On the heels of such a miserable year, it may have seemed counterintuitive to provide a positive outlook for the speculative biotechnology industry in 2009, but that’s exactly what we did.  Our bullish thesis was reiterated for both 2010 and 2011.

The AMEX Biotechnology Index (BTK) ended 2008 at 647.17 and climbed to 1,091.42 by the end of 2011 for a gain of approximately 69% during this three-year period.  Comparing this performance with the general market, the NASDAQ Composite increased 65% from 1,577.03 to 2,605.15 during the same period.

Our favorable outlook for the biotechnology industry remains intact for 2012 and is based on the following key drivers, which build upon many of the catalysts we first proposed in 2009:

• Sector’s defensive characteristics and impact on future economic growth
• Improving number of annual new product approvals since the low set in 2007
• Record number of products in clinical trials and annual industry R&D investment
• Improving access to capital
• Brisk pace of industry consolidation and licensing transactions
• Many micro, small and mid-capitalization companies remain undervalued

Defensive Sector and Economic Driver

During periods of economic uncertainty, the biotechnology sector is often portrayed as defensive given that disease is relentless in both good economic times and bad.  Despite recent medical advances, there remains a need for quality, innovative products to diagnose and treat a broad variety of diseases such as cancer, central nervous system disorders, cardiovascular diseases, diabetes, respiratory and infectious diseases.

Beyond its defensive characteristics, the sector plays a critical role in the United States [US] economy.  Innovative new medicines developed by life science companies provide better patient outcomes, improved quality of care, increased life expectancy, and lead to economic gains and job creation.

While the strengths and weaknesses of the US healthcare system remain the subject of great debate, we believe new medicines should be viewed as investments in the future, not only in patient health – but also in economic recovery and growth.  For example, as indicated in our article “Innovative New Medicines are Key to Economic Growth,” a permanent 1% reduction in mortality from cancer alone has a present value to current and future generations of Americans of nearly $500 billion and a cure would be worth about $50 trillion.

New Drug Approvals

As we highlighted in recent years, legislation passed in 2008 gave the FDA more money and resources, but hiring and training hundreds of new employees takes time.  With that process well underway, combined with increased familiarity of the risk evaluation and mitigation strategies [REMS] program, we expected the drug approval process to gradually improve.

Encouragingly, the total number of approvals for new molecular entities and biologic license applications by the US Food and Drug Administration’s [FDA] Center for Drug Evaluation and Research [CDER] in fiscal year 2011 was 35.  This is an improvement from 21 approvals in 2010 and 25 approvals in 2009.  In fact, according to a press announcement by the FDA, this is among the highest number of approvals in the past decade, surpassed only by 37 approvals in 2009.

However, an article in Nature Reviews by Asher Mullard listing the annual number of drug approvals going back to 1996 shows that 36 approvals in 2004 [not 2009] was the record for the past decade.  The same article also shows that new drug approvals peaked at a high of 56 in 1996.

Notable new drug approvals in 2011 include Johnson & Johnson’s (JNJ) Zytiga® [abiraterone] for late-stage prostate cancer, Roche’s Zelboraf® [vemurafenib] and Bristol-Myers Squibb’s (BMY) Yervoy™ [ipilimumab] both for melanoma, Human Genome Sciences’ (HGSI) Benlysta® [belimumab] – the first new drug for lupus in 50 years, and Seattle Genetics’ Adcetris™ [brentuximab vedotin] for a rare lymphoma known as systemic anaplastic large cell lymphoma [ALCL].

Record Pipeline and Investment

According to the latest report by the Pharmaceutical Research and Manufacturers of America [PhRMA], there are a record number of biotechnology product candidates currently in development.  In the US alone, there are more than 900 biotechnology products in development, including 300 monoclonal antibodies, 298 vaccines, 78 recombinant proteins, 50 gene therapy products, 64 cell therapy products, and 23 antisense products.  More than one-third of these product candidates are targeting cancer and related conditions and more than 20% are targeting infectious diseases.

Annual research and development expenditures by PhRMA member companies for 2009 was an estimated $45.8 billion, more than tripling the $15.2 billion level of investment in 1995.  However, skeptics will point to the fact that despite growing R&D expenditures, the number of new drug approvals has declined since the mid-1990s [see chart below].

Access to Capital

During the second week of January, more than 8,000 registrants gathered in San Francisco, California for the 30^th Annual J.P. Morgan Healthcare Conference [JPMHC] to hear 25-minute presentations from 395 life science companies.  For industry executives and investors, the annual event typically serves as a good barometer for the rest of the year.

Between meetings, we roamed the familiar halls of the Westin St. Francis Hotel to assess the mood among participants and also monitored social media outlets throughout the event.  In general, the plane flights and networking receptions were crowded as usual, industry observers “Tweeted” a sense of optimism, and attendees appeared more upbeat than in 2011.

The recent closing of three new funds may support increased optimism as it relates to access to capital.  First, on January 3, 2012, Vivo Ventures announced the final closing of a $375 million fund targeting later development stage pharmaceutical and medical device companies in the US and in revenue stage healthcare companies in greater China.  Second, during the JPMHC Canaan Partners announced the closing of a $600 million fund, with one-third of the fund designated to healthcare investments in biopharmaceutical, medical device and healthcare infrastructure companies.  Also during the JPMHC, Flagship Ventures announced the closing of a $270 million life sciences fund, its largest fund to date.   According to Flagship’s press release, in addition to investing in early-stage companies, a portion of the new fund will be dedicated to “later-stage value investing opportunities resulting from the current capital-constrained environment.”  Finally, Luke Timmerman of Xconomy recently reported that Frazier Healthcare is also aiming for its first biotechnology fund since 2007.

Last year wasn’t too bad either.  In 2011, venture capitalists invested $28.4 billion in 3,673 deals, an increase of 22% in dollars and a 4% rise in deals over the prior year, according to the MoneyTree™ Report by PricewaterhouseCoopers LLP and the National Venture Capital Association [NVCA], based on data from Thomson Reuters.  In fact, venture capital investing in 2011 ranks in the top three years for venture capital investing in the past decade.  Biotechnology was the second largest investment sector, with $4.7 billion going into 446 deals.  This represents a 22% increase in investment dollars, but a 9% drop in terms of the number of deals.

2012 is also off to a solid start with regard to follow-on financings.  Synageva (GEVA), Arena Pharmaceuticals (ARNA), iBio (IBIO), Talon Therapeutics (TLON), ImmunoCelluar Therapeutics (IMUC), Vical (VICL), Synta Pharmaceuticals (SNTA), Chelsea Therapeutics (CHTP), Sequenom (SQNM), ZIOPHARM Oncology (ZIOP), Neurocrine Biosciences (NBIX), and NeuroMetrix (NURO) have each announced offerings since the start of the year.

Consolidation and Licensing

Adding to the optimism among industry executives and investors during the JPMHC, Bristol-Myers Squibb announced its $2.5 billion acquisition of Inhibitex, Inc. (INHX) on January 7, 2012.  In view of the fact that US pharmaceutical companies stand to lose billions of revenue due to patent expirations from 2010 to 2012, we expect merger and acquisition [M&A] activity to remain brisk.

In other M&A news, ISTA Pharmaceuticals (ISTA) is still being pursued by Valeant Pharmaceuticals (VRX), which recently increased its previously proposed price to acquire ISTA from $6.50 to $7.50 per share in cash. Valeant also communicated to ISTA that it could achieve a price of up to $8.50 per share following confirmatory due diligence.

Licensing deal activity is also off to a strong start in 2012, as evidence by Xenon Pharmaceuticals’ strategic alliance with Genentech, a member of the Roche Group (RHHBY), to discover and develop compounds and companion diagnostics for the potential treatment of pain.

According to the deal, which was announced during JPMHC, Xenon is eligible to receive research, development and commercialization milestone payments, totaling up to $646 million for multiple products and indications.  In addition, Xenon will receive royalties on sales of products resulting from the collaboration.

In other licensing news, BioDelivery Sciences (BDSI) recently signed a worldwide license and development agreement with Endo Pharmaceuticals (ENDP) for the exclusive rights to develop and commercialize BEMA Buprenorphine for the treatment of chronic pain.

Small Versus Large

Similar to recent years, we expect that small and mid-capitalization companies with late-stage programs and/or positive fundamental catalysts will continue to outperform their larger industry peers in 2012.

For example, after being the third worst performer in the prior year, Medivation (MDVN) became the largest percentage gainer within the NASDAQ Biotech Index during 2011 based on encouraging results with MDV3100, the company’s lead product candidate in Phase 3 development for the treatment of castration-resistant prostate cancer.

In another dramatic reversal of fortune, after declining 22% in 2009 shares of Akorn, Inc. (AKRX), a niche generic pharmaceutical company, made an impressive comeback by becoming the largest percentage gainer within the NASDAQ Biotech Index during 2010 and again making the list of top ten gainers in 2011 [see Table 1].

However, the prior year’s winners may not always stay hot.  Both Human Genome Sciences (HGSI) and Dendreon Corporation (DNDN) were among the top ten gainers from the NASDAQ Biotech Index in 2009 with dizzying returns of 1,342% and 474%, respectively.  In 2011, both names appear on the list of top ten decliners [see Table 2].

Table 1. Top ten gainers from NASDAQ Biotech Index (NBI) in 2011

Table 2. Top ten decliners from NASDAQ Biotech Index (NBI) in 2011

2012 Outlook

The drivers supporting our favorable outlook for the biotechnology industry remain intact for 2012, such as the record number of products in clinical trials and annual industry R&D investment, improving access to capital, brisk pace of industry consolidation and licensing transactions, and attractive valuations among many small- and mid-capitalization companies, which should continue to outperform their larger industry peers.  In particular, 2012 represents a period with particularly robust news flow for emerging immuno-oncology companies, as indicated in our article “2012 Preview: Cancer Immunotherapy Catalysts.”

One recent example of this inherent volatility and achieving a lofty valuation prior to commercialization is Dendreon Corporation (DNDN).  On April 29, 2010, the FDA approved the very first active immunotherapy for the treatment of cancer – Dendreon’s Provenge® [sipuleucel-T] for metastatic castrate-resistant prostate cancer [CRPC].  This event reignited enthusiasm for the field of active immunotherapy for cancer and shares of Dendreon, which traded below $5 in March 2009, subsequently reached an all-time high above $57 and a market capitalization of approximately $7.8 billion.

It has been said that a rising tide raises all boats and Dendreon’s success lifted shares of other companies working in the field of active immunotherapy for the treatment of cancer.  Table 1 below depicts the stock price performance of select cancer immunotherapy companies from April 1, 2010 to April 30, 2010, the month Provenge was approved by the FDA.

Table 1: High Tide for Cancer Immunotherapy Around Approval of Provenge

On August 3, 2011, however, Dendreon withdrew its previous guidance of $350-400 million in revenue for 2011, with modest quarter over quarter revenue growth expected for the remainder of the year.  The news not only caused a dramatic decline in Dendreon’s stock, but also cast a shadow on other companies working in the emerging field of active immunotherapy for cancer.  Table 2 below depicts the stock price performance of select cancer immunotherapy companies from August 1, 2011 to August 31, 2011, the month that Dendreon withdrew its revenue guidance.  Dendreon’s stock recently traded around $7 per share, down nearly $50 from its all-time high, and the company’s market capitalization is just over $1 billion.

Table 2: Low Tide for Cancer Immunotherapy Around Dendreon’s Withdrawal of Revenue Guidance

While FDA approval of the first active immunotherapy for cancer was a watershed event for the industry, the future for companies working in this emerging area should not be judged solely by the commercial success of this product.  Growing evidence indicates that the field of cancer immunotherapy, broadly defined as including passive immunization, active immunization, and immunostimulation, is undergoing a renaissance.

Beyond the approval of Provenge in 2010, the FDA approved Yervoy™ [ipilimumab] by Bristol-Myers Squibb (BMY) for the treatment of patients with unresectable or metastatic melanoma on March 25, 2011.  With the news, ipilimumab became the eleventh monoclonal antibody [mAb] approved for the treatment of cancer since 1997.  Ipilimumab is unique among other mAbs for cancer treatment, as it represents the first immune checkpoint modulator.

In addition, positive results from several randomized studies with active immunotherapies have recently been published in peer-reviewed journals.  The first study published in the March 1, 2010, edition of the Journal of Clinical Oncology was a Phase II randomized controlled trial of Bavarian Nordic’s (BAVA) poxviral-based, PSA-targeted immunotherapy [Prostvac®] in metastatic CRPC.  Patients receiving Prostvac had an 8.5-month improvement in median overall survival versus control. These provocative data supported initiation of a pivotal Phase 3 trial that began enrolling patients in November 2011.

Another study published in the June 2, 2011, edition of the New England Journal of Medicine, demonstrated that patients with metastatic melanoma receiving high-dose interleukin-2 (IL-2) plus a gp100 peptide vaccine had a significant improvement in centrally verified overall clinical response (16% vs. 6%; P=0.03), as well as longer progression-free survival (2.2 months versus 1.6 months; P=0.008).  There was a trend toward longer overall survival in the gp100 vaccine arm (17.8 months versus 11.1 months; P=0.06), although the results were not statistically significant.

As discussed in our report published in June 2011 titled “Cancer Immunotherapy: A Roundtable Discussion,” there are more than 40 unique active cancer immunotherapies currently being tested in over 60 clinical trials, including nearly a dozen that are in pivotal Phase 3 development.  With nearly a dozen readouts from randomized Phase 2 or Phase 3 trials expected during the next 12-months, 2012 could be a breakout year for the field [see Table 3 below].  While not all programs will be positive, success with even just one of these key trials could reignite investor interest in the field and demonstrate that the clinical success with Provenge was not a fluke.

Table 3. Expected Active Immunotherapy Catalysts for 2012

* Based on company reports, analyst reports, and/or MD Becker Partners’ projection

It is worth noting that mAbs were hailed as “magic bullets” when they were developed in the 1970s.   However, clinical results with these passive immunotherapies were largely disappointing for the first 10 years of development.  It wasn’t until November 1997 that the first mAb for cancer therapy, Rituxan® [rituximab], was approved by the FDA for the treatment of non-Hodgkin’s Lymphoma [NHL].  Today, mAbs represent one of the most successful therapeutic classes and eleven such products have been approved for cancer therapy.  Three blockbuster products sold by the Roche Group (RHHBY) – Avastin® [bevacizumab], Rituxan, and Herceptin® [trastuzumab] – collectively represented nearly $17 billion in revenue for 2009.

As stated in our firm’s April 2010 report titled “Cancer Vaccine Therapies: Failures and Future Opportunities,” using the history of mAb development as a guide, we expect to see five active cancer immunotherapies approved by 2015 [5x15] that will revolutionize the treatment of cancer owing to their potential to be more targeted, more effective, and less toxic.  2012 represents a period with robust news flow for emerging immuno-oncology companies and while volatility is expected, any good news could serve as a spark to reignite investor enthusiasm for companies working in the area and raise the tide once again.  In addition to clinical progress, major licensing and/or merger & acquisition transactions could also serve as catalysts for the sector.

Visibility for the disease is on the rise following the recent deaths of Apple, Inc. (AAPL) co-founder Steve Jobs and Ralph Steinman, a cell biologist who died several days before being named one of three winners for the 2011 Nobel Prize in Medicine.  While awareness is increasing, there is an urgent need for more effective treatments and diagnostics to detect the disease earlier due to the fact that the number of new pancreatic cancer cases is projected to increase by 55% from 2010 to 2030[3].

Difficult Disease

The disease remains one of the most difficult to treat due to its extreme resistance to treatment and few early symptoms.  At the time of initial diagnosis, 50% of patients have distant metastases to the liver or peritoneal surface, and more than 80% of the remaining patients have locally advanced tumors [confined to the pancreas but unresectable][4]. The majority of pancreatic tumors [95%] are adenocarcinomas that mainly develop from exocrine cells in the tissues of the pancreas[5]. The tumors are characterized by an aggressive behavior with a fast progression rate that makes them highly metastatic. In contrast, neuroendocrine tumors of pancreatic origin [pancreatic NET, also known as islet cell tumors] are not as common [<2%] and are considered less deadly[6].

Illustrating the difference between the two, Hollywood actor Patrick Swayze was diagnosed with stage IV pancreatic exocrine cancer that had already spread to the liver in March 2008 and lost his battle with the disease in September 2009 at the age of 57.  Apple’s Steve Jobs underwent surgery for pancreatic NET in 2004 and didn’t succumb to the disease until October 2011 at the age of 56.

Treatment for Organ Confined Disease

In terms of treatment, surgical removal of the tumor represents the best option for pancreatic cancer patients without invasion into surrounding organs or distant metastasis.  Unfortunately, only 15–20% of all patients are candidates for potentially curative surgery[7].  Depending on the tumor localization, pancreaticoduodenectomy [Whipple procedure], distal, or total pancreatectomy can be performed.  However, even with an optimal curative surgery, metastases often occur.  Median survival time without evidence of recurrent disease is 21.2 months after surgical resection[8].

Treatment for Locally Advanced/Metastatic Disease

For locally advanced or metastatic disease, an effective single agent for pancreatic cancer remains elusive and treatment is still palliative rather than curative.  Since its approval in 1997, Eli Lilly’s (LLY) Gemzar® [gemcitabine] is the only single agent that improves symptoms and overall survival [OS] in patients with locally advanced or metastatic pancreatic exocrine cancer.  However, gemcitabine is associated with a modest median OS of 5.7 months and one-year probability of survival rate of 18%[9]. No confirmed objective tumor responses were observed in the pivotal study.

Beyond Single Agent Gemcitabine

At least 35 Phase II trials of gemcitabine-containing regimens and 11 randomized Phase III trials have been performed to improve the efficacy of gemcitabine alone, but the progress to date has been incremental at best[10].  In these 46 trials, overall response rates ranged from 5% to 58% in the Phase II studies and 4.4% to 38.5% in the Phase III studies.  Median OS ranged from 4 months to 13.1 months in the Phase II studies and 5.4 months to 9 months in the Phase III studies.  Inclusion of heterogeneous patient populations in many of these studies may have confounded the results, as the median survival time for patients with metastatic disease and locally advanced disease is 3–6 and 9-13 months, respectively[11].  The only successful combination approved by the FDA in 2005 is gemcitabine plus Roche/Astellas Pharma’s Tarceva® [erlotinib], which modestly increased the median OS to 6.4 months and one-year survival to 23%.

Hope on the Horizon

Despite the long list of past failures, drug developers continue to explore new options for treating pancreatic cancer and more than a dozen new treatments are currently being evaluated in clinical trials [see Table 1].  One product was recently approved and several programs have demonstrated encouraging results with data from pivotal trials due in the next 6-12 months.  While a comprehensive review of investigational pancreatic cancer therapies is beyond the scope of this article, we briefly highlight some of the more high profile pancreatic treatments below:

Amgen, Inc. (AMGN)

Amgen is developing ganitumab (also known as AMG 479), an investigational fully human monoclonal antibody that targets type 1 insulin-like growth factor receptor [IGF-1R], which plays an important role in the regulation of cell growth and survival.  At the 2010 American Society of Clinical Oncology [ASCO] Annual Meeting, Amgen announced results from a Phase 2 study demonstrating that the addition of AMG 479 to gemcitabine resulted in an OS rate at six months of 56.6% versus 50.1% with gemcitabine alone[12]. Median OS was 7.3 months versus 6.2 months in the gemcitabine arm.  Amgen initiated a Phase III trial with AMG 479 for metastatic pancreatic cancer in the second quarter of 2011 with data expected in late 2013 or 2014 [ClinicalTrials.gov identifier NCT01231347].  This trial focuses on metastatic disease and therefore should represent a homogeneous patient population where the median OS is expected to be 3–6 months in the control arm.

Celgene Corporation (CELG)

Historically known more for its franchise in treating blood cancers, Celgene moved into the realm of solid tumors through its 2010 acquisition of Abraxis BioScience, Inc. for $2.9 billion.  As a result, Celgene is now developing Abraxane® [paclitaxel protein-bound particles for injectable suspension] for the treatment of metastatic pancreatic cancer.  Abraxane is currently approved for the treatment of breast cancer after failure of combination chemotherapy for metastatic disease or relapse within 6 months of adjuvant chemotherapy[13].

In October 2011, positive Phase I/II study results with Abraxane in combination with gemcitabine in 67 patients with advanced pancreatic cancer were published in the Journal of Clinical Oncology[14].  In the Phase II component of the study, the overall response rate was 48% [21/44 patients], median OS was 12.2 months, and the one-year survival rate for patients was 48%.  This compares favorably with the median OS of 5.7 months and one-year probability of survival rate of 18% with single-agent gemcitabine.

The combination of Abraxane and gemcitabine is now the treatment arm of an ongoing, international, randomized Phase III clinical trial for patients with metastatic pancreatic cancer [ClinicalTrials.gov identifier NCT00844649].  Importantly, this study specifically excludes patients with only locally advanced disease and therefore represents a homogeneous patient population where the median OS is expected to be 3–6 months in the control arm.

Clovis Oncology, Inc. (private)

In November 2009, Clovis licensed rights from Clavis Pharma for CO-101 in the U.S., E.U., and select other countries.  CO-101 is an investigational, lipid-conjugated derivative of gemcitabine, currently in a pivotal Phase II randomized, open-label, multicenter study comparing CO-101 with gemcitabine as first-line therapy in patients with metastatic pancreatic adenocarcinoma [ClinicalTrials.gov identifier NCT01124786].  CO-101 is designed to improve upon the efficacy of gemcitabine by enabling the drug to enter cancer cells without requiring membrane expression of transporter proteins.  As a hydrophilic molecule, the entry of gemcitabine into tumor cells is dependent upon the expression of specific membrane transporter proteins, particularly human equilibrative nucleoside transporter 1 [hENT1].  Data from the pivotal Phase II trial are expected in the first half of 2012 and the inclusion criteria for only Stage IV patients [metastatic] represents a homogeneous population to study in this trial.

In April 2010, Clovis Oncology, Inc. and Ventana Medical Systems, Inc. entered into a collaboration for the development of a hENT1 immunohistochemistry [IHC] assay, which will be used in Clovis’ CO-101 clinical trials to identify patients with low level tumor expression of hENT1 protein.  Approximately 50% of pancreatic cancer patients have been shown to have low tumor expression of hENT1 and low levels of tumor hENT1 expression have been shown to correlate with poor survival outcomes after gemcitabine therapy[15].  These observations support the hypothesis that limited tumor uptake of gemcitabine in hENT1-low patients is responsible for a poor treatment effect in many patients and is an excellent example of a biomarker-driven clinical strategy.

Novartis AG (NVS)

In May 2011, the FDA approved Afinitor® (everolimus) by Novartis AG (NVS) for the treatment of progressive pancreatic NET in patients with unresectable, locally advanced or metastatic disease. Afinitor is an allosteric inhibitor of mammalian target of rapamycin [mTOR], a serine-threonine kinase, downstream of the PI3K/AKT pathway that is dysregulated in several human cancers.  Approval of Afinitor represents the first new therapy for pancreatic NET in the US in nearly 30 years[16].  The approval was based on Phase III data from the RADIANT-3 [RAD001 In Advanced Neuroendocrine Tumors] trial, showing treatment with Afinitor plus best supportive care more than doubled median progression-free survival [PFS], or time without tumor growth, from 4.6 to 11.0 months and reduced the risk of cancer progression by 65% when compared with placebo in patients with advanced pancreatic NET.

Threshold Pharmaceuticals, Inc. (THLD)

At the 2011 ASCO Gastro Intestinal Cancers Symposium, Threshold Pharmaceuticals presented results with its hypoxia-activated prodrug, TH-302, in combination with gemcitabine in 47 patients with previously untreated, locally advanced, unresectable or metastatic pancreatic adenocarcinoma[17].  Of the 43 evaluable patients, one patient [2%] demonstrated a complete response as measured by RECIST [Response Evaluation Criteria In Solid Tumors] and 8 patients [19%] had a partial response.  In the gemcitabine plus TH-302 treatment arms, median OS was 8.5 months.  While this compares favorably with the median OS of 5.7 months with single-agent gemcitabine, recall that in 35 Phase II trials of gemcitabine-containing regimens in heterogeneous patient populations the median OS ranged from 4 months to 13.1 months.

In June 2011, Threshold Pharmaceuticals completed enrollment of patients with first-line, locally advanced, unresectable or metastatic pancreatic adenocarcinoma.  The company expanded the study’s enrollment target from the original 165 patients to at least 200 patients.  As mentioned earlier, inclusion of a heterogeneous patient population may confound the study results [expected before the end of 2011], as the median OS for patients with metastatic disease and locally advanced disease is different.

Conclusion

As we approach Pancreatic Cancer Awareness Month in November, visibility for the disease is on the rise following recent high-profile deaths.  Despite numerous late-stage failures, more than a dozen products are currently in clinical trials with key data expected in the next 6-12 months.  Going forward, early detection using biomarkers, more effective treatments, and novel drug targets could provide new hope for the treatment of this deadly disease.

NOTE: For more information, please visit the Pancreatic Cancer Action Network [http://www.pancan.org], a national organization creating hope in a comprehensive way through research, patient support, community outreach and advocacy for a cure.

Table 1. Baker’s Dozen in Active Clinical Development for Pancreatic Cancer

References

Adjuvants are substances that can:

• Accelerate the generation of robust, longer lasting immune responses
• Generate antibodies with increased avidity and neutralization capacity
• Enhance immune responses in individuals with weakened immune systems
• Reduce the amount of antigen and number of doses needed; reducing the cost of vaccination programs
• Activate the cellular arm of the adaptive response, specifically T helper type 1 and cytotoxic T cell responses

For next generation cancer vaccines that require T cell immunity or a broader range of antibody response, adjuvants are playing an essential and central role[1]. For example, GlaxoSmithKline’s (GSK) melanoma antigen epitope-3 [MAGE-A3] antigen-specific cancer immunotherapeutic [ASCI] uses the company’s AS15 adjuvant system[2], which incorporates three different adjuvants [QS-21, MPL, and CpG] and is currently in pivotal Phase III trials for both non-small cell lung cancer [NSCLC] and melanoma with data expected in 2012.

History

During the last 80 years many adjuvants have been used in experimental settings, but due to various shortcomings of most of them only three have made it into regular clinical usage[3] – largely for infectious diseases.  Of the three adjuvants, only two have been used in vaccines licensed by the US Food and Drug Administration [FDA].

Alum (1930s)

For infectious disease vaccines, the most commonly used adjuvants are aluminum salt based [aluminum phosphate and aluminum hydroxide; alum], which are safe and effective for antibody induction.  Alum is a component of many licensed human vaccines, including diphtheria-pertussis-tetanus [DPT], diphtheria-tetanus [DT], DT combined with Hepatitis B virus [HBV], Haemophilus influenza B or inactivated polio virus [IPV], hepatitis A [HAV], Streptococcus pneumonia, meningococcal, and human papilloma virus [HPV].

MF59™ (1997)

MF59 is a potent vaccine adjuvant that has been licensed for more than 13 years for use in an influenza vaccine focused on elderly subjects [Fluad®] by Novartis (NVS)[4].  It consists of an oil-in-water nano-emulsion composed of shark oil [squalene] and has been licensed in Europe for use in influenza vaccines, but not in the US.

MPL® (2009)

MPL [monophosphoryl lipid A] is a derivative of bacterial endotoxin and a potent immunostimulant.  MPL was the second FDA licensed adjuvant molecule and is used in Cervarix® by GlaxoSmithKline, which is a prophylactic vaccine against HPV types 16 and 18.  GlaxoSmithKline obtained MPL through the $300 million acquisition of Corixa Corporation in 2005.  MPL is also the first and only toll-like receptor [TLR] ligand approved in a human vaccine.  TLRs are a class of proteins that play a key role in the innate immune system[5].

Few adjuvants approved

Adjuvants do not receive FDA approval as stand-alone products, but rather as part of a registered vaccine adjuvant–antigen combination[6].  The fact that safety regulations are often much more stringent with vaccines, as they are prophylactic and the main targets are often pediatric patients, partly explains why there are so few adjuvants approved to date[7].

Several recent developments have favorably altered the landscape for adjuvant development.  First, GSK’s Cervarix vaccine received approval in 2009 and contained the first adjuvant [MPL] licensed by the FDA since the approval of Alum back in the 1930s.  The second development has been FDA approval of sipuleucel-T [Provenge®] by Dendreon and ipilimumab [Yervoy®] by Bristol-Myers Squibb, which has renewed interest in the concept of immunotherapy as an approach to cancer treatment.  In the cancer setting, adjuvants are being tested as part of a therapeutic vaccine as opposed to being use as a prophylactic vaccine, which may result in a shorter duration of exposure and reduced safety concerns.  Third, if an influenza pandemic were to occur, such as the 2009-10 H1N1 pandemic, the potential vaccine supply would fall several billion doses short of the amount needed to provide protection to the global population[8]. The antigen-sparing effect of adjuvants could allow for expansion of vaccine supply to meet the necessary global demands during a pandemic, as evidenced by supporting grants from the Biomedical Advanced Research and Development Authority [BARDA], part of the US Department of Health and Human Services.

Investigational adjuvants

Several companies are developing promising new candidates that may finally adjunct or displace aluminum substances as a popular adjuvant:

Agenus (AGEN)

Agenus Inc. (AGEN) is developing QS-21, a saponin extracted from the bark of the Quillaja saponaria tree, also known as the soap bark tree or Soapbark, an evergreen tree native to warm temperate central Chile.  Quillaia raw material has been used for decades as an ingredient to create the foaming in beverages such as root beer, low-alcohol beers and foaming carbonated beverages.  It has also been widely used as an adjuvant in veterinary vaccines.

QS-21 has extensive clinical experience with thousands of patients receiving vaccines containing QS-21 adjuvant.  Agenus has licensed QS-21 to various Big Pharma partners and today there are 15 vaccine candidates using QS-21 in clinical development for infectious diseases, oncology, and central nervous system disorders, including the following Phase III programs by GlaxoSmithKline that could address large markets:

• MAGE-A3 ASCI vaccine candidate, which is being studied in the largest-ever trial in the adjuvant treatment of NSCLC and also in Phase III trials for melanoma, with data expected in 2012
• Mosquirix (RTS,S), the world’s most advanced malaria vaccine candidate, with Phase III data expected by the end of 2011

Agenus is entitled to receive milestone payments and royalties from corporate partners that have licensed QS-21.

Antigen Express, Inc., a wholly-owned subsidiary of Generex Biotechnology Corporation (GNBT)

Antigen Express is advancing its proprietary Ii-Key hybrid technology.  Ii-Key modification entails attaching a four-amino acid peptide [LRMK] to virtually any antigen and results in increased stimulation of CD4⁺ helper T cells and a more robust specific response to the antigen.  Using this technology platform, Antigen Express is building a deep pipeline of therapeutics aimed at a variety of major diseases, including cancer, infectious diseases and autoimmune-based syndromes.

The company’s lead product candidate using Ii-Key modification is AE37, a peptide vaccine derived from a fragment of the HER-2/neu protein, which is expressed in a variety of tumors including 75-80% of breast cancers as well as a high percentage of prostate, ovarian and other cancers[9].

A controlled, randomized, and single-blinded Phase II clinical study of AE37 in HER-2 expressing breast cancer patients is currently underway to establish clinical efficacy.  The study endpoint is a reduction in cancer relapse after two years compared to the current standard of care treatment.  There are currently over 200 patients enrolled in the study with either node positive or high-risk node-negative breast cancer.

Celldex Therapeutics (CLDX) and 3M Company (MMM)

3M Drug Delivery Systems has a portfolio of patent protected TLR agonists that have shown promise as vaccine adjuvants. The lead candidate, resiquimod [TLR7/8 agonist] has shown promising results in a number of animal models and has an extensive toxicology and clinical data package to support further development as a vaccine adjuvant.

Celldex Therapeutics entered into a non-exclusive clinical research collaboration with 3M Drug Delivery Systems to access resiquimod for clinical study with the company’s Antigen Presenting Cell [APC] Targeting Technology™ in exchange for an undisclosed licensing fee, milestones and royalties.  Celldex is developing CDX-1401, a fusion protein consisting of a fully human monoclonal antibody with specificity for the dendritic cell receptor DEC-205 linked to the NY-ESO-1 tumor antigen, which is currently in a Phase I/II trial in combination with immune stimulating agents [resiquimod and/or poly-ICLC] for advanced cancers of the bladder, breast, ovary, non-small cell lung cancer, myeloma, sarcoma or melanoma.

Colby Pharmaceutical Company (private) and Juvaris BioTherapeutics (private)

In September 2011, Juvaris BioTherapeutics, Inc. entered into an exclusive license agreement with Colby Pharmaceutical Company for the worldwide development and commercialization of Juvaris’ Cationic Lipid-DNA Complex [CLDC] technology and related JVRS-100 product candidate. Gene array studies with JVRS-100 show up-regulation of multiple immune response pathways compared to competing technologies. When combined with a vaccine antigen, JVRS-100 stimulates the adaptive immune response including specific antibodies and T-cell responses.

Idera Pharmaceuticals (IDRA)

Idera is developing numerous compounds that act as agonists for TLRs 3, 7, 8, or 9, which the company believes have the potential to be used as adjuvants in vaccines.  In preclinical animal models, Idera’s TLR agonists have shown adjuvant activity when combined with various types of antigens.

In December 2007, Idera entered into an exclusive, worldwide licensing and collaboration agreement with Merck KGaA for the research, development, and commercialization of Idera’s TLR9 agonists, including IMO-2055, for the treatment of cancer, excluding vaccines.  Merck KGaA refers to IMO-2055 as EMD 1201081.

Merck KGaA expects to complete an ongoing Phase 2 clinical trial of IMO-2055 in combination with cetuximab [Erbitux®] in second-line cetuximab-naïve patients with recurrent or metastatic squamous cell carcinoma of the head and neck [SCCHN].  However, based on increased incidence of neutropenia and electrolyte imbalances reported in its Phase 1 trial of IMO-2055 in combination with cisplatin/5-FU and cetuximab in patients with first-line SCCHN and subsequent re-evaluation of its clinical development program, in July 2011 Merck KGaA informed Idera that it will not conduct further clinical development of IMO-2055.

Immune Design Corporation (private)

Founded by the co-founder of Corixa Corporation, Immune Design Corporation is developing its proprietary adjuvant known as glucopyranosyl lipid A [GLA].  GLA is a novel, clinical-stage, human TLR-4 agonist, representing the next generation of MPL.  According to the company, GLA is unique because: it is a pure synthetic small molecule, straightforward to manufacture with excellent stability, rationally designed to optimally activate human TLR-4 receptors, induces Th1 CD4 helper cells and elicits broad humoral immunity and active in multiple formulations and compatible with most antigens.  GLA was also shown to be safe and well-tolerated in humans subjects in a Phase I clinical study in combination with the influenza virus vaccine Fluzone® by Sanofi Pasteur, the vaccines division of sanofi-aventis Group (SNY).  Immune Design Corporation is developing its own proprietary pipeline of vaccine candidates formulated with the GLA adjuvant for evaluation in further human clinical trials.

Vical Inc. (VICL)

Vical is developing Vaxfectin®, a novel proprietary cationic lipid-based formulation that has been shown to effectively enhance plasmid DNA-based [as well as protein- and peptide-based] vaccines. It is a commixture of a cationic lipid [GAP-DMORIE] and a neutral phospholipid [DPyPE] which, when combined in an aqueous vehicle, self-assemble to form liposomes.  In mechanism of action studies, Vaxfectin® has been shown to increase a number of cytokines and chemokines, while Toll-like receptor signaling was contributory.

Vical is developing several products that utilize Vaxfectin® as an adjuvant. These include CyMVectin™, the company’s prophylactic vaccine against cytomegalovirus [CMV] infection, and its pandemic influenza vaccines.

Conclusion

Beyond their established role in infectious diseases, adjuvants will also likely become important in cancer immunotherapy where they will be critical for targeting weakly immunogenic tumor antigens in order to overcome various tolerance mechanisms and facilitate induction of cytotoxic T lymphocytes.  Several promising new adjuvants are currently being developed that offer superior properties and a set of desired characteristics, with clinical data expected in the near future.

The topic of adjuvants in cancer immunotherapy will covered in an upcoming panel session at the second annual Cancer Immunotherapy: A Long-Awaited Reality conference being held in New York City on October 6, 2011.

References

As of today, the NASDAQ Biotech Index is down more than 23% from its 52-week high of 1,143 and the stocks of many small biotechnology companies are reaching new lows.  Company executives are naturally questioning when investor sentiment will change, buyers will return, and how to adjust their corporate strategy and communication activities.  Having been through our share of market cycles, we’d like to offer some of our advice and perspectives on these issues.

First, it is important to note that investor sentiment can change quickly.  Although past performance doesn’t guarantee future results, within one year the NASDAQ Composite nearly doubled from the lows reached in early 2009.  The NASDAQ Biotech Index increased more than 58% during the same period.

No one has a crystal ball to determine when buyers will return, but it is also worth noting that many of the fundamental drivers supporting a favorable outlook for the life science industry remain intact.  These include the large number of products currently in clinical trials, number of new product approvals by the FDA, brisk pace of industry consolidation and licensing transactions, aging population, and attractive valuations among many small- and mid-capitalization companies among other factors.

It may be tempting to dramatically revise corporate strategy and communication activities to fit the current market environment.  In both good times and bad, however, we believe in clear and consistent communication with an emphasis on the long-term strategic vision and unique value proposition that your company offers current and prospective shareholders.  Speaking with confidence, emphasizing key fundamental attributes, and avoiding spin are the best ways to maintain and enhance credibility with investors and analysts.

Regardless of the market backdrop, regular communications with investors, analysts, and the media through telephone calls, electronic communications, conference presentations, hosting an analyst/investor day, and through one-on-one meetings can help a company stay visible.  In addition, make sure that fact sheets, slide presentations, and other corporate materials are up to date.  At some point, investors will put money to work again and these activities will help ensure that they remember your company.

Beyond external audiences, clear and consistent communications with employees is also important – especially during periods of volatility. Make sure that your management team speaks with the same voice and offers thoughtful answers to any questions that arise.  This can be particularly important for those employees who manage external relationships, such as physicians and nurses involved with clinical trials.  The steadfast loyalty and support of your employees can be invaluable – and they may also be current or future shareholders.

Lastly, due to greater focus on a company’s financial strength and ability to survive a downturn, distinguishing your organization from its peers can be beneficial.  Beyond current cash position, this includes highlighting assets that can potentially be monetized along with being transparent regarding the size and nature of any corporate liabilities, including conversion features and maturity dates.  Investors and analysts also benefit by understanding key metrics such as the company’s cash burn rate, years of cash on the balance sheet, and the magnitude or timing of royalty streams, milestone payments, government grants, and licensing transactions.

In closing, despite inquiries from anxious shareholders about declining stock prices and market volatility in the short term, we believe companies that clearly and consistently communicate their strategic vision and value proposition will attract interest from investors, analysts, and the media in the long run.  With deference to the credit rating agencies, the United States – in particular our life science clients working in the areas of oncology, cardiovascular disease, central nervous system disorders, and other major unmet medical needs – will always be “triple-A” in our mind.

The clinical application of radiation therapy in oncology, which uses high-energy radiation to shrink tumors and kill cancer cells, dates back to the early 1900s when radium was used to successfully treat a pharyngeal carcinoma in Vienna[2]. By the 1930s, fractionated X-rays were used to cure a group of patients with inoperable cancer of the larynx[3]. Today, radiation therapy remains a cornerstone of cancer treatment and is often used in combination with surgery and chemotherapy.

Consisting of X-rays, gamma rays, and charged particles, radiation can be delivered to a cancer patient using several techniques. These include using a machine outside of the body (external-beam radiation therapy), placing radioactive material in the vicinity of cancer cells (internal radiation therapy, or brachytherapy), and systemic radiation therapy using injected substances (radiopharmaceuticals) that travel in the blood to seek and destroy cancer cells. Of the three, external-beam radiation represents the most popular delivery option, with nearly one million patients treated annually[4].

Despite numerous medical and scientific advances following its clinical introduction more than a century ago, radiation therapy is an important and growing treatment option for breast, prostate, lung and other cancers. One study calculated the annual percentage of patients receiving radiation therapy between 1991 and 2002 and found that the fraction of breast and prostate cancer patients receiving radiation therapy rose from 26% to 51% and from 33% to 47%, respectively[5]. In fact, a recent journal article suggests that 52% of all cancer patients should receive radiation[6], with the American Cancer Society expecting approximately 1,596,670 new cancer cases to be diagnosed in 2011[7].

Regardless of how it is delivered to the patient, most types of radiation do not specifically attack cancer cells and therefore cause injury to normal tissues surrounding the tumor. Accordingly, the goal of radiation therapy is to maximize the dose delivered to tumor cells while minimizing exposure to normal, healthy cells. While conformal radiotherapy, intensity-modulated radiotherapy (IMRT), image-guided radiotherapy, and proton radiotherapy have allowed more precise targeting of the tumor; exposure to normal tissues and organs still limits the amount of radiation therapy that can be administered to a patient undergoing cancer treatment[8],[9].

It has been reported that increasing the effective ionizing radiation dose by just 10% would increase treatment effectiveness by 5–30%, depending on the type of cancer[10]. For instance, a randomized trial demonstrated that when men with early-stage prostate cancer were treated with high-dose (79.2 Gray equivalents) rather than conventional-dose (70.2 Gray equivalents) external radiation therapy, they were almost twice as likely to be free from disease relapse after 10 years and less likely to have required additional cancer therapy[11]. Many patients in the study still experienced disease relapse after 10 years (32% in the conventional-dose group, 17% in the high-dose group). This suggests that even higher doses of radiation could be more effective – if it weren’t for the significant side effects due to normal tissue damage.  These include urinary reactions, such as bleeding, irritation and pain, urinary frequency, urgency, and incontinence along with rectal complications that include diarrhea, frequent and painful stools, and bleeding.

The close proximity of tumors, normal tissues, and vital organs invariably requires radiation exposure to normal tissue margins that are potentially contaminated with microscopic disease. Therefore, improvements in targeting radiation to the tumor are unlikely to completely prevent side effects and it is expected that normal tissue exposure will remain the key dose limiting toxicity for therapeutic radiation. For example, radiation therapy directed to the chest is commonly employed to treat lung, esophageal, breast and lymphoma cancers. However, lung inflammation caused by radiation therapy, called radiation pneumonitis, is the most common dose-limiting complication of chest radiation[12].

Since the initial clinical application of radiation for the treatment of cancer, researchers have explored the use of radiation protecting compounds (radioprotectants) to defend normal tissues or minimize toxicity after radiation damage has occurred. This is an especially important consideration in escalating the dose of radiation with the aim of increasing overall survival. Early radioprotectant research may have been limited by a lack of consensus with respect to the best animal models, assessment tools, and end points for each of the organ systems considered to be most at risk after moderate radiation exposures[13].

The term “radioprotectant” as used in this article refers to any agent that protects normal tissue against radiation-induced damage, whether administered before (prophylactic), during (mitigation), or after (therapeutic) exposure. To date, the only such prophylactic product to receive approval from the U.S. Food and Drug Administration (FDA) is Ethyol® (amifostine), which was originally discovered through the U.S. Army Research and Development Command’s Anti-radiation Drug Development Program.  This project was intended to search for ideal protective agents for use in a variety of radiation exposure scenarios, such as nuclear war and industrial accidents[14].

Subsequently developed for oncology indications by Pennsylvania-based biotechnology firm U.S. Bioscience, Ethyol is a prodrug that is converted in the body’s tissues to an active metabolite that can scavenge reactive oxygen species (ROS) generated by exposure to either chemotherapy or radiation therapy. By the early 1990s, Wall Street’s expectations for radioprotectants were high and the market value of U.S. Bioscience exceeded $1 billion. At the time, it was projected that 750,000 patients per year could benefit from Ethyol.

Ethyol was approved by the FDA in 1995 to reduce kidney damage associated with repeated chemotherapy (cisplatin) in patients with advanced ovarian cancer and non-small-cell lung cancer. The FDA extended the indication for use in 1999 to protect the salivary glands from radiation therapy used to treat head and neck cancer.

Unfortunately, Ethyol’s inconvenient administration via 15-minute or 3-minute intravenous infusion and unfavorable side effect profile greatly limited product acceptance. According to the prescribing information, nearly one-third of patients experienced Grade 3 or higher nausea/vomiting and nearly two-thirds of patients developed abnormally low blood pressure (hypotension) in the ovarian cancer study. While those toxicities were less common in the lower dose used in the head and neck cancer study, 17% of those patients still discontinued Ethyol due to adverse events.

Despite these severe limitations, MedImmune – now a member of the AstraZeneca (NYSE: AZN) group of companies – obtained Ethyol in 1999 through its acquisition of U.S. Bioscience in a transaction valued at nearly $500 million. In 2006, 2005 and 2004, MedImmune reported worldwide product sales for Ethyol of $87 million, $95 million, and $92 million, respectively.

Products with improved safety and ease of administration could significantly expand the annual market opportunity for radioprotectants beyond $100 million and renew investor interest in the field.  In this regard, a promising new class of investigational agents are entering early clinical development for oncology indications in parallel with leveraging government support as medical countermeasures for radiological/nuclear, biological, and chemical threats (see Table 1). There is an interest in developing and procuring such agents for national stockpiles, with U.S. funding primarily provided by the U.S. Department of Health and Human Services through the National Institute of Allergy and Infectious Diseases (NIAID) and Biomedical Advanced Research and Development Authority (BARDA).  As a further vote of confidence for the new class of radioprotectants, two +$100 million BARDA contracts to develop treatments for the pulmonary/lung and hematopoietic/bone marrow sub-syndromes of acute radiation syndrome (ARS) have been awarded to companies within the past year (see Table 1).

“The complexities of developing radioprotectant agents under conditions where there are few truly appropriate animal model(s) that will satisfy FDA requirements has limited interest and participation from both academia and industry,” said Jackie Williams, Ph.D., research professor of radiation oncology at the James P. Wilmot Cancer Center at the University of Rochester. “Nonetheless, despite these difficulties, several of these next-generation radioprotectants have demonstrated significant efficacy by ameliorating radiation-induced toxicities in animal studies and have been studied in Phase I clinical trials, to date without demonstrating the severe toxicities seen with Ethyol.”

For example, Aeolus Pharmaceuticals (OTCQB: AOLS) is developing AEOL 10150, a metalloporphyrin that scavenges ROS at the cellular level, mimicking the effect of the body’s own natural antioxidant enzyme superoxide dismutase (SOD). In two Phase I clinical trials, 37 patients with amyotrophic lateral sclerosis (ALS, or Lou Gehrig’s disease) received 3 mg to 75 mg of AEOL 10150 as a single daily injection, twice daily injection, or continuous infusion. No serious adverse clinical events were reported.

In addition, a total of 150 human volunteers have received single or double injections (2 to 50 micrograms intramuscularly) with Cleveland BioLabs’ (NASDAQ: CBLI) CBLB502, a Toll-like receptor 5 (TLR5) agonist designed to block stress-induced cell death in normal cells.  The primary adverse event reported to date with CBLB502 has been a transient flu-like syndrome.

In view of the fact that radiation therapy remains a cornerstone of cancer treatment, the development of novel agents that protect normal tissue against the effects of ionizing radiation represents a large market opportunity and unmet medical need. Concerns over radiation exposure following industrial accidents, such as Japan’s Fukushima nuclear reactors, along with the threat of terrorist attacks only adds to the growing importance of developing safer and more effective radioprotective agents.

Table 1. Select companies developing radioprotectants for both oncology and bio-defense “dual use” indications

* Note: The product has already been tested in 37 patients with ALS in Phase I trials

References

Passive immunotherapy is the transfer of an exogenous therapeutic agent to a patient where the therapy has a direct pharmacological action on the desired target.  The best examples of passive immunotherapy are monoclonal antibodies (mAbs), which were hailed as “magic bullets” when they were developed in the 1970s.

However, clinical results with mAbs were largely disappointing for the first 10 years of development.  In fact, it wasn’t until November 1997 that the first mAb for cancer therapy, Rituxan® (rituximab), was approved by the U.S. Food and Drug Administration (FDA).  Developed by IDEC Pharmaceuticals, Rituxan is a chimeric monoclonal antibody against the protein CD20 that is currently approved for the treatment of chronic lymphocytic leukemia (CLL), non-Hodgkin’s Lymphoma (NHL), and rheumatoid arthritis (RA).

After reporting its first year of profitability in 1998, shares of IDEC Pharmaceuticals traded at an all-time high of $140 with a market capitalization above $3.3 billion. Worldwide net sales of Rituxan reached $1.5 billion in 2002 and the following summer IDEC Pharmaceuticals acquired Biogen, Inc. in a stock transaction valued at approximately $6.65 billion to create Biogen Idec, Inc. (BIIB).

While the success of Rituxan spurred the development of other anti-CD20 mAbs, it wasn’t until October 2009 that Arzerra® (ofatumumab) was approved by the FDA for the treatment of CLL.  Ofatumumab, which was developed by Genmab A/S (GNMSF.PK) and GlaxoSmithKline plc (GSK), is a human mAb that targets an epitope different from Rituxan and other anti-CD20 mAbs.

Today, passive immunotherapies represent one of the most successful therapeutic classes and there are currently eleven mAbs approved for cancer therapy.  Three blockbuster products sold by the Roche Group (RHHBY) – Avastin® (bevacizumab), Rituxan, and Herceptin® (trastuzumab) – collectively represented nearly $17 billion in revenue for 2009.  As useful as many of these mAbs have become in cancer therapy, they often have the greatest impact when used in combination with other therapeutic modalities, particularly cytotoxic agents.

Similar to passive immunotherapy with mAbs, the early development of active immunotherapies proved to be an enormous challenge.  In fact, nearly a dozen product candidates failed in Phase III trials.  Unlike passive immunotherapy, active immunotherapies contain a specific antigen or set of antigens that are designed to activate the patient’s own immune system to seek out and destroy cells that carry the same antigen.  They have no direct therapeutic action, but rather rely on the patient’s immune system to recognize and destroy the intended target.

Growing evidence indicates that the field of active immunotherapy for the treatment of cancer is undergoing a renaissance. On April 29, 2010, the FDA approved the very first active immunotherapy for the treatment of cancer – Dendreon Corporation’s (DNDN) Provenge® (sipuleucel-T) for metastatic castrate-resistant prostate cancer (CRPC). This event reignited enthusiasm for the field of active immunotherapy and shares of Dendreon, which traded below $5 in March 2009, subsequently reached an all-time high above $57 and a market capitalization of approximately $7.8 billion.

More recently, the FDA approved Yervoy™ (ipilimumab) by Bristol-Myers Squibb (BMY) for the treatment of patients with unresectable or metastatic melanoma on March 25, 2011. With the news, ipilimumab became the eleventh mAb approved for the treatment of cancer since 1997 (see Figure 1 below).

Figure 1.

Beyond the approvals of both Provenge and Yervoy, there are a number of additional catalysts that could ignite further interest in the field of cancer immunotherapy.

First, approximately 40 unique active cancer immunotherapies that are currently being tested in nearly 60 clinical trials, including almost a dozen that are in late-stage development (see Table 1 below).  For example, GlaxoSmithKline plc (GSK) is conducting the largest ever Phase III clinical trial in lung cancer treatment with its investigational MAGE-A3 ASCI immunotherapy.

Table 1: Late-stage active immunotherapies in development

Second, positive results from at least three randomized studies have recently been published in peer-reviewed journals. The first study published in the March 1, 2010, edition of the the Journal of Clinical Oncology was a Phase II randomized controlled trial of Bavarian Nordic’s (BAVA) poxviral-based, PSA-targeted immunotherapy (Prostvac®) in metastatic castration-resistant prostate cancer. Patients receiving Prostvac had an 8.5-month improvement in median overall survival versus control. These provocative data resulted in a pivotal Phase III trial that is planned to begin in the second half of 2011.

The next study published in the May 31, 2011, online edition of the Journal of Clinical Oncology demonstrated that vaccination with patient-specific tumor-derived antigen in first remission improves disease-free survival by 14 months in follicular lymphoma. For 117 patients who received Biovest International, Inc.’s (BVTI) autologous, active immunotherapy called BiovaxID® (n = 76) or control (n = 41), median disease-free survival after randomization was 44.2 months for the vaccine arm versus 30.6 months for control arm (P=0.047) at median follow-up of 56.6 months. Results were even more robust for patients with a specific biological marker in an unplanned subgroup analysis.

A third study published in the June 2, 2011, edition of the New England Journal of Medicine, demonstrated that patients with metastatic melanoma receiving high-dose interleukin-2 (IL-2)  plus a gp100 peptide vaccine had a significant improvement in centrally verified overall clinical response (16% vs. 6%; P=0.03), as well as longer progression-free survival (2.2 months versus 1.6 months; P=0.008). There was a trend toward longer overall survival in the gp100 vaccine arm (17.8 months versus 11.1 months; P=0.06) although the results were not statistically significant.

In addition, cancer immunotherapy was a prominent topic during the recent American Society of Clinical Oncology® (ASCO*) annual meeting. With so many interesting presentations and discussions during the meeting, however, the Cancer Research Institute and MD Becker Partners organized a cancer immunotherapy roundtable following the event to provide additional focus on the field of cancer immunotherapy.

We united key opinion leaders, analysts, and industry executives to exchange data, knowledge, and experience, facilitated by discussion and debate. In total, 17 experts participated in discussions about the current status and the future outlook for cancer immunotherapy. The roundtable started with general questions and topics about cancer immunotherapy posed by the organizers, followed by a comprehensive discussion among the various participants. The report does not cover all of the cancer immunotherapy presentations from ASCO 2011, but aims to highlight selected points of interest.

A complimentary copy of the full report can be requested by clicking here.

* This publication is not sponsored or endorsed by the American Society of Clinical Oncology® (ASCO).

Shares of SuperGen, Inc. (SUPG), which climbed as high as $2.89 on expectations for positive trial results, reached a new 52-week low of $1.71 in July 2010 following the negative top-line news.  SuperGen receives a 20-30% royalty on worldwide sales of Dacogen from its development and commercialization partners – Eisai in North America and Johnson & Johnson (JNJ) outside of North America.

Despite the negative top-line results, shares of SuperGen have since rebounded and reached a new 52-week high in April 2011.  Optimism may stem from the fact that both Eisai and Johnson & Johnson are continuing to analyze the data and planning to move forward with North America and European regulatory filings in 2011 based on the primary analysis and secondary endpoints.  Accordingly, investors will anxiously await the detailed Phase 3 results being presented on Monday, June 6, 2011 at ASCO to better gauge the likelihood of FDA approval in AML [Abstract #6504 “Results from a randomized phase III trial of decitabine versus supportive care or low-dose cytarabine for the treatment of older patients with newly diagnosed AML”].

Results from the Dacogen study may also be of interest to investors in Cyclacel Pharmaceuticals, Inc. (CYCC), which recently launched a multicenter, randomized, pivotal Phase 3 trial for the company’s sapacitabine oral capsules as a front-line treatment of elderly patients aged 70 years or older with newly diagnosed AML who are not candidates for intensive induction chemotherapy.  Unique among drugs available to treat AML patients, sapacitabine is the only oral agent in late-stage clinical development.  It is also the only candidate to progress into a pivotal study on the basis of survival data from a randomized Phase 2 study.  Historically, sponsors advanced molecules to pivotal development in AML based on Phase 2 studies with primary endpoints of complete remission [CR].

The pivotal Phase 3 study is being conducted under a Special Protocol Assessment [SPA] agreement that Cyclacel reached with the FDA.  The primary efficacy endpoint for the study is an improvement in overall survival from either of the two pairwise comparisons [Arm A versus Arm C, or Arm B versus Arm C] in the following three arms consisting of approximately 150 patients per arm:

• Arm A: sapacitabine administered in alternating cycles with Dacogen
• Arm B: sapacitabine administered alone
• Arm C: Dacogen administered alone

Cyclacel is testing the treatment regimen of sapacitabine administered in alternating cycles with Dacogen [Arm A] in an on-going pilot study, with data expected at ASCO 2011 [Abstract #6587 “Phase I/II study of sapacitabine and decitabine administered sequentially in elderly patients with newly diagnosed acute myeloid leukemia”].  Thirty-day and sixty-day mortality outcomes from this pilot study may be helpful in determining the odds of success in the Phase 3 pivotal study.  To put this in perspective, thirty-day mortality in AML patients aged 70 years or older ranged from 17% to 21% in a recently published Phase 3 study [Harousseau JL, et al, Blood, 2009:114:1166].  Accordingly, results from the pilot study that demonstrate thirty-day mortality with sapacitabine is equal or less than 21% could be encouraging for Cyclacel.

The Phase 3 study builds on promising 1-year survival observed in elderly patients aged 70 years or older with newly diagnosed AML or AML in first relapse enrolled in a Phase 2 study of single agent sapacitabine.  In a disease setting where patients are typically treated with chemotherapy agents like cytarabine for an average of 1 to 2 cycles, patients in Cyclacel’s Phase 2 study achieved a median of 12 cycles of treatment with sapacitabine.

In addition, approximately 45% of patients in the Phase 2 study had transformed into AML after being diagnosed with myelodysplastic syndromes [MDS] and were previously treated with Dacogen or Celgene Corporation’s (CELG) Vidaza® [azacitidine].  Only newly diagnosed AML patients are expected to be enrolled in the ongoing Phase 3 trial, none of whom had been previously treated with Dacogen or Vidaza and none of whom had relapsed, potentially increasing the odds for a successful trial.

Finally, Sunesis Pharmaceuticals, Inc. (SNSS) will also be presenting at ASCO [Abstract #TPS201, “Adaptive design of VALOR, a phase III trial of vosaroxin or placebo in combination with cytarabine for patients with first relapsed or refractory acute myeloid leukemia”].  Unlike the aforementioned frontline trials being conducted under SPA’s, Sunesis is studying vosaroxin in relapsed/refractory AML in an ongoing Phase 3 trial.  Approximately 450 patients will be randomized to receive either vosaroxin or placebo in combination with cytarabine.

Cytarabine, a generic chemotherapy drug introduced several decades ago, is already a critical part of the treatment for younger patients with AML who are fit to withstand its toxicity.  Unfortunately, several companies that make cytarabine have recently experienced production difficulties and others cannot make the drug fast enough to keep up with demand.  This has resulted in a severe shortage of cytarabine that has reportedly affected leukemia clinical trials being run by the Cancer and Leukemia Group B [CALGB].  Accordingly, investors will be looking to Sunesis for an update on enrollment in the VALOR Phase 3 trial to determine whether or not the cytarabine shortage has been a factor.

Beyond the aforementioned investigational therapies, a researcher in the field of oncology noted that newer, targeted agents will be required to advance the treatment of AML: “My personal opinion on AML affecting the elderly population is that the field is in need of a total revamp whereby certain chemotherapy agents need to be combined with targeted therapies to overcome drug resistance and provide meaningful survival data,” said Daruka Mahadevan, M.D. Ph.D., Director, Phase I Program, Arizona Cancer Center.  “If you can increase the survival of a 70-year old patient by ten years, that would be a real achievement.  Sapacitabine is interesting as it is an oral agent, while vosaroxin in combination of cytarabine may provide short term control – but is unlikely to provide a survival benefit.”

The similarities don’t end there, as both ipilimumab and sipuleucel-T have reignited enthusiasm for the field of active immunotherapy.  Accordingly, the purpose of this article is to highlight some of the other parallels between these two innovative agents.

Both Studied in Prostate Cancer

While ipilimumab was recently approved for the treatment of melanoma, the product has also been extensively studied in prostate cancer.  In fact, there are eight clinical studies with ipilimumab in prostate cancer according to ClinicalTrials.gov, including five that are currently active or recruiting.

One particular prostate cancer study made headlines in June 2009 when investigators at the Mayo Clinic reported in the online research magazine Discovery’s Edge that the combination of a single dose of ipilimumab [3 mg/kg] with androgen ablation therapy dramatically reduced the tumor size in two patients, making surgery possible for both patients whose prostate cancer had been previously considered inoperable. The controversial results from a handful of patients were met with skepticism and the complete Phase 2 results with 108 patients with advanced prostate cancer were later reported at the American Society of Clinical Oncology [ASCO] 2010 Genitourinary Cancers Symposium [abstract #168].  According to the ASCO abstract, patients treated with androgen ablation either alone or in combination with ipilimumab demonstrated a greater than 97% decline in testosterone levels, underscoring the possibility that the tumor reductions in a few patients could have been associated with androgen ablation.  Patients treated with ipilimumab, however, were more likely to have undetectable prostate specific antigen [PSA] by three months [55% vs. 38%].

A Phase 3 trial with ipilimumab following radiation therapy in patients with CRPC that have received prior treatment with docetaxel is ongoing [ClinicalTrials.gov identifier NCT00861614].

Two is Better than One

As the first two active immunotherapies approved for the treatment of cancer, it wouldn’t be surprising to see the products studied in combination in prostate cancer – especially in view of the fact that ipilimumab has already been studied in this disease.  Sipuleucel-T may help build an effective immune response to kill tumor cells, while ipilimumab may stimulate the immune system through T-cell activation and proliferation and stop tumor cells from growing.  Accordingly, giving vaccine therapy together with ipilimumab may be an effective treatment for prostate cancer.  Interestingly, the only such combination study listed on ClinicalTrials.gov relates to a completed Phase 1 trial with ipilimumab in combination with Bavarian Nordic’s (BAVA.CO) Prostvac®, an “off-the-shelf” therapeutic cancer vaccine moving into pivotal Phase 3 clinical development [ClinicalTrials.gov identifier NCT00124670].

Pricing Controversy

Both Dendreon’s sipuleucel-T and Bristol-Myers’ ipilimumab have been criticized as overly expensive new therapies.

The cost of sipuleucel-T is approximately $93,000 for a course of treatment, which consists of three infusions at two-week intervals.  In view of the fact that the product has been demonstrated to extend median survival by 4.1 months, this translates into an average cost of $23,000 per month of added survival.

In comparison, Taxotere® [docetaxel] by Sanofi-aventis (SNY) is indicated for the treatment of CRPC and is administered every 3 weeks for 10 cycles.  Assuming an average monthly cost of $4,000 for docetaxel [source: Cancer Res 2009;69(24 Suppl):Abstract nr 1076], this is an approximate total cost of $40,000 per patient.  In the pivotal TAX 327 study, median survival for prostate cancer patients receiving docetaxel was 18.9 months versus 16.5 months in the control arm, which results in an average cost of $16,666 per month of added survival or about 28% less than sipuleucel-T.  Updated survival analysis of the TAX 327 study demonstrates a 2.9-month survival advantage, which lowers the average cost to $13,793 per month of added survival or about 40% less than sipuleucel-T.  Unlike sipuleucel-T, however, treating common adverse reactions with docetaxel, such as infections, neutropenia, anemia, nausea, diarrhea, and others, increases the total cost of therapy – and more importantly negatively impacts the patient’s quality of life.  As such, the pricing of sipuleucel-T doesn’t appear completely out of line.

According to the prescribing information, ipilimumab is administered intravenously [3 mg/kg] over 90 minutes every 3 weeks for a total of four doses.  Bristol-Myers is pricing each dose at $30,000, which translates into a total cost of $120,000 for a full course of therapy.  In the pivotal ‘020 study, median survival for melanoma patients receiving ipilimumab was 10.1 months versus 6.4 months in the control arm.  The average cost per month of added survival is approximately $32,432, which is 41% higher than the only other active immunotherapy for cancer, sipuleucel-T.

However, on March 21, 2011, Bristol-Myers announced that the ‘024 study [ClinicalTrials.gov identifier NCT00324155] met its primary endpoint of overall survival.  Minimal details were provided, but an abstract of the ‘024 data is expected to be submitted to ASCO for potential presentation at the Annual Meeting in June 2011.  The ‘024 study is in patients with untreated Stage III [unresectable] or IV melanoma receiving dacarbazine plus 10 mg/kg ipilimumab versus dacarbazine with placebo.  If the median survival for patients in the ipilimumab arm is 5.2 months or greater than the placebo arm [versus 3.7 month difference in the ‘020 study], then the pricing of ipilimumab per month of added survival would be comparable to sipuleucel-T.

Prostate and Melanoma Highly Competitive

Melanoma and prostate cancer are the two most crowded clinical development segments within the active immunotherapy field.  As such, both ipilimumab and sipuleucel-T may face competition from other active immunotherapies in the near future.  In addition, the products may soon encounter small molecule rivals.

For example, Johnson & Johnson’s (JNJ) abiraterone acetate significantly improved overall survival for patients with metastatic advanced prostate cancer.  Based on the positive Phase 3 results, the company has filed marketing applications for abiraterone acetate with regulatory authorities worldwide for the treatment of metastatic advanced prostate cancer that has developed resistance to conventional hormonal therapies. Not far behind, Medivation, Inc. (MDVN) is evaluating its MDV3100 product candidate in collaboration with Astellas Pharma, Inc. (ALPMY.PK).  The Phase 3 AFFIRM trial with MDV3100 has completed enrollment of men with advanced prostate cancer who were previously treated with docetaxel-based chemotherapy and the Phase 3 PREVAIL trial with MDV3100 is currently enrolling men who have not yet received chemotherapy

In addition, Plexxikon, Inc. [being acquired by Daiichi Sankyo Company, Limited] and co-development partner Roche Holding (ROG.VX) are advancing PLX4032, an oral drug candidate that targets the oncogenic BRAF mutation present in about half of melanoma cancers and about eight percent of all solid tumors.  Interim data from a Phase 3 controlled study of PLX4032 in previously untreated metastatic melanoma patients with the BRAF mutation met both co-primary endpoints.  Patients treated with PLX4032 had improved overall survival (OS) and improved progression-free survival (PFS) compared to patients treated with dacarbazine, the current standard of care.  A New Drug Application [NDA] for PLX4032 is expected in 2011.

Some new agents might actually be synergistic with active immunotherapies instead of representing potential competition.  This was a central theme at the recent Cancer Immunotherapy Consortium’s 2011 Scientific Colloquium titled “Schedule and Dose for Combination Therapy.”

Summary

Both ipilimumab and sipuleucel-T represent important clinical advances for the field of active immunotherapy in oncology and for patients with melanoma and prostate cancer, respectively.  Further, with nearly 50 clinical programs currently underway, including nearly a dozen that are in pivotal Phase 3 development, we expect to see five active cancer immunotherapies approved by 2015.  Beyond these clinical accomplishments, however, industry observers will be closely monitoring the commercial success of these innovative agents in view of the product pricing, supply constraints, and competitive dynamics identified to date.