Spinifex Pharmaceuticals, Inc. ("Spinifex"), a company focused on the development of new drugs for the treatment of chronic pain, today announces that it has agreed to the sale of Spinifex to Novartis International AG ("Novartis"), for an upfront cash consideration of US$200 million plus undisclosed clinical development and regulatory milestone payments.
The acquisition is centred on Spinifex's lead candidate EMA401, a novel angiotensin II type 2 (AT2) receptor antagonist, being developed as a potential first-in-class oral treatment for chronic pain, particularly neuropathic pain, without central nervous system (CNS) side effects.
Neuropathic pain is defined by the International Association for the Study of Pain as that "caused by a lesion or disease of the somatosensory nervous system". These causes are diverse and include diabetes (painful diabetic neuropathy (PDN)), cancer or its treatment with therapeutic agents (e.g. chemotherapy induced peripheral neuropathy), viruses (e.g. postherpetic neuralgia (PHN)) and nerve trauma (peripheral nerve injury induced neuropathy). Current treatments for neuropathic pain do not relieve pain in all individuals or are not well tolerated, so drugs targeting a new treatment modality are needed urgently.
Positive results from Spinifex's Phase 2 clinical trial of EMA401 in PHN, a painful condition that develops in some people following herpes zoster (shingles), have been published in The Lancet Novartis will continue the development of EMA401 and is planning to initiate Phase 2b clinical trials in patients with PHN or PDN. Novartis also intends to build on these two key indications and pursue a broad peripheral neuropathic pain (PNP) label for EMA401.
Under the terms of the deal, in addition to the upfront payment of US$200 million from Novartis, Spinifex shareholders are eligible to receive payments contingent on future clinical development and regulatory milestones. The transaction is expected to close in H2 2015, subject to the receipt of clearance under the Hart-Scott-Rodino Act and customary closing conditions.
Commenting on the acquisition, Tom McCarthy, Spinifex's President and Chief Executive Officer, said: "This acquisition by Novartis is a testament to the significant progress our team has made in developing an entirely new approach to the treatment of chronic pain and particularly neuropathic pain. We acknowledge the founding discovery and research carried out by Professor Maree Smith at University of Queensland and we share Novartis' vision that EMA401, underpinned by our deep understanding of the AT2 receptor pharmacology, has the potential to be an important new treatment option for patients suffering from these debilitating conditions."
Heath Lukatch, Spinifex's Chairman, said: "The success of Spinifex and the tremendous potential for EMA401 to help patients suffering from neuropathic pain is a significant example of how an international venture capital syndicate, partnering with Australian based investors, can bring university technology closer to commercialisation. We have tremendous respect for Novartis' clinical development and commercial expertise, their passion for neuroscience and their commitment to helping patients who are suffering from neuropathic pain. I would like to thank Spinifex shareholders for their support across the years and the Spinifex and Novartis teams for their hard work in signing this acquisition."
Deutsche Bank is acting as exclusive financial advisor to Spinifex and Goodwin Procter LLP is serving as legal counsel.