oncogenex technologies: drugs market in a tight · 2018-09-26 · 4 launched. the type of market...
TRANSCRIPT
Ambarish Chatterjee (MBA 2009) prepared this case under the supervision of Professor Thomas Hellmann, with the close cooperation of OncoGenex Pharmaceuticals and a generous grant from the British Columbia Innovation Council (BCIC). This case is intended as the basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation.
Copyright © 2008 by Sauder School of Business. All rights reserved.
BCIC Case Study Library No. 0003 November 2008
OncoGenex Technologies: Bringing Drugs to Market in a Tight Funding Environment
Scott Cormack, President and CEO of OncoGenex Technologies, was pacing up and down his office, far too absorbed to notice the beautiful view over False Creek near downtown Vancouver. All he could think of was to make no ‘false moves.’ OncoGenex’s most advanced drug, called OGX‐011, was advancing to a crucial testing stage, namely the so‐called phase III trials. The company needed funds, as phase III trials were an expensive proposition. The issue that lingered on Scott’s mind was how difficult it seemed to be to obtain funds at this critical juncture. For example, in the last five years, only one Canadian biotechnology company had managed to get a listing on the NASDAQ stock exchange. His company had come a long way, and was now facing a strategic decision that might fundamentally change its direction. He pondered his three options: Should he seek an acquirer for the company? Should he sell off the commercial rights to the upcoming drug, and focus the company onto developing its other drugs under development? Or, should he support the potential reverse takeover of Sonus Pharmaceuticals? Or. Three good options, but no room for false moves!
The Biotechnology Industry – Some Background
The biotechnology industry came into its own during the 1970’s. Two breakthroughs in the field of molecular biology, Stanley Cohen and Herbert Bayer’s research on recombinant DNA, and George Kohler and Cesar Milstein’s research on monoclonal antibodies,1 heralded 1 Recombinant DNA is a process by which a piece of DNA molecule from one organism is inserted into another DNA molecule from the same or different organism. On the other hand, ‘monoclonal antibodies’ is a process through which highly specific antibodies are produced through the fusion of lymphocytes with tumour cells (hybridomas). The application of recombinant (rDNA) is now widespread from vaccination to forensic testing. The first application of rDNA was to enlarge the manufacturing of therapeutically important human proteins in microorganisms. In the 1970’s monoclonal antibodies were thought to be ideal for the treatment of cancer. See exhibit 7 for a background to OncoGenex’s drug development efforts.
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the birth of an industry. Biotechnology helped to reduce the minimum efficient scale for drug discovery and then paved the way for small start‐up firms to take part in this endeavour. The incentive of independent work and its ownership appealed to entrepreneurial scientists and doctors who had the experience of running a lab or large firms.
Typical biotechnology companies are started through seed money funds provided by government grants, angel investors, venture capitalists and corporate investors. Since the early nineties, biomedical technology has been a fertile area for new companies. Many of today’s leading medical device companies began as start‐ups founded by industry professionals who saw potential and were willing to take on risk. The valuation of these companies rose to millions – and even billions, in some cases – as the firms grew over the years. However, many biotechnology companies also faltered, never developing any successful drugs, let alone generating a return for their investors.
The biotechnology industry more than tripled in size since 1992 and the revenues have increased from US $8 billion to around $50 billion in 2005. The rate of growth for the U.S. biotechnology industry in the last decade has been nearly 14% annually. The revenue for this industry is expected to reach $150 billion by 2010. As of now there are more than 15,000 biotechnology companies in the United States alone, out of which over 350 are publicly held companies. The highest concentration of public and private biotechnology companies in the U.S. is in New England and San Francisco. Other key biotechnology research countries include Denmark, Germany, Switzerland, Canada, Belgium, Australia and New Zealand.
The Biotechnology Environment in British Columbia
Strong Medical Infrastructure
Like other Canadian provinces, the biotechnology industry in British Columbia benefits from an extremely strong, centralized medical infrastructure. “Because we have universal healthcare, BC researchers have access to anonymous longitudinal patient information for 4.3 million residents, including 19,000 new cancer patients in our province each year, whose treatment is standardized,” said Sam Abraham, Ph.D., director of the BC Cancer Agency’s technology development office.
Canadian medical institutions are part of a coordinated network, which enables researchers to do genetic research. BC has Canada’s strongest genome initiative, to which the Canadian government has invested over US $173 million in research projects, with about half of that spent on cancer research.
The Prostate Center at Vancouver General Hospital (VGH), where most of the work for translational research is carried out, is a National Center of Excellence. It is also one of the world’s leading facilities for research and treatment of Prostate cancer. Researchers at the
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Prostate Center at VGH are able to design therapeutic inhibitors, test them in preclinical models and are able to evaluate therapies in clinical trials.
Academic Ties
BC’s biotechnology industry is intimately tied to UBC, which has a long‐standing, successful commitment to technology transfer. Of approximately 115 companies spun‐off from the university over the past 25 years, approximately half have been biotechnology companies, accounting for 70% of the province’s total biotechnology industry.
Companies that have been spun off from UBC include QLT, OncoGenex, NeuroMed, Xenon, Inex, and Migenix, among others. “Because of QLT’s early success, faculty are aware of commercial opportunities,” said Dr. Bruce. Unlike in the U.S., UBC professors most often retain their academic positions while founding and running biotechnology companies. Academics are often doing early and subsequent research on campus with students, reducing the need for early funding to build labs.
Biotechnology Financing and Limitations
“Canadian firms are not on a level playing field when it comes to raising capital from the U.S. They must start earlier and take a long‐term approach,” said Nancy Harrison, senior V.P. of Vancouver‐based Ventures West.
“There is a perception in the U.S. of high corporate rates in Canada, a complex legal system, and the question of whether it is possible to attract human capital here,” she added. For proactive tax and legal solutions, good lawyers are the key to cross‐border deals. Many BC‐based companies have been successful in obtaining cross‐border financing and establishing a range of collaborations and alliances.
For biotechnology companies which have large upfront capital requirements and which cannot be financed by cheaper alternatives such as debt the most common method of financing is through venture capitalists. This is most commonly the case for intangible assets such as intellectual property or drugs in development whose value is unproven but which have a huge market potential. A start‐up company looking for venture capital generally need to fulfills three criteria:
Technology – Technology is the foundation of the investment. Investors look for a unique product to fill an unmet need in the market. The technology platform supports multiple products in the pipeline that helps VCs leverage their risk. The VCs also look for investments that have the capability to hit key milestones in one to three years.
Market Potential – VCs also look for significant market potential of the technology. Instead of a ‘me too’ drug they look for a product that will have a big impact on the market when it is
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launched. The type of market also matters when it comes to secure funding – for a cancer drug company to secure venture capital before it has completed its human trial is very difficult as many companies have been burned by early stage targets that do not formulate. If the development landscape is very crowded it becomes very difficult for the company to secure funding too.
Strong IP – IP protection, either in the form of a patent or trade secret, is another flag that the venture capitalist looks for. An IP which fails to cover international markets is less attractive to investors as they feel that it will give rise to problems in the future.
External factors also matter in biotechnology financing as depending on the economic swing of the industry it is easy/hard to secure funding. Governmental regulation and other socio‐economical factors play a crucial role in this funding arena from time to time.
OncoGenex’s Inception and Early History
Dr. Martin Gleave, a cancer researcher at UBC (and urologist at Vancouver General Hospital) discovered anti‐sense oligonucleotides designed to inhibit a cell survival protein called clusterin that made tumours more susceptible to cancer therapies. The University Industry Liaison Office (UILO) invested $10,000 for the market assessment of the technology, which identified a promising market opportunity. In order to further develop that opportunity, Dr. Bruce at the UILO brokered an introduction between Dr. Gleave and Scott Cormack (formerly of Milestone Medica Corporation, a Canadian venture capital firm – see Exhibit 1). Together Dr. Gleave and Mr. Cormack then founded OncoGenex Technologies, a UBC spin‐off (for a timeline of major events, refer to Exhibit 2).
Commercializing OncoGenex
On Jan 24, 2002 OncoGenex Technologies raised $3.6M (CAD) in private financing mainly with BDC Venture Capital in participation with Milestone Medica Corporation, and the Qwest Emerging Biotech (VCC) Fund. In the meantime, it developed a co‐development relationship with Isis Pharmaceuticals (see Exhibit 3), as well as a working relationship with the Division of Urology and the Prostate Cancer at the Vancouver Hospital and Health Sciences Center. At this time, OncoGenex had two products in its preclinical development with its lead OGX‐011 intended to enter clinical trials later that year. The company at that time had Scott Cormack as the CEO and Martin Gleave as the CSO. In addition to these members, Dr. Bruce was an observer on the board as OncoGenex chartered its path toward commercial success. In December 2002, OncoGenex and Isis Pharmaceuticals started the initiation of the Phase I clinical trial of OGX‐011 in patients with prostate cancer. Scott Cormack, commented on the developments: “We are very pleased that the co‐development partnership between OncoGenex
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and Isis has successfully delivered on its intent to advance OGX‐011 into clinical development in 2002.” The first phase would evaluate OGX‐011 in combination with hormone therapy prior to surgical removal of the prostate.
Later, the company started the initiation of a second phase I clinical trial of OGX‐011 in combination with Taxotere to treat patients with a variety of solid tumours. “This trial is intended to demonstrate the safety of OGX‐011 in combination with chemotherapy in patients with prostate, lung, renal, ovarian and bladder cancer,” said Martin Gleave. “We see this trial as serving as the basis to subsequently evaluate OGX‐011 in parallel Phase II studies directed to specific tumour types.”
Further Financing
In September 2003, OncoGenex completed a US $11.5M financing in Canada, one of the largest financings in Canada that year. The financing was led by Ventures West and was joined by other new investors such as H.I.G. Ventures and the Working Opportunity Fund managed by Growth Works Capital. The other existing investors were the Business Development Bank of Canada and Milestone Medica Corporation (see Exhibit 4).
“Attracting this strong syndicate of investors in this oversubscribed round is testament to their confidence in our products and capabilities” said Scott Cormack, President and CEO of OncoGenex. “These funds provide cash to continue the momentum that we have established in expanding our products pipeline, securing alliances and partnerships and advancing our clinical programs.”
The total research funding spent at UBC on the contract between OncoGenex and UBC was $307,780 and $416,700 in the years 2003 and 2004 respectively. A brief breakdown of the work is provided in Exhibit 5. A good working relationship with the Vancouver General Hospital Prostate Centre and the UBC Hospital helped the company to conduct its clinical trials.
Phase I Success
In June 2004, OncoGenex and Isis Pharmaceuticals completed their phase I study and showed that the once‐weekly administration of OGX‐011 was well tolerated and achieved excellent drug concentration in the target tissue (see exhibit 8 for details on the FDA drug testing phases). At the time, Dr. Chi, principal investigator commented that “this study clearly demonstrates the biological effectiveness of OGX‐011 at doses that are very well tolerated. The Phase I study demonstrates for the first time the ability of OGX‐011 to potentially inhibit clusterin expression in primary prostate cancers.” Moreover, the Phase I study showed a statistical correlation of target reduction of clusterin level with varying doses of OGX‐011. “This finding gives us confidence in advancing to Phase II studies because the dose is now known to correlate to biologic activity in humans,” said Dr. Gleave.
In July 2005 OncoGenex initiated the first of five Phase II clinical trials of OGX‐011 in newly diagnosed previously untreated patients with clinically localized high risk prostate
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carcinoma. “This study will provide data on the ability of OGX‐011 to enhance the activity of hormone ablation therapy in prostate cancer. The rapid movement of OGX‐011 from discovery to Phase II development in only five years is proof of our ability to achieve our stated goals and our commitment to building value for our shareholders,’’ stated the CEO.
Phase II Funding and IPO Development
In August 2005, OncoGenex closed a $12.8M (USD) round of financing. This ‘series B2’ round of private equity financing included several new venture capital firms, such as the WHI Morula Fund and BC Advantage. Proceeds of the financing were used to support the advancement of OncoGenex’s second product candidate OGX‐427 (see Exhibit 6) into clinical development, and the initiation of four other Phase II trials.
In December 2006, OncoGenex filed a registration statement with the U.S. Securities and Exchange commission and a preliminary prospectus with the Canadian provincial securities regulatory authorities for a proposed initial public offering of its common shares. In March 2007, the company had to withdraw its registration statement from the U.S Securities and Exchange Commission citing market conditions as a deterrent to completing its Initial Public Offering (IPO). “Due to recent adverse market conditions, we have decided not to move with an initial public offering at this time,” stated Scott Cormack, regarding the decision. “We anticipated pricing our initial public offering on February 27, coincidentally the same day that the equity market suffered the largest one day decline in four years. Given current market conditions we believe it is in our shareholders’ best interest to withdraw our initial public offering and continue to focus on delivering results from our Phase II programs.”
Evaluating the Options
OncoGenex now had preliminary data from all five of its Phase II clinical trials and the results looked encouraging to carry on to the next stage. Scott Cormack had three options in hand and time was precious as cash was dwindling. The options on the table were:
I) An outright sale of the company;
II) A sale of the commercial rights to OGX‐011 – this would allow OncoGenex to maintain its R&D focus while earning its first revenue through royalties;
III) Proceed with a reverse takeover – this would mean getting some of the money required to continue operations, receive a listing on the NASDAQ stock exchange and acquire additional product candidates.
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There have, as of yet, been no tangible offers made to purchase OncoGenex. Takeovers in this industry however are very common. Pharmaceutical companies are constantly looking for biotechnology firms to buy‐out in order to replenish their drug development pipelines. For instance, to‐date in 2008 there has been over 20 acquisitions in the pharmaceutical industry that have exceeded $20 million in value. If OncoGenex were to start looking for a buyer, then their strategy would be to begin cutting costs and ancillary expenses to make them as attractive as possible for acquirers, hoping to generate the highest possible return for share holders. Commercialization is the second option facing the firm right now. This is the most common method for biotechnology firms to make money while continuing to develop drugs. A pharmaceutical firm, instead of buying out the entire firm, would license the drug from OncoGenex and market/distribute it on their behalf. OncoGenex would benefit through receiving royalty payments from the licensing firm. In connection with the third option, the most probable target for a reverse takeover would be Sonus Pharmaceuticals (refer to Exhibit 3), a Seattle based company focused on the development of cancer drugs designed to provide better efficacy, safety and tolerability. Sonus had previously failed Phase III testing of its lead product candidate and had recently received a notification from the NASDAQ stock exchange indicating that the company was not in compliance with the minimum $1.00 bid price requirement for continued listing on the exchange. On May 8th, 2008, Sonus received a determination letter from NASDAQ indicating that the company had failed to regain compliance and was therefore to be delisted from the NASDAQ exchange. A reverse takeover is essentially a private company buying out a public company. In the case of Sonus, their share price is so low that OncoGenex would be able to buy‐out their outstanding shares while keeping some cash on the books. The result of the transaction would be similar to taking the company public while skipping the majority of the legal and regulatory fees associated with a public listing. The resulting firm would be named OncoGenex Pharmaceuticals, Inc. OncoGenex Technologies security holders would then hold more than 50% of the outstanding shares of common stock of the Company. In terms of the consolidated financial statements this arrangement would be viewed as a reverse acquisition, whereby OncoGenex Technologies would be deemed to be the acquiring entity from an accounting perspective. Scott felt that the reverse takeover of Sonus was the best option available as Sonus had cash ($40M) and a NASDAQ listing which would help fund its Phase III clinical trials. Sonus had a limited product pipeline and few options to restore shareholder value and so the deal would potentially work well for both companies. This was a big opportunity as well as a risk for Scott Cormack and OncoGenex Technologies. Under this plan, the combined company would operate as the newly renamed
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OncoGenex Pharmaceuticals Inc., and Scott Cormack would remain President and CEO of the new company. The combined company would have a deep oncology pipeline of five product candidates, with three in clinical trials in humans, with each product having a distinct mechanism of action and represent a unique opportunity for cancer drug development.
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Exhibit 1 – Select OncoGenex Technologies Inc. Executive Biographies
Scott Cormack, President & Chief Executive Officer
Mr. Scott Cormack is the founding President and CEO of OncoGenex Technologies Inc. He has over two decades of diverse experience in the biotechnology industry in executive management, research and development, regulatory affairs, business development, operations, sales and marketing and corporate finance. At Vetrepharm Research (now Bioniche Life Sciences), Mr. Cormack successfully led the development of the company’s immunotherapeutic from the laboratory bench through preclinical development and into clinical trials in oncology. This technology was also successfully applied to vaccines as an adjuvant, and as an immunotherapy for viral diseases and oncology in veterinary indications which was approved for marketing in multiple countries. Mr. Cormack subsequently expanded his business development and operational skills, initially as Business Development and then as Chief Operating Officer of NeuroSpheres, Inc. Immediately prior to joining OncoGenex, Mr. Cormack served as the Vice President, Western Region for Milestone Medica Corporation, where he was responsible for managing the western operations of the seed‐capital investment fund. Under his tenure, Milestone Medica co‐founded and funded start‐up companies in Western Canada. Mr. Cormack became full‐time President and CEO of OncoGenex Technologies Inc. in January, 2002. He has led OncoGenex through significant corporate milestones including serial rounds of private financing; leading the corporation through transition from pre‐clinical through completion of multiple phase 2 clinical trials leading to planned supportive registration trials in 2009; and, building a robust pipeline of product candidates.
Martin Gleave, MD, FRCSC, FACS, Founder & Chief Scientific Officer
Dr. Gleave is a Professor in the Department of Surgery at the University of British Columbia, Director of Clinical Research at the Prostate Center at Vancouver General Hospital, and Director of Research for the Division of Urology at UBC. He is a Senior Research Scientist at the Prostate Research Lab at Vancouver General Hospital and the Department of Cancer Endocrinology at BC Cancer Agency, and is appointed as a Consultant Urologist for the Department of Urology at the University of Washington. Dr. Gleave’s current research focuses not only on the study of cellular and molecular mechanisms which mediate progression of prostate cancer to its lethal stage of androgen independence, but also on the use of this information to develop integrated multi‐modality therapies that specifically target these mechanisms. He is active in clinical trials across Canada and is Chairman of the National Cancer Institute of Canada GU Clinical Trials Group, and Chairman of the Canadian Uro‐Oncology Group.
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Exhibit 2 – A Timeline of Major Milestones
UBC University-Industry Liaison O
fficew
ww
.uilo.ubc.ca
The Story of a Spin-Off
Announces new
encouraging data from
Phase I trials w
ith OGX-
011 in non-sm
all cell lung cancer
Licenses fourth technology from
UBC (O
GX-427)
OGX-427 advanced as second product candidate for clinical developm
ent
Positive data from
second and third OGX-011 Phase I studies
Initiates first, second, third and fourthPhase II trials for OGX-011
Completes
$US12.8m B2
round equity funding
Initiates third Phase I trial for O
GX-011
Oncogenexannounces positive data from
first OGX-011 Phase I trial
Initiates second Phase I trial for OGX-011
OncoGenexexpands co-developm
ent relationship w
ith Isis.
Completes
$US12m
B round of equity financing
Initiates first Phase I trial for OGX-011
OncoG
enexlicenses third technology from
UBC leading toO
GX-225
OncoG
enexlicenses tw
o technologies from
UBC.
First technology enters product pipeline as O
GX-011
OncoGenexsigns a co-developm
ent deal w
ith Isis Pharm
aceuticals to provide backbone for antisense.
Completes
$US2.5m seed
round financing
UILO
converts patent to PCT.
OncoG
enexfounded as U
BC spin-off from
Prostate Centre at Vancouver G
eneral H
ospital w
ith initial corporate offices leased from
VG
H.
UILO files U.S.
Provisional Patent for TRPM
-2 AntisenseTherapy.
UILO
introduces M
artin to Scott Corm
ack
First D
isclosure of a N
ovel AntisenseTherapy for Prostate Cancer m
ade to UBC UILO
Dr M
artin Gleave
works as a
researcher at the U
BC and Vancouver G
eneral H
ospital’s Prostate Centre, supported by num
erous sources of funding.
20062005
20042003
20022001
20001999
19981996-97
TM
TM
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Exhibit 3 – Related Companies and Investors
Isis Pharmaceuticals Inc.
Isis Pharmaceuticals Inc. is exploiting its expertise in RNA to discover and develop novel human therapeutic drugs. The company has successfully commercialized the world’s first anti sense product and has 11 antisense products in development. In the company’s GeneTroveTM program, Isis uses anti sense technology as a tool to determine the function of genes and uses that information to direct the company’s internal drug discovery research and that of its corporate partners. Through its Ibis Therapeutics TM program Isis is developing a novel diagnostics tool to detect infectious organisms and is focused on the discovery of small molecule drugs that bind to RNA. As an innovator in RNA based discovery and development Isis is the owner or exclusive licensee of more than 1,200 issued patents worldwide
BDC Venture Capital
BDC Venture Capital is a major venture capital investor in Canada, active at every stage of the Company’s development cycle, from start up through expansion, with a focus on technology based business that have high growth potential and that are positioned to become dominant players in the market. BDC venture capital has been involved in Venture Capital since 1975 and has to date invested in more than 270 different companies. It currently manages over $300 million in venture capital assets and has more than 80 percent of its portfolio is invested in the areas of biotechnology, medical and health related technology, telecommunications, information technology and electronics
Milestone Medica Corporation
Milestone Medica Corporation’s mission is to enable Canadian Biomedical Research to advance from early stage technologies to innovative healthcare products. Since 1999, the corporation has been providing both investment and early stage management designed specifically for launching commercial developments based on Canadian medical discoveries. It is a majority Canadian owned company established in 1998, Milestone Medica is a joint venture between RBC technology ventures Inc. and Research corporation technologies based in Tucson, Arizona
Qwest Emerging Biotech Fund Ltd.
This is a private British Columbia Venture Capital Corporation that makes venture capital investments in early and emerging stage biotech companies located in British Columbia and offer investors tax benefits. Qwest Emerging Biotech Fund Ltd. is controlled by Qwest Bancorp Ltd. which is a Vancouver based merchant bank. Qwest Bancorp Ltd. has successfully raised and invested over $250 million in western Canadian based technology, biotechnology, oil and gas and real estate and agribusiness.
Ventures West Capital Ltd.
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Ventures West Capital Ltd. is a privately held venture capital investment group that invests in early stage technology companies across North America and has offices in Toronto, Vancouver and Ottawa. Since its founding in 1968, Ventures West has invested over $400 million in more than 125 companies. Ventures West has the people, the expertise and the capital to develop emerging technology companies into market leaders. Examples of Ventures West portfolio companies in biotechnology include Angiotech Pharmaceuticals Inc., Caprion Pharmaceuticals Inc., Salmedix Inc. and Stressgen Biotechnologies Corp.
H.I.G. Ventures
H.I.G Ventures is one of the largest and most successful venture capital firms in the south east United States. H.I.G is dedicated to helping talented entrepreneurs build market leading businesses. H.I.G’s investment activity is focused on early stage and high growth technology companies. Its most recent venture capital fund has total capital of over U.S $250 million.
Growth Works
Growth Works is a recognized leader in the venture capital fund management with proven expertise in raising and investing capital. Growth works TM manage funds including the Working opportunity Funds and the Working management funds, have $700million in assets. Growth Works has a team of skilled and knowledgeable investment professionals with a combined experience of over 200 years. The Investment team has a proven track record of identifying, structuring and making investment in emerging sectors. Growth Works is a registered trademark of Growth Works Capital Ltd.
Sonus Pharmaceuticals Inc.
Headquartered near Seattle, Washington Sonus Pharmaceuticals Inc. is focused on the development of cancer drugs that are designed to provide better efficacy, safety and tolerability and ease of use.
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Exhibit 4 – Funding for OncoGenex Technologies Inc. Type Year Investors Amount (figures in USD) Preclinical (Grants, Seed funding)
1995/96 onwards
V.G.H N.I.H (U.S) N.C.I.C (Canada) C.I.H.R U.S Dept of Defense CFI Terry Fox foundation B.C provincial govt. UILO – Market research
$50M in peer reviewed funding $1.5M $1M
2002 BDC Venture Capital Milestone Medica Corporation Qwest Emerging Biotech Ltd.
$3.6M (CAD)
Post clinical (Phase I, Phase II)
2003 Venture West H.I.G Ventures Work Opportunity funds BDC Milestone Medica
$11.5M (USD)
2005 W.H.I Morula fund BC Advantage funds Venture West H.I.G Ventures Work Opportunity funds BDC Milestone Medica
$12.8M (USD)
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Exhibit 5 – Research Contracts Sponsored by OncoGenex Technologies Inc. for research conducted at the Prostate Centre at VGH (or UBC)
Title of Research Project/Experiment Funding Year
CRA: RNAi and LNA antisense oligo‐nucleotides to inhibit the gene expression of clusterin in Prostate cancer models. Exp No. VGH PC 03‐02
$100,500 02/03
Evaluate the role of Biopecific IGFBP ‐2 & IGFBP – 5 in Prostate, Bone, Stromal Interactions Experiment No VGH PC 02‐01
97,290 02/03
Evaluate the role of clusterin ASO (OGX – 011) as a chemosensitizer of gemcitabine in bladder and lung cancer Experiment number VGH PC 02 ‐04
110,040 02/03
CRA: Evaluate the role of clusterin ASO (OGX – 011) in angiogenesis. Exp No.VGH PC 03‐05
27,600 03/04
CRA: RNAi and LNA antisense oligo‐nucleotides to inhibit the gene expression of clusterin in Prostate cancer models. Exp No. VGH PC 03‐02
17,388 05/06
Evaluate the role of IGFBP – 2 & IGFBP ‐5 in breast cancer progression (VGH PC 03‐02)
65,500 03/04
Establishment and optimization of methods required for OGX – 011 PK/PD studies (VGH PC 03‐05)
55,200 03/04
Pilot studies to evaluate the role of clusterin expression and the therapeutic potential of clusterin regulation in colo‐rectal and pancreatic cancer as well as in systemic anaplastic large cell lymphoma (VGH PC 03‐04)
37,260 03/04
CRA : RNAi and LNA Antisense Oligonucleotides to inhibit the gene expression of clusterin in Prostate cancer models, Experiment Number VGH PC 02 ‐03
324,300
380,000
05/06
06/07
Studies on the dose‐target regulation relationship of OGX‐011in PC‐3 human Prostate cancer xeno‐transplantation models
65,550 03/04
Evaluate the role of clusterin on the prognosis of breast cancer and the potential of Clusterin ASO (OGX – 011) as a chemo sensitizer in breast cancer
72,450 03/04
Evaluate the role of IGFBP ‐2 and IGRBP ‐5 in Prostate cancer progression (VGH PC 03 ‐01)
93,840 03/04
Investigation of Androgen Regulated MicroRNAs in Prostate cancer 67,896 07/08
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Exhibit 6 – Glossary of Scientific Terms
Ribonucleic acid (RNA) is a nucleic acid and consists of a long chain of nucleotide units. Each nucleotide consists of a nitrogenous base, a ribose sugar and a phosphate. In the cell RNA is usually single stranded while DNA is usually double stranded.
Messenger ribonucleic acid (mRNA) is a molecule of RNA encoding a chemical blueprint for a protein product .mRNA is transcribed from a DNA template and carries coding information to the sites of protein synthesis: the ribosomes.
Deoxynucleic acid (DNA) is a nucleic acid that contains genetic instruction used in the development and functioning of all known living organisms and some viruses. The main role of DNA molecule is the long term storage of information .Chemically DNA consists of two long polymers of simple units called nucleotides with backbones made of sugars and phosphate groups joined by ester bonds.
Lymphocyte is a type of white blood cell in the vertebrate immune system .Lymphocytes play an important and integral role in the body’s defenses.
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Exhibit 7 – Scientific Background to OncoGenex’s Drug Development Prostate Cancer
Prostate cancer is a disease in which cancer develops in the prostate, a gland in the male reproductive system. This occurs when cells of the prostate mutate and begin to multiply out of control. These cells sometimes spread (metastasize) from the prostate to other parts of the body, especially in the bones and lymph nodes. Prostate cancer causes pain, difficulty in urinating, erectile dysfunction and other related problems.
Prostate cancer is most often detected by PSA (prostate specific antigen) screening and rarely by physical examination or by symptoms. There is some concern, however, about the accuracy of the PSA test and its usefulness. Suspected prostate cancer is generally confirmed by taking a biopsy of the prostate and examining it under a microscope. Further tests, such as CT scans and bone scans, may be performed to determine whether prostate cancer has spread.
The treatment options for prostate cancer are primarily surgery and radiation therapy. Other treatments such as hormonal therapy, chemotherapy, proton therapy, cryosurgery, and high intensity focused ultrasound (HIFU) also exist depending on the clinical scenario and desired outcome.
Antisense Therapy
Antisense therapy is a form of treatment for genetic disorders or infections. When the genetic sequence of a particular gene is known to be causative of a particular disease, it is possible to synthesize a strand of nucleic acid (DNA, RNA or a chemical analogue) that will bind to the messenger RNA (mRNA) produced by that gene and inactivate it, effectively turning that gene “off”. This is because mRNA has to be single stranded for it to be translated.
This synthesized nucleic acid is termed an “anti‐sense” oligonucleotide because its base sequence is complementary to the gene’s messenger RNA (mRNA), which is called the “sense” sequence.
Antisense oligonucleotides are single strands of DNA or RNA that are complementary to a chosen sequence. In the case of antisense RNA they prevent protein translation of certain messenger RNA strands by binding to them. Antisense DNA can be used to target a specific, complementary (coding or non‐coding) RNA. If binding takes places this DNA/RNA hybrid can be degraded by the enzyme
OGX‐011
OGX‐011 is a second‐generation antisense inhibitor of clusterin and represents the first second‐generation anticancer antisense drug to enter clinical development. Clusterin is a cell‐survival protein that is over‐expressed in many cancers and is associated with treatment resistance and poor clinical outcome. OGX‐011, in a dose‐dependent fashion, achieved effective
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drug concentration in prostate cancer tissue and produced up to a 91 percent dose‐dependent decrease in clusterin expression. Results from the Phase 1 clinical trial also demonstrated that the inhibition of clusterin was associated with the predicted pharmacological outcome, the death of prostate cancer cells.
In preclinical animal studies, OGX‐011 improved the potency of traditional chemotherapies by more than 10‐fold in prostate cancer with no increase in toxicity. OGX‐011 also significantly delayed disease progression in many tumour model systems including in prostate, non‐small cell lung, bladder and renal.
OGX‐427
OGX‐427 inhibits the production of heat shock protein 27 (Hsp 27) a small heat shock protein that is over expressed in numerous tumour types and is associated with treatment resistance through its ability to help cancer cells survive stress induced injury
OGX ‐225
OGX‐225, which is the first antisense drug to target two proteins simultaneously: insulin‐like growth factor binding protein‐5 (IGFBP‐5) and insulin‐like growth factor binding protein‐2 (IGFBP‐2). When patients are treated with hormone ablation therapy in certain stages of prostate and breast cancers, tumours adapt and substitute growth factors to continue their growth. IGFBP‐2 and IGFBP‐5 facilitate access to a key alternate growth factor which enables tumours to grow the absence of hormone.
Preclinical studies conducted by the Prostate Centre at Vancouver General Hospital demonstrated that over‐expression of IGFBP‐2 and IGFBP‐5 correlates with significantly more aggressive disease progression. Antisense inhibition of IGFBP‐2 and IGFBP‐5 simultaneously, appears to reduce the tumour’s access to the alternate growth factor and thus delay disease progression and metastasis. Therefore, OGX‐225 could prove effective as a therapeutic to prevent progression of prostate cancer and other tumour types.
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Exhibit 8: The Structure of Clinical Trials
In clinical trials that involve the formation of a new drug, the drug development process can be divided into four phases.
Phase 0 is the first‐in‐human trial to clarify whether the drug will work in the way it was designed in the preclinical studies. Phase 0 is initiated to gather preliminary data on the agent’s pharmacokinetics (how the body processes the drug) and pharmacodynamics (how the drug works in the body). A phase 0 study gives no data on safety or efficacy, as it is by definition a dose too low to cause any therapeutic effect.
A phase I trial is the first stage of testing in human subjects (a small group; at least 20) for safety. This phase tests a new drug or treatment in a small group of people for the first time to evaluate its safety, determine a safe dosage range, and identify the side effects.
A phase II trial encompasses the safety and efficacy of the drug. The drug or treatment is given to a larger group of people to see if it is effective and to further evaluate its safety. Phase II trials generally determine if the drug has some toxic effects or not.
A phase III trial determines the controlled safety and efficacy of the drug. The drug or treatment is given to a larger group of people to confirm its effectiveness, monitor side effects, compare it to commonly used treatments, and collect information that will allow the drug or treatment to be used safely.