Destiny Pharma Plc

Bivictrix Therapeutics joined AIM almost exactly three years ago, raising 7.5 million pounds sterling ($9.5 million) from an IPO. Antibody-drug conjugates (ADCs) have been at the center of many a billion-dollar biobuck licensing deal over the last year, but Bivictrix Therapeutics feels like it’s been missing out.The preclinical company—which is currently listed on the U.K.’s ailing AIM stock exchange—is keen to get its lead bispecific candidate BVX001 into human trials, but currently has just 1.7 million pounds sterling ($2.2 million) to its name. After mulling its options, the biotech’s leadership has decided the best way to raise fresh funds is to go private.Bivictrix said it has already had “positive initial interactions” with the FDA about moving BVX001, a CD7xCD33 candidate for acute myeloid leukemia, into the clinic. Now, it requires “significant funds to be able to proceed.”“In comparison to private companies operating in the ADC space, the directors believe the current market capitalisation of the company neither fully reflects the positive achievements nor the underlying prospects of the business and is a barrier to future growth, funding and potential partnership and licensing discussions,” Bivictrix said in an Aug. 12 release.The company name-checked fellow U.K.-based ADC company Myricx Bio, which last month raised 90 million pounds ($114 million) in a series A round to take its own candidates into the clinic as illustrating “the appetite for major investors to invest in this area.” The current levels of liquidity available from trading the company’s shares on AIM “do not, in itself, offer investors the opportunity to trade in meaningful volumes or with frequency within an active market,” Bivictrix explained.“Whilst there is no guarantee that cancellation and re-registration will lead to the company successfully completing a significant fundraise or licensing deal, the directors believe its prospects of such a transaction will be significantly increased as a private company,” Bivictrix said.Bivictrix will be following a well-worn path of biotechs like Destiny Pharma as well as other companies that are fleeing AIM, a junior exchange to the London Stock Exchange, citing a desire to raise money elsewhere or the cost of listing requirements.Bivictrix joined AIM almost exactly three years ago, raising 7.5 million pounds ($9.5 million) from an IPO that saw the company list its shares for 20 pence apiece. The company has lost 35% of its value in the following years, trading at 13 pence on Friday.Shareholders will be asked to vote on the plan to go private at a meeting at the end of the month.

Like many biotechs, Destiny has struggled on the public markets in recent years. Destiny Pharma’s search for a partner to take its nasal infection prevention med into phase 3 has come up short, leading the British biotech to go private to avoid liquidation. Destiny was one of the few biotechs to choose to list in London in recent years, joining the AIM exchange via a £15.3 million ($19.8 million at the time) offering in 2017. The Brighton, U.K.-based company’s pitch was to use the money to fund the phase 2b trial of XF-73, a nasal drug designed to prevent post-surgery staphylococcal infections. That trial read out in 2021, showing that XF-73 Nasal—a synthetic dicationic porphyrin drug called exeporfinium chloride—produced a more than 99% reduction in nasal bacterial load when compared to placebo, hitting the study’s primary endpoint. But the biotech has struggled to find a partner to take the asset into phase 3 development. With money tight, Destiny has been advised that its best chance of getting an infusion of equity is to return to being a private company. “While there can be no guarantee, the board believes that the only viable option now available to Destiny Pharma to create future shareholder value is the pursuit of capital as a private company,” Nigel Rudd, chair of Destiny’s board of directors, explained in a July 15 release. “Without taking this route, we believe that liquidation of the company is the most likely alternative,” Rudd added. Destiny entered 2024 with £6.4 million ($8.3 million) in cash and equivalents, and notified investors as far back as April that despite engaging with “a number of potential partners” and receiving “some strong and positive feedback” about XF-73 Nasal, the company had been unable to nail down a licensing partner. One stumbling block for potential partners was the anticipated phase 3 trial costs, as well as the general view that antibiotics have limited commercial potential, Destiny explained at the time. To this end, the company pledged to work to “enhance the attractiveness” of XF-73 with a new trial design that should halve the clinical costs. Despite the best efforts of CEO Chris Tovey, who moved across to Destiny from Jazz Pharmaceuticals in September 2023, to “vigorously pursue a potential licensing deal,” there is still no partner in sight. “Although we continue to speak to partners about this renewed proposition, we are extremely disappointed that a deal has not been forthcoming and, given our shortening cash runway, have been forced to amend our strategy as we seek to continue to progress this important product,” Tovey said in this morning’s release. Like many biotechs, Destiny has struggled on the public markets in recent years. The company’s stock rested comfortably above the one pound mark in 2021, but has declined since and despite a rally towards the end of 2023, now sits at just two pence per share. Destiny will put its delisting proposal to shareholders at a meeting later in July.

Destiny’s biggest concern right now is finding someone to help take forward XF-73. Both Destiny Pharma and Santhera Pharmaceuticals used their earnings announcements this morning to explain why a tighter clinical focus will come at the expense of one of their potential assets. In Destiny’s case, the company has decided not to extend its collaboration with SporeGen past the pre-agreed conclusion point this month. The two British biotechs had been working on a nasal spray of Bacillus bacteria that could work as a preventive treatment for COVID-19. The phase 1 candidate, dubbed SPOR-COV, has already been shown by SporeGen to provide 100% protection in preclinical models of influenza, according to Destiny’s website. But Destiny confirmed today that it would not be taking the collaboration any further as it “focus[es] resources on development of the XF platform and our other key company pipeline programs.” Destiny’s biggest concern right now is finding someone to help take forward XF-73, an antibiotic designed to prevent post-surgery infections. “The company has engaged with a number of potential partners and has received some strong and positive feedback on XF-73 nasal,” Destiny explained in the earnings release. “However, no potential licensing deal has, to date, been forthcoming that we believe would provide fair value to the company and its shareholders.” One stumbling block for potential partners are the anticipated phase 3 trial costs, as well as the general view that antibiotics have limited commercial potential, according to Destiny. To this end, the company is working to “enhance the attractiveness” of XF-73 with a new trial design that should halve the clinical costs. Destiny will also review “strategic options” for the asset, although at the moment these won’t stretch to putting the whole company up for sale. “XF-73 nasal has enormous market potential and can make a huge difference in the prevention of surgical site infections, and the reduction in the usage of antibiotics,” said CEO Chris Tovey in the release. “Whilst we will now be presenting an enhanced proposition for the product to potential partners, we also have initiated a wider review to evaluate a range of strategic options to progress the programme and to maximise value from XF-73 nasal,” Tovey added. In the case of Santhera, the writing was already on the wall for the lung disease candidate lonodelestat long before the Swiss biotech finally pulled the plug. Back in 2022, the company was already warning that available resources were being channeled to its Duchenne muscular dystrophy prospect vamorolone, leaving lonodelestat’s prospects dependent on finding fresh funding from somewhere. While the vamorolone dream became a reality when Santhera scored FDA approval last year, lonodelestat was left to languish. Focusing on the DMD drug, rebranded as Agamree, means Santhera has no time for lonodelestat. With internal development of the human neutrophil elastase inhibitor still on pause, Santhera finally confirmed in this morning’s earnings release that it is terminating work completely and will return lonodelestat to fellow Swiss biotech Spexis. “This has no further financial impact on the 2023 accounts, as an impairment was already recognized under development costs in the 2022 consolidated income statement,” Santhera pointed out.