NexMed updates corporate activities

Jan 9 2010

NexMed, Inc. (Nasdaq: NEXM), a specialty CRO and a developer of products based on the NexACT^® technology, today provided an update on ongoing corporate activities and the status of the Company’s NASDAQ listing.

Product Pipeline

Topical Alprostadil Treatments

NexMed expects to hear from Health Canada concerning the approvability of its New Drug Submission (NDS) for Vitaros^®, its topical treatment for erectile dysfunction, sometime in February 2010. As such, management has postponed negotiations with its potential partner until an approval decision from Health Canada is received, as partnering negotiations with a marketing approval would be expected to yield more favorable terms for the Company.

In the U.S., NexMed is awaiting a response from the Food and Drug Administration (FDA) regarding the carcinogenicity (CAC) assessment package, which it expects to occur within the next two months. Partnering efforts for Femprox^®, NexMed’s topical treatment for female sexual dysfunction, are on hold pending the final decision by the FDA.

Outside of North America, NexMed is awaiting Health Canada or the FDA’s response to accelerate partnering efforts and/or filing for marketing approvals. To date, NexMed has received multiple indications of interest from international pharmaceutical companies that might be interested in partnering with NexMed.

In addition, through its Bio-Quant research and development team, NexMed is running new efficacy studies on the Vitaros formulation to assess the potential of the compound for other indications such as wound healing and Raynaud’s Syndrome. NexMed’s strategy is to take advantage of the development work already completed for Vitaros and bolster the existing database with new data and apply it to potentially shorten the path of approval. The goal includes commencing partnering discussions in mid-2010 for the new indications, if the pre-clinical data are positive.

NM100060 Onychomycosis Treatment

NexMed is actively engaged in efforts to re-license this product for the treatment of nail fungus. In the meantime, Novartis continues to transfer the clinical and regulatory dossiers to the Company and the data are being shared with potential partners.

Topical Psoriasis Treatment

NexMed’s Bio-Quant R&D team is also proceeding with extensive pre-clinical efficacy studies to strengthen its psoriasis candidate while actively engaging in partnering discussions.

Topical NSAID Program

NexMed is also exploring the opportunity to license an early stage NSAID program, which includes an issued U.S. patent. This program was not pursued when NexMed chose to focus its resources on its sexual dysfunction programs. Preclinical data of the NexACT-based ketoprofen cream has shown more rapid and efficient delivery of the drug as compared to the currently marketed products.

NexACT technology, Partnering as a Service

NexMed has initiated discussions with potential partners regarding the application of its NexACT technology to drugs that will soon be going off-patent to help create a second-generation drug that has patent protection through the mechanism of delivery. The NexACT platform technology has demonstrated the potential to improve the topical absorption of active therapeutic ingredients and/or to develop new patient-friendlier routes of administration. Incorporating older drugs with the NexACT proprietary delivery system can create new products that not only provide patients with added therapeutic benefits, but can also extend the product life for up to an additional 20 years. As such, the Company intends to aggressively pursue these types of potential partnering arrangements going forward.

NexACT technology, New Applications

In addition to developing innovative topical treatments, NexMed’s new scientific team is evaluating the ability of the NexACT technology to deliver biologics, such as humanized or fully human antibodies, via transdermal application. The delivery of such biologics through the skin represents a novel approach to delivering antibodies to specific areas of the body with limited systemic exposure – potentially reducing side effects and toxicity. We are also evaluating the ability of the NexACT technology to deliver drugs orally, including various first-line oral chemotherapeutics, which currently have poor bioavailability and thus require high doses and result in certain toxic side effects.

NASDAQ Listing

On January 4, 2010, NexMed received an expected notice of non-compliance from The NASDAQ Stock Market LLC based upon its failure to solicit proxies and hold an annual meeting for fiscal 2008 by December 31, 2009, as required by NASDAQ Listing Rules 5620(a) and 5620(b), which could serve as an additional basis for the delisting of the Company’s securities from The NASDAQ Capital Market. NexMed had discussed this matter with the NASDAQ Listing Qualifications Panel (the “Panel”) at the hearing on November 12, 2009, and explained that it planned to postpone the 2008 annual meeting due to the ongoing acquisition of Bio-Quant and would not be able to incorporate all of the relevant acquisition related materials in the meeting proxy in a timely manner.

As NexMed previously announced on December 18, 2009, the Panel granted its request to remain listed on The NASDAQ Capital Market, subject to the condition that it evidence stockholders’ equity of at least $2.5 million or a market value of listed securities of at least $35 million on or before March 31, 2010. The determination followed the hearing before the Panel on November 12, 2009, at which time NexMed presented its plan to evidence compliance with all requirements for continued listing on The NASDAQ Capital Market, including the proxy solicitation/annual meeting and bid price requirements (notwithstanding the fact that NexMed was not yet deficient with respect to those standards).

As provided by NASDAQ’s most recent notice, NexMed plans to timely make a formal written submission to the Panel presenting its plan to evidence compliance with the proxy solicitation and annual meeting requirements. While it intends to file a proxy statement for a special meeting of shareholders to be held within the next sixty days to consider amending its Articles of Incorporation to authorize more common stock for issuance, that meeting may not be conducted as an annual meeting since the proxy statement will not incorporate audited financial statements for the fiscal year ended December 31, 2009. As a result, in order to satisfy NASDAQ’s annual meeting requirement, NexMed plans to file a proxy statement for a joint 2008/2009 annual meeting promptly following the filing of its Annual Report on Form 10-K for fiscal 2009 in March 2010. Accordingly, the Company is asking the Panel to modify its previously issued decision in accordance with the Company’s revised plan of compliance. However, there can be no assurance that the Panel will grant the Company’s request.

Also as previously announced, NexMed remains subject to a grace period through January 25, 2010 to evidence compliance with the $1.00 bid price requirement for continued listing on NASDAQ. In the event NexMed does not evidence compliance with the bid price requirement by that date, NexMed expects to receive an additional formal notice of non-compliance and to be afforded an opportunity to request an exception from the Panel to evidence compliance with the minimum bid price requirement. In that regard, NexMed will implement a reverse stock split, if necessary, to evidence compliance with NASDAQ’s minimum bid price requirement, which action may be taken at any time at the discretion of the NexMed Board of Directors.

Corporate Integration

Subsequent to the December 17, 2009 announcement of the lease of its manufacturing building in New Jersey, NexMed has completed the relocation of its headquarters to 6330 Nancy Ridge Drive, San Diego, CA 92121. NexMed now has 34 full time employees, of whom eight employees hold either Ph.D or MD degrees. NexMed will include the pro forma financial statements for the combined entity in an amendment to its December 17, 2009 Current Report on Form 8-K, to be filed on or before February 26, 2010.

Source: NexMed, Inc.