News

Ziopharm Adds $50M, Pushing Internal, Partnered Programs

Jan 23 2012

Taking advantage of a modest stock bump following its presentation at the J.P. Morgan Healthcare Conference earlier this month, Ziopharm Oncology Inc. priced a $50.2 million public offering to support ongoing work with late-stage programs, including palifosfamide and a DNA therapeutic gained via last year’s partnership with Intrexon Corp.

Under the terms, the New York-based biotech is selling about 9.65 million shares at $5.20 each, only a slight discount from Thursday’s closing price. The offering could bring in an additional $7.5 million if underwriters J.P. Morgan Securities, Lazard Capital Markets, Piper Jaffray & Co., Collins Stewart LLC and Griffin Securities exercise their overallotment option in full.

Ziopharm hasn’t yet reported its full-year 2011 earnings, but the company ended the third quarter with about $118.9 million in cash. The latest infusion adds a much-needed cushion for the firm, which has moved into pivotal testing on its own with lead candidate palifosfamide, and could position it more soundly ahead of any possible partnership negotiations.

A DNA cross-linker and a stabilized active metabolite of ifosfamide, palifosfamide (also known as Zymafos or ZIO-201), was one of the darlings of the 2010 American Society of Clinical Oncology (ASCO) meeting, where interim Phase II data showed promising results in front-line, metastatic softtissue
sarcoma, an orphan disease affecting about 9,000 people in the U.S. (See BioWorld Today, May 24, 2010.)  Shortly after ASCO, Ziopharm launched the pivotal Phase III PICASSO study to test palifosfamide in combination with doxorubicin vs. doxorubicin alone. The fi rm opted to forgo the special protocol assessment agreement with the FDA for the 424-patient trial, which is measuring progressionfree survival for potential accelerated approval and overall
survival as the primary endpoint. (See BioWorld Today, June 22, 2010.)

During his J.P. Morgan presentation, CEO Jonathan Lewis said he expects the PICASSO trial to be fully enrolled “somewhere around the end of the fi rst quarter,” with PFS data available in the second half of this year. Though accelerated approval has become a hotly contested topic at the FDA, Ziopharm is hoping stellar data and the fact that the only current therapy option, doxorubicin, has limited activity in the soft-tissue sarcoma population will be enough to sway the agency to grant an early nod.  Meanwhile, Ziopharm has its sights set on a larger cancer population. It plans to start a second pivotal trial of
palifosfamide in small-cell lung cancer (SCLC) in the second half of this year. SCLC affects about 30,000 to 50,000 people in the U.S., and the number of SCLC patients in other countries, particularly in China, is even larger.  Earlier in the pipeline, Ziopharm has organic arsenic compound darinaparsin (ZIO-101), which is being tested intravenously in relapsed peripheral T-cell lymphoma (PTCL) patients and is completing a Phase I trial as an oral drug in solid tumors. The PTCL program is partnered in Asia with Tokyo-based Solasia Pharma KK. (See BioWorld Today, March 8, 2011 .)  Also in Phase I testing is indibulin (ZIO-301), an oral tubulin binding agent.  Those three programs were enough to keep the company busy, but last year Ziopharm picked up a stake
in DNA-based cancer therapies in a collaboration with Blacksburg, Va.-based Intrexon, including rights to two lead clinical-stage candidates. Under the terms, Intrexon purchased an initial 2.4 million Ziopharm shares and agreed to buy up to $50 million more in conjunction with future Ziopharm securities offerings. In return, Ziopharm will pay Intrexon 50 percent of the net quarterly profi ts from sales of products developed under the partnership.  The lead product to emerge, immunotherapy candidate ZIN-CTI-001 has been tested in Phase I and is slated to move into a pivotal Phase II trial in melanoma around the end of this year or early next year.  Lewis told J.P. Morgan attendees that a second pivotal trial is anticipated to start in 2013.  ZIN-CTI-001 uses autologous dendritic cells transduced with a controllable gene switch and a gene for expressing interleukin-12. 

The public offering is set to close on or about Jan. 25.  Prior to the offering, Ziopharm had about 68.5 million shares outstanding.  The firm’s stock (NASDAQ:ZIOP) closed Friday at $5.11 , down 21 cents. ■

by Jennifer Boggs, Managing Editor, BioWorld TODAY