avexa closes apricitabine (atc) program...

AVEXA CLOSES APRICITABINE (ATC) PROGRAM
Announces CEO Resignation, Headcount Reduction and Plan to Explore Strategic Alternatives

Melbourne, Australia, 10 May 2010. The Board of Avexa Limited (ASX:AVX) has resolved to cease any
further development of its lead HIV program, ATC, following the unsuccessful conclusion of partnering
discussions with global pharmaceutical companies.
This announcement follows the 2 October 2009 closure of ATCs Phase III clinical trial. Since then, detailed
results from this study at 24 weeks were provided to interested parties as part of a formal process designed to
secure a licensing transaction. On Thursday, 6 May 2010, the last party involved in this process notified
Avexa that it did not intend to submit a term sheet. Consequently, the Board of Avexa has resolved to cease
all activities for this program. Avexa has commenced a strategic review of its remaining programs and intends
to consider suitable merger, acquisition, in-licensing opportunities and other corporate initiatives.
The Company has taken immediate action to reduce costs and will continue to actively preserve capital,
including taking further action to significantly reduce overhead in combination with the strategic review
process. Additionally, Julian Chick has resigned from the Board, effective immediately, and will leave his
position as the Chief Executive Officer on 31 May, 2010.
The Board wishes to extend its appreciation to Julian for his tireless efforts to create shareholder value via the
development of ATC. The assets clinical milestone timelines were consistently achieved and the trial results,
both in terms of safety and efficacy, were excellent. Unfortunately, for ATC, the compounds successful
development did not translate into a commercial deal to partner the program with a global pharma company
and, as a result, the program is no longer viable. We are grateful for Julians contributions to the company as
CEO since the companys inception. said Nathan Drona, Avexas Chairman.
The Board is of the view that Avexa has exhausted all possible avenues to complete a global licensing
transaction for ATC. However, it intends to continue discussions with smaller regionally focused companies
who have expressed an interest in a regional licensing transaction for ATC. The probability of this type of
transaction being executed remains uncertain and if completed would be unlikely to generate a meaningful
return on the capital invested in the ATC program to date.
SUMMARY OF LICENSING PROCESS
Over the past two years, Avexa has been in active discussions with potential partners. However, in early
March 2010, the company initiated the final stage of the partnering process via a full review of the data set
from the Phase III study, which incorporated a detailed presentation of the results by Avexa scientists. The
primary objective of the process was to secure a license agreement for ATC with one of several global
pharmaceutical companies who had previously been in a dialogue with the Company. Unfortunately, this
partnering process did not result in a partner for ATC.
Some of the key reasons why potential partners involved did not proceed to the term sheet stage included:
the time and capital required to secure regulatory approval for ATC in key markets may be too large of
a commitment to allow for an attractive investment in light of the other drugs in the marketplace and
other potential factors such as perceived risks around US market exclusivity;
the required dosage for ATC may be too high when used in combination with certain existing
approved HIV drugs, making it difficult to be combined into one pill with some other HIV drugs; and
an inability to determine the level of activity of ATC when used in combination with a number of new
active drugs on the market (which mask the level of activity).
Avexa Limited
ABN 53 108 150 750
576 Swan Street Richmond
Victoria Australia 3121
Telephone 61 3 9208 4300
Facsimile 61 3 9208 4146
Website www.avexa.com.au
STRATEGIC REVIEW
Accordingly, the Board of Avexa wishes to advise shareholders that:
Avexa is closing the ATC program effective immediately, and does not intend to invest further capital
in the development of ATC or seek regulatory approval for the drug;
a significant headcount reduction in all areas of the Company, including discovery, clinical, and
executive staff has commenced;
the Board has commenced a strategic review of all of Avexas remaining programs (including HIV
integrase and HCV);
the Board has appointed an advisor to assist in conducting the strategic review and to consider:

potential regional or other type of licensing transaction in relation to ATC;

the future of the other remaining programs in Avexas portfolio; and

merger, acquisition, in-licensing opportunities, and other corporate initiatives.
In the interim, the Company will be actively preserving capital and taking further action to significantly reduce
overhead in combination with the strategic review process. Avexa had a net cash position of approximately
$26.6m as at 31 March 2010 and expects to have approximately $23m in net cash as at 30 June 2010 after
allowing for net current liabilities and expected redundancy and restructuring costs.
The Board and Senior Management of Avexa have worked diligently over the past two years with the explicit
objective of securing a global licensing deal with a global pharmaceutical company for ATC. We are
extremely disappointed that this key objective was not achieved. Our top priority moving forward is to
preserve capital while completing our strategic review with the primary focus of uncovering a transaction that
will be value accretive for our shareholders. We look forward to updating the market in the near-term with our
progress continued Nathan Drona, Chairman of Avexa.
For more information:
Nathan Drona Stephen Kerr
Chairman Chief Financial Officer, Company Secretary
+61 3 9208 4300 +61 3 9208 4300
www.avexa.com.au