In January, Ziopharm (ZIOP) announced a strategic deal with billionaire RJ Kirk's synthetic biology company, Intrexon. In return for an $11,628,202 million investment in Ziopharm stock, Intrexon was issued 7.5% of Ziopharm stock and will receive an additional 7.5% once its lead candidate DC-IL-12 begins Phase II trials. From time to time, Kirk will also participate in fund raisings, investing an additional $50 million in the company.
Ziopharm and Intrexon appear to have little if anything in common. Ziopharm is as old school an oncology company as you can get, designing nitrogen mustard, arsenic, and tubulin binding chemotherapies. Kirk's company on the other hand is on the leading edge of biotechnology, making and controlling DNA to create biologics. One is public, the other private.
Ziopharm has a number of compounds in clinical trials, even in Phase III, yet its market cap is below $300 million. It seems the company's candidates are not getting much respect from the investing community. In small trials, lead compound palifosfamide looked good in combination with doxorubicin compared to dox alone. The results landed it as one of the “best of ASCO”. Data from a pivotal trial for palifosfamide in sarcoma should be available by the middle of this year. As such, the company’s shares have been rising steadily since July of last year.
But what Ziopharm called “transformational” for the company was its new partnership with Intrexon and RJ Kirk, although the lead candidate in the deal was only in Phase Ib. As it turned out, Kirk’s impact was felt almost immediately; the company announced plans to raise $50 million from a sale of stock. Investing alongside made the 18% increase in shares outstanding more palatable; in the end, over $59 million was raised.
This will be an eventful year for Ziopharm. Along with data from its own compounds, results for a jointly developed DNA-based drug, DC-IL-12, will be coming out in Q4. Second in line from the Intrexon pipeline, AD-IL-12, will enter the clinic during the first half of this year. In pre-clinical studies, this treatment appeared even more potent than the first.
The CEO from Ziopharm aims to go full steam ahead with both the Intrexon pipeline as well as the company’s original three candidates. One must wonder if there will be some eventual prioritization: I doubt Kirk made this investment for his projects to play second fiddle to products he believes are second-rate in comparison.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.