Australian biotechnology and research development company Avexa has resolved to cease any further development of its lead HIV programme, ATC, following the unsuccessful conclusion of partnering discussions with global pharmaceutical companies.
The company says unfortunately, for ATC, the compound’s successful development did not translate into a commercial deal to partner the programme with a global pharma company and, as a result, the programme is no longer viable. Avexa does not intend to invest further capital in the development of ATC or seek regulatory approval for the drug.
Avexa’s chairman Nathan Drona stated that ATC’s failure did not occur in the clinic.
“Development milestones were consistently met in a timely manner and trial results posted solid data around safety and efficacy. In the end, the challenge came down to the relationship between asset development timelines and the fluid nature of the treatment landscape,” Drona said.
“As new combination therapies entered the market, in the view of our potential global pharmaceutical partners, the value of ATC diminished. Although Avexa was engaged with every relevant party in the HIV market, the Company was unable to monetise ATC and it became appropriate to close the programme.”
This announcement follows the closure of ATC’s Phase III clinical trial in October last year.
Since then, detailed results from this study at 24 weeks were provided to interested parties as part of a formal process designed to secure a licensing transaction. Last week, the last party involved in this process notified Avexa that it did not intend to submit a term sheet. Consequently, the Board of Avexa has resolved to cease all activities for this programme. Avexa has commenced a strategic review of its remaining programmes and intends to consider suitable merger, acquisition, in-licensing opportunities and other corporate initiatives.
The company has taken immediate action to reduce costs and will continue to actively preserve capital, including taking further action to significantly reduce overhead in combination with the strategic review process.
Headcount reduction
The move will also result in loss of pharmaceutical jobs.
Julian Chick has resigned from the Board, effective immediately, and will leave his position as CEO by the end of this month.
The company also shared that a significant headcount reduction in all areas of the company, including discovery, clinical, and executive staff has commenced.
The company, which had 24 employees, will probably only retain one to two executives as well as a minimum of administrative staff by the end of this month, Drona said, according to Bloomberg.
In the interim, the company will be actively preserving capital and taking further action to significantly reduce overhead in combination with the strategic review process. Avexa had a net cash position of approximately $26.6m as at 31 March 2010 and expects to have approximately $23m in net cash as at 30 June 2010 after allowing for net current liabilities and expected redundancy and restructuring costs.
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