Protox Therapeutics breaks ground with $75m licensing agreement in Japan
Drug developer Protox Therapeutics Inc.(TSX: PRX) has released its second quarter financial results for theyear, marking a ground-breaking step for the company, as in April,Protox announced a US$75 million license agreement with KisseiPharmaceutical for the development and commercialization of Protox’slead drug candidate PRX302 in Japan, a drug to be used for the treatmentof enlarged prostate (BPH), prostate cancer and other diseases of theprostate. The company has climbed almost 8% in the early hours oftrading today to
.42, demonstrating investors’ confidence in thepotential of Protox’s drug platforms as well as the positive effects thelicensing agreement has made on the business’ revenues.
The Vancouver-based company uses genetic engineering to transformnaturally-occurring proteins into new therapeutics for the treatment ofprostate diseases and various cancers. It is currently advancing apipeline of clinical-stage product candidates derived from its PORxin™and INxin™ technology platforms. Protox’s lead drugs currently inclinical development include PRX302, as well as PRX321 for primary braincancer. The latter drug has already received fast track designation andorphan drug status from the US FDA and EMA.
"This strategic agreement provides strong validation for our PRX302program and non-dilutive cash, while allowing us to preserve marketingrights for PRX302 in the rest of the world,” said president and CEO ofProtox, Dr. Fahar Merchant.
As a result of the licensingagreement, the company earned US $3.0 million in license revenue duringthe quarter, leading to net and comprehensive income of $1.1 million(
.01 per share) for the three months ending June 30, 2010 – the firstrevenue-making quarter for Protox.
The payment also triggered aroyalty payment to John Hopkins University and the University ofVictoria of $210,000 under the terms of Protox’s PORxin licenseagreement for benign prostate hyperplasia (BPH, commonly known asenlarged prostate).
In the future, the drug therapeutics companyis eligible to earn a near term milestone payment of $5 million and anadditional $67 million in milestone and product supply revenues, as wellas double digit royalties on sales of PRX302 in Japan.
Researchand development expenditures were $893,000 for Q2 2010, a decrease from$1.3 million in the prior year quarter. The drop in R&D expenses isdue to the advancement of the company's current BPH program, as onlyone trial was active during the past quarter, compared to three activetrials in Q2 2009. For the remainder of the year, Protox expects tocontinue to incur costs related to the further clinical, manufacturingand regulatory activities associated with its PRX302 BPH program.
AtJune 30, 2010, the company had cash and cash equivalents of $6.7million and working capital of $5.4 million. Protox anticipates itsbusiness development activities will continue as it pursues furtherregional and global licensing opportunities.