VitaResc Acquisition Of Apex To Fund Septic Shock Treatment Phase III Study

The acquisition of Apex Bioscience by Munich-based start-up VitaResc Biotech AG will provide for the financing of a Phase III program in nitric oxide-induced shock with Apex' lead product, pyridoxalated hemoglobin polyoxyethylene.

In a July 6 statement announcing the acquisition, VitaResc said that the deal "will result in substantial funding that will enable VitaResc to continue the ongoing development of PHP." The transaction will allow Research Triangle, N.C.-based Apex to operate under its current name as a wholly owned subsidiary of the German company.

VitaResc was founded in March 1999 by German-U.S. venture capital company Techno Venture Management with an estimated $12 mil. in seed financing that will close in mid-July. A second round of financing is likely to take place following the commencement of a Phase III trial for PHP.

Apex was advised by the life science venture development company A. M. Pappas & Associates, which was hired in 1998 "to assist in the assessment of various strategic alternatives for the company." In addition to facilitating the transaction, AMP&A provided interim management and "restructured the company into a more viable acquisition candidate," Apex Chief Operating Officer Vipin Garg, PhD, said.

Arthur Pappas, who was a director on the Apex board until March 1998, functioned as acting chief executive of Apex, following the departure in September of former Baxter exec John Irick, who had served as Apex' president since its founding in 1993.

Under Pappas' restructuring, Apex downsized its operations, cutting staff numbers from 30 employees to 10, and temporarily put a halt to its manufacturing facility for PHP. Following the acquisition of Apex, VitaResc will employ a total staff of 14.

Apex believes that its pilot plant "has sufficient capacity to produce human-derived PHP for all of the company's clinical trial requirements and initial commercial supplies in the U.S." Once the initiation of Phase III trials occurs, the plant will be made functional again.

The new President & CEO of Apex will be VitaResc head Ulrich Delvos, who was previously managing director of the venture capital biotech start-up Pathogenex. Prior to that, Delvos spent 10 years at Behringwerke AG.

The new entity will be organized around the concept of treating systemic inflammatory response syndrome.

In addition to PHP for septic shock, VitaResc intends to acquire from Pathogenex a humanized monoclonal antibody against endotoxin, which will be developed for the prevention of sepsis and septic shock in high-risk patients. VitaResc is currently in discussions with a diagnostic manufacturer for a test for sepsis predisposition.

Apex is preparing to begin a Phase III trial in NO-induced shock with PHP, and will pursue an indication "for the treatment and resolution of shock secondary to SIRS in fluid refractory, pressor-dependent patients."

The firm is targeting an FDA submission in 2001, and "estimates that 10% of all intensive care unit patients, or approximately 700,000 patients per year in the U.S., are potentially treatable with PHP." NO-induced shock is associated with a 30%-40% mortality rate and a cost of $50,000-$100,000 per patient, Apex said.

Following the conclusion of a Phase II trial at the end of 1998, Apex received clearance from FDA to continue its PHP program.

Apex concluded a Phase II study of PHP in 1998. The continuous infusion, dose escalation trial in 22 patients with septic shock or presumed sepsis examined total doses of 160 mg, 320 mg, 640 mg and 2,560 mg Hb/kg.

PHP infusion "permitted a decrease in vasopressor utilization, while maintaining or increasing [mean arterial pressure]," Apex said. PHP further increased systemic vascular resistance and decreased heart rate, and was "relatively safe and well-tolerated."

Preliminary results from a Phase I/II 30-minute infusion trial in 18 septic shock patients who were refractory to standard intravenous fluid therapy demonstrated PHP's "potential to restore normal hemodynamic function and reduce the need for vasopressor drugs (i.e., dopamine, norepinephrine)."

PHP was acquired under a 1995 agreement with Ajinomoto, which had originally developed PHP as a blood substitute. The deal with Ajinomoto covers rights to PHP for all indications and for all territories outside of Japan.

The compound is a purified hemoglobin product derived from outdated human red blood cells provided from the American Red Cross. "PHP scavenges nitric oxide in a catalytic, concentration-dependent reaction to formulate nitrate, a non-toxic metabolite," Apex corporate information states. PHP has been optimally formulated to selectively destroy only the excess concentrations of NO," Apex maintained.

The development of hemoglobin-based blood substitute products has proved problematic for other pharmaceutical firms. Lilly pulled out of its agreement for Somatogen's recombinant hemoglobin product Optro in 1997. In April 1998, Baxter announced that it had stopped a Phase III trial in severe traumatic hemorrhagic shock with its diaspirin cross-linked hemoglobin product HemAssist (¹ (Also see "Baxter Pays $150 Mil. For Somatogen Recombinant Hemoglobin Technology" - Pink Sheet, 2 Mar, 1998.)).

Baxter and Somatogen have continued development of their products. Baxter is conducting a Phase III European trauma trial and a Phase III study of HemAssist as a blood substitute. Another competitor product in late-stage development is Northfield's PolyHeme.

Apex is also developing PHP to enhance the efficacy of "certain widely used chemotherapeutic agents in the treatment of solid tumors."

The firm's research pipeline additionally focuses on the development of therapeutics derived from S-nitrosothiol modification of hemoglobin. "SNO-Hb therapeutic agents selectively deliver a special form of nitric oxide to increase blood flow to hypoperfused tissue and may be useful in a wide variety of ischemic disorders, such as atherosclerosis, heart attack, stroke and sickle cell disease," Apex said.

Another component of Apex' research strategy is the development of small molecule modulators of nitric oxide synthase in rheumatoid arthritis and oncology indications.

Apex was originally established as a partnership between Stroh Brewery Company and Bass Ale for the large-scale production of albumin and hemoglobin, and operated in the 1980s under the name Strohtech.