastatin A4 Prodrug ¿ aka CA4P ¿ which has been through three Phase I trials. The compound works to starve tumors of blood, but unlike angiogenesis inhibitors, it isn¿t designed to affect newly developed blood vessels.
¿It deprives the tumor of blood flow,¿ Dricsoll said. ¿Inhibitors can¿t deal with the existing structure. What our [compound] is doing is shutting down the vessels that are already in place.¿
Oxigene will plan its next move for the family of drugs after a transitional stage in which it takes over development, Driscoll said.
¿The final decision will be made after we look at all the information that [Bristol-Myers] has filed with the agency, after we meet with our advisers, and then go sit down with the [FDA],¿ Driscoll said. ¿But our thought at the moment is to move it into a Phase II as a monotherapy and/or a Ib combination trial with chemotherapy or radiation.¿
Oxigene will consider repartnering the compound, Driscoll said. Others have come calling in the past over the family, and the return of rights ¿opens the door for discussions.¿
The deal with Bristol-Myers initially was struck in December 1999 and had a potential total worth of $70 million, $10 million of which was paid up front. (See BioWorld Today, Dec. 17, 1999.)
¿We got our up-front monies, and no milestones since then,¿ Driscoll said. ¿But they completed the Phase I¿s ¿ two in the U.S. and one in the UK ¿ and they have put an extensive amount of research and effort and financials behind the next generation of compounds, which we will also get back.¿
Oxigene reported a third-quarter net loss of about $2 million, or 18 cents per share, for the period, compared to a net loss of about $2.7 million, or about 24 cents per share, over the same period in 2000. It generated revenues of $577,000 for the quarter. As of Sept. 30, the company had about $20.7 million in cash and cash equivalents.
To conserve that $20.7 million, the company has cut loose the Declopramide program, but Driscoll said it also would look to raise funds if the opportunity presented itself. In September, it formed a collaboration to research restenosis inhibitors with Jomed NV, of Beringen, Switzerland, and entered into an agreement with the National Eye Institute, a division of the National Institutes of Health, of Bethesda, Md., to study the effect of CA4P on proliferative diabetic retinopathy.
¿We are trying to broaden our indications for the use of this compound where new blood vessel formation is problematic,¿ Driscoll said. ¿We want to utilize as best we can this compound, not just in cancer.¿