Monday, June 25, 2007

Promising prescription: $5.5B market waiting as Pipex tests 2 drugs

By Andrew Dietderich

6:00 am, June 25, 2007

An Ann Arbor-based company that’s moving to the American Stock Exchange today plans to tap at least two drug markets that could be worth a total of $5.5 billion annually, using drugs licensed from the University of Michigan and the University of California at Los Angeles.

Two weeks ago, Pipex Pharmaceuticals Inc. (Amex: PP) received $5 million from the National Multiple Sclerosis Society, the largest grant ever given by the organization.

Pipex has six drugs in its pipeline, but two are closest to going to market: Trimesta and Coprexa.

Trimesta is used to treat multiple sclerosis; and Coprexa is used to treat Wilson’s disease, which destroys the lungs.

Pipex was founded in Miami in 2001 by Steve Kanzer, the company’s chairman and CEO. A biotech investor, Kanzer moved Pipex to Michigan in 2004 to be nearer to the talent pool in Ann Arbor.

“Florida is working on its biotech industry. But there is so much more talent in Michigan, I decided to come here,” he said.

That’s not the only reason, though.

The compound for Coprexa is licensed from UM. Coprexa has been through two clinical trials and treats a disease called idiopathic pulmonary fibrosis — the technical name for Wilson’s disease, which kills about 128,000 people in the United States annually.

“The technology came out of the University of Michigan, so it really speaks to the kind of talent and money that is available in the Ann Arbor area,” said Tim Robinson, vice president of operations at Ann Arbor Spark, the economic development association for the Ann Arbor area.

Kanzer said there is no treatment for Wilson’s disease, and the potential market for the drug is $5 billion annually.

Pipex plans to file its application for approval for Trimesta in late 2009. The drug was discovered by a UCLA researcher who found that a specific hormone in the placenta of pregnant women with multiple sclerosis helped with remission of the disease and reduced lesions in the brain by 80 percent.

The drug, also licensed by Pipex, has completed phase II clinical trials.

Kanzer said the potential U.S. market for that drug is worth $500 million annually.

Pipex completed $13.9 million in private-equity financing in the fourth quarter and went public at the end of April.

Besides UM and UCLA, the company has agreements with McLean Hospital at Harvard University, the University of Southern California and Children’s Hospital-Boston.

Pipex recently completed a new lab in Ann Arbor. The company has 18 employees — four from Esperion Therapeutics Inc., including the co-founder and co-developer of Lipitor, Charles Bisgaier. He is Pipex president and a member of the board.

Pipex has a way to go when it comes to finances, though.

In the first three months of the year, the company reported a net loss of $2.8 million or 90 cents a share. It does research and development and didn’t have any revenue.