Sources inform ''Globes'' that due diligence at Keryx Biopharmaceuticals (Nasdaq: KERX; LSE: KRX ) is delaying negotiations with a foreign pharmaceutical giant for a licensing agreement for its flagship drug KRX-101. Keryx Biopharmaceuticals director of investor relations Ron Bentsur said, "Things are not progressing as fast as we would like. Due diligence is a confidential matter, but it is simply going more slowly."
Keryx announced in the fourth quarter of 2001 that it was negotiating cooperation agreements with several international pharmaceutical companies, the most important of which involved the sale of rights to KRX-101. KRX-101 treats diabetic kidney disease, a condition known as diabetic nephropathy, in Type II diabetics. Keryx received FDA approval for fast-track trials for KRX-101 at the end of 2001. Keryx believed at the time that an agreement would be reached by the end of the first quarter of 2002. Keryx was also negotiating to sell rights to its drug development platform KinAce and some of the drugs based on it.
Bentsur attributed the delay in the negotiations to a general delay in the biotechnology industry since the US Food and Drug Administration (FDA) in December refused to approve a cancer treatment developed by US company ImClone Systems (Nasdaq:IMCL). Bristol-Myers-Squibb (NYSE:BMY), which promised to invest $2 billion in ImClone toward developing the drug, was accused of not properly checking the drug's chances of receiving marketing approval. The result was a severe prolonging of due diligence in the entire industry, and it is hard to know how long it will last.
"We are hearing similar things from other companies in the industry. It's force majeure. The entire industry was battered by the events at ImClone and everything is now happening much more slowly and cautiously. We were already on the verge of a deal, but they now want to repeat tests we already conducted."
Bentsur said the deal will probably be signed "in a few months. There is no objective reason for us not getting a deal. The product has proven itself in clinical trials and the FDA loves the drug. The delay has pushed the deal back a bit, but nothing has happened to the drug itself. People are simply more cautious and scared to sign on the bottom line. However, we have indications that things are moving forward."
Keryx is also developing KRX-123, a treatment for prostate cancer.
Keryx, founded four years ago, is based in Boston and Jerusalem, where it dedicated a new R&D center yesterday. The company's chairman is Dr. Morris Laster and its president and CEO is Dr. Benjamin Corn.
Published by Israel's Business Arena on 19 March 2002