Teva jettisons an option deal with struggling Rexahn

Over the past few years, Rexahn ($RNN) has regularly cited its development pact with Teva ($TEVA) for a preclinical tumor drug dubbed RX-3117 as a cause for hope in the little biotech's future. Today, Rexahn issued word that Teva had nipped that one in the bud, choosing not to exercise its option for the therapy as it neared the clinic.

Teva was in a 45-day review period that followed an IND filing for 3117. But Rexahn says that the giant ended up walking away. According to Rexahn, Teva concluded that "RX-3117 appears to have potential in various indications, but does not align with Teva's new Oncology strategy."

For Rexahn, it was more bad news to share with investors. And shares quickly shed more than 20% of their already shredded value, dropping to a mere 38 cents this morning. With no revenue, Rexahn outlined $4.6 million in losses over the first half of the year. The biotech has a little more than $10 million in cash and equivalents.

Rexahn ran into some bad problems in the fall of 2011, when its depression drug Serdaxin flunked a clinical trial. That program is now sitting on a shelf, waiting to see if a partner will come along. But the developer still has Archexin, which wrapped a Phase IIa study last summer. Rexahn says it's considering its options on moving ahead.

Rexahn's CEO, though, maintains that he has good reason to hope for good news ahead on 3117.

"Rexahn looks forward to advancing the clinical development of RX-3117," said Rexahn CEO Peter D. Suzdak in a statement. "RX-3117 has already demonstrated safety and oral bioavailability in cancer patients, and has the potential to treat a wide variety of solid cancer tumors. 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."

- here's the press release