Pain drug M6G might 'transform' CeNeS in '06 as development costs widen losses
CeNeS Pharmaceuticals plc's (CEN.L) cash burn rate increased in 2005 as it stepped up clinical development on drugs in its pipeline, especially its promising post-operative pain drug labelled M6G.
Results from the pivotal European Phase III trial for M6G are expected in the second half of this year. If successful they could "transform" the company's prospects, CEO Neil Clarke (pictured) said today when releasing financial results for the year to end December 2005.
The firm's loss for the year was £6.6m, up from £4.9m in 2004. Its net cash position at the end of year was £8.5m, down from £14.3m previously.
Research and development costs rose 40% to £4.9m as a result of clinical trial costs associated with the M6G Phase III and CNS 5161 (a novel compound for the treatment of neuropathic pain) Phase II clinical trials while administrative expenses increased 29% to £3.1m.
Mr Clarke said the cash would last until the first half of 2007. Before then it would know the fate of M6G, which has been in development since 1997, and given positive results, will have started negotiations for a European partnering deal. It would expect the partner to complete the registration process, in 2007, to enable a European launch thereafter.
"A positive Phase III result from this trial will also significantly increase the value CeNeS will be able to obtain from a North American licensing deal," Mr Clark said.
Independent marketing studies estimate the potential peak market sales for M6G in post-operative pain in Europe and the U.S at £200m. If it works treating post-operative pain using the current intravenous formulation there is potential for its use in other areas such as chronic pain and in epidurals, thereby significantly boosting potential sales.
Pipeline
The company's pipeline is focused on new drugs for the commercially attractive Central Nervous System market, which in total is worth $68 billion and is growing at 5% a year. During 2006 it also expects to:
• secure an Investigational New Drug application to the US Food and Drug Administration for CNS 7056X (a short acting sedative); and
• move its COMT (inhibitor for Parkinson's disease) programme into pre-clinical development.
"Over the next two years our four main programmes are planned to reach significant clinical or pre-clinical milestones and the progression made to date in all four is reflected by the significant [commercial] interest potential partners are expressing in them," Mr Clark said. Of four drugs other than M6G in the pipeline, three could be registered in 2009 and the fourth in 2012.
M6G trial on over 400
The company said clinical studies show that M6G (morphine-6-glucuronide) in addition to having at least an equivalent analgesic effect and longer lasting action than morphine (the current 'gold standard' treatment for the control of moderate to severe pain), may have a reduced tendency to cause side effects such as respiratory depression, nausea and vomiting.
The Phase III study is being carried out at 30 centres in seven European countries in 428 patients suffering moderate to severe post-operative pain following surgical procedures such as hysterectomy or major gastrointestinal, bowel and urological surgery.
In 2005 additional pre-clinical work required by the Food and Drug Administration for the U.S. market was also successfully completed with a view to submitting an Investigational New Drug ("IND") application this year. If discussions with the FDA go smoothly, the company expects that M6G could enter Phase III studies in the US at an earlier date than previously planned.
Mr Clarke reiterated that the company uses an outsourcing business model so that it can move more quickly.
Share price wobbles
The stock market initially reacted by marking the share price up 1.75% to 7.25p, valuing CeNeS at £29.2m, but after taking a second look in early afternoon there was some selling that saw the price slip back to 7.0p. It has been hovering around this level for the past two months.
10th April, 2006
