OncoZenge AB has entered into an investment agreement with Sichuan Yangtian Bio-Pharmaceutical Co, Ltd, securing SEK 30.2 million (approximately $2.9 million) to finance the Phase 3 clinical trials of BupiZenge for the treatment of oral pain caused by oral mucositis. The investment, executed through four share issues, could give the Chinese investor a 28.5% ownership stake in OncoZenge. This funding aims to propel BupiZenge, a novel oral lozenge formulation of bupivacaine, through its registrational Phase 3 trial, addressing a significant unmet need for effective, opioid-sparing pain relief in cancer patients.
Investment Details and Strategic Rationale
The investment agreement stipulates that Yangtian Pharma will subscribe for a maximum of 4,669,647 new shares in OncoZenge at a subscription price of SEK 6.47 per share, representing a 40% premium compared to the volume-weighted average price of OncoZenge's shares. The investment is structured in four tranches, contingent upon OncoZenge achieving specific Phase 3 trial milestones. These milestones include completing the Phase 3 clinical trial plan, submitting the Clinical Trial Application (CTA) in Europe, and receiving European approval for the CTA.
Stian Kildal, CEO of OncoZenge, stated, "We are very pleased to welcome Yangtian Pharma as a new strategic shareholder in OncoZenge. Together, we share the vision of bringing BupiZenge to a global market, and the millions of patients who deserve better pain relief during their cancer therapy. With their investment, we have secured the necessary funds for our registrational Phase 3 trial."
BupiZenge: Addressing Oral Mucositis Pain
BupiZenge is designed to provide relief from oral pain caused by oral mucositis, a common and debilitating side effect of cancer therapy. Oral mucositis affects millions of cancer patients, leading to severe physical and psychological distress. Current treatment options often fall short, with insufficient pain relief or significant side effects. BupiZenge offers a potential opioid-sparing alternative, leveraging the local anesthetic properties of bupivacaine in a novel oral lozenge formulation. Phase 2 trials have demonstrated substantially better pain relief compared to the standard of care.
Use of Investment Proceeds
Approximately 67% of the investment will be dedicated to conducting the multi-country Phase 3 clinical trial(s), covering expenses such as CDMO appointment and manufacturing, CRO appointment and clinical trial execution, clinical site fees, regulatory fees, and Market Authorization Application (MAA) preparation. The remaining 33% will support general corporate purposes and operational activities in 2025-2026, including business development for licensing in Rest of the World markets, joint business development and collaboration with Yangtian Pharma to maximize commercial potential in China, development and filing of intellectual property, resourcing of sponsor oversight roles, management, legal, finance, Nasdaq listing fees, and development of a strategy for launching in the USA market.
Yangtian Pharma's Perspective
Mr. Zhang Zuo, Chairman of Yangtian Pharma, commented, "Our investment in Oncozenge is part of Yangtian’s strategy of international cooperation with interesting pharmaceutical companies. We are therefore excited to support Oncozenge when taking BupiZenge to international markets. We are also looking forward to exploring further pharmaceutical market opportunities such as in the United States and Asia."
Conditions and Approvals
The investment is conditional upon several factors, including authorization from an extraordinary general meeting (EGM) of OncoZenge shareholders, changes to the company's articles of association, and mandatory filings with Chinese regulatory authorities. The EGM is scheduled for March 3, 2025. Furthermore, the investment qualifies as an Outbound Direct Investment under Chinese regulations and is conditional of mandatory filing with NDRC, Bureau of Commerce and Foreign Exchange Authority in China at the provincial level. The estimated timeframe for approval is 45 days or less.
