BioXcel Launches OnkosXcel to Advance High-Potential Oncology Asset

Financing Concept

New Haven, Connecticut-based BioXcel Therapeutics launched a wholly-owned subsidiary, OnkosXcel, to focus on, as its name suggests, oncology.

BioXcel leverages artificial intelligence (AI) to develop neuroscience-focused therapeutics. Its pipeline includes drugs for Alzheimer’s disease, major depressive disorder, severe acute agitation and chronic agitation in dementia.

It also has BXCL701 in the immuno-oncology space, in a Phase Ib/II trial with Merck’s checkpoint inhibitor Keytruda (pembrolizumab) for metastatic castration-resistant prostate cancer and a Phase II basket trial of the drug with Keytruda for hot and CPI-resistant tumors.

OnkosXcel will take over the development of BXCL701. BioXcel presented positive data from the Phase II trial of the drug on Feb. 14 at the 2022 American Society of Clinical Oncology (ASCO) Genitourinary Cancers meeting. In the evaluable patient cohort of 15, 33% achieved a composite response at the planned interim analysis. In patients whose disease was measurable, RECIST-defined partial response was seen in four patients (33%) with three confirmed responses.

The disease control rate, defined as complete response (CR) plus partial response (PR) plus stable disease (SD) was 58% (7 patients). About 17% of patients had serious adverse events associated with either BXCL701 or Keytruda, with four patients discontinuing any drug because of it.

Part of OnkosXcel’s plans for the drug is to expand its development into hematological cancers and other solid tumors.

“We believe the formation of OnkosXcel will unlock significant value for both our neuroscience and immuno-oncology franchises and build a foundation for sustainable growth,” said Vimal Mehta, Ph.D., CEO of BioXcel.

He went on to say, “For BioXcel Therapeutics, this is the logical next step as we advance our five-year vision of becoming the premier AI-driven neuroscience company, exemplified by the recent FDA approval of Igalmi for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults. For our immuno-oncology assets, we believe this new structure will sharpen our strategic focus and help us further maximize the value of our oncology portfolio with increased flexibility in the future.”

BioXcel also announced today it has inked strategic financing deals with funds managed by Oaktree Capital Management and Qatar Investment Authority. The two firms will provide up to $260 million in support of Igalmi dexmedetomidine sublingual film. Specifically, the money will expand the clinical development of BXCL501, including a pivotal Phase III program for acute treatment of agitation in Alzheimer’s patients, as well as for more neuroscience and immuno-oncology clinical programs.

The first tranches will be $100 million, which comes after the U.S. Food and Drug Administration approval of Igalmi on Apr. 5.

BioXcel's stock was up 10% to $16.30 in premarket trading.

Mehta said, “Following our recent approval of Igalmi and today’s financing announcement, we have never been in a better position to realize our vision of becoming the leading AI-enabled neuroscience company. We are pleased to have strengthened our cash position with primarily non-dilutive capital as we prepare to launch Igalmi and progress our three-pillar portfolio growth strategy for this franchise, which includes pursuing additional indications, extending our geographical reach, and expanding the medical settings where Igalmi is offered. In parallel, we remain committed to advancing our additional neuroscience and immuno-oncology portfolio, including BXCL502 and BXCL701.”

Aman Kumar, co-portfolio manager of Life Sciences Lending at Oaktree, said, “We are delighted to partner with BioXcel Therapeutics during this upcoming period of anticipated growth, highlighted by the recent approval and anticipated commercial launch of Igalmi as an acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults. The company has an exciting, AI-driven approach to drug discovery and development, and we look forward to funding the expansion of these efforts and assisting the company in bringing new, innovative therapies to patients worldwide.”

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