Introgen Therapeutics: Advexin therapy--Hype or Hope?

Introgen Therapeutics, Inc. (INGN-$5.27) is focused on the development and commercialization of targeted molecular therapies for the treatment of cancer and other diseases. The Company’s lead product candidate, ADVEXIN therapy, combines the p53 tumor suppressor with a, non-replicating, non-integrating, Adenoviral Vectors delivery system (the technology is licensed from The University of Texas M. D. Anderson Cancer Center).

Because most cancers are amenable to local treatment and because local cancer treatments are administered far more often than systemic cancer treatments, Introgen believes that ADVEXIN therapy can be deposited directly into a patient’s cancerous tumor by hypodermic syringe. In those cases for which a systemic therapy may be indicated, the Company is developing the use of a systemically administered nanoparticle formulation system to deliver tumor suppressors.

Introgen is initially developing ADVEXIN therapy for head and neck cancer, which has been designated an Orphan Drug under the Orphan Drug Act.

The Company has two ongoing Phase 3 clinical trials of ADVEXIN therapy in patients with advanced recurrent squamous cell carcinoma of the head and neck (recurrent head and neck cancer). These trials involve administration of ADVEXIN therapy, both independently and in combination with chemotherapy, in recurrent head and neck cancer.

The problem at Introgen, as columnist Adam Feuerstein wryly points out in two of his thestreet.com articles, is that top management at Introgen (a) “wrote the book” on how to perform misleading data analysis and (b) has been issuing empty promises about Advexin for years.

In my view, the FDA will not give the nod to ADVEXIN until Introgen scientists (i) identify a set of prognostic indicators associated with high response rates and increased survival in prior Phase 2 clinical trials of Introgen's ADVEXIN therapy and (ii) design, enroll, and carry-out a NEW clinical trial of aforementioned cancer patients with the predictive biomarkers.

At December 31, 2006, Introgen had an accumulated deficit of $172.3 million; and, according to Introgen’s regulatory filings, since inception (June1993), resources have been principally used to conduct research and development activities for ADVEXIN therapy.

This second point, however, is somewhat misleading, for despite repeated years of research and repeated clinical setbacks, some resources have gone to top executives at the Company:

• David G. Nance, who beneficially owns 8.10% of Introgen’s common stock has served as a member of the Board and as President and Chief Executive Officer since inception. In fiscal 2006 and fiscal 2005, his salary was $594,944 and $538,750, respectively, and he was rewarded with options valued at $2.1 million and $1.53 million, respectively, too.
• Max W. Talbott, Ph.D. joined Introgen in February 2002 as the Senior Vice President, Worldwide Commercial Development. In fiscal 2006 and fiscal 2005, his salary was $361,667 and $325,000, respectively, and he was rewarded with options valued at $747,864 and $600,300, respectively, too.
• John N. Kapoor, Ph.D., who beneficially owns 8.01%, or 3.51 million shares, is the Chairman of the Board, and received director compensation in fiscal 2006 of $163,624 (in the form of stock and option awards).

Dr. Kapoor is the sole shareholder of EJ Financial Enterprises, Inc. Introgen has a consulting agreement with EJ Financial pursuant to which EJ Financial provides services to the Company, which include business development, license negotiations, market analysis and general corporate development, for $175,000 per year.

• In October 2004, Introgen acquired Magnum Therapeutics Corporation, a company owned by Dr. Robert Sobol, Senior Vice President, Medical and Scientific Affairs. Introgen paid approximately $1.75 million to Dr. Sobol for the Magnum stock.

Magnum’s primary asset is the right to receive funding under a grant from the National Institutes of Health. During fiscal 2006 and fiscal 2005, Introgen earned $1.0 million and $163,000 of revenue under this grant, respectively. The funding available to Introgen under this grant has now ended!

Sadly, the empirical data presented—to date—suggests that the pocketbooks of Introgen insiders are doing better than the health of the patients in the Company’s cancer trials.

Editor David J. Phillips does not hold a financial interest in any of the companies mentioned in this posting. The 10Q Detective has a Full Disclosure Policy.