Battered, cash hungry Intec feels the burn of Novartis rejection
It’s a case of some bad timing for Intec.
Just when a key trial testing the company’s Accordion drug delivery tech imploded in Parkinson’s disease, they handed Novartis data from a successful PK study of a custom Accordion pill engineered to deliver a Novartis compound to entice the Swiss drugmaker into signing a licensing agreement.
Novartis said thanks, but no thanks.
For the cash-strapped Israeli drug developer, the failure to clinch the deal marks a big blow. As of the third quarter, the company has $15.7 million in cash and equivalents, which HC Wainwright analysts estimate will keep the lights on into mid-2020.
In response to the announcement, the company’s stock tumbled nearly 11% to 53 cents in early trading. On July 19th, the last trading day before Intec revealed the late-stage failure, its stock closed at $2.29.
Novartis entered a ‘feasibility and option’ agreement with Intec last January, but no financial details were disclosed at the time. However, Intec chief Jeffrey Meckler has since suggested that a Novartis licensing deal could bring in between $30 million to $80 million upfront, in addition to milestone payments.
The program no longer meets Novartis’ mid- to long-term strategic goals — despite the PK study having met technical expectations — and the drugmaker will pay Intec $1.5 million to call it quits, the Jerusalem-based drug developer said on Wednesday.
“(W)e are now looking to identify additional compounds in the Novartis portfolio that can benefit from the unique characteristics the AP (Accordion pill) platform,” Meckler said in a statement.
The company’s AP technology converts active ingredients into a biodegradable polymeric film, which is folded and then encapsulated in a pill. The idea is to improve the efficacy and safety of existing drugs and drugs-in-development by releasing the active ingredient slowly in the stomach over hours, allowing the body to absorb it more steadily. Once the drug runs out, the pill is designed to simply dissolve in the gastrointestinal tract.
In July, Intec’s AP version of carbidopa/levodopa failed to induce a statistically significant improvement over Merck’s carbidopa/levodopa treatment Sinemet in a key late-stage Parkinson’s disease trial. Adding insult to injury, days ahead of the readout Merck announced its decision to cease manufacturing of Sinemet in response to the monopoly of cheap generics in the US market.
Intec does, however, have a high-profile partner in the form of Merck. The large US drugmaker signed a research deal in May, in which Intec is tasked with developing a custom AP for a Merck compound. Intec is also developing Accordion pills filled with cannabis-derived compounds for use in various pain indications.