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RXi to Acquire Peptide Immunotherapy Firm Apthera

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By Doug Macron

Roughly four years after it was spun out of CytRx as a pure-play RNAi therapeutics firm, RXi Pharmaceuticals announced that it has expanded its focus beyond the gene-silencing technology through the acquisition of privately held peptide-based immunotherapy firm Apthera.

As part of the transaction, which values Apthera at around $7.2 million, RXi will pick up the firm's NeuVax peptide immunotherapy for low- to-intermediate HER2-positive breast cancer patients who are not eligible for treatment with Genentech's Herceptin. NeuVax is slated to enter phase III testing in the first half of 2012

RXi said that it will continue developing its lead RNAi drug candidate, a dermal anti-scarring drug also expected to enter phase I in the first half of next year, but indicated that earlier-stage RNAi programs might be put on the back burner.

The acquisition represents a “turning point in which we are advancing from being a technology platform company to a late-stage product development company aimed at blockbuster therapeutic markets,” Mark Ahn, an RXi board member who will become the combined company's new president and CEO, said in a statement. “With this successful transition, we have streamlined our operations, integrated the RXi and Apthera management teams, and reduced our early stage RNAi research and development activities that will free up financial and other resources.”

RXi officials were not available for additional comment in time for this publication.

Under the terms of the acquisition, Apthera shareholders will initially receive approximately 4.8 million shares of RXi’s common stock, and be entitled to undisclosed contingent payments based on the achievement of certain development and commercialization milestones related to NeuVax. Based on the $1.50 closing price of RXi's stock on March 30, the deal values Apthera at roughly $7.2 million.

RXi's President and CEO Noah Beerman will leave the company, while Apthera's President and CEO Mark Schwartz will become RXi's executive vice president and COO.

Additional terms of the deal were not disclosed.

Pure-Play No More

In acquiring Apthera, RXi is essentially backtracking from the strategy its one-time parent company CytRx set in motion in 2007 when it spun out its RNAi assets into a new company (GSN 1/11/2007).

CytRx had long maintained an interest in RNAi, making it the centerpiece of its drug-development operations until around 2005, when the company began expanding into small molecules and DNA-based vaccines. President and CEO Steven Kriegsman disclosed to Gene Silencing News around that time that CytRx was thinking of spinning out RNAi into a separate firm in order to gain better traction among rivals such as Alnylam Pharmaceuticals (GSN 11/11/2005).

CytRx followed through less than two years later, but RXi never quite lived up to expectations. Under its first CEO, Tod Woolf, the company missed a number of partnership and drug-development goals. In late 2009, he was replaced by Beerman, who also failed to make good on a promise to seal a corporate partnership before the end of 2010.

Last December, while still under Beerman, the company did finally select a lead product candidate in the anti-scarring drug, called RXI-109, which incorporates the company's so-called self-delivering RNAi technology, but not until after several false starts with other technologies (GSN 12/23/2010).

Around that time, the company also laid out a number of other indications and disease areas to which it might apply its RNAi approaches, and said that it would select a drug candidate for retinal disorders this year (GSN 9/16/2010).

With the announcement of the Apthera deal, however, it seems RXi is now taking a more measured approach to RNAi by looking also to alternate drug modalities, which may prove to be a smart strategy given the recent pullbacks by some of the biggest players in the space.

For instance, Roche in November announced it was cutting its in-house RNAi work amid a broader restructuring effort (GSN 11/18/2010). Shortly thereafter, Pfizer said it was shuttering its oligonucleotide therapeutics unit (GSN 2/3/2011).


Have topics you'd like to see covered in Gene Silencing News? Contact the editor
at dmacron [at] genomeweb [.] com.

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