17 October 2007, Melbourne: Diagnostics company HealthLinx Limited (ASX:HTX) will spin off its CR014 drug development assets into a new single purpose company, Proaegis Biosciences. In addition, a second therapeutic compound Follistatin, with two patents targeting Ulcerative Colitis been in-licensed and will also be transferred to Proaegis.
Follistatin is a naturally-occurring human protein inhibitor with potent anti-inflammatory and antifibrotic characteristics with demonstrated preclinical efficacy in acute lung injury, intestinal inflammation and organ fibrosis
Proaegis, in which HTX will retain a 36% stake, will develop the two novel bio-therapeutics, CR014 and Follistatin, to target Acute Respiratory Distress Syndrome (ARDS) and Ulcerative Colitis (UC) respectively. Proaegis will also be in-licensing foundation technologies from a US company that has filings in the area of combination therapies in peptide therapeutics.
The Proaegis strategy is to demonstrate clinical Phase I efficacy for CR014 and Follistatin for targeted clinical indications that have large markets and significant unmet clinical needs such as ARDS and UC, and then seek to partner the programs.
CR014, the lead compound, is a novel natural human peptide that inhibits aberrant vascular permeability and associated inflammation after acute lung injury. “It appears to be a promising treatment for ARDS and similar diseases.,” said MD Mr. Nick Gatsios.
“While these drug candidates are early stage, they have very promising efficacy and toxicity profiles,”said Mr. Gatsios.
“We have been working on this transaction for some time and continued patent portfolio development is anticipated to build a portfolio of assets to create significant value for shareholders,” said Mr. Gatsios. The Company is evaluating strategies for extending patent life obtaining regulatory exclusivity particularly in the US and Europe. The terms of the Follistatin in-license transaction are confidential.
Proaegis will embark on a private capital raising of up to $5 million to fund the next 36 months development. “We have secured the first $1million and expect to soon raise the remaining $4million,” said Mr. Gatsios. Expressions of interest for the remaining $4million have already been received, and it is anticipated that the balance of the funds will be secured from sophisticated investors by early 2008.
HealthLinx will receive cash for licensing the IP into Proaegis and all costs incurred since April 2007 will be reimbursed. HealthLinx will also reduce its quarterly burn rate by almost $60,000.
Initial funding will see CR014 completing a Phase I trial and Follistatin complete all pre-clinical development with filings for Phase I trials.
“HTX has attracted eminently qualified people to the Proaegis board including Emeritus Prof Graham Macdonald ex-medical director Merck Sharp Dohme (Australia) as the independent chairman and Dr Russell Rydel, ex-VP Pharmacology Elan Pharmaceuticals as an independent director. This brings over 50 years of experience and acumen in clinical and drug development,” said Mr. Gatsios. The laboratories and administration will initially be shared with HealthLinx in Richmond Victoria.
ARDS is the general term for serious respiratory failure in the trachea from predisposing conditions including shock, trauma, fracture and drug intoxication in post operative situations. The mortality rate is 30-50 percent with the only treatment options being increased point of care and steroids with little or no efficacy. The ARDS market is about $1.8 billion per year in the US and Europe.
UC and Crohn’s disease are the primary constituents of Inflammatory Bowel Disease affecting over 2 million people in major markets. UC cannot be completely cured by current drug therapies and severe sufferers may need colon removal. First line treatment usually involves steroids with sub-optimal efficacy. Other treatments may be new high priced drugs with toxicity risks. The global market potential for UC is estimated at to be over US$2 billion.
Enquiries
Nick Gatsios (HealthLinx Limited) +61 3 9208 4200
Rudi Michelson (Monsoon Communications) +61 3 9620 3333
About HealthLinx Limited (ASX:HTX)
HealthLinx uses biomarkers to develop best practice diagnostics that detect and monitor diseases. First commercial targets are:
Ovarian cancer diagnostic (OvPlex) targeting US$250m pa market; and Pregnancy diagnostic. This would be used in a woman’s first prenatal visit to identify whether she is at high risk of having complications during pregnancy. Currently there is no product on the market which identifies complications in early stages of pregnancy.
A biomarker is a specific biochemical in the body that is used to measure progress of disease or the effects of treatment.
HealthLinx targets important markets with unmet needs. HealthLinx is developing product applications to successful Phase II biomarker trials and will then seek to out-license to partners for upfront and milestone payments and royalties on sales.
The company also has significant IP in Protein Depletion Technologies (ClearIT™) that depletes serum and other biological fluids of high abundant proteins. HealthLinx offers access to the Cryptomics Platform, which screens and identifies bio-active peptides for nutraceutical, functional foods and biological applications, on a fee for service and or collaborative basis
www.healthlinx.com.au
