VANCOUVER, Nov. 17 /PRNewswire-FirstCall/ - Inex Pharmaceuticals Corporation (“INEX"; TSX: IEX) announced today that its Board of Directors has approved a Company reorganization that would include the spin-off of its Targeted Immunotherapy technology and product candidates into a new company. If the proposal is approved by shareholders and the Supreme Court of British Columbia, the majority of shares in the new public company would be distributed to INEX shareholders.
The reorganization would enable the new company to focus on INEX’s Targeted Immunotherapy program and raise the additional capital necessary to advance this technology. The new company would give INEX shareholders a direct investment in a promising early stage area of research, the use of Targeted Immunotherapy products to treat cancer and other diseases. This reorganization would also allow INEX to continue its focus on extracting value from its late stage Targeted Chemotherapy platform including Marqibo(TM), INX-0125 (sphingosomal vinorelbine) and INX-0076 (sphingosomal topotecan).
Timothy M. Ruane, President and Chief Operating Officer of INEX, said the Board’s decision came after several months of reviewing various Company options. “We are confident that this reorganization reflects the highest value path forward for our stakeholders. This is a classic case of our two technology platforms being worth more to stakeholders as independent entities than combined in one company.”
Under the reorganization plan, INEX’s Targeted Immunotherapy assets and some cash would be transferred to a new company. INEX would retain an equity position in the new company with the remainder being distributed to INEX’s common shareholders. A portion of the equity in the new company would also be reserved for issue to holders of INEX’s convertible debt. Additional information will be made available in an information circular to be mailed to shareholders in advance of an Extraordinary Meeting of shareholders to held to approve the reorganization. INEX intends to hold the shareholder meeting on January 26, 2006 and has established a record date of November 28, 2005.
The Targeted Immunotherapy platform is based on the encapsulation of immunostimulatory oligonucleotides (short sequences of DNA) in INEX’s liposomal technology and combines the immunostimulatory properties of oligonucleotides into a single synthetic particle. The lead product candidate is INX-0167, which has demonstrated in preclinical studies to enhance the number and potency of certain immune cells, including natural killer (NK) cells. The resultant increase in NK cell activity is important for the enhancement of the potency of monoclonal antibodies through a mechanism known as antibody-dependent cell mediated cytotoxicity (ADCC).
Preclinical data has demonstrated the ability of INX-0167 to enhance NK cell activity resulting in an improvement in the anti-tumor efficacy of monoclonal antibodies when tested in lymphoma and breast cancer models. Data presented in a preclinical model of lymphoma demonstrated that treatment with the monoclonal antibody rituximab (Rituxan®) alone prolonged median survival by 25% over control and INX-0167 alone was able to prolong survival by 110% over control. However, combining INX-0167 and rituximab produced a synergistic response prolonging median survival by over 500% over control.
The major objectives for the new company would be to complete an equity financing in 2006 and complete the preclinical development to file an Investigational New Drug application for INX-0167 to start clinical development.
INEX intends to complete the reorganization by way of a Plan of Arrangement under the Business Corporations Act (British Columbia). Before proceeding with the plan, INEX will ask the Supreme Court of British Columbia to rule on whether the proposed plan can be completed given INEX’s current outstanding convertible debt. INEX has given notice to Stark Trading and Shepherd Investments International Ltd. (collectively “Stark”), the majority note holder, of the Plan of the Arrangement and Stark has advised that they intend to seek an order requiring note holder consent to proceed with the plan. INEX expects a hearing on these matters to take place before the end of the year. INEX believes the transaction is fair for all stakeholders and that the reorganization can be completed under the current terms and conditions of the debt and that note holder consent is not required.
Following the reorganization, the near term mandate of INEX would be to sell, license or partner its Targeted Chemotherapy technology platform and product candidates, including Marqibo, which has demonstrated anti-tumor activity in several cancers in phase 2 clinical trials. To achieve this goal, INEX will consider all possible alternatives including licensing or selling the products.
Given the focus of the new company on early stage technology and product development and INEX’s focus on the partnering of well-developed technologies, some of the cash and the majority of the INEX employees will be transferred to the new company. The new company will also assume most of INEX’s monthly expenses. INEX will retain a small senior management team to execute the business plan of selling, licensing or partnering the Targeted Chemotherapy assets. INEX will also have access to the personnel of the new company through a service agreement. The new company is expected to commence operations free of debt. The current executive team and Board of Directors of INEX would manage and direct operations of the new company.
“The next logical step in the continued development of Marqibo and our other chemotherapy products is the traditional step of partnering. We believe these products represent significant value and it is our intention to capture this value for stakeholders as quickly as possible,” Ruane said.
INEX has reached agreement in principle with the US Food and Drug Administration (FDA) on a path to commercial approval based on phase 3 clinical trial designs using complete response rate as the primary endpoint. The phase 3 trials would evaluate Marqibo as a treatment for both first-line non-Hodgkin’s lymphoma (NHL) and first-line acute lymphoblastic leukemia (ALL). Marqibo has shown promising anti-tumor activity in clinical trials in both of these cancers. Large cooperative medical groups have expressed an interest in participating in these phase 3 trials.
Two early-stage products in the Targeted Chemotherapy platform have potential for clinical development. INEX has received approval from the FDA to begin clinical trials to evaluate INX-0125 (sphingosomal vinorelbine). INX- 0076 (sphingosomal topotecan), is also ready for advancement towards clinical trials.
INEX’s liabilities would include convertible debt that, on September 30, 2005, totaled $41.0 million (US$35.3 million), including accrued interest. INEX will continue to meet all of its ongoing obligations, including the obligations of the convertible debt, which matures in April 2007.
About INEX
INEX is a Canadian biopharmaceutical company developing and commercializing proprietary drugs and drug delivery systems to improve the treatment of cancer. Further information about INEX and can be found at www.inexpharm.com.
Forward Looking Statements
There are forward-looking statements contained herein that are not based on historical fact, including without limitation statements containing the words “believes,” “may,” “plans,” “will,” “estimate,” “continue,” “anticipates,” “intends,” “expects,” and similar expressions. Such forward- looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, INEX’s stage of development, lack of product revenues, additional capital requirements, risks associated with the completion of clinical trials and obtaining regulatory approval to market INEX’s products, the ability to protect its intellectual property and dependence on collaborative partners. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.
Contact Information
Investors Ian Mortimer Vice President, Finance and Chief Financial Officer Phone: 604-419-3200 Email: info@inexpharm.com Website: www.inexpharm.com
Media Karen Cook Boas James Hoggan & Associates Inc. Phone: 604-739-7500 Email: kcook@hoggan.com
Source: Inex Pharmaceuticals Corporation
