By DAVID BERTOLA
dbertola@bizjournals.com | 716-541-1621

When clinical trials are performed on a new cancer drug before it goes to market, it's uncommon that they are tried on patients with different types of cancer.

But that is happening with KX01, the lead compound of Buffalo-based Kinex Pharmaceuticals LLC. Company officials say the ability to have their drug included in different studies, as opposed to treating just one, can speed the process of commercializing it.

"It's unusual to have one drug being used in so many trials," said David Hangauer, co-founder of Kinex and chief scientific officer.

In earlier clinical studies, KX01 was found to reduce or eliminate pain related to cancer metastasizing to bone. The company considers that a major breakthrough.

KX01 is being used to treat patients with castration-resistant prostate cancer and two forms of leukemia, as well as forms of breast and ovarian cancer.

Using it in multiple trials was possible because of an exclusive rights licensing agreement the company signed earlier this year with Hanmi Pharmaceutical Co. Ltd., a leading pharmaceutical company in Seoul, South Korea.

Through the agreement, Hanmi acquired the rights to develop and commercialize KX01 in Asian territories, including Korea, Greater China and some Southeast Asian countries. Japan, India, Australia and New Zealand were not included as part of the agreement, terms of which were not disclosed.

Some tests to be conducted in WNY

Kinex has other compounds besides KX01 at different development stages. This helps increase Kinex' potential and reduces risk.

"If something doesn't work, you have something else right behind it," Hangauer said.

He added that many trials with Hanmi could result in learning which doses work best and what other cancer drugs KX01 performs best with.

"As part of the deal structure, they commit to more patients for Phase II clinical studies; these will be in combination with chemotherapy studies," he said.

Hanmi provides a means to conduct numerous clinical trials in Asia. Studies where the drug is used to treat triple-negative breast cancer and ovarian cancer will be conducted in Western New York and, probably, through Tulane University.

The Hanmi agreement also helps get trials paid for. This is beneficial to Kinex because clinical trials can cost more than $500,000.

Overall, Hanmi's ability to match large groups of patients to KX01 and collect data is faster than if Kinex were to do so on its own. Kinex CEO Johnson Lau said there's an estimated 26 million South Koreans being served by five hospitals conducting cancer studies near Seoul.

Of the Hanmi partnership, he said, "It accelerates the establishment and achieving of our goals." 

Speed is also key in proving the drug's worth to investors and it's a main factor in aligning with Hanmi.

"We can subtract 12 to 18 months off our process," Lau said. "Partnering with Hanmi to do clinical studies will be to the benefit of Kinex and its shareholders."

Next step: Raise $10 million to $20 million

In June, Kinex closed on more than $5 million of equity financing. Three-quarters of it, according to board Vice Chairman Charles Lannon, came from area investors.

"We're doing very well financially, but we need a bigger war chest to move forward," said Lau who, as chairman and CEO of Ribapharm, launched the second-largest biotech initial public offering in U.S. history ($300 million).

"We're stable; we're not a startup anymore," Lau said of Kinex. "We want to go public."

The next step is another round of funding where Kinex would look to raise $10 million to $20 million.

Without providing a timetable, Lau, Hangauer and Lannon said they will be examining multiple offers and options for the next financing round "in the near future."

Nearly all the money raised will be used for clinical projects, according to Lau.

"Again, it's essential to balance what's good for us and our shareholders," he said. "We have many options, many sources of capital, different companies that want to invest using different approaches, including licensing deals."

It takes time to evaluate before a decision is made, he said. But the more on the table, the better. 

"We want to create the best deal - to create value for investors and shareholders and be successful in the eyes of the community," Lau said. "We are in a very good position."