Teva Says “No Thanks” to Rexahn’s Cancer Drug

From bottom to top in 2013, shares of Rexahn Pharmaceuticals (RNN) had more than doubled when it peaked at 66 cents in July, fueled in part by optimism of an Investigational New Drug application for RX-3117, a drug candidate being licensed to Teva Pharmaceutical Industries Ltd. (TEVA) .  Rexahn said on July 15 that Teva submitted the IND for the novel oral cancer drug to the FDA, positioning the drug to enter the clinic.

Lab research showed RX-3117 to be effective against various solid tumor lines, including colon, lung, renal and pancreatic.

That plan took a right turn on Wednesday with Rexahn announcing that Teva has, for strategic reasons, decided not to exercise its option to license RX-3117, putting an end to the companies’ Research and Exclusive License Option, or RELO, Agreement.

Per the agreement, Teva had 45 days from the time of IND filing to exercise its option for exclusivity of the drug.  The drug making giant has chosen to walk away, saying that even though RX-3117 appears to have potential, it doesn’t align with its new oncology strategy.

The 3117 ball is now back in Rexahn’s court and the company says that it will be advancing the DNA and RNA synthesis inhibitor.  “We will explore potential partnering opportunities with oncology focused pharmaceutical companies for this compound, as we continue to make progress in the clinical development of RX-3117,” said Dr. Peter Suzdak, chief executive at Rexahn.

Rexahn’s most advanced drug is Archexin®, an Akt protein kinase inhibitor that completed a phase 2 study last year in combination with gemcitabine in metastatic pancreatic cancer patients.  31 subjects were evaluated across four U.S. centers and five centers in India.  Top-line results showed that treatment with Archexin in combination with gemcitabine provided a median survival of 9.1 months compared to the historical survival data of 5.65 months for standard single agent gemcitabine therapy.

Further down the pipeline, dosing has begun this month in a phase 1 trial of Supinoxin™ (RX-5902) in patients with solid tumors.  Administered orally, Supinoxin is a small molecule inhibitor of phosphorylated-p68 RNA helicase, a protein only expressed in cancer cells that contributes to tumor progression and metastasis.

As of the quarter ended June 30, Rexahn had about $10.5 million in cash and equivalents.  The company  in July reported a $5.7 million registered direct offering where it is selling an aggregate of 11.4 million shares of stock and warrants (exercisable for about 4 million more shares) to a single healthcare institutional investor.  During the latest quarter the company recorded a net loss of $3.11 million, bringing the 2013 net loss total to $4.64 million.

Losing Teva’s development help has apparently heightened awareness of additional expenses without a partner.

Shares of RNN got jolted with the news, falling about 18 percent to 40 cents halfway through Wednesday trading. With the decline, shares are still up about 29 percent so far in 2013.