Drug developer Bionomics Limited (BNO) is seemingly on the verge of something exciting.
Adelaide-based Bionomics discovers and develops innovative therapeutics for cancer and diseases of the central nervous system. It uses four proprietary technology platforms: Angene, a drug discovery platform which incorporates a variety of genomics tools to identify and validate novel angiogenesis targets (involved in the formation of new blood vessels); MultiCore, a chemistry platform for the discovery of small-molecule drugs; ionX, a set of novel technologies for the identification of drugs targeting ion channels for diseases of the central nervous system; and CSC Rx Discovery, which identifies antibody and small-molecule therapeutics that inhibit the growth of cancer stem cells.
These platforms drive Bionomics’ pipeline and underpin its business strategy of securing partners for its key compounds. Pharmaceutical researcher EvaluatePharma has estimated that there are US$290 billion of sales of “big pharma” products at risk from patent expirations between 2012 and 2018. The Bionomics business model is built on the industry’s urgent need to replace these drug compounds, while recognising that bringing blockbuster drugs through large-scale clinical studies to market is both costly and inherently risky.
By signing much bigger development partners Bionomics can validate the value of its intellectual property while lessening the development risk, and generate regular “milestone” revenue payments, which help pay the bills and the R&D costs.
In cancer, Bionomics has two lead projects: its “vascular disrupting agent,” BNC105, which has demonstrated clinical benefit in a phase 1 renal cancer trial, and is progressing into a phase 11 renal cancer trial and a phase 1 ovarian cancer trial; and BNC101, its cancer stem cell-targeting antibody for solid tumours, which came with last year’s acquisition of Eclipse Therapeutics, a spin-out from Nasdaq-listed Biogen Idec.
The Eclipse Acquisition provides Bionomics with world-class cancer stem cell technology and antibody drug candidates, as well as an important strategic base in the US, the world’s largest pharmaceutical market. BNC101 has demonstrated functional activity against cancer stem cells from primary colorectal cancer patient samples. In pre-clinical studies, BNC101 has significantly reduces CSC frequency in vivo and prevents tumour re-growth in long-term studies. BNC101 has been advanced into investigational new drug (IND) application stage and Bionomics is preparing it for clinical trials.
In the central nervous system area, Bionomics’ BNC210 compound has also progressed to IND application stage: subsequently the compound – now known as IW-2143 – entered a US Phase I clinical trial with the company’s development partner, Boston-based Ironwood Pharmaceuticals. Also, Bionomics’ BNC375 has been identified as drug candidate for cognitive impairment in Alzheimer’s disease, Parkinson’s disease and other conditions where memory loss occurs.
Both the BNC105 and IW-2143 compounds offer “blockbuster” potential if successfully developed.
In July, Bionomics demonstrated its partnership strategy by striking a research deal with pharmaceutical giant Merck that may generate more than $US172 million ($A190.67 million) for Bionomics. Under the licensing deal, Bionomics will use its technology to discover and develop small molecules that may be used in the treatment of chronic pain in disease such as diabetes, Alzheimer’s and shingles.
Merck has the option to license exclusively from Bionomics a new compound for development and commercialisation. In return, Bionomics may receive option exercise fees and development and regulatory milestone payments of up to $US172 million. Bionomics could also receive royalties on sales of products from the collaboration.
Bionomics will use its ionX drug discovery platform and MultiCore chemistry to identify potential drug candidates. The research program will initially run for two years. Bionomics says the market for drugs to treat chronic pain holds some of the largest opportunities in the pharmaceutical industry, especially for conditions affecting the brain.
In cancer, Bionomics is also working with the Bundoora-based Co-operative Research Centre for Cancer Therapeutics, a drug discovery company focused on developing small-molecule drug candidates that target specific pathways related to the tumour microenvironment or growth. In May, Bionomics announced that the joint program had reached “proof of concept” stage with a candidate compound, CTx-0357927, which has reduced tumour size and cancer spread in a human model of melanoma.
This model of human melanoma forms primary melanoma lesions that metastasize to the regional lymph nodes and enables the evaluation of a compound’s ability to suppress both primary tumour growth and lymph node metastasis. 90% of cancer deaths are caused by cancer that has spread from the original site (metastatic disease) and targeting the mechanisms that encourage metastasis will be key to further reducing cancer deaths. Melanoma is the fourth most common cancer reported in Australia: in 2008, there were 11,057 new cases of melanoma of the skin in Australia, accounting for 9.8% of all new cancers.
Further out, Bionomics is also working in the immune diseases area in its Kv1.3 program. Kv1.3 is a key modulator of the immune system and a target found on human immune cells associated with nerve cell damage in patients with multiple sclerosis (MS). Inhibitors of Kv1.3 have been shown to inhibit the proliferation of these immune cells, suggesting they have application in the treatment of MS and potentially other auto-immune conditions such as rheumatoid arthritis (RA), psoriasis and uveitis. Bionomics has identified orally active compounds that it believes offer potential for new treatments in a range of inflammatory diseases.
After raising $16.4 million in May Bionomics closed FY13 with $22.45 million in cash. This gives it plenty of room to continue its development programs: it also had revenue of $11.8 million in FY13, coming from R&D payments under the development agreement with Ironwood, contract service revenue of Bionomics’ wholly-owned European subsidiary Neurofit SAS, and other income including government grants and assistance.
For the FY14 financial year, the company anticipates several important R&D milestones, including release of the Phase II results of the clinical trial of BNC105 in metastatic renal cancer, and the progression of BNC101 towards its first clinical trial in cancer patients.
Bionomics says it will continue to focus on its partnership strategy across its pipeline of drug candidates, with both BNC375, for the treatment of cognitive impairment in Alzheimer’s disease and Parkinson’s disease, and BNC164, the most promising compound from the Kv1.3 autoimmune diseases program, the subject of ongoing discussions with potential partners.
Bionomics shares began the year at 35.8 cents, moved to 84 cents in October, but have retreated to 70 cents. Investors entering the stock at this point have a potentially healthy flow of news coming up – but must understand that drug development is a risky business, even a developer as impressive as Bionomics looks to be.
