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Oct 28, 2013

Santaris Resumes Full LNA Ownership as Enzon Collaboration Ends

  • Santaris Pharma said today it will resume full ownership of all rights, data, products, and intellectual properties relating to the locked nucleic acid (LNA) drug platform and drug discovery engine, a week after agreeing with partner Enzon Pharmaceutical to end a seven-year-old cancer drug collaboration that could have netted Santaris more than $200 million.

    "We have been very pleased with the collaboration and are excited to resume full ownership of these important cancer programs, of which several are under clinical development." Henrik Stage, Santaris’ president and CEO, said in a statement.

    Under a worldwide-except-Europe development and commercialization license from Santaris, Enzon has developed several LNA-based messenger RNA (mRNA) antagonists to inhibit transcription factors or molecules that rely on protein-protein interaction to drive tumor growth, and are considered difficult to drug. Enzon said the LNA-based oligonucleotides had demonstrated that they can downregulate the target and inhibit tumor growth in preclinical models, thus warranting clinical study. The mRNA antagonists target hypoxia-inducible factor-1 alpha (HIF-1 alpha), survivin, androgen receptor (AR), and additional preclinical targets.

    As part of the termination, Enzon agreed to revert LNA rights back to Santaris, and pay Santaris an undisclosed amount of money, while both companies agreed to release all claims against the other in connection with their old license and collaboration agreement, as indicated by Enzon in an October 21 8-K filing with the U.S. Securities and Exchange Commission.

    A day after the companies agreed to the termination, according to the filing, a director of Enzon’s board resigned. Thomas F. Deuel’s resignation “was not, to the knowledge of the Company’s executive officers, due to any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices.”

    The termination came nearly a year after Enzon “substantially” suspended all clinical development activities and launched a review of a possible sale, just days after activist investor Carl Icahn, who at the time held a 13% stake in the company, sought to speak with the company about its operations. In December 2012 the company’s board retained Lazard Frères to carry out the review, with a goal of conserving capital and maximizing value returned to the company’s stockholders.

    As part of that review, Enzon sought to sell for $100,000 its interest in the LNA technology to Belrose Pharma—to which Enzon sold all interests in its customized PEGylation linker technology platform and related assets for $700,000. However, the LNA interests sale fell through when “the conditions to the second closing were not satisfied,” Enzon disclosed in its August 6 Form 10-Q filing for the second quarter.

    Enzon placed itself and its assets for sale following three years that included the departure of a CEO, a clinical setback, and job cuts. The company thought it would succeed by refocusing on pipeline drugs, royalty income, and platform technologies when it sold its specialty pharmaceuticals business—including four marketed products and an Indianapolis manufacturing plant—to sigma-tau Group in 2009 for up to $327 million. Instead, Enzon cut jobs following royalty losses in 2010 and 2011, and halted development of the experimental drug PEG-SN38 for metastatic colorectal cancer generate after weak Phase II results, though the compound later showed promise for metastatic breast cancer.



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