Since I first wrote about Lixte Biotech (OTC:LIXT) at
<font> BioMedReports.com in early April </font> , the Company has provided an update on its development-stage cancer drug discovery operations as part of a SEC 10Q filing in mid-May for 1Q09. LIXT.OB was originally founded as a diagnostics company in 2005 evaluating biomarkers (indicators of disease at the molecular level), but has shifted its focus to cancer drug discovery research that is primarily focused on the development of compounds for malignancies with few effective treatment options – such as certain types of brain cancer (glioblastoma multiforme or GBM, neuroblastoma, and medulloblastoma) and pancreatic cancer.
Areas of secondary focus for the Company include the early-stage, preclinical drug discovery of improved anti-fungal treatments for patients with compromised immunity (e.g. HIV/AIDS and bone marrow transplant patients) and the treatment of neurodegenerative conditions such as Alzheimer's disease, Parkinson's disease, and Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig's Disease).
Lixte is focused on securing a strategic partnership this year with an established pharmaceutical company to provide the necessary funding for these research initiatives since the Company does not currently generate revenue from its operations. The Company has made preliminary presentations to several large pharmaceutical companies for its lead compounds (in addition to chemical derivatives of these compounds), which have the effect of modifying critical pathways in both cancer cells and microorganisms such as fungi that appear to result in a protective effect on neural tissues such as the brain.
Lixte ended 1Q09 with about $87,000 in cash/equivalents and subsequently raised net cash proceeds of about $215,000 in early April through the sale of 500,000 common stock units at a price of 50 cents each. The units consisted of one share of common stock and one five-year warrant to purchase a share of common stock on a cashless exercise basis at an exercise price of 50 cents. As of early May, Lixte reported 29.4 million shares of common stock outstanding, in addition to options and warrants at the end of 1Q09 that were exercisable into 3.4 million shares of common stock and outstanding (4.2 million shares).
The Company’s operating activities used about $206,000 in cash during 1Q09, compared to about $179,000 in the year-ago period. Lixte provided previous guidance for a minimum requirement of $750,000 during 2009 to fund operations and attempt to bring two compounds through preclinical evaluation for the submission of an IND application. Three closings of private placements resulted in net proceeds of about $597,000 with $100,000 being used to repay a short-term note earlier this year. Lixte has modified its budget for 2009 based on available funding and currently expects to continue the development of its two lead compounds while pursuing strategic partnerships or another private placement in 2H09 to raise additional capital and possible expand upon existing research activities.
The Company’s primary goal is to begin preclinical studies for its two lead compounds, which is a requirement for submitting an IND application to the FDA to begin human clinical trials. Lixte will choose its lead compound based in part upon discussions with the Agency at a pre-IND meeting and the Company will also begin preclinical studies for a second compound if sufficient resources are available. The secondary goal for Lixte is to further characterize the anti-fungal activities for select derivative compounds of the LB-200 series, which will be done in collaboration with academic partners. The Company recently confirmed that its lead compound of the LB-200 series has shown the potential to safely (no evidence of toxicity was observed) cure two common types of fungal skin infections in a guinea pig model through topical application of the compound on a daily basis for two weeks.
One lead compound (LB-1) is the most advanced in the process and Lixte plans to be ready for IND submission in mid-2010. The other lead compound (LB-2.5), which inhibits cancer cells by a different mode of action compared to LB-1, is anticipated to complete its evaluation by the end of 2010. If the Company is able to achieve a strategic partnership and funding from an established pharmaceutical company to co-develop its compounds, the development process is expected to occur more quickly since these two lead compounds are well characterized with regards to their activity and mechanism of action. The Company anticipates that remaining pre-clinical activity, toxicology, and pharmacokinetic characterization could be accomplished quickly with adequate financial resources or through a strategic partner with expertise conducting such studies.
During 1Q09, Lixte filed eight patent applications that included the chemical formula of one of the Company’s lead compounds (LB-100), which was found to be novel. The Company considers this finding a milestone in the development of its intellectual property. The specific claims for the structures and methods of synthesis of all compounds in the LB series were filed on the same day in a separate patent application and are the sole property of Lixte. The pending review of this patent application is crucial to the Company’s future business prospects since the outcome will validate the novelty of the LB-100 compounds.
In addition, the results of studies characterizing the novel and potent anti-cancer activity and mechanism of action of a compound from the LB-100 series (LB-102) both alone and in combination with standard chemotherapy drugs have been submitted for publication in a leading scientific journal. An abstract which characterizes the neural protective effects of two lead compounds in a mouse model was also submitted for presentation at a neurological society meeting later in the year.
Lixte does not have any full-time employees with John S. Kovach, M.D., serving as the Company's sole administrative officer and founder. Dr. Kovach is a part-time Professor in the Department of Preventive Medicine at the State University of New York. He received approvals from the School of Medicine of Stony Brook University and from the New York State Ethics Commission to operate the Company and to hold greater than 5% of our outstanding shares. Dr. Kovach has not received any compensation from the Lixte since its inception in August 2005.
The major determining factor in the speed of development for Lixte’s drug discovery operations is the ability of the Company to obtain funding and/or a strategic partnership with an established pharmaceutical company. Other key upcoming catalysts for Lixte include the outcome of the patent filing for LB-100 as a novel compound, scientific journal publication for anti-cancer compound LB-102, and acceptance of the abstract for two of the Company’s compounds for presentation at a neurology conference later this year. Check out the related coverage of other small and micro-cap cancer biotechs, which are among some of the most popular articles and best performing stocks highlighted at BioMedReports over the past few months.
Disclosure: Long ACCP.
$7.33 (06/23/09)
