viroxis - on cusp of drug break through!

Viroxis onto verge of major breakthrough:

Paul Castella, a principal with the Texas Research and Technology Foundation, is also a co-founder and director of Viroxis. He says the company is on the verge of a major breakthrough later this year when it expects to receive approval from the U.S. Food and Drug Administration to launch a Phase III clinical trial of its compound known as albuterpenoid.

We hope that (the Phase III study) will show that it is effective against the human papilloma virus (HPV), which causes warts and is a leading cause of cervical cancer, Castella says.

Some 20 million people in the United States are believed to be infected with HPV. Currently, there are no prescription treatments for skin warts and the over-the-counter treatments that are available only treat the symptoms and not the cause, Castella says.

Current treatments either burn or freeze the growth, but dont treat the virus, Castella says. The problem is that those treatments are not always suitable for children or for warts in sensitive places, such as on the face.

Viroxis patented treatment for HPV uses sandalwood oil, which is made through steam distillation of the bark of the East Indian sandalwood tree. The fact that Viroxis drug uses a well-known botanical compound as its basis for a topical treatment should make it easier to gain FDA approval, Castella says, since there are fewer safety considerations.

The FDA issued new guidelines for approving botanical-based products in 2004, which makes it much easier to go through the approval process, he says.

Partnership agreements

Viroxis has a partnership agreement in place with an Australian company TFS (TFC.asx)that raises sandalwood trees on commercial plantations. This way the company will have a reliable source for high-quality oil without taking any trees out of the wild where they are relatively rare, Castella says.

In addition, the company has an arrangement with San Antonio-based DPT Laboratories to provide the pharmaceutical-manufacturing services once the company is ready to scale up to mass production.

The fact that we are keeping the manufacturing process here locally is another added benefit we can provide, Castella says

Viroxis Corp a start-up pharmaceutical company that is developing a patented antiviral compound for the treatment of warts, is awaiting final approval for $2.5 million in funding from the Texas Emerging Technology Fund.

Once the grant is finalized, the money will be used to initiate a Phase III clinical trial of the companys botanical-based drug compound.

The companys product is still in the development stage, and, to date, Viroxis has no revenues. So the pending ETF funding represents a key development in Viroxis plan to bring its antiviral compound to market.

Ian Clement, CEO of Viroxis, says the company has completed all of the due diligence for the ETF funding and is now awaiting final approval that could come in a matter of days.

I talked to them (ETF) this morning (June 29), and they said they were putting a contract together and we could expect to receive it by the end of the week, Clement says.

Jonathan Taylor, assistant director of ETF, confirmed that Viroxis has a pending application for $2.5 million in ETF funding, but says the signature process for the grant is still not completed. Before a contract can be sent out, he says, the application must get the signatures of the governor, lieutenant governor and speaker of the house. And, so far, that has not happened.

Taylor could not say which signature is still missing or how long it might take before the process is completed.

The ETF is a $200 million fund created by the Texas Legislature in 2005 to help promote and encourage commercial growth in the high-tech and biomedical sectors of the Texas economy. To date, the ETF has allocated more than $130 million in grant funds to 102 early stage companies across Texas.

If the ETF funding comes through as expected, it would add to the approximately $750,000 that Viroxis has raised so far through a series of two private offerings.

All of the companys private equity funds so far have come from the locally based venture capital fund Targeted Technology Fund I, according to Clement. The fund was formed in the spring of 2008 by the Texas Research and Technology Foundation to capitalize on growth in the biomedical device sector.

TTF initially made a $500,000 loan to Viroxis earlier this year, according to a filing the privately-held Viroxis made with the U.S. Securities and Exchange Commission. That debt was later converted to equity as part of a separate offering two months ago that also raised an additional $250,000 in equity.