Genprex Announces Plans to Launch Separate Company to Focus on the Development of Gene Therapy to Treat Type-1 and Type-2 Diabetes

Rhea-AI Summary

Genprex (NASDAQ: GNPX) has announced plans to create a new subsidiary focused on developing GPX-002, a gene therapy for Type 1 and Type 2 diabetes. This move aims to separate the diabetes program from Genprex's oncology portfolio, potentially attracting more investors and expediting clinical development. The spin-out is expected to occur by the end of 2024, subject to financing and board approval.

The new company would become a pure-play diabetes-focused biopharmaceutical entity, while Genprex would concentrate on oncology. GPX-002, licensed from the University of Pittsburgh, uses an AAV vector containing Pdx1 and MafA genes administered directly into the pancreatic duct. This approach could potentially replace daily blood glucose monitoring and insulin therapy, as well as GLP-1 treatments in Type 2 diabetes.

Positive

• Potential to attract more investors and partners for the diabetes program
• Possible expedited clinical development for GPX-002
• Streamlined focus for both diabetes and oncology programs
• GPX-002 has the potential to address both Type 1 and Type 2 diabetes markets
• Novel gene therapy approach could disrupt the diabetes treatment market

Negative

• Spin-out transaction is subject to adequate financing and board approval
• GPX-002 is still in preclinical studies, indicating a long path to potential commercialization
• Potential dilution of shareholder value if the spin-out requires additional funding

Insights

Biotech Industry Analyst

This strategic move by Genprex to separate its diabetes and oncology programs is a significant development for the company. By creating a dedicated subsidiary for the diabetes gene therapy, Genprex aims to unlock value and attract focused investment. This could potentially accelerate the development of GPX-002, their novel gene therapy for both Type 1 and Type 2 diabetes.

The planned spin-out could lead to increased investor interest in both entities, as it allows for clearer valuation of each program. However, the success of this strategy heavily depends on the clinical progress of GPX-002 and Genprex's ability to secure adequate financing for both companies. The $7.3 billion global diabetes drug market presents a substantial opportunity, but competition is fierce and regulatory hurdles remain high for gene therapies.

Financial Analyst

From a financial perspective, this restructuring could be a strategic move to maximize shareholder value. By separating the diabetes program, Genprex creates an opportunity for targeted investments and potential partnerships specific to each therapeutic area. This could lead to more efficient capital allocation and potentially higher valuations for both entities.

However, investors should note that the spin-out is subject to financing conditions and final board approval. The company's ability to secure funding for both entities will be crucial. Additionally, the timeline for completion by the end of 2024 suggests a long-term play and short-term market reaction may be muted. Investors should closely monitor the progress of GPX-002 and Reqorsa® Gene Therapy, as clinical success will be key drivers for future value creation.

Medical Research Analyst

The potential of GPX-002 as a disease-modifying therapy for both Type 1 and Type 2 diabetes is scientifically intriguing. The use of AAV vector delivery of Pdx1 and MafA genes directly to the pancreas represents a novel approach that could potentially address the root cause of diabetes, rather than just managing symptoms.

However, it's important to note that the therapy is still in preclinical stages. The transition from animal models to human trials often presents significant challenges, especially for gene therapies. The simplicity of administration via endoscopy is promising, but safety and long-term efficacy in humans remain to be proven. If successful, this could indeed be a major breakthrough in diabetes treatment, potentially reducing or eliminating the need for insulin therapy and GLP-1 agonists. Investors should closely follow the preclinical results and any upcoming IND filings.

Intends to Create Two Distinct Businesses, Re-Focusing Genprex on its Oncology Clinical Development Program

New Subsidiary to Focus on Developing Novel Gene Therapy for Diabetes

AUSTIN, Texas, Sept. 4, 2024 /PRNewswire/ -- Genprex, Inc. ("Genprex" or the "Company") (NASDAQ: GNPX), a clinical-stage gene therapy company focused on developing life-changing therapies for patients with cancer and diabetes, today announced its intention to transfer the Company's diabetes clinical development program and its diabetes gene therapy assets into a new, wholly-owned subsidiary ("NewCo"). NewCo would focus on developing and commercializing GPX-002, a diabetes gene therapy drug candidate for the treatment of Type 1 (T1D) and Type 2 diabetes (T2D).

"Genprex's diabetes program has received the attention of several potential investors, partners, collaborators and pharmaceutical companies, and we believe separating it from our oncology programs could help increase interest, expedite clinical development and unlock the value of our novel diabetes program," said Ryan Confer, President and Chief Executive Officer at Genprex. "The new subsidiary would be positioned to be a pure-play diabetes-focused biopharmaceutical company, while Genprex would be a pure-play oncology-focused biopharmaceutical company. This contemplated separation of entities could enable potential direct investment and strategic collaboration into the advancement of the diabetes program. Diabetic patients are in need of advanced therapies, and we believe GPX-002 holds the potential for disease modification for long-term effectiveness, which could directly impact the global diabetes epidemic."

The planned spin-out transaction would allow both Genprex and NewCo to enhance each company's focus on meeting the needs of their respective markets, patients and stakeholders. The spin-out, if completed as presently contemplated, would result in NewCo focusing on developing GPX-002, while Genprex would retain its oncology clinical development programs and other oncology pipeline assets. The decision to pursue the reorganization demonstrates Genprex's strong ongoing commitment to the Company's streamlined, focused strategies and ongoing research and development prioritization initiative.  The potential formation and transfer of the clinical development program into the wholly-owned subsidiary is currently anticipated to occur by the end of 2024, subject to adequate financing, the satisfaction of customary conditions and final approval from the Genprex management and Board of Directors.

The Company's goal for separating the diabetes clinical development program from its oncology program follows closely behind Genprex's recent announcement to re-focus its oncology clinical development program for streamlined, expeditious regulatory submission of its lead oncology drug candidate, Reqorsa® Gene Therapy.  As previously announced, the Company continues to evaluate ways to optimize its clinical and research programs and operational strategies.  Additionally, the Company is considering various strategic alternatives and opportunities to enhance stockholder value.

GPX-002, which has been exclusively licensed from the University of Pittsburgh, is being developed using the same construct for the treatment of both T1D and T2D. The same general novel approach is used in each of T1D and T2D whereby an adeno-associated virus (AAV) vector containing the Pdx1 and MafA genes is administered directly into the pancreatic duct. In humans, this can be done with a routine endoscopy procedure. The diabetes product candidates are currently being evaluated and optimized in preclinical studies at the University of Pittsburgh.

"With the potential to address the entire diabetes market, we believe our gene therapy approach would position NewCo as an innovator in emerging diabetes therapies," continued Confer. "The most significant advancement in the treatment of diabetes happened more than 100 years ago when insulin was first introduced to treat T1D patients. We believe our treatment has the potential to disrupt the diabetes market by replacing the daily burden of blood glucose monitoring and insulin replacement therapy, as well as the need for GLP-1 treatments in T2D."

About GPX-002 and Diabetes

In T1D, GPX-002 is designed to work by transforming alpha cells in the pancreas into functional beta-like cells, which can produce insulin but may be distinct enough from beta cells to evade the body's immune system. In vivo, preclinical studies show that GPX-002 restored normal blood glucose levels for an extended period of time.

In February 2023, research collaborators at the University of Pittsburgh presented preclinical data in a NHP model of Type 1 diabetes highlighting the therapeutic potential of GPX-002 at the 16th International Conference on Advanced Technologies & Treatments for Diabetes (ATTD 2023) in Berlin, Germany. 

The statistically significant study results showed the treated animals had:

• Decreased insulin requirements
• Increased c-peptide levels
• Improved glucose tolerance compared to baseline

In April 2023, Genprex hosted a Key Opinion Leader virtual event entitled "Novel Gene Therapy to Treat Type 1 Diabetes," which discussed preclinical data reported at ATTD 2023 supporting gene therapy to treat T1D. Watch the KOL event here.

In a similar approach for T2D, GPX-002 (formerly known as GPX-003), where autoimmunity is not at play, is believed to work by replenishing and rejuvenating exhausted beta cells that make insulin.

According to the U.S. Center for Disease Control as of 2024, 38.4 million Americans, or approximately 11.6% of the U.S. population, have diabetes. It is also believed that more than 97 million Americans aged 18 years or older have prediabetes. In 2021, approximately 537 million adults (20-79 years) worldwide were living with diabetes, and the total number of people living with diabetes is projected to rise to 643 million by 2030 and 783 million in 2045. Also in 2021, diabetes caused more than 6.7 million deaths globally and diabetes resulted in approximately $966 billion dollars in health expenditures, a 316% increase over the preceding fifteen years.

About Genprex, Inc.
Genprex, Inc. is a clinical-stage gene therapy company focused on developing life-changing therapies for patients with cancer and diabetes. Genprex's technologies are designed to administer disease-fighting genes to provide new therapies for large patient populations with cancer and diabetes who currently have limited treatment options. Genprex works with world-class institutions and collaborators to develop drug candidates to further its pipeline of gene therapies in order to provide novel treatment approaches. Genprex's oncology program utilizes its systemic, non-viral Oncoprex® Delivery System which encapsulates the gene-expressing plasmids using lipid-based nanoparticles in a lipoplex form. The resultant product is administered intravenously, where it is taken up by tumor cells that then express tumor suppressor proteins that were deficient in the tumor. The Company's lead product candidate, Reqorsa® Gene Therapy (quaratusugene ozeplasmid), is being evaluated in two clinical trials as a treatment for NSCLC and SCLC. Each of Genprex's lung cancer clinical programs has received a Fast Track Designation from the U.S. Food and Drug Administration (FDA) for the treatment of that patient population, and Genprex's SCLC program has received an FDA Orphan Drug Designation. Genprex's diabetes gene therapy approach is comprised of a novel infusion process that uses an AAV vector to deliver Pdx1 and MafA genes directly to the pancreas. In models of Type 1 diabetes, GPX-002 transforms alpha cells in the pancreas into functional beta-like cells, which can produce insulin but may be distinct enough from beta cells to evade the body's immune system. In a similar approach, GPX-002 for Type 2 diabetes, where autoimmunity is not at play, is believed to rejuvenate and replenish exhausted beta cells.

Interested investors and shareholders are encouraged to sign up for press releases and industry updates by visiting the Company Website, registering for Email Alerts and by following Genprex on Twitter, Facebook and LinkedIn.

Cautionary Language Concerning Forward-Looking Statements
Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of management, are not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in Genprex's reports that it files from time to time with the Securities and Exchange Commission and which you should review, including those statements under "Item 1A – Risk Factors" in Genprex's Annual Report on Form 10-K for the year ended December 31, 2023.

Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include, but are not limited to, statements regarding: the potential separation of its diabetes clinical development program, including the anticipated benefits of the internal reorganization, the expected timing of the reorganization and/or if it is completed as contemplated or at all; Genprex's ability to advance the clinical development, manufacturing and commercialization of its product candidates in accordance with projected timelines and specifications; the timing and success of Genprex's clinical trials and regulatory approvals; the effect of Genprex's product candidates, alone and in combination with other therapies, on cancer and diabetes; the effects of any strategic research and development prioritization initiatives, and any other strategic alternatives or other efforts that Genprex takes or may take in the future that are aimed at optimizing and re-focusing Genprex's diabetes, oncology and/or other clinical development programs including prioritization of resources, and the extent to which Genprex is able to implement such efforts and initiatives successfully to achieve the desired and intended results thereof; Genprex's future growth and financial status, including Genprex's ability to maintain compliance with the continued listing requirements of The Nasdaq Capital Market and to continue as a going concern and to obtain capital to meet its short-term and long-term liquidity needs on acceptable terms, or at all; Genprex's commercial and strategic partnerships, including those with its third party vendors, suppliers and manufacturers and their ability to successfully perform and scale up the manufacture of its product candidates; and Genprex's intellectual property and licenses.

These forward-looking statements should not be relied upon as predictions of future events and Genprex cannot assure you that the events or circumstances discussed or reflected in these statements will be achieved or will occur. If such forward-looking statements prove to be inaccurate, the inaccuracy may be material. You should not regard these statements as a representation or warranty by Genprex or any other person that Genprex will achieve its objectives and plans in any specified timeframe, or at all. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Genprex disclaims any obligation to publicly update or release any revisions to these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.

Genprex, Inc.
(877) 774-GNPX (4679)

GNPX Investor Relations
investors@genprex.com 

GNPX Media Contact
Kalyn Dabbs
media@genprex.com

 

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SOURCE Genprex, Inc.

FAQ

What is Genprex's plan for its diabetes program?

Genprex plans to transfer its diabetes clinical development program and gene therapy assets into a new, wholly-owned subsidiary by the end of 2024, focusing on developing GPX-002 for Type 1 and Type 2 diabetes.

How does GPX-002 work as a potential diabetes treatment?

GPX-002 uses an adeno-associated virus (AAV) vector containing Pdx1 and MafA genes, administered directly into the pancreatic duct via routine endoscopy, potentially treating both Type 1 and Type 2 diabetes.

What is the current development stage of GPX-002 for diabetes treatment?

GPX-002 is currently being evaluated and optimized in preclinical studies at the University of Pittsburgh.

How might the spin-out of the diabetes program affect GNPX stock?

The spin-out could potentially unlock value for GNPX shareholders by creating two focused entities, attracting new investors, and expediting clinical development of the diabetes program.