Acrux acquires rights for contraceptive spray

Melbourne-based Acrux (ASX:ACR) has signed an agreement with the New York-based Population Council to commercialise a contraceptive spray containing Nestorone, a fourth-generation progestin contraceptive which cannot be taken orally.

Under the agreement, Acrux's wholly owned subsidiary, Fempharm, has a worldwide licence from the Population Council to intellectual property covering the use of Nestorone with Acrux's patented metered-dose skin spray technology.

"Importantly, it gives us rights to develop Nestorone as a spray for other indications as well," said Acrux CEO Igor Gonda. "It's a very interesting molecule with very good safety records so far."

Fempharm will develop, manufacture and commercialise the Nestorone spray and has the right to sub-license to commercial partners.

The Population Council, a not-for-profit organisation, will receive a licence fee of US$100,000 as well as three milestone payments of US$100,000 during the phase III clinical trial and regulatory process. The organisation will also receive 20 per cent of licence fees, milestone payments and royalties if Fempharm sub-licences the product and 5 per cent of net sales once the product is on the market. These percentages will reduce over time as patents expire.

"We're providing the commercial arm," said Gonda. "But we'll also help [the Population Council] with their mission to provide products for people who can't pay for them or can't pay the full price. I think this could form a template of how commercial organisations can work with not-for-profit organisations and how it can be a win-win for both."

As well as commercially distributing the product, Acrux will make the Nestorone spray available at a reduced price to public sector organisations providing human reproductive health products to disadvantaged people.

A phase I trial last year showed that once-daily application of Acrux's Nestorone spray provided a level of the drug in the blood known to be effective for contraception. A phase II trial, scheduled in the second half of 2006, will aim to demonstrate that the spray controls ovulation. Acrux will seek partners for the remaining steps in global commercialisation.

"We're very pleased that we've got the possibility of commercialising a drug that is known to be safe and is potentially efficacious for other indications as well," said Gonda. "We think that the future of hormone therapy is transdermal and using a very convenient, non-irritant, very discreet, elegant method of application."

Speeding ticket

The ASX queried Acrux last week as to why its share price had increased from $0.64 on February 6, to a high of $0.77 on February 8. Acrux replied that the share price increase may have been due to presentations made to a number of institutions during January and February and positive reviews by two healthcare analysts. "We did a roadshow in Sydney and I think it was in response to that -- that's the only explanation that we have," said Gonda.

Acrux told the ASX that "the board and management believe that the shares of the company are undervalued in the market and that the price change could be a correction of this undervaluation."

Acrux's shares were trading at $0.725, down $0.035 since trade opened today.