The patent, titled, "Antisense Oligonucleotides that Inhibit Expression of HIF-1," covers a method of inhibiting HIF-1 in human cells or tissues. HIF-1, a human protein, is involved in angiogenesis, cancer cell survival, radiation resistance and cancer spread, and as a result, increased levels are associated with poor prognosis and increased mortality.

According to Rexahn, RX-0047 has shown that it can inhibit the expression of HIF-1 and also induce toxicity in several cancer cell lines.

"Obtaining this additional patent coverage for RX-0047 in the large pharmaceutical market of Japan is another step forward for the development of this compound, and helps strengthen our overall global intellectual property position," said president Rick Soni.

Corresponding patents have already been issued to Rexahn in other jurisdictions, including the U.S. and Europe.

Rexahn is developing therapies for cancer, CNS disorders, sexual dysfunction and other unmet medical needs. The company currently has three drug candidates in Phase II clinical trials: Archexin, Serdaxin, and Zoraxel.

The study, published in the Bioorganic & Medicinal Chemistry, showed that the compounds "strongly inhibit" the growth of human cancer cells through programmed cell death, including colorectal cancer cells that were resistant to other cancer treatments.

The company said that quinoxalinyl-piperazine also has a synergistic toxic effect on cells when combined with several known cancer drugs such as paclitaxel, doxorubicin, cisplatin, gemcitabine or 5-fluorouracil.

During the trial, it was proven that with drug resistant HCT-15 cancer cells, the company's compounds had a stronger anti-cancer effect than paclitaxel, decreasing cancer growth by 70-fold, the company said.

"This result implies that the compound may control and overcome drug resistance," Rexahn concluded in a statement.

Rexahn currently has three drug candidates in phase II clinical trials, including Archexin, Serdaxin, and Zoraxel, and a pipeline of preclinical compounds to treat multiple cancers and CNS disorders.

The grants were awarded as part of a program under the Patient Protection and Affordable Care Act of 2010, designed to provide tax credits or grants to biotechnology companies with no more than 250 employees for expenses related to a medical development project.

"We are very pleased to receive the grants for all four applications we submitted. The award will further strengthen Rexahn's financial position as we advance our drug development projects for cancers, depression, and erectile dysfunction," said president and COO Rick Soni.

The program targeted projects that showed potential to produce new therapies to treat areas of unmet medical need or chronic or acute diseases, as well as reduce long-term health care costs in the United States.

The grants are meant to reimburse up to 50% of investments in qualifying projects in 2009 and 2010.

Rexahn currently has three drug candidates in phase II clinical trials: Archexin for pancreatic cancer, Serdaxin for depression, and Zoraxel for erectile dysfunction. The company is also developing a drug delivery system for cancer, which works to target cancer cells to avoid damage to healthy tissue.

In the published study, Rexahn said that various substituted 3-aryl-1-isoquinolinamine derivatives were shown to have "excellent" toxicity against eight different human cancer cells, including breast, prostate, colon, ovary, kidney, pancreas, glioblastoma and melanoma.

"In this second published study, we further establish that isoquinolinamine derivatives, such as our anti-cancer compound RX-8243 - a new chemical entity - are potent anti-cancer compounds that have the potential to be developed into chemotherapeutic agents," said president Rick Soni.

Last month, Rexahn announced the publication of new preclinical data in Bioorganic & Medicinal Chemistry Letters demonstrating that RX-8243, an isoquinolinamine analogue, significantly inhibits the growth of human cancer cells, including paclitaxel-resistant human colorectal cancer cells.

Rexahn develops and commercialized drugs for cancer, CNS disorders and sexual dysfunction. The company currently has three drug candidates in phase II clinical trials:  Archexin, Serdaxin, and Zoraxel - and a pipeline of preclinical compounds to treat different cancers and CNS disorders.

The company was up more than 3% in the first hour of trading on Tuesday at $1.2 as of 9:41am ET.

In the study, rodents that were exposed to different neurotoxins, were administered with clavulanic acid, which protected neurons in the hippocampus and dopaminergic regions of the brain that are critical in Alzheimer's and Parkinson's disease, respectively.

"The exciting neuronal protective properties of clavulanic acid make it a highly promising treatment for neuronal cell death diseases like Parkinson's and Alzheimer's," said Rexahn CEO Chang Ahn.

Parkinson's disease afflicts five million people worldwide, and with the aging of the baby boom generation, that population is expected to double by 2030.

According to the Alzheimer's Association, by 2050, the number of Americans aged 65 and older with Alzheimer's is projected to reach between 11 million and 16 million, unless medical breakthroughs can prevent or more effectively treat the disease.

Currently, Alzheimer's and Parkinson's therapies only provide symptomatic relief.

"Clavulanic acid has breakthrough potential of shielding the brain cell survival mechanisms, rather than fighting one-by-one the multitude of triggers that can activate the cell death mechanisms common in Alzheimer's and Parkinson's," added Ahn.

Alzheimer's has at least five major triggers, while Parkinson's has three major dysfunctioning mechanisms. Rather than intercepting and fighting each trigger, clavulanic acid has shown to broadly protect brain cell mechanisms.

Rexahn develops and commercializes therapeutics for cancer, CNS disorders, sexual dysfunction and other unmet medical needs. The company currently has three drug candidates in Phase II clinical trials, including Archexin, Serdaxin, and Zoraxel.

The company rallied more than 3% Tuesday morning, to trade at $1.24 on NYSE Amex Exchange.

The Phase IIb study is designed to assess Zoraxel’s efficacy in approximately 225 male subjects, ages 18 to 65, with ED. The double blind, randomized, placebo-controlled, 12-week study will include the International Index of Erectile Function (IIEF), Sexual Encounter Profile (SEP) survey, and quality of life study endpoints.

The Phase IIb study is expected to begin in the second half of 2010 and the preliminary data is expected to be available in 2011. The study will be conducted at multiple sites in the US.

Rexahn’s decision to move forward with the Phase IIb trial is supported by data from a Phase IIa proof of concept study of 39 ED patients treated with Zoraxel.

The Phase IIa study was completed in May 2009 and demonstrated that Zoraxel consistently improved IIEF scores of treated subjects. Furthermore, the study found that treated subjects demonstrated a dose dependent treatment effect with improved erectile function and quality of life measures. Zoraxel was also found to be safe and well tolerated, with no serious adverse events reported.

Rexahn currently has three drug candidates in Phase II clinical trials, Archexin, Serdaxin, and Zoraxel - all potential best in class therapeutics - and a pipeline of preclinical compounds in development to treat multiple cancers and CNS disorders. Rexahn also operates key R&D programs of nano-medicines, 3D-GOLD, and TIMES drug discovery platforms.

Zoraxel is being developed as an orally administered tablet for on-demand use, and is one of three clinical stage compounds being developed by Rexahn. Zoraxel has a well established and excellent safety record in humans and studies demonstrate a lack of severe side effects associated with current standard of care phosphodiesterase (PDE-5) inhibitor ED drugs. Zoraxel is a centrally acting, dual enhancer of serotonin and dopamine in the brain, whereas PDE-5 inhibitors work in peripheral blood vessels.

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The Company’s research determined that by “tuning” the cell signaling pathways to shut down the uncontrolled cell growth that results in cancer, they could similarly tune the cell signaling pathways related to CNS-based conditions such as Parkinson’s, Alzheimer’s, depression, and sexual dysfunction. Rexahn has three drug candidates in various stages of Phase II clinical trials.

·    Archexin® - a first-in-class AKT inhibitor therapy for treating various cancers, such as pancreatic cancer, renal cell carcinoma, glioblastoma, and cancers of the ovary and stomach.
·    Serdaxin® - a best-in-class therapy for treating depression, and potentially break-through treatment for Parkinson’s and Alzheimer’s.
·    Zoraxel™ - a first-in-class CNS-based therapy for treating sexual dysfunction.

Discovery Platform - Rexahn owns a highly productive discovery platform that continues to yield a portfolio rich in potential first-in-class and best-in-class compounds. The discovery platform features a first-in-class small molecule drug discovery (TIMES, “The Inhibitors of Multi-Expression Signals”), highly integrated computational modeling (3D-GOLD, “3D-Gateway of Ligand Discovery”) and nano-based drug targeting and delivery. Working in concert, these technologies enable the Company to screen, select, and optimize large numbers of compounds while retaining stringent selection criteria. Rexahn’s R&D pipeline success is largely due to its R&D platforms, which has demonstrated greater efficacy with fewer side effects.

Overview

Rexahn’s pipeline, scientific and business goals for 2010 are:

·    Advance Serdaxin in a Phase IIb clinical trial in depression. In October 2009, Rexahn reported top-line Phase IIa clinical results for Serdaxin for Major Depressive Disorder (MDD). The study demonstrated that patients ages 18-65 with MDD exhibited clinically significant improvement over baseline in symptoms of depression. Serdaxin exhibited an onset of action in less than two weeks and was found to be safe and well tolerated, without any of the serious side effects often linked to currently marketed antidepressant drugs.

·    Expand clinical development of Serdaxin to Parkinson’s disease. Current animal model studies demonstrate that Serdaxin protects neuronal cells from death, of which death is a key mechanism implicated in many brain disorders such as Parkinson’s and Alzheimer’s. In a Parkinson’s disease animal model, Serdaxin has proven to be a powerful neuroprotective agent and has significant potential as a next-generation drug for disease-modifying treatment that goes beyond the dopamine replacement schemes often used in current treatments. Additionally, an MRI study exhibited stronger neuronal activity in dopamine and serotonin systems in Serdaxin-treated animals. Rexahn expects to begin a Phase II clinical trial for Parkinson’s in the second quarter of 2010.

·    Advance clinical development of Zoraxel for sexual dysfunction. In the first half of 2010, Rexahn expects to submit a protocol to the FDA for a Zoraxel Phase IIb clinical study for male sexual dysfunction. In May 2009, Rexahn announced data from a Phase IIa clinical study demonstrating Zoraxel’s potential as an effective, new treatment of erectile dysfunction (ED) and as a safer alternative to currently marketed drugs for ED. The double blind, randomized, placebo-controlled, dose ranging study found that human subjects treated with Zoraxel showed improved erectile function and quality of life during the 8-week treatment period.

·    Continue clinical development of Archexin for the treatment of pancreatic cancer. Archexin is a potent AKT protein kinase inhibitor with potential utility to inhibit cancer cell survival and proliferation, angiogenesis and drug resistance. The drug is currently being studied in Phase II clinical trials for pancreatic cancer. Rexahn expects to complete it by the end of 2010. In previous clinical studies, Archexin has demonstrated an excellent human safety profile, with fatigue being the only noticeable side effect. Archexin has FDA Orphan drug designation for five different cancer types; renal cell carcinoma, glioblastoma, pancreatic, stomach, and ovarian cancers.

·    Initiate clinical program for RX-3117. Rexahn and its partner Teva Pharmaceutical Industries, one of the largest pharmaceutical firms in the world, are co-developing novel anti-cancer compound, RX-3117, for the treatment of cancer, in particular, gemcitabine-resistant lung and pancreatic cancers. RX-3117 has shown potent anti-tumor effects in xenograft human tumor models. Preclinical studies have revealed the compound’s high bioavailability and superior safety profile to gemcitabine, which is the current first-line therapy for pancreatic and other cancers. Rexahn and Teva expect to begin human clinical trials for RX-3117 in late 2010. Teva is scheduled to invest millions of dollars into Rexahn. Teva’s investment into the Company is contracted to be at a 20% premium to the then current market price. The Company will also receive roughly $4 million milestone fee in 2010 if a set of milestones are achieved. The Teva partnership illustrates and validates the underlying, hidden value of the Rexahn’s pipeline drugs, even in the pre-clinical stage. Rexahn is expected additional partnerships for later stage products over the next 6-12 months.

Financial

Major shareholders in Rexahn, in addition to insiders, are a top 5 pharmaceutical company, the largest pharmacy chain, and the leading tobacco company in Korea. These "closely held" investors account for holding 80% of the company's outstanding shares.

As of December 31, 2009, the Company was burning $1.8 million in cash per quarter and had:
·    $10 million in cash
·    Assets of $10 million
·    Equity of $8 million

Top Three Drugs in the Pipeline

Serdaxin® – Depression and Parkinson’s disease - Unlike other treatments for depression and mood disorders, Serdaxin tackles three mechanisms simultaneously: serotonin, dopamine, and neuronal survival. Serdaxin is a game-changing mood disorder drug in a huge market filled with major players (Pfizer, Eli-Lilly, GSK). Among antidepressants, SSRIs/SNRIs appear to be the leading therapy but are only partially effective and have a 50% estimated response rate and up to 30% relapse rate. Serdaxin aims to change all of that. Previous research indicates that loss of serotonin in the brain underlies common symptoms such as anxiety.

Recent findings, however, indicate that dopamine plays a central role in other aspects of the disease, including anhedonia (loss of pleasure) and lack of motivation. In preclinical studies, Serdaxin supports both serotonergic and dopaminergic systems in the brain, enabling a multi-prong approach to treating depression. In the next four years, over $5 billion of the $11 billion anti-depressant market will come off patent protection. This means that Serdaxin has perhaps the best shot at replacing those compounds and expanding the market for patients who did not do well on Prozac or Zoloft.

In addition, Serdaxin prevents neuronal death, a disease mechanism implicated in many brain disorders from depression to Parkinson’s and Alzheimer’s diseases. In a Parkinson’s disease animal model, Serdaxin protects dopamine-releasing neurons from environmental damage. This result supports the Company’s hypothesis that Serdaxin is a long-awaited neuroprotective agent and potential next-generation treatment that goes beyond dopamine replacement.

Zoraxel is a developmental stage drug for sexual dysfunction that directly modulates the sexual activity control center in the brain. Zoraxel enhances the action of serotonin and dopamine, brain signaling molecules that play a key role in three phases of male sexual activity: arousal, erection and release. Zoraxel is the first erectile dysfunction (ED) therapeutic to affect all three of these phases. Unlike PDE-5 inhibitors (Viagra, Cialis and other ED drugs) that only address blood flow issues and thus peripherally acting, Zoraxel is centrally acting in the brain affecting all three functions of male sexual activity. Roughly half the patients who suffer from sexual dysfunction do not respond to Viagra.

Preclinical studies demonstrated Zoraxel improves sexual performance via enhanced motivation and arousal. Its centrally acting mechanism also warrants potential use in the treatment of female sexual dysfunction. Zoraxel also has superior safety compared to PDE-5 inhibitors. Considering all these, Zoraxel has multi-billion dollar blockbuster potential.

Archexin has US FDA orphan drug designation for five cancers (RCC, glioblastoma, and cancers of the ovary, stomach and pancreas). Multiple indications for other solid tumors may also be pursued. In preclinical studies, Archexin significantly reduced AKT in cancer cells of many human solid tumors. Once again, a multi-billion dollar blockbuster is possible.

Archexin is an antisense oligonucleotide compound that is highly selective for inhibiting mRNA expression and production of Akt protein. Akt activation leads to cancer cell survival, proliferation, angiogenesis, and drug resistance.  Both native and activated forms of Akt are involved in cancer cell signaling. Archexin is the first anticancer drug that inhibits both native and activated forms of Akt, with the potential to inhibit cancer survival and proliferation, angiogenesis, and drug resistance. In the Archexin Phase I clinical study, grade 3 fatigue was the only dose limiting toxicity observed.

The goal of the ongoing Phase II trial is to assess efficacy and safety in treating metastatic pancreatic cancer. The primary study endpoints are tolerability and survival. Preliminary results of the Phase II clinical trial for the use of Archexin in pancreatic cancer is expected in late 2010.

Summary

With three drugs of significant potential in Phase II trials and a number of other compounds in various stages of development, Rexahn is much more diversified than many small dug companies that typically rely on one or two drugs. With the pharmaceutical partnership as well as long-term Korean institutional and corporate shareholders in the company, Rexahn is well positioned for the foreseeable future.