Has ImmuPharma a second drug winner?

Tip update: ImmuPharma has licensed out the rights to its drug Lupuzor and now has enough cash to develop a potentially remarkable cancer treatment

September 30, 2009

by AnstedR

In November last year, leading US biotech company Cephalon paid ImmuPharma $15m (£9.32m) option money to view Phase IIb trials of Lupuzor. This drug treats lupus - an autoimmune disease where 90 per of sufferers are female and where the body's immune system attacks that person's body tissue. On viewing the results Cephalon handed over another $30m this February to obtain exclusive worldwide licensing rights.

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Cephalon is now responsible for all future development costs including possibly another Phase IIb trial in the US (the first one was undertaken in Europe and Latin America) and then a Phase III trial. Immupharma reckons that in total, including milestone payments and royalties, it could receive $500m from this drug less money already received. It also looks likely that the company will pay little tax on that income as it's channelled through a French subsidiary, and France taxes income from intellectual property lightly. In 2008, ImmuPharma paid tax of just 4 per cent on profits of £4.86m, thanks in part to tax losses; in the latest half year, the tax bill was less than £2m or 15 per cent.

ImmuPharma has five drug candidates in its pipeline but the main one is a cancer treatment designed to block the activity of a protein called nucleolin. Tests on rodents suggest that the drug can combat a wide range of different cancers from breast to lung to prostate. So ImmuPharma has plenty of money to spend £3m a year on clinical work and the French government has recently contributed €1.15m (£1.04m) in grants.