After in-licensing compounds off the shelves of a slate of Big Pharma companies and raising $42 million from Pfizer ($PFE) and others a little more than two years ago, the small team of development vets at Flexion set out to show that they could quickly push through the clinic to proof-of-concept. Once at the PoC stage, they could out-license the drugs back out, reaping rewards for their efficiency and clinical savvy.
This morning, Flexion announced that they hit the proof-of-concept stage as planned. Top-line results from a Phase II study demonstrated that FX005 - which is injected directly into joints - hit its primary endpoint on pain relief and function among osteoarthritis patients. But instead of automatically pivoting back to the out-licensing position, as originally planned, Flexion says it plans to keep pushing ahead in the clinic with a portfolio of osteoarthritis therapies, retaining the right to market their drugs in the U.S. as the best way to build value in the company.
Flexion CEO Mike Clayman, a veteran of Eli Lilly's Chorus unit, says that the change of strategy is a direct result of changing market conditions for licensing deals and biotechs.
"In the absence of an IPO market, with pharma the only game in town, we're aware of large pharma companies doing option-based deals with modest up-fronts and lots of downstream risk," Clayman tells FierceBiotech. And given the market opportunity of a new pain medication for osteoarthritis, he adds, it was easy to decide to hold on to the asset, with an option to market the drug with a relatively small sales force.
Flexion plans to release the data on its osteoarthritis drug at an upcoming conference, probably before the end of the year. But the company says FX005 offered the "first-ever" clinical data demonstrating the efficacy of a p38 MAP kinase inhibitor.
Now a Phase IIb dose-ranging study can be launched next year, while a IIb trial of FX006 - a long-lasting injectable corticosteroid - is almost ready to go. A preclinical program for an anti-NGF treatment is also in the pipeline.
Flexion raised an additional $13 million in venture funds from its existing lineup of backers in the first quarter, bringing its total haul to $55 million. And the company has slowly added staffers, growing from a core team of 6 to 11. Now it has the money to get into 2013, with an eye to raising more cash as needed.
"Our core competency is recognizing interesting, important assets and designing efficient and effective development programs," says Clayman. "You don't need to have large numbers of people behind it."
- read Flexion's release