Apricus Biosciences has licenced the US development and commercialisation rights for a novel selective estrogen receptor modulator (SERM), fispemifene, an investigational treatment for urological conditions in men, from Forendo Pharma, a private therapeutics company based in Finland. This licence agreement combines Apricus' expertise in men's health with Forendo's established leadership in SERM drug discovery, to advance the development of fispemifene as an investigational treatment for urological conditions in men.

Fispemifene is an oral once-daily, new chemical entity SERM, with a unique profile that is ideally suited for use in men. Fispemifene is a tissue-specific SERM designed to treat secondary hypogonadism, chronic prostatitis and lower urinary tract symptoms in men. Two successful US-based phase 2 trials have demonstrated clinical proof-of-concept for the treatment of male secondary hypogonadism, without exhibiting the negative effects on prostate health often associated with testosterone replacement therapies. Apricus anticipates commencing a phase 2b clinical trial during the first half of 2015 to confirm the optimal fispemifene doses to treat men with secondary hypogonadism, while assessing improvements in symptoms commonly associated with low serum testosterone levels, as well as lower urinary tract symptoms in aging men.

Apricus chief executive office, Richard Pascoe, commented, "The in-licensing of fispemifene in the US is a transformative event for Apricus. It marks the achievement of a primary corporate objective of diversifying our pipeline with a complementary drug candidate targeting multiple indications in urology, while building upon the clinical and commercial success of Vitaros, our marketed drug for erectile dysfunction. Importantly, Apricus has funded this major step using an attractive combination of equity, valued at a premium to our current stock price, and venture debt with a four-year term."

Mr. Pascoe continued, "Fispemifene's product profile offers an exciting next-generation treatment option for men suffering from urological conditions such as secondary hypogonadism, in an existing multi-billion dollar market. Moreover, with new chemical entity exclusivity and a patent estate extending to 2028 and beyond, we believe that fispemifene should deliver long-term value for all shareholders through future clinical development and commercial success."

Risto Lammintausta, chief executive officer, Forendo Pharma, stated, "Having previously developed and partnered two SERMS that are approved and marketed in the US, we are excited to work with the Apricus team, which has a demonstrated track record of innovation within men's health and a strategy committed to addressing the unmet needs of these patients. Fispemifene, a unique SERM targeted for use in men, will offer both patients and physicians a differentiated alternative for treating urological conditions in aging men. As a partner and now a major shareholder, we look forward to the progress of Apricus' portfolio of bio-pharmaceutical programmes, including the advancement of fispemifene in US clinical trials."

Under the terms of the agreement, Forendo and its advisors received an upfront license fee of $12.5 million comprised of a $5 million cash payment and the issuance of $7.5 million in Apricus common stock (approximately 3.6 million shares priced at the 360-day average market price of $2.08 per share).

The agreement includes additional potential clinical and regulatory milestone payments to Forendo of up to $45 million, including for potential FDA approval, as well as potential commercial milestone payments totaling up to $260 million, based on achieving specified annual net sales levels up to $1 billion in the US  Apricus will also pay tiered low double-digit royalties based on net sales once the product is commercialised. Apricus will be responsible for the clinical development of fispemifene in the US., as well as all future commercialisation efforts in the US and its territories.

Apricus also announced that it has secured $10 million in venture debt financing from Oxford Finance LLC (Oxford) and Silicon Valley Bank (SVB), to fund the cash portion of the acquisition of fispemifene rights and to fund the Phase 2b clinical development programme during 2015. With existing cash on-hand, access to the Company's committed equity financing facility, and $10 million from this non-dilutive Oxford/SVB debt facility, Apricus has fully funded the up-front license fee and the phase 2b trial costs expected to be incurred in 2015. The venture debt will include interest-only payments for 12 months, followed by payments of principal and interest for 36 months.

Fispemifene is a once-daily orally administered selective estrogen receptor modulator (SERM). A phase 2b clinical trial is expected to commence during the first half of 2015 to confirm the optimal fispemifene doses to treat men with secondary hypogonadism, and provide proof-of-concept data to evaluate the anti-estrogenic and anti-inflammatory effects of reducing prostate volume and improving urodynamics. Fispemifene acts in secondary hypogonadism by inhibiting the negative feedback of testosterone production via an estrogen-blocking effect at the level of the pituitary, resulting in increased testosterone production in the testes, which in turn restores circulating testosterone levels to within, but not beyond, the normal range. In line with fispemifene's mechanism of action, the treatment has been shown in phase 2a studies involving a total of 154 hypogonadal men to normalize testosterone levels while retaining (and, in some cases restoring) testicular function, a feature of importance for infertile younger men with hypogonadal symptoms. Additionally, in line with fispemifene's anti-estrogenic action on the lower urinary tract (LUT), no negative effects on prostate volume, prostate specific antigen (PSA), or urodynamic obstructive symptoms were observed. Expanding on these observations seen in three-month clinical studies in hypogonadal men, preclinical studies involving fispemifene have shown the potential beneficial anti-estrogenic effects of fispemifene of reducing prostate volume and inflammation and improving urodynamics, opening up additional potential indications for this SERM in men with obstructive LUT conditions and chronic prostatitis.