Lixte Biotechnology (LIXT.OB) was founded as a diagnostics company in 2005 evaluating biomarkers (indicators of disease at the molecular level), but has shifted its focus to become a cancer drug discovery operation.

 

Lixte engages in the discovery of anti-cancer compounds to improve the treatment of malignancies with few effective treatment options, such as certain types of brain cancer. Other areas of early-stage, preclinical drug discovery include: (1) improved anti-fungal treatments for patients with compromised immunity (e.g. HIV/AIDS, bone marrow transplantation); (2) neurodegenerative conditions such as Alzheimer’s and Parkinson’s disease; and (3) biomarker assays for diagnostic and prognostic applications in the detection of disease and monitoring of treatment effectiveness.

 

Since Lixte is a development-stage company which does not generate any revenue, the ability to obtain financing to fund research and drug discovery operations will be a key factor this year. The Company estimates minimum funding requirements of $750,000 for this year, which will allow for preclinical evaluation of two lead drug compounds with a goal of an IND submission to the FDA next year to begin Phase 1 clinical trials in humans.

 

Lixte has already raised over half of its 2009 funding requirement (with net proceeds of $382,000) through two closings of a private placement in February and March of this year. The Company hopes to secure an additional $500,000 in funding through this private placement and used $100,000 of its net proceeds to repay a short-term note.

 

As of year-end, Lixte had no full-time employees with John S. Kovach, M.D., serving as the Company's sole administrative officer and founder. Dr. Kovach is a part-time Professor in the Department of Preventive Medicine at the State University of New York. He received approvals from the School of Medicine of Stony Brook University and from the New York State Ethics Commission to operate the Company and to hold greater than 5% of our outstanding shares.

 

Dr. Kovach has extensive experience in medical oncology, anti-cancer drug pharmacology, and in applied medical research, particularly, the early evaluation of new anti-cancer drugs and the development and management of multi-disciplinary highly productive cancer research teams. In consultation with Lixte’s advisors and board, he is responsible for the selection and prioritization of the scientific directions and goals of the Company.

 

The Company’s most valuable resource is its scientific team, which includes a coalition of experts from cancer biology, proteomics (cancer biomarkers), medicinal and synthetic chemistry, pharmacology, clinical oncology, and drug evaluation. This team has enabled Lixte to develop two distinct lead compounds for development in the treatment of several types of cancer. The development strategy will be influenced by pre-IND discussions with the FDA and is expected to focus on the treatment of neuroblastoma, medulloblastoma, and /or glioblastoma multiforme.

 

Last August, the Company filed five patent applications associated with the preclinical research activities outlined above. Two of the patent applications involve previous joint filings with the NIH related to their Cooperative Research and Development Agreement (CRADA) (established 3/22/06), including 1.) a filing entering the regional stage of a PCT application involving the use of certain compounds to treat human tumors expressing a biomarker for brain and other human cancers and 2.) an application for the treatment of the pediatric tumors, medulloblastoma (the most common brain tumor in children), and neuroblastoma (a tumor arising from neural cells outside the brain that is the most common cancer of children).

 

Three new patent applications include: (1) a joint application with NIH identifying a new biomarker for many common human cancers that when targeted by compounds developed by the Company result in inhibition of growth and death of cancer cells; (2) an application by the Company regarding the structure, synthesis and use of a group of new homologs of its LB-1 compounds; and (3) an application by the Company for the use of certain homologs of its drugs (compounds of the LB-100 and LB-200 series) as neuroprotective agents with potential application to common neurodegenerative conditions such as Alzheimer's and Parkinson's diseases.

 

The Company continues to evaluate compounds for activity against several types of fungi that cause serious infections, especially in people with compromised immunity, such as those with HIV-AIDS, and those who have undergone bone marrow transplants. The Company is also exploring indications that its compounds have against strains of fungi that cause the most common fungal infections of the skin and nails. Discussions are in progress with experts in fungal infections regarding the most reliable methods of assessing the potential of new agents for the management of common fungal diseases.

 

Lixte expects its products to be derived directly from intellectual property related to its research activities in conjunction with the NIH/NINDS. The discovery of a biomarker associated with GBM has resulted in the development of lead pre-clinical compounds which have different modes of action against brain cancers and other types of common human cancers as well as anti-infective properties in the treatment of serious fungal infections. The Company plans to continue utilizing the discovery of molecular variations associated with specific cancers as a means for drug discovery and new diagnostic screening tests.

 

Under the CRADA, Lixte is entitled to negotiate an exclusive license from NIH to all claims in these patent applications. The majority of these patent applications are related to the use of certain compounds of the Company for the treatment of glioblastoma multiforme, neuroblastoma, and medulloblastoma as well as the potential use of two biomarkers as either diagnostic tests or in assays for the screening of compounds for anti-cancer activity. 

 

The agreement provides for an initial license fee, minimum annual royalty payments, payments at various milestones in the clinical development of the licensed compounds, and a percentage of net sales of the licensed compounds. The Company has also filed patent applications for intellectual property owned solely by the Company. These applications concern two series of new anti-cancer agents referred to as the LB-100 series and the LB-200 series.

 

The research at NINDS continues to be led by Dr. Zhengping Zhuang, an internationally recognized investigator in the molecular pathology of cancer. Dr. Zhuang is aided by two senior research technicians supported by the Company as part of the CRADA. The goal of the CRADA is to develop more effective drugs for the treatment of GBM through the processes required to gain FDA approval for clinical trials in the form of an IND filing. The CRADA was extended and is presently scheduled to end on September 30, 2009, and Lixte has agreed to provide additional funding under the CRADA of $200,000, which is scheduled to be paid in four equal quarterly installments from 10/1/08.

 

The estimated market for the treatment of glioblastoma multiforme (GBM) is about $800M annually, based on the current use and pricing of an existing drug for the condition (temozolomide). Temozolomide is given to nearly every patient with a diagnosis of GBM, including about 40,000 people in the U.S. and Europe each year. Lixte believes its lead compounds may be used in conjunction with Temozolomide and/or following relapse after treatment with Temozolomide, since nearly all patients with this disease relapse regardless of current treatments.

 

In January 2008, Lixte extended its agreement with Chem-Master until 2/15/14 for the low-cost synthesis of drug compounds as part of the Company's drug development program. Lixte is exploring the possibility of synthesizing additional compounds as novel anti-cancer agents (to be designated LB-3 to distinguish from first two classes, LB-1 and LB-2), but the process is still in the planning stages with no firm commitments.

 

The LB-100 series has the potential to be the first of its type in clinical cancer treatment (first-in-class) and a lead compound from the LB-200 series has the potential to be competitive for best-in-class. Lixte believes that there is only one approved drug with a mechanism of action similar to the LB-200 series in the clinic at present. One lead compound (LB-1) is the most advanced in the process and the Company plans to be ready for IND submission in mid-2010. The other lead compound (LB-2.5), which inhibits cancer cells by a mechanism distinct from that of LB-1, is anticipated to complete its evaluation by the end of 2010.

 

The major determining factor in the speed of development for these two lead compounds is the ability to obtain funding and/or a partnership with a larger bio-pharmaceutical company since the compounds are well characterized with regards to their mode of action and only require the financial resources to complete standard preclinical toxicology/pharmacokinetic studies to complete an IND submission and begin clinical trials.