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SEC Filing Offers Details on Acuity Merger, Troubled Manufacturing Deal for RNAi Drug

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New information about eXegenics, the publicly traded shell company that recently merged with Acuity Pharmaceuticals, was released this week in a filing with the US Securities and Exchange Commission including details about the merged company’s pipeline and operations.
 
“One of the major areas we’re focusing on in 2007 is our advanced clinical trials of [our lead drug, the anti-VEGF siRNA] bevasiranib in wet AMD,” according to Acuity’s former President and CEO Dale Pfost, who will be president of the new company, Opko. “We plan on beginning enrollment in [a phase III study] in the second half of 2007.”
 
According to eXegenics’ SEC filing, the new company will initially seek regulatory approval of bevasiranib as a maintenance therapy for AMD, to be used after initial treatment with an approved VEGF antagonist. However, the company also sees opportunities for the drug to be used in combination with other AMD treatments, as a stand-alone therapy, and as a prophylactic in patients at risk for developing the wet form of AMD.
 
The filing also revealed that a manufacturing deal Acuity had signed in 2004 with Avecia BioTechnology for bevasiranib is likely to end prematurely, apparently because of Avecia’s failure to meet its obligations.
 
Although Pfost said that Opko expects to explore the possibility of establishing its own manufacturing operations in the future, currently the company has no such capabilities. And with phase III trials of its lead candidate looming, securing supplies of bevasiranib is key.
 
In September 2004, Acuity announced that it had signed a “long-term” agreement to have pharmaceutical-grade supplies of bevasiranib manufactured by Avecia Biotechnology up through the product’s commercial launch.
 
According to the SEC filing, however, that arrangement is on the rocks.
 
“Avecia has been unable to produce product for the company pursuant to this agreement,” according to the filing. “During 2006, [Acuity] notified Avecia that the agreement is terminated as a result of this failure to produce product.”
 
The two companies “are currently in negotiations with regard to the legal termination of the agreement … [and Acuity] does not believe that there are any future commitments under this agreement. [It] will recognize return of payments made under the agreement, if any, when [a] settlement is reached,” the filing adds.
 
Pfost declined to comment on the situation with Avecia or provide details on how bevasiranib has been manufactured for previous clinical studies.
 
He did state that Acuity has developed “a variety of [manufacturing] relationships,” which it plans on extending. “We have relationships we’ve been nurturing over the years and we are confident we will have the product both for our clinical trials as well as our eventual … market launch,” he said.
An Avecia spokesman told RNAi News that the company does not comment on customer relationships.
 
Moving Beyond Drugs
 
Last week, Acuity announced that it had merged with Froptix, a privately held developer of treatments for eye diseases located in Gainesville, Fla., and eXegenics, a public company formerly developing cancer and infectious disease therapies, but which currently has no active operations (see RNAi News, 3/29/2007).
The resulting company, which is to be traded on the American Stock Exchange, combines Acuity’s pipeline of RNAi therapeutic candidates, including bevasiranib, with Froptix’s preclinical, non-RNAi ophthalmic drug portfolio.
 
Pfost told RNAi News week noted that while Acuity had previously considered itself a pharmaceutical company developing treatments (including RNAi-based ones) for eye diseases, through the merger it has stepped into a new role.
 
“Previously we had been a pharmaceutical company focusing on ophthalmology, and now we increasingly see ourselves as an ophthalmology company [not limited] … to just therapeutics,” he said. “We see a strong coupling and synergy between emerging diagnostics and therapeutics.”
 
Nonetheless, Opko will continue to be closely tied to the RNAi field.
 
Aside from bevasiranib, the firm’s RNAi pipeline candidates include ACU-HHY-011, an siRNA licensed from the University of Pennsylvania that targets HIF-1alpha. According to eXegenics, HIF-1alpha is a transcription factor “involved in the cellular response to hypoxia, a key step in the neovascularization process [that] occurs in wet AMD. HIF-1alpha is upstream of the target for bevasiranib and preclinical data suggests that targeting HIF-1alpha may have advantages over other approaches to treating wet AMD.”
 
About a year ago, Acuity licensed from ZaBeCor an option to an siRNA targeting Syk kinase for ophthalmic applications (see RNAi News, 5/4/2006). According to this week’s SEC filing, that siRNA — termed ACU-XSP-001 — is under preclinical development for uveitis, an inflammatory condition of the eye.
 
Syk-kinase is a “key cell-signaling molecule that has been shown to be central in initiating critical elements of the inflammatory response in a number of disease models … [and is] essential for the activation of signaling pathways that lead to the release of allergic mediators such as cytokines and histamine that cause an inflammatory response,” eXegenics said in the filing. “We believe that ACU-XSP-001 will have utility in the treatment of inflammatory conditions of the eye, including uveitis and allergic conjunctivitis, and that it also may have the potential to prevent the inflammation that contributes to vision loss in conditions such as wet AMD.”
 
According to eXegenics, as of Dec. 31, 2006, Acuity had not exercised its licensing option.
 
Lastly, eXegenics said in its SEC filing that the merged company is developing ACU-HTR-00X, an siRNA licensed from the University of Illinois in 2006, as an anti-fibrosis drug. The siRNA targets transforming growth factor-beta receptor type II, which the company said is a mediator of wound healing that has been shown to play “a significant causative role in ocular inflammation and scarring.”
 
In 2005, Acuity signed a deal to exclusively license Intradigm’s ophthalmic drug discovery and delivery platforms (see RNAi News, 6/10/2005).
 

“Also, now because we’re a publicly traded company, we’ll need to fill out … some of the infrastructural elements of the finance group. Over the next year I would think we’d approximately double, maybe more than double, the number of employees at the company.”

Though few details about the arrangement were available at the time, eXegenics’ SEC filing states that the arrangement, which has a 20-year term, calls for the companies to develop a topical siRNA to a target agreed upon by both companies through a joint development committee.
 
“Each party agreed to commit personnel, equipment, and resources to perform its obligations under the research and development plan,” according to the filing. “After the topical siRNA compound is selected … [eXegenics is] obligated to use commercially reasonable efforts to obtain regulatory approval for the topical siRNA in the United States and any foreign country we choose, at our sole discretion and sole expense.”
 
Opko will also be obligated to use “commercially reasonable efforts to market, distribute, and sell the topical siRNA” in the US and abroad, and pay Intradigm milestones and royalties.
 
In order to support these and other non-RNAi-related programs, eXegenics said that it expects to expand its staff from its current level of 17 employees. According to Pfost, the new company could add as many as 17 more staffers over the coming year.
 
Aside from increasing headcount in Opko’s clinical development group to oversee bevasiranib, “we are going to be expanding modestly our research [team] because we now have a greater portfolio than we had a couple of weeks ago, gaining the intellectual property rights from the Froptix portion of the acquisition,” he said.
 
“Also, now because we’re a publicly traded company, we’ll need to fill out … some of the infrastructural elements of the finance group,” he added. “Over the next year I would think we’d approximately double, maybe more than double, the number of employees at the company.”
 
Although Acuity is based in Philadelphia, the new company will be headquartered in Miami — the home of Opko Chairman, CEO, and largest shareholder Phillip Frost. For the time being, however, Opko will maintain research operations in Philadelphia and existing clinical development operations in Morristown, NJ.
 
This setup, however, could change. “We will be reviewing the spread of facilities with time and looking at the opportunity of consolidating to, perhaps, two locations,” Pfost said, adding that Acuity’s obligations to early investors to keep a Philadelphia presence “have all been discharged and fulfilled.”

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