Improvements on Existing Therapies

Levodopa [L-dopa] is one of the most commonly prescribed medicines for PD. L-dopa initially reduces the symptoms of slowness, stiffness and tremor associated with PD; over time the dose of L-dopa needs to be increased often resulting in drug related complications. Several biopharmaceutical companies are developing new drug formulations of currently approved medicines:

Impax Laboratories, Inc.

Shares of Impax Laboratories, Inc. (IPXL), which were trading around $7.50 at the time our initial PD article published, recently reached a new 52-week high of $10.86, representing a 45% increase in a matter of months. The company recently initiated a multinational Phase III trial of its late-stage drug candidate IPX066 in advanced PD patients. IPX066 is an investigational extended release carbidopa-levodopa product intended to rapidly achieve and then sustain effective blood concentrations of levodopa, potentially improving PD clinical symptom management. This is the second of two Phase III studies designed to support marketing approval of IPX066 in Parkinson’s disease. In June 2009, Impax reported the initiation of the first Phase III study of IPX066 in treatment naïve PD patients.

Nupathe Inc. and SurModics, Inc.

Privately-held Nupthe Inc., a neuroscience-focused specialty pharmaceutical company, recently announced a partnership with SurModics, Inc. (SRDX), a leading provider of drug delivery and surface modifications to the healthcare industry, for development of NP201. NP201 is a biodegradable sustained release formulation of an approved dopamine agonist and the first long-acting treatment available in broadly acceptable dose form that maintains the potential to provide sustained relief from Parkinson’s disease without motor response complications. NP201 leverages NuPathe’s long-acting delivery [LAD™] technology and SurModics’ proprietary biodegradable polymer matrix implant technology to achieve optimal drug release over an extended period of time. NP201 consists of a dopamine agonist formulated to provide effective relief of the signs and symptoms of Parkinson’s disease [e.g., tremor, rigidity, postural instability] for 1-3 months with a single administration. By providing stable, continuous drug delivery over an extended period, NP201 may significantly decrease the dose complications associated with current treatments. Furthermore, many researchers believe that continuous, stable stimulation of the dopamine receptors may slow the progression of the disease.

Neurotrophic Factors and Gene Therapy

Neurotrophic factors are a family of proteins responsible for the growth and survival of developing neurons and the maintenance of mature neurons. Neurotrophic factors represent an attractive drug class because of their anti-apoptotic properties*. Several classes of neurotrophic factors exist, each with unique pharmacodynamic properties. Investigators are still in the process of understanding the different receptor targets of these proteins and the downstream cellular responses; therefore, the best individual or combination of neurotrophic factors is not yet known. Despite these challenges, several companies are proceeding with development of this promising class of drugs.

Local administration of neurotrophic growth factors is required to achieve therapeutic concentrations in the target tissue, although the site of administration and method of delivery have represented significant historical barriers. We believe gene therapy is among the more promising delivery alternatives for companies seeking to restore abnormal cellular signaling, especially in diseases with difficult to reach targets such as PD, and several companies have demonstrated considerable progress.

Ceregene, Inc.

Just a few days after our original PD article published in August, privately-held Ceregene, Inc. announced that the Michael J. Fox Foundation for Parkinson’s Research [MJFF] will provide funds for long-term follow-up testing of patients enrolled in the company’s Phase II trial of CERE-120. CERE-120 is an adeno-associated virus [AAV] carrying the gene for neurturin [NRTN], a naturally occurring neurotrophic factor that repairs damaged and dying dopamine-secreting neurons. The funding will enable Ceregene to collect and analyze more extensive data for up to 48 months from patients with advanced PD who were enrolled in the double-blind, controlled trial which ended in November 2008. The Phase II trial involved 52 patients and failed to demonstrate a difference in the primary endpoint in treated versus the control group. However, the study suggested improvements in secondary endpoints at 12 months. Based on those findings, and insight gained from analyses of post-mortem brain tissue from two CERE-120 treated patients, the company has revised the dosing regimen and expects to initiate a new trial of CERE-120 in the near future.

In October 2009, BioSante Pharmaceuticals, Inc. (BPAX) completed its merger with Cell Genesys, Inc. and now owns a sixteen [16] percent equity ownership position in Ceregene, a former subsidiary of Cell Genesys.

Phytopharm plc

Phytopharm plc (LSE: PYM) is developing Cogane™, a novel non-peptide, orally bioavailable neurotrophic factor inducer that readily crosses the blood brain barrier. In preclinical models, Cogane reverses the changes in the area of the brain involved in Parkinson’s disease by inducing the body’s own production of neurotrophic factors including glial cell line-derived neurotrophic factor [GDNF].

Phytopharm recently announced two positive results from studies for Cogane. In the first study, funded by a grant from MJFF, Cogane demonstrated efficacy in a preclinical study using a non-clinical, non-human primate model of PD resulting in a 43% reduction in parkinsonian disability. In the second study, the company reported Phase 1b, 28-day safety data demonstrating that Cogane was well tolerated, with blood levels of Cogane reaching efficacy levels seen in the non-human primate model. The promising results, although still early in clinical development, demonstrate the scientific and financial interest in this biologic pathway and a Phase II, proof-of-concept study for Cogane is planned to commence in the second quarter of 2010.

Shares of Phytopharm soared more than 300% to a new 52-week high of 26.95 pence on the news.

Oxford BioMedica

Oxford BioMedica (LSE: OXB) recently presented data that positions the company at the forefront of gene therapy for PD. Oxford BioMedica recently announced new data from the ongoing Phase I/II trial of ProSavin®, its novel gene therapy for the treatment of PD. All patients treated at the second dose level have completed their six-month assessments and have shown further improvement in motor function. The maximum improvement was 53% and the average was 34% relative to patients’ pre-treatment motor function. The Principal Investigator, Professor Stéphane Palfi of the Henri Mondor Hospital in Paris, is expected to present interim results from the trial at the European Society of Gene & Cell Therapy Annual Congress, being held November 21-25, 2009, in Hannover, Germany.

In addition, Oxford BioMedica recently released preclinical studies demonstrating increased dopamine production without the addition of L-DOPA resulting in decreased disease severity without the dyskinesias associated with L-DOPA [1]. Movement and posture were significantly improved after two weeks [p < 0.05], reaching 77% and 85% of respective normal levels. Overall, these preclinical data suggest that ProSavin may offer significant benefit in the clinical setting, treating the primary symptoms of Parkinson’s disease as well as reducing the severe side-effects of long-term L-DOPA therapy. These conclusions are supported by initial data from human clinical trials.

Oxford BioMedica has clearly taken the lead in the race for novel PD therapies. In addition to the excellent safety profile, ProSavin delivers three genes, AADC [aromatic amino acid decarboxylase], TH [tyrosine hydroxylase] and CH1 [GTP-cyclohydrolase 1], addressing multiple protein targets associated with PD pathophysiology. As Oxford BioMedica continues clinical development, including dosing optimization, this therapy could potentially offer long-term improvements in patients afflicted with PD.

Shares of Oxford BioMedica, which were trading around 10.00 pence at the time our original PD article published, more than doubled and reached a new 52-week high of 21.75 pence on the news, resulting in upgrades from research analysts.

Neurologix, Inc.

Neurologix, Inc. (NRGX) is developing NLX-P101, an AAV vector delivering an inhibitory therapeutic gene [glutamic acid decarboxylase, or “GAD”] which is inserted in the subthalmic nucleus [STN]. In its third quarter of 2009 financial results press release, Neurologix reported that its Data Monitoring Committee held its second meeting to review the progress of the ongoing Phase II study of NLX-P101 and recommended that the trial continue unmodified. Despite having one of the most clinically advanced gene therapy solutions for PD, Neurologix also disclosed that the company must secure additional funding by December 31, 2009, or shortly thereafter, otherwise its ability to continue as a “going concern” may be in doubt. While the company remains on track to complete all surgeries for the Phase II study before year-end, the first efficacy results from this trial won’t be available until around mid-year 2010.

Link Between Gaucher’s Disease and PD Published

Recent clinical data has demonstrated that a mutation in the gene encoding glucocerebrosidase [GBA] in patients with PD is the most common genetic risk factor for Parkinson’s disease identified to date. The lysosomal enzyme GBA is deficient in patients with Gaucher’s disease; lack of a functional copy of GBA results in accumulation of glucocerebroside in many tissues including the liver, lungs, brain, and spleen. In a recent New England Journal of Medicine [NEJM] article, 20% of Ashkenazi Jewish Patients and 7% of Non–Ashkenazi Jewish Patients were found to be carriers of a GBA mutation [2]. Patients with a GBA mutation presented earlier with the disease, were more likely to have affected relatives, and were more likely to have atypical clinical manifestations.

Amicus Therapeutics, Inc.

Amicus Therapeutics, Inc. (FOLD) recently presented data demonstrating a correlation between GBA and alpha-synuclein, an upregulated PD protein that can form aggregated insoluble amyloid fibrils and neuronal toxicity. Alpha-synuclein up-regulation and aggregation has previously been shown to be critical in the development of PD. Amicus’ in vivo data shows that increasing GBA activity re-established alpha-synuclein homeostasis. In a mouse model overexpressing alpha-synuclein, Amicus was able to restore normal synuclein levels by increasing the GBA activity with Plicera™ [afegostat tartrate], the company’s experimental, oral therapy for the treatment of Gaucher disease that belongs to a class of molecules known as pharmacological chaperones.

This is important for two reasons: 1) by restoring GBA activity to normal levels, this could potentially decrease the risk of PD for patients with a GBA genetic mutation and 2) in patients that are not carriers [i.e. normal GBA but elevated synucleins], the preclinical data has shown that increasing GBA activity above normal levels restores alpha-synuclein levels, possibly slowing disease progression. Amicus, which has also received funding support from MJFF, plans to continue its preclinical chaperone molecule optimization, including Plicera, in an in vivo PD motor deficit model.

Success in this area could reignite investor interest in Amicus, which recently announced negative results from a Phase II trial with Plicera in Gaucher’s disease. The genetic link between GBA and PD is clear and although the direct molecular relationship between these two proteins in not completely understood, GBA is a new and attractive therapeutic target for PD. Importantly, in the Phase II trial for Gaucher’s disease, Amicus demonstrated an increase in GBA activity in those patients receiving Plicera and the company recently reacquired global development and commercialization rights to the product candidate from Shire plc (SHPGY).

Amicus has a clear lead in developing small molecules that increase GBA activity and despite the Gaucher’s disease trial setback, complete GBA restoration may not be needed to restore normal synuclein levels. Amicus will continue with lead optimization for GBA in the brain, including Plicera, for the treatment of PD along with other GBA chaperone molecules. Clearly, Plicera is an attractive lead compound because much of the preclinical and phase I safety studies have been completed and it has been shown to cross the blood brain barrier.

Conclusion

While treatment of PD is complex due to the disease location, difficulty in clinical trials, and multiple causes of pathophysiology, investor enthusiasm for companies working in this area is warranted in view of recent progress.

Several companies, such as Impax Laboratories and Nupathe, are developing new drug formulations of currently approved medicines. If approved, these drugs could improve the side effect profiles of the FDA approved medicines. From an investor’s perspective, these companies are attractive since the FDA approval process will be much more straightforward and physician acceptance will be high because these drugs are an improvement on a known drug class.

Other companies, although generally earlier in development, are using neurotrophic factors and gene therapy approaches to directly address the disease mechanism. While much riskier, these new technologies could drastically change the disease outcomes of those patients afflicted with this debilitating disease. Speed to market combined with superior efficacy will be critical for high market penetration.

* Neurotrophic factors were discovered in 1948 in the brain. Originally thought to be exclusive to the brain, these peptides are now found to have broader applications in other cell types and locations. Due to their pharmacodynamic properties such as reducing ER stress, neurotrophic factors possess anti-apoptotic properties and could serve as therapies for many diseases such as myocardial infarctions/ischemia and stroke.

References:

1. Sci Transl Med. 14 October 2009 1:2ps2
2. N Engl J Med. 22 October 2009;361(17):1651-61

While the precise cause of PD is not fully understood, it is associated with the loss or impairment of the dopaminergic neurons [nerve cells] in the middle region of the brain called the substantia nigra [SN] that leads to an alteration in the activity of the brain networks that control movement.  These neurons produce a chemical called dopamine, which allows smooth, coordinated function of the body’s muscles and movement.  When approximately 80% of a patient’s dopamine-producing cells are damaged, the symptoms of PD appear.  These include impaired motor skills and speech, muscle rigidity, tremor, slowing of physical movement [bradykinesia], loss of balance, and a loss of physical movement [akinesia] in extreme cases.

There are a number of effective medicines that help to ease the symptoms of PD rather than slowing disease progression or curing the disease.  While global sales of PD therapeutics exceed $3 billion, most of these approved medications do not work over long periods of time due to the progressive nature of the disease.  For this reason, biotechnology companies continue to develop new therapies to potentially slow the progression of the disease and death of nerve cells.

One of the most commonly prescribed medications is levodopa [L-dopa].  L-dopa is converted into dopamine by enzymes in the brain.  The drug reduces the symptoms of slowness, stiffness and tremor and most patients initially benefit from the treatment.  Over time, the dose of L-dopa may need to be increased in patients with advanced PD, which can lead to drug-related complications such as involuntary, repetitive movements [dyskinesia] and motor fluctuations.

Impax Pharmaceuticals, Inc. (IPXL) commenced a Phase 3 trial of IPXO66 for the treatment of PD patients with mild symptoms in April 2009.  IPX066 is an extended release carbidopa-levodopa product which is intended to produce a fast and sustained concentration of L-dopa.  In June 2009, Impax announced positive interim results based on data from the first 13 patients of a Phase 2 active–controlled, multi-center crossover study in advanced PD patients.  The interim results demonstrated that IPX066 provided more than two additional hours of reduction in motor off time during waking hours as well as increased duration of finger tapping speeds and prolonged improvements in walking speeds in comparison with generic Sinemet [cardiodopa-levodopa].  IPX066 extended release formulation is designed to enhance patient compliance as a result of less frequent dosing.  By early 2010, Impax anticipates initiating a second Phase 3 trial of IPX066 in patients with advanced PD.

Another class of drugs called dopamine agonists may be used instead of L-dopa or in combination with it.  Other medications that do not stimulate dopamine receptors and improve movement in PD include amantidine, anticholinergic medications and selegiline, an inhibitor of the enzyme monoamine oxidase B [MAO-B].

As PD progresses and medications no longer improve the patient’s mobility or cause significant side effects, surgical treatment may be considered.  In advanced PD, deep brain stimulation [DBS] surgery is an alternative that may be utilized.  DBS surgery involves placing a thin metal electrode into a brain target site and attaching it to a computerized pulse generator, which is implanted under the skin in the chest.  This surgery improves the patient’s movement in the “off-medication” state to be more like movement in the “on-medication” state.  The most serious potential risk of DBS is bleeding in the brain that can lead to stroke, with infection representing another serious potential risk of DBS. 

Efforts by biotechnology companies to find a cure or treatment that slows the progression of PD have been challenging and complicated due to a variety of issues, including:

• Late diagnosis of PD after substantial nerve cell death has occurred
• Long history of dramatic placebo effects in PD
• Difficulties with drug delivery
• Challenges in assessing clinical outcomes resulting in expensive clinical trials 

Neurotrophic factors, such as neurturin [NRTN], glial cell line-derived neurotrophic factor [GDNF], and brain-derived neurotrophic factor [BDNF], were incorporated into the first biotechnology therapies for PD and other neurodegenerative diseases.  While none of these products have been commercialized to date and several clinical studies have disappointed, there is reason for optimism going forward. 

To date, the major difficulties encountered in the use of neurotrophic factors for the treatment of PD may relate to drug delivery issues.  For example, neurotrophic factors do not cross the blood-brain barrier and cannot be taken orally.  In addition, there are side-effects associated with systemic administration resulting from binding to extra-target receptors.  Local administration of neurotrophic growth factors is therefore required to achieve therapeutic concentrations in the tissue, although the site of administration and method of delivery have represented significant barriers to date.

For example, Amgen, Inc. (AMGN) discontinued its randomized, double blind placebo controlled Phase 2 study of recombinant GDNF for the treatment of advanced PD in 2004.  By way of background, Amgen acquired GDNF and several other product candidates through the 1994 acquisition of Synergen, Inc. for approximately $240 million  [although Synergen had about $125 million in cash at the time – resulting in an enterprise value closer to $115 million].  The clinical trial of GDNF did not meet its primary endpoint of symptom improvement after six months of treatment as defined by the Unified Parkinson’s Disease Rating Scale [UPDRS].  The company also later identified potential safety issues, as high doses of the drug damaged some monkey brains and a few patients developed antibodies against the drug.

The failure of Amgen’s Phase 2 GDNF trial may have been related to the site and method of delivery, which included monthly injections of GDNF into the lateral ventricle.  In other words, sufficient concentrations of GDNF may not have diffused through the ventricular wall and brain parenchyma to the putamen.  This is supported by the success of chronically infusing a low dose of GDNF into the dorsal putamen using an implantable pump [SynchroMed™ by Medtronic, Inc. (MDT)].  Although primarily a safety study in only five patients, chronic GDNF infusion resulted in improved motor function in all patients, reduction in off-time duration and severity, reduction in dyskinesia duration and severity, and a corresponding increase in on-time duration.  After 12-months, there was a 39% improvement in the off-medication motor sub-score of the UPDRS and 61% improvement in the activities of daily living sub-score.

In addition to implantable pump delivery technology, gene therapy is considered one of the most promising approaches to developing a novel effective treatment for PD.  In this regard, Amsterdam Molecular Therapeutics (Euronext: AMT) obtained a license from Amgen to use their GDNF gene for the development of a treatment for PD in September 2008.  Amsterdam Molecular Therapeutics intends to combine the GDNF gene with their proprietary adeno-associated virus [AAV] gene therapy platform, which the company believes may provide a solution for delivering GDNF to the brain to protect and enhance the function of nerve cells that produce dopamine.

While gene therapy offers hope, a Phase 2 trial of CERE-120 in advanced PD patients conducted by privately-held Ceregene, Inc. still underscores the importance of drug delivery to the appropriate portion of the brain.  CERE-120 is an AAV vector carrying the gene for NRTN, a naturally occurring protein which repairs damaged and dying dopamine-secreting neurons.  In November 2008, the company announced that the Phase 2 clinical trial did not meet the primary endpoint of improvement in the UPDRS motor off score at 12-months of follow-up, although several secondary endpoints suggested a modest clinical benefit.  In May 2009, Ceregene announced that at the 18-month additional protocol described analyses of the Phase 2 clinical trial; CERE-120 demonstrated a clinically modest improvement and statistically significant treatment effect in the primary efficacy endpoint.

Ceregene, which expects to conduct a follow-on Phase 2 trial later this year, suggests that the deficient axonal transport of the degenerating nigrostriatal neurons in advanced PD impaired transport of CERE-120 from the putaminal terminals in the putamen region of the brain where the therapy was delivered to the nigral cell bodies.  The company believes that it can overcome the transport problems associated with degenerating neurons by modifying the dosing paradigm of CERE-120 to also directly target the cell bodies in the SN.  Genzyme Corporation (GENZ) has licensed ex-North American rights for the development and commercialization of CERE-120 from Ceregene.

Several additional gene therapy programs are currently in clinical development for the treatment of PD:

Neurologix, Inc. (NRGX) is developing NLX-P101, an AAV vector delivering an inhibitory therapeutic gene [glutamic acid decarboxylase, or “GAD”] which is inserted in the subthalmic nucleus [STN].  Among the most clinically advanced gene therapy solutions for PD, NLX-P101 is currently in Phase 2 trials.  GAD catalyses synthesis of gamma-aminobutyric acid [GABA], the major inhibitory transmitter in the brain.  Neurologix’s non-dopaminergic approach aims to restore function to GAD to increase the production of GABA to turn off hyperactivity in the STN.  NLX-P101 may avoid some of the off-target side effects typical of dopamine stimulating agents.  The open label Phase 1 clinical trial in 12 patients with advanced PD demonstrated statistically significant improvements in both clinical symptoms and improved brain network activity and NLX-P101 was safe and well tolerated.  Researchers reported the clinical outcomes were encouraging, with the treated patients showing significant improvements in both the “on” and “off” states of their illness.  Neurologix anticipates completing patient enrollment in the Phase 2 clinical trial by the end of 2009.

In July 2009, Oxford BioMedica (LSE: OXB) announced an update on its Phase I/II clinical trial of ProSavin in patients with mid-stage PD.  ProSavin is a novel gene therapy which uses the company’s LentiVector® system that delivers three enzymes required for the synthesis of dopamine.  The product is administered locally to the striatum and requires several hours of surgery.  Interim trial results demonstrated that three patients in the first cohort [lowest dose level] have maintained their improvement in motor function after one year, with an average improvement of 29%.  The investigator assessments of the three patients in the second cohort [2X dose level] demonstrated the patients have achieved a similar benefit at three-months.  One patient in the second cohort to reach the six-month assessment has shown further improvement.  The motor function is assessed according to the UPDRS in the “off state”.   ProSavin has been safe and well tolerated in all patients treated to date.  Based on PDQ-39 score, a standard measure of clinical benefit that is recorded by the patient answering a questionnaire, Oxford BioMedica plans to proceed to the third patient cohort [5X dose level] utilizing its new delivery technology for the administration of ProSavin.  The new, less invasive technique reduces the surgical time and facilitates delivery of higher doses.  Oxford BioMedica intends to complete the ongoing study in the second half of 2010.

Separate from its deal with Ceregene, Genzyme Corporation is conducting a Phase 1 open label safety study of an AAV encoding human Aromatic L-Amino Acid Decarboxylase [AADC] in patients with PD.  Genzyme acquired the rights to AAV-hAADC-2 from Avigen, Inc. (AVGN) in December 2005.  The enzyme AADC converts L-dopa into dopamine.  Over time in patients with PD, the brain loses its ability to convert the L- dopa to dopamine and thus the treatment with L-dopa becomes less effective.  The investigational drug, AAV-hAADC-2, is injected into the striatum and is intended to provide, directly to the brain, the missing enzyme AADC.  It is designed such that advanced PD patients will respond to a lower dose of L-dopa without experiencing the debilitating side effects.  Primate studies demonstrated the investigational drug to be effective, long-lasting and safe.  A single administration of AAV-hAADC-2 in the striatum of primates with Parkinsonian symptoms demonstrated stable expression of AADC and significant behavioral responses to low levels of L-dopa without developing dyskinesias or other debilitating side effects.

In addition to drug delivery and gene therapy advances, other promising neurotrophic factors have recently been discovered and are in preclinical development.  For example, a 2003 issue of the Journal of Molecular Neuroscience described the discovery of mesencephalic astrocyte-derived neurotrophic factor [MANF] that selectively protects nigral dopaminergic neurons, versus GABAergic or serotonergic neurons.  MANF, which is being developed by privately-held CNS Protein Therapeutics, Inc., is also more selective in the protection of dopaminergic neurons at lower and middle concentrations, although GDNF is more selective at higher concentrations.  The discovery of MANF and other novel neurotrophic factors may renew investor interest in this class of drugs.

Beyond solving scientific and clinical issues, another challenge facing biotechnology companies developing promising PD therapies is obtaining the funding necessary to continue the preclinical studies and clinical trials.  In the current economic environment, some companies will not have the capital to move these product candidates forward and will discontinue development unless they have access to capital through financing or collaborations. 

For example, Neurogen Corporation (NRGN) announced that it suspended the enrollment of additional patients in its ongoing Phase 2 clinical trials for PD and restless leg syndrome in order to conserve capital in May 2009.  The company has eliminated approximately fifty percent of its staff positions and plans to further decrease staff consistent with its planned reduction in operations and efforts to conserve capital.  Neurogen announced it is pursuing strategic options including a sale of the company or sale of its assets.

While a comprehensive review of PD development is beyond the scope of this article, additional public biotechnology firms in early [eg, preclinical or Phase 1] development for the treatment of PD include Addex Pharmaceuticals Limited (SIX: ADXN), Amicus Therapeutics, Inc. (FOLD), Depomed, Inc. (DEPO), and Prana Biotechnology Limited (PRAN).

Treatment of PD represents a critical unmet medical need that may be addressed by the aforementioned technologies.  Current medications only address the symptoms of this debilitating disease and do not halt the progression of PD.  As demonstrated by the significant increase in Impax Pharmaceuticals’ stock price since the initiation of its Phase 3 trial, recent advances in drug delivery, the promise of gene therapy, and the discovery of novel neurotrophic factors may encourage investment in biotechnology companies developing novel therapies that ease the symptoms of PD, slow disease progression, or offer hope to cure the disease.

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About MD Becker Partners LLC

MD Becker Partners is a boutique management and strategy consulting firm focusing on both public and private companies in emerging growth industries, such as pharmaceuticals, biotechnology, medical devices, and cleantech. The firm’s mission is to bring experience-based insights gleaned from the three independent disciplines of investor relations, strategic advisory and operational improvement together and apply them to carefully conceived and expertly enacted strategies that help companies increase visibility, unlock value and access resources to grow their business. For more information, visit the website: http://www.mdbpartners.com/

Disclaimer: This article contains the author’s own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. To the extent any of the information contained in the article may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

Genetic mutations may alter the instructions for making proteins.  Some mutations are very severe and prevent the production of a specific protein, while other mutations can lead to the production of faulty proteins in cells that do not achieve their correct three-dimensional shape and are generally referred to as “misfolded” proteins.  Many well known diseases, including neurodegenerative diseases such as Parkinson’s, Alzheimers, and Huntington’s, in addition to many cancers, arise when misfolded proteins are unable to perform their intended biological function or when they are not recognized as defective and eliminated by the cell’s own internal processes.

Protein misfolding can also result in rare diseases, such as lysosomal storage disorders [Gaucher disease, Fabry disease, Pompe disease, and Mucopolysaccharidosis Type I  and Type II].  Historically, these disorders have been described as being caused by a missing protein, with each one involving a different lysosomal enzyme.  However, recent evidence reveals that many individuals who have lysosomal storage disorders actually do make lysosomal enzymes – they are just misfolded and unable to perform their intended biological function.

Despite the fact that lysosomal storage disorders are less common [defined as affecting fewer than 200,000 people], companies have found the markets extremely profitable.  In addition, the Orphan Drug Act [ODA] of 1983 provides incentives for sponsors to develop products for rare diseases, such as seven years of marketing exclusivity upon regulatory approval, as well as the opportunity to apply for grant funding from the U.S. government to defray costs of clinical trial expenses, tax credits for clinical research expenses and potential waiver of the FDA’s application user fee.  The ODA has been very successful – more than 200 drugs and biological products for rare diseases have been brought to market since 1983. In contrast, the decade prior to 1983 saw fewer than ten such products come to market.

To date, the primary therapeutic strategy for lysosomal storage disorders has been enzyme replacement therapy [ERT], which involves the administration of exogenous recombinant human enzymes into the patient.  For example, people with Gaucher disease are deficient in the enzyme glucocerebrosidase, which is responsible for breaking down a certain fat molecule called glucocerebroside. This causes a buildup of glucocerebroside in certain cells, called Gaucher cells.  Clinical manifestations of the disease are the simultaneous enlargement of both the liver and the spleen [hepatosplenomegaly], skeletal disorders, and, in some instances, lung, kidney, and central nervous system impairment with the progression sometimes ending in death.  It is estimated that Gaucher disease affects approximately 8,000 to 10,000 people worldwide.

Genzyme Corporation (GENZ) markets Cerezyme® [imiglucerase for injection] to replace the missing enzyme in Type 1 Gaucher disease.  Cerezyme is a a mammalian cell expressed version of glucocerebrosidase that is created using recombinant DNA technology.  It has been used since 1994 in thousands of patients around the world with reported annual sales of $1.24 billion in 2008.  

On June 16, 2009, Genzyme announced the disruption of Cerezyme manufacturing due to a viral bioreactor contamination and that current product inventories would not be sufficient to meet projected global demand.  Genzyme indicated that the period of constraint for Cerezyme should last approximately 6-8 weeks beginning in August, but that the manufacturing plant should be fully operational again by the end of July 2009.  Production of Fabrazyme® (agalsidase beta) at the plant was also interrupted.  While the news resulted in a significant decline in Genzyme’s common stock, several other companies have benefited.

For example, the FDA requested treatment protocols from Shire plc (SHPGY) and Protalix Biotherapeutics, Inc. (PLX) for their competitive ERT products.   If approved by the FDA, the treatment protocols would allow physicians to treat Gaucher patients ahead of commercial availability in the US.  Shire is currently developing velaglucerase alfa, a version of glucocerebrosidase made from a human cell line that has the exact human amino acid sequence and carries a human glycosylation pattern.  Shire reported filing a treatment protocol with the FDA on July 6, 2009 with plans to file a New Drug Application [NDA] as early as possible.  Protalix only indicated that the company “expects to submit” a treatment protocol to the FDA for its prGCD product candidate, a plant-cell expressed recombinant form of glucocerebrosidase that is currently the subject of a pivotal Phase 3 clinical trial being conducted under the FDA’s Special Protocol Assessment [SPA].  However, shares of Protalix have risen more than 40% since Genzyme’s announcement. 

Shares of Amicus Therapeutics, Inc. (FOLD) also gained more than 40% following news of the Genzyme manufacturing disruption.  Amicus Therapeutics is currently conducting a Phase 2 study of Plicera™ [afegostat tartrate] for Gaucher disease as part of a strategic collaboration with partner Shire to develop novel, oral therapeutics known as pharmacological chaperones for the treatment of a range of human genetic diseases.  Amicus Therapeutics’ pharmacological chaperone technology involves the use of small molecules that selectively bind to and stabilize proteins in cells, leading to improved protein folding and trafficking, and increased activity.  Amicus previously reported that enrollment has been completed for the Phase 2 Gaucher study with results to be available in the third quarter of 2009.  Amicus has also commenced the U.S. registration Phase 3 trial for Amigal™ [migalastat hydrochloride] for the treatment of Fabry disease and is studying AT2220 [deoxynojirimycin] in a Phase 2 clinical trial for the treatment of Pompe disease, although this particular study was placed on clinical hold by the FDA in February 2009.

While not working in the area of lysosomal storage disorders, shares of CytRx Corporation (CYTR) have also risen dramatically since Genzyme’s manufacturing disruption announcement.  CytRx is developing novel compounds that amplify the production of endogenous molecular chaperones.  In January of 2008, CytRx announced that a Phase 2b study with the company’s drug candidate arimoclomol for the treatment of amyotrophic lateral sclerosis [ALS, or Lou Gehrig’s disease] was placed on clinical hold by the FDA pending additional data and preclinical toxicology studies.

Amicus and CytRx are taking different approaches to small molecule chaperone technology.  One potential advantage for Amicus is that their pharmacological chaperones directly stabilize the misfolded proteins, while CytRx’s molecule will indirectly stabilize a misfolded protein through upregulation of endogenous molecular chaperones, possibly leading to cellular desensitization with chronic drug intervention.

Lysosomal storage diseases are rare and debilitating diseases, but with the advancement of ERT are becoming more manageable.  However, as the pharmacoeconomic landscape changes, difficult decisions need to be made about the costs for some of these therapies.  In fact, several insurance companies refuse to pay for ERT for adults (click here for reference).

Amicus Therapeutics and others have several small molecule compounds in development that may offer improved patient outcomes at a significant reduction in cost.  Upcoming clinical trial results will be critical for the evaluation of improved efficacy in these patient populations. 

In addition, there is the possibility for combination therapy with ERT and pharmacological chaperones leading to improved patient outcomes. 

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About MD Becker Partners LLC

MD Becker Partners is a boutique management and strategy consulting firm focusing on both public and private companies in emerging growth industries, such as pharmaceuticals, biotechnology, medical devices, and cleantech. The firm’s mission is to bring experience-based insights gleaned from the three independent disciplines of investor relations, strategic advisory and operational improvement together and apply them to carefully conceived and expertly enacted strategies that help companies increase visibility, unlock value and access resources to grow their business. For more information, visit the website: http://www.mdbpartners.com/

Disclaimer: This article contains the author’s own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. To the extent any of the information contained in the article may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.

Trying to explain the decline, most industry pundits pointed to budget plans outlined by the Obama administration during the week, which focused on healthcare reform. In fact, there were many comparisons to the sector’s decline during the Clinton administration’s health care reform initiative.

I’m not buying it.

President Barack Obama made healthcare reform a major campaign topic, so this is certainly not “new” information. In addition, it appears that money for cancer research would actually increase under the proposed budget; including a 15 percent increase in National Cancer Institute (NCI) spending that is in line with his pledge to double research funding over five years.

Instead, I propose a different catalyst for the biotechnology bloodbath last week: the recent spate of high profile clinical setbacks and regulatory delays. Consider the following, several of which occurred during the past week:

• February 12 – La Jolla Pharmaceutical (LJPC) announced that the Independent Data Monitoring Board for its Riquent® Phase 3 study completed the first interim efficacy analysis and determined that continuing the study is futile.
• February 18 – Hemispherx Biopharma (HEB) announced that the originally scheduled Prescription Drug User Fee Act (PDUFA) date on its Ampligen® New Drug Application (NDA) would be extended by three months.
• February 23 – MAP Pharmaceuticals, Inc. (MAPP) announced that its Phase 3 clinical trial of Unit Dose Budesonide (UDB) for the potential treatment of children with asthma did not meet its co-primary endpoints in either of the doses evaluated.
• February 23 – Spectrum Pharmaceuticals, Inc. (SPPI) announced that the PDUFA date on its Zevalin® sBLA would be extended by three months to July 2, 2009.
• February 26 – Synta Pharmaceuticals Corp (SNTA) announced that based on an analysis by an independent Data Monitoring Committee (DMC), it has suspended a Phase 3 clinical study comparing elesclomol in combination with paclitaxel to paclitaxel alone in chemo-naïve patients with stage IV metastatic melanoma. The decision to suspend the trial was based on the results of an analysis by the independent DMC which identified safety concerns.
• February 27 – Amicus Therapeutics (FOLD) announced that it suspended enrollment for the Phase 2 clinical trial of its investigational drug AT2220 for the treatment of Pompe Disease and that it has received verbal notice from the U.S. Food and Drug Administration (FDA) that the trial is on clinical hold.

At the start of the year I provided a positive outlook for the biotechnology industry in 2009, citing the sector’s defensive characteristics, favorable technical aspects, and improving fundamentals, such as the number of new product approvals, products in clinical trials and the brisk pace of industry consolidation and licensing transactions.

Many of these fundamental and technical characteristics remain intact, as does my bullish thesis for biotechnology in 2009. However, there is no discounting the negative impact of continued clinical and regulatory setbacks on the psyche of biotechnology investors, which is definitely a chink in the biotechnology armor.

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Disclaimer: This article contains the author’s own opinions, and none of the information contained therein constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. To the extent any of the information contained in the article may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.