Avexa reels from HIV drug dropout

Positive phase III results weren't enough to save apricitabine, the flagship HIV treatment being developed by Melbourne-based Avexa.

Since it announced that the last of its potential partners had backed out of making a deal with the company and subsequently cancelled further development on apricitabine, Avexa has been going through a tumultuous readjustment.

Avexa CEO, Julian Chick, fell on his sword following the announcement, with the board making a statement acknowledging Chick's efforts in reaching clinical milestones.

Avexa Chirman, Nathan Drona, released a statement on Tuesday expressing his "sincere disappointment" over the announcement.

"On behalf of the board and senior management of Avexa, I would like to express my sincere disappointment that we were not able to secure a global licensing deal with a major pharmaceutical company for ATC.

"I have spoken to a number of you over the past 48 hours and certainly appreciate the shareholder frustration."

He also stressed that apricitabine didn't fail in the clinic, but was hoodwinked by market forces.

Because, at the end of the day, even a drug with high safety and proven efficacy needs to perform as well or better than other drugs in a highly competitive market.

According to Hedwig Kresse, lead healthcare analyst at Datamonitor, the shelving of apricitabine wasn't a surprise - although Avexa shareholders may beg to differ.

Kresse pointed out that apricitabine's large dose, requiring twice daily administration, was also a barrier to bringing it to market by complicating its delivery and interaction with other drugs, such as antiretrovirals into a single daily dose.

"Datamonitor sees little commercial potential in novel NRTIs unless they offer significant improvements over the current nucleoside backbones. This is reflected in the fact that there are currently no other NRTIs in late-stage development for HIV," said Kresse.

According to Kresse, the existing market leader in the nucleoside reverse transcriptase inhibitor (NRTI) class, Truvada, is predicted to remain the backbone of the anti-HIV market for the coming decade, leaving little room for competitors. But that wasn't the only challenge to apricitabine's success.

“While Truvada would have been a significant competitor, cross-class FDCs posed an even greater challenge for apricitabine.

"The launch of the first once-daily cross-class FDC Atripla (tenofovir/emtricitabine/efavirenz) in 2006 was a major landmark, and has significantly raised the bar for HIV pipeline drugs with regards to efficacy and convenience.

"Additionally, major patent expiries in the next few years, together with rising pressure to reduce costs, will further increase competition in the already crowded HIV market.

"Consequently, it will become increasingly difficult for new drugs to offset time and capital invested in their development,” said Hedwig.

Avexa is currently undergoing a strategic review of its operations with a vision to cut costs and consider future plans.

There is also discussion of a board spill being demanded by some shareholders as well as a class action suit by shareholders against the company from individuals opposed to the shelving of apricitabine.

Avexa's share price, which hovered around the 12-13c mark prior to the announcement, is currently at $0.026, an 80 per cent drop.