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Lipoxen drug pipeline progressing nicely

Bio-pharmaceuticals group Lipoxen (LON:LPX) said that development of ErepoXen, its long acting erythropoietin for the treatment of anaemia, is progressing well.

The drug candidate is currently undergoing phase IIa clinical trials in India overseen by the Serum Institute, its local partner and the company’s second largest shareholder.

Dosing of the remaining patients in the study and the delivery of the final trial report are expected by the end of the year.

ErepoXen is one of two key developments in the Lipoxen portfolio. The other is SuliXen, a long-acting insulin, which is being developed by Russian partner FDA Pharma.

The company said the programme remains on track to enter phase II clinical trials in the final quarter of this year.

Separately, discussions continue with the Barbara Davis Centre for Childhood for Diabetes over the pair’s pre-clinical collaboration on SuliXen. 

“While the current programme has shown that our product is only as effective as other therapies for the prevention or reversal of diabetes, it has demonstrated positive therapeutic outcomes for treatment of the disease,” the company said.

“This continuation of the programme has budgetary considerations and we are therefore continuing our dialogue with the BDC on the costs of conducting further challenge efficacy studies in diabetic animals.  We expect to report further on this programme before end-2010.”

The update was given alongside the company’s interim results, which showed the group’s pre-tax loss widened by £100,000 to £1.5 million in the six months to June 30.

However the financials were something of a side-show to what was a comprehensive research and development update from Lipoxen.

The firm seems particularly buoyed by the results of its work on a potential flu vaccine, which should move into the next stage of pre-clinical development in early 2011.

“The challenge study end-stage of this project is nearing completion to such degree and with such level of positive expectation that the company has now initiated a process for full scale clinical development aimed at ensuring the near seamless continuation of the development of Lipoxen's influenza vaccine product candidate,” the company said.

“The final report on the current programme (being part-funded by the UK's Technology Strategy Board) is expected to be released early in the fourth quarter this year. 

“The company has developed a number of viable vaccine candidates and hopes to move to the next pre-clinical development stage early in 2011 subject always to the availability of internal capital and/or the securing of external collaborator funding arrangements which we hope to make in the next three to six months.”

Last week Lipoxen strengthened its ties with Baxter International (NYSE:BAX) in a US$4 million deal that gives the drugs giant a seat on the board.

Under the renegotiated terms of its agreement, Lipoxen will receive a US$2 million licence fee.

The AIM-listed group is also issuing warrant rights to subscribe to US$2 million of new equity between July next year and June 2015.

But instead of receiving the US$75 million of milestone payments and royalties negotiated in 2005, Lipoxen will get US$71 million. Baxter also gets to appoint a non-executive director to the Lipoxen board.

The agreement covers the PSA Factor-VIII molecule, which treats haemophilia and uses the Lipoxen-developed PolyXen protein drug delivery technology.

The Baxter injection of funds comes at just the right time for Lipoxen, which had £946,213 of “cash and equivalents” at the period end.
In April the group raised £1.2 million, and it later emerged that the senior management were the “cornerstone investors” in the placing.

This underlines the confidence of chief executive Scott Maguire and his finance director Colin Hill in the company’s prospects.

This confidence is also reflected in a two-part stock option scheme the pair signed up to in June that will see awards at 20p, 40p and 100p a share. The current share price is 7.38p a share.

“We have subscribed to the last two equity placings, “Maguire told Proactive Investors recently. “We bought in the open market.

And there’s a stock option programme that goes to 20p, 40p and a pound. So we are committed.”

Lipoxen was founded by professor Gregory Gregoriadis and spun out from the School of Pharmacy at the University of London in 1997.  It listed on AIM nine years later.

The company targets three specific areas – biological, vaccines and oncology drugs. It has three novel platforms to do this – PolyXen, ImuXen and VesicAll.

However the key focus of the company is the first two platforms.

The PolyXen platform is a versatile protein drug delivery technology. It is essentially based on a polymer of sialic acid which is naturally found in the body.
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Disclosure: The author holds no position in the comapny