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With $29.5M Financing Complete, Benitec Aims at Reestablishing US Operations

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Roughly eight years after it shuttered its US operations due to financial pressures, Australia's Benitec Biopharma is preparing to set up a modest laboratory in Northern California.

The moves comes on the heels of yet another successful financing round for Benitec and marks the renewal of in-house research and development for the firm, which had been reliant on contract research organizations in recent years.

Though Benitec started off as one of the RNAi therapeutics field's most promising players, a spate of intellectual property litigation drained its coffers and damaged its reputation. When reexaminations of its core US patent — No.6,573,099 — led to the rejection of claims in the IP, Benitec encountered difficulties raising capital and finding partners.

In 2006, the company closed down satellite operations in California and reorganized as a much smaller firm with little to no internal R&D, licensing off its flagship hepatitis C program to startup Tacere Therapeutics.

But by 2010, Benitec's fortunes changed when the US Patent and Trademark Office reversed its previous rejections of the '099 patent, putting the firm on track to close a series of financings and IP-licensing deals. In 2012, Benitec was also able to acquire Tacere and regain control of the HCV program, which included the late-stage preclinical candidate TT-034.

This week, the company announced that it had completed its biggest capital raise to date, selling A$31.5 million ($29.5 million) in stock to institutional investors and giving it the resources needed to not only move TT-034 through the clinic but also reestablish a presence in the US.

TT-034 has recently received clearance to enter human trials, and recruitments of patients for a Phase I/IIa study is underway, according to Chief Business Officer Carl Stubbings. Assuming a positive outcome, Benitec intends to move the compound into Phase IIb testing, after which it will look for a partner interested in taking the drug through additional clinical trials and to the market.

Stubbings conceded that the HCV market has changed significantly since TT-034 was first developed, namely due to the introduction of highly effective, orally administered small-molecule treatments such as Gilead Sciences' Sovaldi.

However, "we think first to market is not always best, and something that offers a significant advantage over other products will always take a market share that is appropriate," he said. TT-034, if successful, would offer a single-shot treatment for HCV — something that could eliminate issues of patient compliance encountered with therapies like Sovaldi, which comprises one pill a day for 12 weeks.

"Generally speaking, people acknowledge that," Stubbings said.

Meanwhile, as the TT-034 program continues, Benitec is preparing to set up a lab in Northern California near where David Suhy, its senior vice president of research and development who led the HCV program at Tacere, resides.

Stubbings stressed that the US operations would be small, and that only a few staffers would be hired to support Suhy there for the near term.

"We've been able to get to where we've gotten to through judicious use of funds," he explained. "Now we've got a lot more … but our intent is still to be fairly careful with how we allocate those funds."

As such, Benitec will continue to use CROs for specialized research and development. The US lab will primarily be used to "quickly design and validate particular aspects of a therapeutic … and potentially extend our technology or enhance certain aspects of our [expressed RNAi] platform," Stubbings said.

This includes work on the company's next pipeline program in lung cancer, which is expected to enter Phase I/IIa testing early next year, as well as the evaluation of technologies and candidates for potential in-licensing.

Before the latest private placement, "we were solely focused on TT-034's advancement and continuing to move the lung cancer program along," Stubbings said. "The funding enables us to broaden our horizons in terms of what we might be looking at next. We do not have anything specifically in mind, it's just that now we have the time and the resources … to look a little further."

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