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AVEXA IN-LICENSES PHASE II HIV DRUG FROM SHIRE.

Research and development biotechnology company Avexa Limited (ASX: AVX) has in-licensed the Phase II HIV drug - SPD754 - from global specialty pharmaceutical company Shire Pharmaceuticals Group plc (LSE: SHP, NASDAQ: SHPGY, TSX: SHQ).

SPD754, a nucleoside reverse transcriptase inhibitor (NRTi), has already successfully completed a Phase IIa trial in 63 HIV-infected patients. Avexa is on schedule to initiate the Phase IIb trial, with results expected in the first quarter 2006. Avexa research indicates that there is a need for new drugs that will treat the resistant virus emerging during 3TC therapy (a first line anti-HIV treatment) and SPD754 will be developed to target this market. SPD754 is expected to be on the market by 2009, potentially providing Avexa with significant revenues.

"Avexa has in-licensed this later stage product because of its potential to generate significant revenues and to reduce the overall risk involved in drug development for our shareholders," said Avexa CEO, Dr Julian Chick. "This is a great opportunity for Avexa. It recognizes Avexa's particular expertize and depth of experience of its management and scientific team in the commercial development of drugs for HIV. We are competitive with the world's best in our understanding of this field."

"The rates of success for late stage HIV projects are very high. According to a US Bureau of Economics 2003 paper, all 29 HIV drugs that entered Phase III between 1989 and 2002 made it to market. On the assumption that SPD754 is successful in the Phase IIb study; our objective is to take the drug into Phase III and for SPD754 to reach the market by 2009."

Matthew Emmens, chief executive of Shire, said, "Avexa is an ideal partner for the product, having the skills and expertize to take this program forward and see it through to registration and approval in a timely manner."

The in-licensing of SPD754 will not affect the progress of existing Avexa programs. Iin fact, the strengthening of Avexa's internal clinical capabilities will complement the clinical phases of these programs, in particular Avexa's HIV integrase inhibitor program. Assuming SPD754 reaches the market in the time frame outlined, the revenue generated will enable Avexa to retain more value from its existing programs, and allow Avexa to build a portfolio of products.

SPD754 is under Investigational New Drug status and has received fast-track approval from the US-Food and Drug Administration.

The Clinical Trial

SPD754 is a nucleoside analogue and part of a class of drugs known as NRTi. NRTis represent the major class of HIV therapeutics and the drugs of first choice in the treatment of HIV. Currently reverse transcriptase inhibitors represent over 50% of the global sales of HIV drugs which in 2004 was in excess of US$6 billion.

SPD754 has been shown to selectively inhibit the HIV replication enzyme reverse transcriptase and has successfully completed a Phase IIa trial. Importantly SPD754 is under Investigational New Drug (IND) status and has received fast-track approval from the FDA in the USA helping to speed development. Avexa is preparing SPD754 to enter a Phase IIb trial designed to demonstrate its efficacy in HIV-infected patients that have demonstrated resistance to therapy with 3TC (Lamivudine), a first line HIV therapy. The Phase IIb trial will examine two different doses of SPD754 and compare the drug to 3TC. This trial will be conducted in Australia, with the first patient expected to be enrolled by the middle of this year and results due in the first quarter of 2006.

Shire has previously conducted a Phase IIa trial with SPD754 in 63 HIV-infected patients who had not had prior exposure to HIV drugs. In this trial, SPD754 showed a statistically significant, greater than 1.4 log10 ( 25 fold) decrease in viral load. A decrease in viral load is one of the primary measures used to benchmark the effectiveness of HIV drugs and a 1.4 log decrease is similar or greater than that achieved by other NRTis currently being sold on the market demonstrating the potential of SPD754 in the treatment of HIV.

Avexa intends to differentiate SPD754 from other marketed NTRis in the marketplace by conducting a Phase IIb trial which is focused on demonstrating the effectiveness of SPD754 in patients that have shown resistance to therapy with 3TC. 3TC as either a stand-alone or combination drug generates close to US$1 billion in global sales annually. Other NRTi drugs on the market in this class include FTC (emtricitabine), Tenofovir and the combination (emtricitabine and Tenofovir) Truvada.

A successful outcome to this trial will assist Avexa in positioning SPD754 as a second line NRTi therapy in the treatment of HIV, meaning that patients that are no longer experiencing direct clinical benefit from 3TC therapy can be switched to SPD754 as an ongoing HIV treatment alternative. Avexa believes that there is a need for new drugs that will treat the resistant virus selected during 3TC therapy.

Terms of the Agreement

By in-licensing SPD754 Avexa takes on full responsibility for the worldwide development of the drug in accordance with an agreed development plan. Included in the deal, subject to shareholder approval, and the subsequent satisfaction of certain conditions, Shire will take a AUD$2 million equity position in Avexa and will also have an option to acquire 4 million more shares following the successful completion of the Phase IIb trial. Avexa has the right to market SPD754 throughout the world, excluding North America where Shire retains the right to market the product. An undisclosed reciprocal royalty will be payable. Avexa is not obliged to make any milestone payments to Shire as SPD754 progresses towards the market. The development and commercialization of SPD754 will be overseen by a Development Committee with joint representation from Avexa and Shire.

Avexa has retained Wilson HTM Corporate Finance to assist in raising the capital required for the Phase IIb development of SPD754 which will likely provide an opportunity for new and existing shareholders to invest in the company and this later stage project.

About Avexa

Avexa Limited is an ASX listed, Melbourne-based biotechnology company with a focus on research and development of anti-infectives. The company is developing drugs for the treatment of infectious diseases which have a significant unmet medical need. Avexa has dedicated resources and funding for its three key projects: antiviral drugs for HIV/AIDS and hepatitis, and an antibiotic alternative for antibiotic-resistant bacterial infections. Avexa has followed the ASX Code of Best Practice for Biotechnology Companies in preparing this announcement.

For more information, visit http://www.avexa.com.au.

About Shire Pharmaceuticals

Shire Pharmaceuticals Group plc (Shire) is a global specialty pharmaceutical company with a strategic focus on meeting the needs of the specialist physician and currently focuses on developing projects and marketing products in the areas of central nervous system (CNS), gastrointestinal (GI), and renal diseases. Shire has operations in the world's key pharmaceutical markets (US, Canada, UK, France, Italy, Spain and Germany) as well as a specialist drug delivery unit in the US.

For more information, visit http://www.shire.com.
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Publication:Worldwide Biotech
Date:Mar 1, 2005
Words:1165
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