Navidea Joins Essex Woodland's Rheumco, Will Develop Radiopharmaceuticals To Detect And Treat Arthritic Diseases

Navidea Biopharmaceuticals, Inc. (NYSE MKT:

) today announced that it has formed a joint enterprise with Essex Woodlands-backed Rheumco, LLC, to develop and commercialize radiolabeled diagnostics and therapeutics for rheumatologic and arthritic diseases. The joint enterprise, called R-NAV, LLC, will combine Navidea's proprietary Manocept CD206 macrophage targeting platform and Rheumco's proprietary Tin-117m radioisotope technology to focus on leveraging the platforms across several indications with high unmet medical need: 1) Detection of rheumatoid arthritis (RA) initially using Tc-99m tilmanocept, commercially known as Lymphoseek® (technetium Tc-99m tilmanocept) Injection, 2) Combination of the Manocept platform with Tin-117m for detection and treatment of RA, 3) Detection and treatment of human and veterinary osteoarthritis (OA) using the Tin-117m technology, and 4) Treatment of pediatric hemophilic arthropathy (PHA); a rare rheumatologic condition. “We chose to combine our proprietary Tin-117m technology with Navidea's Manocept CD206 receptor- targeting technology due to its unique ability to seek out and attach itself to immune cells responsible for detrimental inflammation in arthritic conditions,” said Gilbert Gonzales, M.D., Founder, Rheumco, and R-NAV Director. Immanuel Thangaraj, Managing Director and Partner at Essex Woodlands and R-NAV Director, added, “A broad-based approach using radiopharmaceuticals would enable earlier detection and therapeutic intervention before irreversible damage occurs in joints, distinguish between autoimmune and degenerative diseases, and potentially improve patient outcomes and quality of care.” “Through this partnership, we will for the first time explore the development of our Manocept technology for therapeutic uses, expanding the commercial potential of the platform beyond the important role it currently plays in cancer detection,” said Michael Goldberg, M.D., Navidea Interim Chief Executive Officer. “We believe R-NAV may help accelerate development of both diagnostic and therapeutic applications of our Manocept platform in a cost-effective manner, capitalizing on the proven pathway established by the FDA approval of Lymphoseek, the first US FDA-approved product from the Manocept platform. The R-NAV joint enterprise allows us to leverage our broad Manocept technology platform for therapeutic and diagnostic applications, including global license rights to tilmanocept, to multiply the available funding, create optionality, and efficiently expand our product pipeline outside of Navidea as we focus our internal resources on Lymphoseek commercialization and market growth.” R-NAV will focus on deploying the two technology platforms as an ideal combination for the development of novel diagnostic and therapeutic agents for rheumatologic and arthritic conditions. For a number of years, Essex Woodlands and Rheumco have invested in the development of their patented, high-specific-activity Tin-117m technology to optimize its therapeutic potential and safety profile. Tin-117m possesses unique imaging and therapeutic properties not found in alternative medical isotopes, including its ability to locally target disease-causing cells without damaging adjacent healthy tissue. Navidea's Manocept technology is able to quickly seek out and attach to certain immune cells expressing CD206, called macrophages. Macrophages are an emerging participant in disease-associated inflammation, which has been found to play a role in conditions such as RA, cancer, and heart disease. “We decided to form the joint enterprise with Rheumco and Essex Woodlands and their financial partners given their successful track record of investing and building innovative medical technologies and the resources they will be able to contribute to this venture,” said Mark Pykett, V.M.D., Ph.D., Head of Navidea's Manocept development program and R-NAV Director. “Together, with this proof statement for our technology platforms, we have the opportunity to help the millions of patients diagnosed each year with arthritic conditions as well as the very serious rare disease, pediatric hemophilic arthropathy, for which there are no effective treatment options available today.” R-NAV will be initially funded primarily through a $4 million investment from Infinity Capital III, of Houston-based McRay Money Management, and other third-party private investors working closely with Essex Woodlands, and underpinning the technology contributions from Rheumco and Navidea. Navidea has committed an additional $1 million to support R-NAV's development efforts to be paid in equal installments over three years. In exchange for its cash, in-kind and technology contributions, Navidea has received both common units and Preferred Series A units of R-NAV and will initially own approximately 30% of the combined entity. Joint oversight of R-NAV is shared between Navidea, Rheumco, Infinity Capital III of Houston-based McRay Money Management, and the other investors. Navidea also has an option to acquire, at its sole discretion prior to Phase 3 clinical study, imaging products derived from the Manocept platform, and therapeutic products combining Manocept agents from Navidea with the Tin-117m technology for commercialization. Detection of RA, a chronic, progressive, systemic autoimmune disorder, is the nearest-term opportunity being pursued by R-NAV. Clinicians are often faced with diagnostic confusion early in disease progression resulting in inaccurate diagnosis when existing therapies could be most effective. There is currently no approach to reliably detect, evaluate or therapeutically target the macrophage inflammatory component of RA, which is a key driver of RA pathogenesis. Misdiagnosis results in billions of dollars being spent each year unnecessarily on therapies, which may result in significant side effects. According to the Centers for Disease Control (CDC), the overall cost of arthritis and other rheumatic conditions in the U.S. was approximately $128 billion in 2003. Of this, $80.8 billion was due to direct costs and $47 billion was due to indirect costs (lost wages only). The CDC also notes that in 2004 arthritis resulted in 78 million physician visits and 5 million hospitalizations having a principal or secondary diagnosis of arthritis. Further, current intervention using methotrexate or biologics is costly, associated with side effects, and in many cases does not adequately treat the disease or the underlying inflammatory pathology. A targeted imaging agent such as Manocept could assist physicians and healthcare providers to better diagnose patients and allow for earlier and more effective intervention, and use of a Tin-117m therapeutic could improve and localize therapeutic intervention for the same patients.