Inex to spin off assets: Company to refocus efforts on late-stage products

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VANCOUVER—December 27, 2006—Protiva Biotherapeutics announced it filed a dismissal, without prejudice, of its pending claims against Inex Pharmaceuticals in California's Superior Court, however it retains the rights to reinstate its claims at any time as permitted under California law. "In the meantime, we are actively pursuing the motion we filed on December 1st for a preliminary injunction that would prohibit Sirna [Therapeutics] from, among other things, unlawfully transferring Protiva's trade secrets and know-how to Merck," said Protiva President and CEO Dr. Mark Murray.
VANCOUVER—July 11, 2006—To fulfill a commitment made under a debt purchase and settlement agreement with previous promissory note holders, Inex Pharmaceuticals announced it will revise its plans to spin out Tekmira Pharmaceuticals. Under the new agreement, Inex common shareholders will own 100 percent of Tekmira while Tekmira will own 100 percent of Inex technology, cash, products and partnership alliances. Under the revised plan, Inex will have no pharmaceutical assets and will complete $5.6-million financing from Investor Group, which will raise additional capital and acquire a new business for Inex.
VANCOUVER—January 27, 2006—Inex Pharmaceuticals announced it had received approval from its shareholders to spin-out its targeted immunotherapy assets into a new company, Tekmira Pharmaceuticals Corp. The final closing of the transaction now awaits approval of the Toronto Stock Exchange and receipt of certain court approvals, including a bankruptcy petition brought forward by Stark Trading and Shepherd Investments International, which hold certain promissory notes issued by Inex.
VANCOUVER—Inex Pharmaceuticals announced that it would reorganize its in-house technology platforms and spin-off its targeted immunotherapy platform and products into a new company. The move will allow the new company to raise capital for continued platform development, while allowing Inex to focus its efforts on extracting value from its late-stage targeted chemotherapy products.
"The targeted chemotherapy platform and products will progress through partnering or out-licensing in which the value of the technology/products is realized by Inex shareholders, while the partner or licensee takes the technology/products forward toward commercialization," explains Timothy Ruane, Inex president and CEO. "The earlier-stage targeted immunotherapy platform will benefit from a focus on completing preclinical research and moving products toward commencement of clinical development."
Under the reorganization plan, Inex will share equity in the new company with Inex's common shareholders. Likewise, the new company will assume most of Inex's monthly expenses and absorb most of its current employees.
The targeted immunotherapy platform relies on the liposomal encapsulation of immunostimulatory oligonucleotides, combining the efficacy of the active agent with that of the delivery device. In the case of INX-0167, the combination enhances the activity and number of various immune cells, including natural killer cells.
The targeted chemotherapy platform uses the company's sphingosomal drug delivery technology to deliver already approved chemotherapy drugs. The first drug is this platform is Marqibo (sphingosomal vincristine), which Ruane says is ready to enter Phase 3 clinical trials to treat non-Hodgkin's lymphoma and acute lymphoblastic leukemia. Other products in this pipeline include INX-0125 (sphingosomal vinorelbine), which is ready to enter Phase 1, and INX-0076 (sphingosomal topotecan), which is in preclinical development.
Inex sees the reorganization as a way to maximize shareholder value by allowing each company to focus on only those issues most relevant to their stage of development.
"The main motivations for the spin-off are that the two technology platforms are very different in terms of their stage of development, requirement for personnel, and requirement for financing," explains Ian Mortimer, Inex vice president of finance and CFO. "The best way to maximize the value of the two different technologies is in separate companies, each with a separate focus."
According to Jack Gardner, an analyst for Kalorama Information, spin-offs are becoming an increasingly attractive mechanism for pharmaceutical companies looking for ways to expand their pipelines and enhance their market opportunities.
"Sometimes, there are elements in the mix that no longer fit the corporate goals, or require more management effort than they are worth," he explains. "One option is to simply shut them down, take a write-off, and move on. The second is to find a buyer who will pick up the product line or business unit and pay money to get it. The third option is to spin it off as a separate business. Spin-offs can be a very attractive option under several different scenarios."
First on the list of objectives for the newly spun off company will be completing equity financing in 2006 and the filing of an Investigational New Drug (IND) application for its current preclinical candidate INX-0167. According to Mortimer, this will be easier to do as an independent company than as part of Inex.

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