On heels of psych drug approval, BioXcel dives head first into oncology R&D with new cash infusion
Two weeks after New Haven, CT biotech BioXcel Therapeutics won FDA approval for the psychiatric drug Igalmi, the biotech is making a major new move: pivoting its focus to commercialization and spinning out much of the rest of its pipeline into a new company.
The biotech announced early Tuesday that they have entered into strategic financing agreements with funds managed by two firms: Oaktree Capital Management and Qatar’s sovereign wealth fund, Qatar Investment Authority. Combined, the two funds will net BioXcel up to $260 million.
According to BioXcel, the cash will help fund the commercial launch of Igalmi, BioXcel’s newly FDA-approved schizophrenia and bipolar drug, in the US — and push clinical pipeline development forward. The biotech also said that the funds will push the company’s cash runway into 2025.
CEO Vimal Mehta told Endpoints News that BioXcel had $233 million at the end of 2021, which was enough runway to last the company well into 2023.
The long-term strategic financing process was led by Oaktree and is comprised of:
- A credit agreement, allowing for up to $135 million in a delayed draw term loan,
- A $120 million revenue-based financing agreement — with up to $120 million in an unspecified, capped revenue-based financing on net sales of IGALMI and any other future BXCL501 products, and
- A $5 million equity investment in BioXcel common stock.
Under the agreement, BioXcel would receive $100 million following FDA approval “in respect of the use of the Company’s BXCL501 product for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults.” That condition was cleared two weeks ago with the FDA’s approval of their now-sole approved drug Igalmi.
In the meantime, BioXCEl is forming a new subsidiary: OnkosXcel to go after cancer. According to a statement and with the funding, OnkosXcel plans to progress the development of BXCL701, an investigational, orally administered innate immune activator, designed to initiate inflammation in a microenvironment around tumors.
Mehta said that since BioXcel now has an approved product, the company is pivoting to a commercial-stage company, and said that there was a need to create a dedicated resource for BXCL701.
“It brings that laser sharp focus to continue to expand 701, to take it all the way to provability as well as expand in other areas,” Mehta added.
The CEO confirmed to Endpoints that for right now, BioXcel’s leadership team will be leading OnkosXcel until a new management team is in place, which BioXcel will announce in the second half of 2022.
BioXcel CMO Vince O’Neill told Endpoints that the drug candidate that OnkosXcel is looking at first is a DPP8/9 inhibitor. It is currently being tested in a Phase II trial in combo with Keytruda in metastatic, castration-resistant prostate cancer.
And while BioXcel has not made any announcements or statements as to which indications the company will pursue, O’Neill did note that the company has “a number of orphan drug designations.” These include pancreatic cancer, melanoma and soft tissue sarcoma.