GenSpera, Inc. (GNSZ-OTC: BB)

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September 25, 2010 Issue

The Most Powerful Name In Corporate News and Information


GenSpera, Inc. Has Developed A Chemotherapeutic Agent That Is Better Than Other Drugs In The Fight Against Cancer As It Kills Independent Of Cell Division And Reduces Side Effects

Company Profile:

GenSpera, Inc., a development stage company, focuses on the development of targeted cancer therapeutics for the treatment of cancerous tumors, including breast, prostate, bladder, and kidney cancer. The company is involved in the discovery and development of prodrug cancer therapeutics. A prodrug is an inactive precursor of a drug that is converted into its active form only at the site of the tumor. GenSpera’s prodrug development candidates include G-202, which is in a Phase I clinical trial and targets the blood vessels of various solid tumors; G-114, G-115, and Ac-GKAFRR-L12ADT, all of which are in pre-clinical animal models for the treatment of prostate cancer. The company was founded in 2003 and is based in San Antonio, Texas.

Craig A. Dionne, PhD

President, CEO and Director
Dr. Dionne has over 18 years of experience in the pharmaceutical industry, including direct experience of identifying promising oncology treatments and bringing them through the clinic. For example, he served for several years as VP Discovery Research at Cephalon, Inc., where he was responsible for its oncology and neurobiology drug discovery and development programs. Dr. Dionne has also served as EVP at the Prostate Cancer Research Foundation.  In addition to extensive executive experience, Dr. Dionne’s productive scientific career has led to six issued patents and co-authorship of many scientific papers.

Interview conducted by: Lynn Fosse, Senior Editor, Published – September 25, 2010

Cancer Therapeutics

GenSpera, Inc.
2511 N Loop 1604 W, Suite 204
San Antonio, TX 78258
Phone: 210-479-8112


CEOCFO: Dr. Dionne, what is the vision of GenSpera?

Dr. Dionne: We develop cancer drugs on a proof-of-concept basis, taking them through clinical studies and then licensing or partnering them with large pharma. We feel that is the greatest value creation for our shareholders and it allows us to do what we do well, which is to understand our drugs and do early clinical development. Then we exploit the resources of large pharma to do the large-scale registration studies, which should go hand-in-hand with sales and marketing.


CEOCFO: How is your technology different?

Dr. Dionne: Our technology is not just different, but better. We have a new type of chemotherapeutic agent, which is different from anything that has been in man before. We think it is a better chemotherapeutic agent because not only is it very potent, much more potent than other standard therapeutic agents, but it kills independent of cell division. Why is that important? Most chemotherapeutic agents that you are familiar with, like anthracyclines and taxanes, kill cells during the act of cell division, which is how they are selective for cancer cells versus normal cells. It is also why you have the side effects of cancer chemotherapeutic agents – they kill rapidly- dividing normal cells in the body, which limits how high one can dose. It also kills the gut cells, the bone marrow, and hair follicles – which results in the negative side effects of chemotherapy. Another major downside of conventional chemotherapeutics is that they have no effect on slow-growing tumors, and very little effect on the cancer stem cells that give rise to the tumors. Therefore, they can shrink tumors, but the cancer stem cells are still there and the tumor relapses. Our drug, on the other hand, kills independent of cell division: whether cells are dividing rapidly, or slowly, as is the case with prostate cancer, as well as cancer stem cells. Our drug will kill all of those; hence, we believe it will have better efficacy. The other half of our technology is the ability to deliver this drug specifically to tumors, thereby minimizing any side effects and maximizing the anti-tumor efficacy even further.


CEOCFO: Would you tell us about your drug and where it came from?

Dr. Dionne: First off, the drug itself is a natural product that we isolate from a plant that grows in the Mediterranean area. The drug is called thapsigargin, which we acquire from the seed of this plant. The most descriptive image for how we target it is that we create little molecular grenades. We have a bomb, but we also have the “grenade pin,” which keeps the “grenade” inactive until it gets to the site of the tumor. We attach a small peptide to thapsigargin that is recognized and then removed by enzymes that reside only within the tumor. That is our targeting aspect, so our drug molecule floats through the body safe as can be in the form of these molecular “grenades.” But, when it gets within the tumor, the tumor enzymes pull the grenade pins and then the “bomb”the chemotherapeutic – is released. Then our thapsigargin analogue floats right into the tumor and never comes back into the blood stream to be toxic elsewhere in the body. What we own, therefore, is a composition of matter patents for the thapsigargin analogues, and for the peptides, and, of course, for the conjugates.


CEOCFO: How did you find these?

Dr. Dionne: I have been collaborating with a group at Johns Hopkins University since 1993. The co-founders of the company and the co-inventors of the technology are that group at Hopkins, as well as some other scientists at the University of Copenhagen and Memorial Sloan Kettering. I have known these individuals since the early 1990’s, so (I) was very much aware of their progress.


CEOCFO: What is happening today at GenSpera?

Dr. Dionne: Good news! We are in clinical trials and ramping up the doses for our lead drug G-202, which is targeted to all solid tumors, in very large markets: breast cancer, colon cancer, prostate cancer, lung cancer, pancreatic cancer – everything. G-202 is in clinical studies at Johns Hopkins University and at the University of Wisconsin Comprehensive Cancer Center. We started the Phase I study in January of this year and are in the dose escalation phase. We expect that we will have completed the Phase I by the second quarter of 2011. Our molecules are very modular: we can replace the “grenade pins” with other peptides that are specifically recognized by other enzymes. Our second drug, G-115, for which we expect to file an IND with the FDA in the third quarter of 2011, is targeted specifically to prostate cancer. We are pretty excited about that drug as well and a question I often get is, ‘Well, why would I develop a second drug specifically for prostate cancer if the first drug will also do that?’ The answer to that is because the first drug will be marketed to medical oncologists who treat tumors of all different types, but in the United States in particular, prostate cancer is managed by urologists. Therefore, it is a completely different market, and a different sales force all the way around. So that is how we plan to take advantage of that distinction.


CEOCFO: You recently got rights for a cancer imaging technology. How does that fit in to your program?

Dr. Dionne: Medical imaging technology was built into our drugs by design and then supported by data in animal models. When the thapsigargin molecule is released, it falls into the tumor, we accumulate a lot of thapsigargin in the tumor and it doesn’t come out. It takes a very long time to be metabolized and we have taken advantage of that by creating a thapsigargin analogue that is easily labeled with the radio tracer. So, when it precipitates in the tumors, we can image the tumors and find the metastatic sites throughout the body. Obviously, we want to focus on therapeutics, but this also gives us the ability to develop a diagnostic platform by which to diagnose the cancer stage and develop a treatment plan. We will also be able to track treatment effects over the course of the disease.


CEOCFO: Development is costly. What is the financial picture for GenSpera?
Dr. Dionne: We are actually in pretty good shape. We raised $11 million over the last two and a half years. We are a very lean operation, so we can focus directly on the drugs themselves rather than on a big infrastructure. We have about $4.5 million in the bank, and that is sufficient to carry our operation through the third quarter of 2011. Prior to the Phase II study, which we hope to begin in the third quarter of next year, we will be doing an additional financing to insure that we don’t slow down any of our aggressive development plans.


CEOCFO: Has the investment community and the medical community been paying attention?

Dr. Dionne: I certainly believe so. We have been able to raise money in some of the worst markets in recent years, so I think we have been favorably received by our investors. The medical community is pretty excited about the drugs as well. These drugs did not just fall out of the sky; they were developed over a long period of time with over $15 million in research funding from the NCI, NIH, the Danish Cancer Society, and others. There has been a continuous and long peer review of the advances by the medical and scientific community. We are in two of the best Phase I centers in the country. There is a lot of excitement there and, actually, one of our principle investigators is the director of the Cancer Institute at the University of Wisconsin, Dr. George Wilding. They remain very enthused about the program.


CEOCFO: Do you do much investor outreach?

Dr. Dionne: Probably not as much as we should. We have a very strong and loyal investor base in our last financing; more than 50% of the investors had come in during previous investment rounds. I think they have been happy because we hit our milestones and keep things very focused, but we probably will be doing more investor outreach in the future.


CEOCFO: How do you deal with the frustration of knowing you have such potential and having to go through all the steps that it takes to get it done?

Dr. Dionne: That is a very good question! We have worked closely with the FDA. I have had a number of interactions with them over the years. I like them! I find them smart and dedicated, but they are also in a bureaucracy which requires them to focus primarily on patient safety. On the other hand, I believe the oncology division would do anything to help get a drug approved if it showed real efficacy with acceptable toxicity. Drug development is a slow process, but you really want to make sure that you understand the drug’s activity in man. Phase I seems to be the slowest part because you are in a dose escalation paradigm, but once you get beyond that you are really limited only by the enthusiasm of your doctors and perhaps your pocketbook in how fast you can proceed. Although the entire process does seem long, I believe it is best to do the process correctly once rather than rush and make mistakes that cost you more time and money in the long run.


CEOCFO: Why does GenSpera stand out to investors?
Dr. Dionne: GenSpera stands out for several reasons, including great science, a very large potential upside, and liquidity as a public company. We are very focused and run a lean operation, so the amount of monies we will need to get through our game-plan is much lower than most other companies.


The other thing is that the payout for these drugs at Phase II approximates $1 billion per asset. I know that sounds like a large number, but that is really comparable to deals that were done in 2009 with companies that had molecules that showed positive activity in Phase II in just prostate cancer. We expect that we will have several assets worth a billion dollars each in just a few years’ time. We will get there with about 35 to 40 million shares, fully diluted, because we have done very careful financings and have not overspent. So our total number of fully-diluted shares is going to be much lower than comparable companies. Therefore, the upside is higher because of the space that we are in and also because of the way that we run the company.


CEOCFO: Final thoughts: what should people remember most about GenSpera?

Dr. Dionne: We are developing little molecular grenades that are safe in the body and then get exploded within the tumor. We run a very focused operation and we keep to our timelines.


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Our technology is not just different, but better. We have a new type of chemotherapeutic agent, which is different from anything that has been in man before. We think it is a better chemotherapeutic agent because not only is it very potent, much more potent than other standard therapeutic agents, but it kills independent of cell division. - Dr. Craig A. Dionne Ph.D.

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