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Biotech / Medical : Elan Corporation, plc (ELN) -- Ignore unavailable to you. Want to Upgrade?

To: Icebrg who wrote (3184)	9/24/2002 6:39:16 AM
From: Icebrg	Read Replies (1) \| Respond to of 10345

Inex's future may be decided by year-end Test results for cancer drug expected soon LEONARD ZEHR Tuesday, September 24, 2002 The next three months will likely make or break Inex Pharmaceuticals Corp.'s bid to vault into the biotech big leagues. For starters, the Vancouver-based company will release pivotal clinical results of its chemotherapy drug Onco TCS as a treatment for relapsed lymphoma, or aggressive blood cancer. It also plans to update additional clinical testing of Onco TCS at a medical conference in December, which if positive, could expand the annual market for the drug to $400-million (U.S.) from $100-million in a few years. And Inex also is negotiating a deal to repurchase the 20-per-cent interest in the Onco TCS joint venture held by beleaguered Irish drug giant Elan Group PLC, which is hunkering down after an accounting scandal that happened earlier this year. "There's no question the balance of the year is very important for Inex," said Dlouhy Merchant Group Inc. analyst Cosme Ordonez, who is also a physician. "The pivotal data will be the basis to file Onco TCS for marketing approval with the FDA in early 2003," he said. Despite a hectic agenda, Inex's stock price has slumped more than 50 per cent this year as analysts blame Elan's problems for hammering not only Inex, but the entire biotech sector. Inex closed yesterday at $4.25 (Canadian) on the Toronto Stock Exchange, down 38 cents. Dr. Ordonez rates the stock a "strong buy," with a 12-month price target of $13.90. Inex president and chief executive officer David Main said the final data for Onco TCS should be released before the end of November. "I think the deal with Elan will be done before the Phase III data is out. But we'll probably wait a few months to do a new marketing deal because strong data will give me more bargaining leverage," he added. Elan has injected $25-million (U.S.) into Inex stock and Onco TCS research during the past 18 months. It also holds a $27-million note that can be converted into about five million new Inex shares in two years. Mr. Main said the exit negotiations involve giving Elan "future cash milestones" from Onco TCS sales in exchange for its 20-per-cent stake. "The goal of any new partnership is the same 50-50 split of profits that we had with Elan," he said, adding that 50 per cent of profits is equivalent to 20 to 30 per cent of revenue from drug sales. Onco TCS, which also is being tested in nine Phase II trials, consists of the widely used generic cancer drug, vincristine, encapsulated in Inex's patented drug delivery technology, transmembrane carrier system (TCS). The lipid carrier is designed to increase the effectiveness of vincristine by releasing higher doses of the drug at tumour sites for extended periods of time and reducing damage to surrounding tissue. At a medical conference last May, Inex reported that of 26 lymphoma patients who received Onco TCS as a first-line therapy, 25 had all their tumours eliminated and one patient partly responded to the drug. "If the 100-per-cent tumour response rate holds true in the larger analysis [this December], Inex will have very compelling data," Dr. Ordonez said. He wouldn't be surprised to see Inex, which has about $75-million (Canadian) in cash, become a takeover candidate after the company concludes a deal with Elan, but before it gets a new pharmaceutical partner. Among other things, he said three other "lipid-based drug delivery companies" have been acquired recently. He also suspects that GlaxoSmithKline PLC, which has licensed the TCS delivery system to improve the efficacy of its Hycamtin chemotherapy drug, would be a logical candidate to replace Elan in the Onco TCS venture. globetechnology.com