VERTEX PHARMACEUTICALS' ORALLY ACTIVE HIV PROTEASE INHIBITOR
VERTEX PHARMACEUTICALS' ORALLY ACTIVE HIV PROTEASE INHIBITOR clinical trials may begin in late 1992, the two-year-old R&D start-up said in a preliminary prospectus for an initial public offering. Vertex has identified three small molecule lead compounds that inhibit in vitro HIV protease, an essential enzyme in HIV replication, and has filed patents for two separate categories of inhibitors. The prospectus asserts that only an oral drug is likely to be "widely used in the largest HIV infected population: asymptomatic or 'healthy' carriers of the virus." Vertex is developing non-peptidal inhibitors with the goal of producing an orally deliverable drug to treat AIDS and related pre-AIDS conditions. In April, Vertex added AIDS authority Jerome Groopman, MD, to the scientific advisory board; Groopman is also chairman of FDA's Biological Response Modifiers Advisory Committee ("The Pink Sheet" May 6, In Brief). One of the two types of protease inhibitors identified by Vertex includes VX-10,411, which binds to the "substrate groove" region of the HIV protease and has demonstrated in vitro anti-HIV activity comparable to AZT, the company said. The other category, termed "alternate groove" inhibitors, includes VX-10,307 and VX- 10,318, "the only reported inhibitors that bind in other than the 'substrate groove' region," the prospectus notes. Vertex Senior Scientist Manuel Navia, PhD, was the first to report the molecular structure of the HIV protease enzyme, which he determined with X-ray crystallography. Navia made the discovery while serving as senior research fellow at Merck Sharp & Dohme Research Labs, where he spent nine years. Navia is one of five former Merck scientists who are now in leading positions on Vertex' 41-member R&D staff. In addition to Vertex founder, President and Chief Scientific Officer Joshua Boger, PhD (formerly Merck senior director of basic chemistry), the Vertex chemistry team is headed by two Merck alums -- David Armistead, PhD, and Roger Tung, PhD. Another Merck veteran is Mark Murcko, PhD, who is a "key member" of the biophysics/computational chemistry group. Of the 16 top scientists mentioned in the prospectus, eight were recruited from competing firms, with the other half drawn from academic and research institutions. Vertex' R&D is divided into three programs: orally active immunosuppressive drugs -- termed "Immunophilins" -- to treat organ transplant rejection and autoimmune disorders such as rheumatoid arthritis, psoriasis and insulin dependent diabetes; CLEC (crosslinked enzyme crystals) enzyme technology; and the HIV protease inhibitors. The focus of the Immunophilins program is to develop drugs with less toxicity and more efficacy than Sandoz' cyclosporine and Fujisawa's experimental antirejection drug FK-506. Vertex has three lead compounds, one of which "closely resembles FK-506 in its detailed biochemical and cellular actions" but is "novel, chemically distinct and far less chemically complex," the firm said. The target date for an Immunophilin Phase I trial is 1993. Vertex expects initial trials will involve treatment of organ transplant rejection in "rescue situations, when conventional immunosuppressive therapy has failed." The Japanese firm Chugai invested $ 2.7 mil. in the Immunophilins program from October through March as part of a potential $ 30 mil. collaborative agreement announced last fall ("The Pink Sheet" Oct. 8, T&G-10). Vertex' R&D expenses for all of 1990 totaled $ 5.5 mil. The joint venture requires Chugai to provide a minimum of $ 10 mil. up to Sept. 30, 1992, at which point the firm may cancel the agreement. If the collaboration proceeds, Chugai will pay Vertex $ 19 mil. in product research funding over five years and $ 9 mil. in milestone payments; the Japanese firm also made a $ 2 mil. equity investment. The partners will split any profits from product sales in North America, while Chugai has exclusive rights in the Far East and Vertex retains European rights. After the offer, Chugai will control 4% of Vertex common stock, assuming conversion of every three of the firm's convertible preferred shares into two shares of common. J.H. Whitney & Co. will be the largest shareholder, with 14.3% of the common shares. Vertex hopes to net $ 38.5 mil. from the initial public offering of 3 mil. shares -- 2.5 mil. in the U.S. and 500,000 abroad -- at an estimated price of $ 14 per share. The proceeds should fund R&D for three years, the Cambridge, Mass. firm said. Kidder Peabody, Cowen & Co. and BT Securities are the underwriters. Vertex will have 9.6 mil. common shares outstanding after the offering. The company previously raised $ 11.3 mil. through private placements.
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