William Blair cut its target from $8 to $4 but maintained its outperform rating. They cut the target mainly based on the expectation of increased R&D expenses for custirsen and the resulting increased likelihood of another financing. But the Teva termination agreement won't materially change OGXI's funding needs unless ENSPIRIT passes the second futility. If it fails, the $27mm Teva is paying should cover the cost of winding down ENSPIRIT and AFFINITY, which completed enrollment awhile ago. If ENSPIRIT passes the futility, it's possible OGXI can repartner custirsen to help it fund the remainder of the trial, though it's also possible it wouldn't be able to repartner until the AFFINITY results are known around the end of 2015.
According to today's PR the statistical analysis for the second interim futility for ENSPIRIT, for which results are expected in Q2 of 2015, is being modified to be more rigorous so that if passed "there will be increased confidence in success." In addition, it would enable a smaller enrollment requirement and therefore a shorter time to regulatory submission.
Since ENSPIRIT involves 2nd line NSCLC, which is a major indication, and OGXI would now collect 100% of the profits if it succeeds, the second futility has now become a major catalyst. If it's passed, Teva would look pretty dumb for paying $27 million just a few months earlier to bail and walk away with nothing. Maybe Teva wants out of oncology really bad, or they just like Scott Cormack, but it does seem they don't have high expectations of success so I tend not to either. But you never know and it does give us something to look forward to besides the results of one or two more P2 trials for apatorsen.
On the whole the Teva deal worked out okay for OGXI. Teva funded or will have funded almost the entire cost of the 3 Custirsen P3 trials yet if any of the trials is successful and the drug reaches the market, Teva won't collect a penny.
Well they now have two wholly-owned assets, Custirsen and Apatorsen. The value of both should be basically established by around the end of 2015, as the results of the ENSPIRIT and AFFINITY trials and of one or two more P2 trials for Apatorsen will be known. At that point, it would probably make more sense to sell the company than to seek partners for both drugs. That's if the results are favorable. If they're not, they could give away the company, if they can find a taker.