Onxeo announces acquisition of DNA Therapeutics

PARIS & COPENHAGEN—Onxeo S.A., an innovative company specializing in the development of orphan oncology therapeutics, today announced that it has reached an agreement to acquire DNA Therapeutics, a privately held, clinical-stage biopharmaceutical company, for its signal-interfering DNA (siDNA) repair technology, which is directed at overcoming cancer resistance mechanisms, and includes lead product candidate DT01. The acquisition, which is subject to customary closing conditions, is expected to close by the end of March 2016.

The acquisition of DNA Therapeutics continues to demonstrate Onxeo’s commitment to developing novel orphan oncology drugs that position the company at the forefront of scientific research for rare cancers with high, unmet medical needs, and have the potential to generate significant value for the Company and its stakeholders by opening other indications and markets.

Under the terms of the agreement, Onxeo is acquiring DNA Therapeutics for an upfront payment of €1.7 million (about $1.85) in common shares at deal closing. Additional payment will come in the form of milestones including €1 million in cash or in ONXEO shares, at ONXEO’s sole discretion, upon successful initiation of a Phase 2 trial in a selected indication as well as royalty payments on future commercial sales, up to €25 million per indication developed and approved.

In conjunction with the transaction, in parallel with the contribution in kind, a large part of DNA Therapeutics’ historical shareholders have agreed to invest €1 million in cash in Onxeo shares, showing their full support to Onxeo to take over the development of the siDNA technology.

Through DNA Therapeutics, Onxeo is acquiring a first-in-class clinical signal-interfering DNA (siDNA) molecule breaking the cycle of tumor DNA repair while sparing healthy cells. The siDNA technology offers a potential new treatment option for patients suffering from various types of cancer.

A first-in-human Phase 1/2a trial performed in metastatic melanoma demonstrated that siDNA molecules showed good tolerance and safety when administered intra-tumorally and subcutaneously around the tumors. Onxeo now plans to initate the development of this first-in-class product by the systemic route, and to assess their safety and tolerance in monotherapy and in combination with other DNA-damaging agents in various solid tumors. This clinical development will be implemented after first optimizing the manufacturing process, set to start as soon as the deal closes.

Judith Greciet, CEO of Onxeo, commented: “The acquisition of DNA Therapeutics and its siDNA technology represents a significant milestone for Onxeo. We are excited about this opportunity, which, based on its differentiated mechanism of action to fight cancer, will be significant in strengthening the level of innovation in our orphan oncology portfolio and instrumental in delivering value for our shareholders. The development of new agents specifically targeting DNA repair while sparing healthy tissues is imperative in the treatment of many solid tumors. Based on preclinical findings, we plan to evaluate the product in orphan oncology indications where a systemic application is suitable and for which there is significant unmet need, for example triple-negative breast cancer and platinum-resistant ovarian cancer.”

Over the course of 2015, Onxeo has continued to advance the clinical development of Validive and notably its validation by the U.S. and European regulatory agencies. Despite recognition from both agencies of Validive’s interest and value to patients, these discussions have confirmed that two Phase 3 clinical trials will be required for registration in the U.S., which makes the further clinical program significantly longer and more costly than expected. Therefore, the company has decided it is in the best interest of its shareholders to move forward with this Phase 3 program only with the support of a partner. While actively seeking such collaboration, Onxeo will continue to promote the scientific value of Validive through presentations at meetings.

“Validive remains a key asset in our orphan oncology pipeline. We have successfully developed the product to date and it is ready to enter Phase 3 as soon as we find the appropriate partner,” commented Greciet. “We are particularly excited about the acquisition of DNA Therapeutics and its first-in-class product-candidate which largely complements our core expertise and scientific ambitions. We believe it will be a tremendous addition to our pipeline, creating sound opportunity for short-to-long term milestones, adding value for our shareholders and bringing potentially new treatment options to patients with rare cancers.”

Biological responses to DNA damage and approaches to prevent the repair mechanisms allowing cancer cells to escape treatments have been identified as one of the most promising new avenues in cancer treatment. Most therapies against cancer induce DNA damage to tumor cells. DNA damage can also occur spontaneously in certain types of genetically unstable cancers. Yet cancer cells have the ability to recognize DNA damage and activate multiple DNA repair pathways or proteins to survive damages. These DNA repair processes contribute to cancer aggressiveness and resistance.

The siDNA technology developed by DNA Therapeutics, and acquired by Onxeo, breaks the cycle of cancer DNA repair activities by interfering at the core of DNA damage and interfering with multiple repair pathways, while sparing healthy cells. The technology, known as Dbait, was invented by Marie Dutreix, research director at The French National Centre for Scientific Research (CNRS), and Jian-Sheng Sun, professor at The French National Museum of Natural History (Museum National d'Histoire Naturelle) in Paris, and further developed in Dr. Dutreix’s lab at Institut Curie. DNA Therapeutics was formed as a spin-out of the Institut Curie and three other French academic institutions.

The siDNA molecule is a short double-stranded DNA molecule that acts as a decoy, providing a false DNA break signal to attract DNA repair proteins which prevents the recruitment of repair enzymes to the site of actual DNA damage. Cancer cells do not have the ability to stop division in the face of DNA damage; they will continue dividing with the damaged DNA and therefore die. Healthy cells, on the other hand, will halt cell division until the compound is no longer present and damaged DNA can be repaired.

In a variety of preclinical animal models, the siDNA molecule demonstrated an increase in the efficacy of radiotherapy, radiofrequency ablation, and chemotherapy, and has not lead to toxicity with repeated cycles of treatment, making it a promising candidate for both monotherapy and combination therapy. A first-in-human Phase 1/2a trial, “DNA Repair Inhibitor & Irradiation on Melanoma” (DRIIM; NCT01469455), in patients with metastatic melanoma demonstrated the safety of local administration of the product. Additionally, no maximum-tolerated dose (MTD) was identified and the product showed excellent tumor response correlated with systemic exposure.

Onxeo is a leading developer of orphan oncology drugs. The company is focused on developing innovative therapeutics for rare cancers, one of the fastest growing markets in the healthcare industry with high, unmet medical needs. Onxeo’s comprehensive portfolio features a broad orphan oncology pipeline, with three independent programs in advanced clinical development, including Onxeo’s first approved orphan oncology drug, Beleodaq. In addition, Onxeo has successfully developed and registered two non-cancer products which are currently being commercialized in the U.S. and Europe. Onxeo’s vision is to become a global leader and pioneer in oncology, with a focus on orphan or rare cancers, by developing advanced, effective, and safe therapeutics designed to improve the lives of patients. The company is headquartered in Paris, France and has approximately 50 employees.