Friday, August 8, 2008

Spinout CPEX already an established biotech

By Ryan McBride

CPEX Pharmaceuticals Inc. is not your ordinary 6-week-old biotech firm.  

CPEX is the former drug-delivery business of generic drug maker Bentley Pharmaceuticals, which spun out CPEX (Nasdaq: CPEX) on June 30. Israeli generic drug giant Teva Pharmaceutical Industries Ltd. then completed its purchase of Exeter, N.H.-based Bentley on July 22.

With former Bentley executives at the helm, CPEX already earns steady income from royalties on sales of a testosterone gel that uses its permeation technology. Yet the firm’s future growth now rests on the success of its insulin nasal spray in clinical trials and its ability to derive further value from its drug-delivery assets. 

“We believe that we have the resources and the management to drive a successful company,” said John Sedor, chief executive of CPEX and former president of Bentley. He noted that the company operates in former Bentley offices in Exeter with 15 employees.    

Unlike many new biotechs, CPEX has started with a predictable source of revenue. The business received $11.1 million in royalties last year from Auxilium Pharmaceuticals Inc., based in Malvern, Pa. That revenue came from Auxilium’s sale of its testosterone gel, Testim, in which CPEX’s permeation technology is used, according to CPEX officials. 

Presently, CPEX is in the midst of Phase 2 clinical trials for Nasulin, a nasal insulin spray for people with Type 1 and Type 2 diabetes. The company is channeling much of its resources to develop Nasulin and hopes to attract a pharma partner to fund late-stage clinical trials after Phase 2 studies conclude in mid-2010, Sedor said.

Once a hot commodity, alternatives to injected insulin have lost some luster in the pharma industry after the failure of New York drug giant Pfizer Inc.’s inhaled insulin, Exubera, pulled from the market last year due to slow sales and amid concerns of respiratory side effects. Nasulin, however, is absorbed in the nose and avoids contact with the lungs, Sedor said.

Meantime, CPEX is in search of new partners to license its drug-delivery technology. Sedor said the firm is in negotiations with several interested biotech and pharma companies. One such partner is Serenity Pharmaceuticals Corp. of New York, which earlier this week said it was using CPEX’s nasal spray technology to deliver its urology drug.

“There are a lot of drugs out there where there are challenges of getting the drug to the right place,” said Alan Carr, a biotech analyst for investment firm Needham & Co. LLC in New York. “New drug-delivery platforms are needed.”

Stephen DeSantis is the new contact to send all your tips and information on life sciences, biotech and pharmaceutical news. He can be reached at sdesantis@masshightech.com.