Emerging Drug Developer: Rexahn Pharmaceuticals

Rexahn turns to deal-making as Phase II results loom

Over the course of its eight-year history, Rexahn Pharmaceuticals' rep was been built primarily around its successful advancement of three key drug programs covering two distinct therapeutic areas: CNS and cancer.

Now Rexahn--which was founded by Chang Ahn, a scientist and former FDA official--would like to develop a reputation for signing up development partners. That's why Rockville, MD-based Rexahn recruited Chief Business Officer Rick Soni a little less than a year ago.

"Over the years (Ahn) has discovered several potential market-leading agents," says Soni. "And we really started focusing on the clinical development in the last few years."

Rexahn, a public company, needs to do something to help ignite investor interest. As the stock market swooned over the past year Rexahn's share price has slid more than 70 percent and now hovers a bit over $1 a share. On Friday the stock closed at $1.12. A year ago, the share price was $4.12.

Rexahn has three mid-stage products in clinical trials. And they're looking for some ace mid-stage data on each.

There is Archexin, a cancer therapy, Serdaxin, a CNS drug being tested for anxiety and depression, and another CNS drug, Zoraxel, which is being studied as a therapy for sexual dysfunction.

"Archexin is the lead cancer product," says Soni. "We are conducting a Phase II trial in pancreatic cancer in the U.S and India. Phase II just started in pancreatic patients. Since there's no treatment right now, everyone is doing clinical trials in pancreatic cancer. We went to India to complete the study faster, to recruit patients and to expedite the completion of the trial. Our best quesstimate is that it will take 12 to 15 months to finish the trial.

"And then we have Serdaxin, which is in Phase II for depression. That study is ongoing right now. The study should complete enrollment at the end of next month and we should get preliminary results from the study in the third quarter."

Serdaxin has provided data suggesting that it could be used for a variety of CNS ailments.

"We recently got some very exciting data in animal models relating to Parkinson's disease," says Soni. "It can stop the progression of Parkinson's disease. We started working with an expert in Parkinson's and our current plan is to initiate a Phase II trial in Parkinson's. The third thing regarding Serdaxin is that there is some interest from the government to use it for PTSD (post traumatic stress disorder.)

"For Zoraxel, we completed a Phase IIa study in sexual dysfunction," says the business officer. "The big differentiation from Viagra and Cialis is that they are cardio-based products, whereas Zoraxel works with the brain, centrally acting. We have preliminary positive Phase II results and plan to release final results in the next few weeks. And then we plan a big Phase II study with 200 patients in the second half.

"Our goal is to have a partnership in place after we complete the Phase II studies," he adds. "We're in discussions with many different companies. From our perspective the best way to partner and maximize value for our stakeholders is to partner after Phase II data is in hand. The upfronts are higher and the milestones are also much higher."

But Rexahn is flexible. The developer has preclinical programs in place that it is also open to partnering.

Says Soni: "We do anticipate a partnership in the next three to six months. Also, we can leverage our discovery platform, form another partnership in some licensing arrangement. Near term that's our goal: to have the partnership money as a source of revenue and medium or longer term, depending on how our financing goes, to maybe become a specialty pharma company at some point."

A co-promotion deal would help get that process underway.

"Oncology is an area where you don't need a big sales force," Soni explains. "On the CNS side--sexual dysfunction--you do need a fairly big sales force. So oncology is an area we could start on a co-promotion basis. Because that's our strength."

In the meantime an investor recently stepped up with equity financing of $3 million to help fund the company and could provide another $7 million on top of that.

Right now, says Soni, the developer has 15 employees. That's down from about 20 after the company decided to let attrition lower the head count to ease the burn rate.

Emerging Drug Developer: Rexahn Pharmaceuticals
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