a variety of options to divvy up the worldwide commercial rights, and the costs of running such big trials. One early budget projection for those trials was about $70 million, according to what Cormack told me back in December, before the ASCO hubbub, when his company only had $17 million in cash in the bank.
The talks involve more than one pharmaceutical company, and are “competitive,” Cormack says, although he wouldn’t say how many companies are in the running. He’ has been scoping a number of options, in terms of the usual financial mix of upfront payments, milestones, and royalties, as well as global deals versus more regionally focused collaborations. OncoGenex is also vetting partners for their cancer drug development expertise and, how broad their vision is for the product, and mulling how involved its team wants to remain in the future development plans, or whether it wants to mostly hand off the ball.
Because the clusterin protein plays a role in multiple cancers, OncoGenex is hopeful that a partner will want to think bigger than just prostate cancer, and consider opportunities to test the drug further for lung and breast malignancies, Cormack says.
Partnership talks always take a good amount of time, although Cormack says he’s confident the deal can get done by the end of this year. He’ has been trying to send a signal to Wall Street that he’s serious about doing a deal, and not trying to find a way to do the trials alone, and he’s hopeful that the latest financing will have proved his point.
“If you believe that we’re going to do a partnership deal, and that is going to bring in more money and expertise, then why would you raise more money and unnecessarily dilute your existing shareholders?” Cormack says. “If we had raised $60 million, people would have said, ‘they’re not that confident they’re going to do a partnership, and maybe they’ll do it themselves.”
That’s partly why Cormack isn’t seizing the moment to do any empire building. The company has 26 employees, andsays it isn’t hiring. The core management team is made up of Cormack, Anderson, Cindy Jacobs, the chief medical officer, and Monica Krieger, the vice president of regulatory affairs.
Staying lean may not be great for all the talented unemployed people in town, but it’s the kind of thing potential acquirers like to see in a company that’s dressed up for a sale. Fewer HR headaches, or integration issues can crop up that way. Cormack says he’s not ruling any options out.
“Our focus is on doing a partnership, but having said that, if an offer came to acquire the company, it wouldn’t be the first time that partnership talks evolved into something else,” Cormack says.
