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

Since the atomic bombings against the cities of Hiroshima and Nagasaki in Japan during World War II, radiation exposure to large populations has been largely limited to industrial accidents, including the April 1986 event at the Chernobyl Nuclear Power Plant in the Ukraine.  Ironically, radiation accidents involving medical uses have accounted for more acute radiation deaths than from any other source, including Chernobyl [Reference 1].

The effects of radiation exposure manifest quickly and depend on a variety of factors, including the dose absorbed by different parts of the body, the route and rate at which it is delivered, and the type of radiation [alpha, beta, gamma, or neutrons].  The effects from various levels of radiation exposure can be found in Table 1 [adapted from Reference 2].

Table 1. Effects from Various Levels of Radiation Exposure

Acute Radiation Syndrome and Treatment

Acute radiation syndrome [ARS], also known as radiation toxicity or radiation sickness, is caused by exposure to a high dose of radiation over a short period of time, usually in a manner of minutes [Reference 3].  The cells that are lost the earliest following exposure are rapidly dividing hematopoietic stem cells and progenitor cells of the bone marrow that are highly sensitive to the effects of radiation, whereas the nervous system is generally regarded as the least sensitive.  These differences in cellular sensitivity help categorize ARS into three syndromes, which occur with increasing dose exposure in the following order:

• Hematopoietic or bone marrow syndrome [HP/BM]
• Gastrointestinal syndrome [GI]
• Central nervous system or cardiovascular syndrome [CNS/CV]

Depending on the level and location of radiation exposure, the management of early-onset ARS is mainly supportive, including supportive care with fluids, antibiotics, and growth factors such as Amgen, Inc.’s (AMGN) Neupogen® [filgrastim] and Neulasta® [peg-filgrastim].  While these growth factor products have not been approved by the U.S. Food and Drug Administration [FDA] for treating radiation-induced neutropenia, they have been recommended by the Strategic National Stockpile [SNS] Radiation Working Group [Reference 4].

When patients survive HP/BM and GI syndromes, respiratory failure may become a major cause of morbidity.  Radiation can impair lung cells either directly via generation of reactive oxygen species [ROS] or indirectly via the action on parenchymal and inflammatory cells through biological mediators [Reference 5].

Protective Measures

There are no approved products to treat or prevent ARS.

Potassium iodide [KI] was approved by the FDA in 1982 to reduce the risk of thyroid cancer in radiation emergencies involving the release of radioactive iodine. For example, the Chernobyl reactor accident resulted in massive releases of I-131 [radioactive iodine] and other radioiodines. Beginning approximately 4 years after the accident, a sharp increase in the incidence of thyroid cancer among children and adolescents in areas covered by the radioactive plume was observed.

By saturating the body with a source of stable iodide prior to exposure, inhaled or ingested I-131 tends to be excreted.  Accordingly, following the Chernobyl incident approximately 10.5 million children under age 16 and 7 million adults in Poland received at least one dose of KI as a prophylactic measure against accumulation of I-131 in the thyroid gland.

However, it is important to note that KI cannot protect against any other causes of radiation poisoning, nor can it provide any degree of protection against dirty bombs that produce radionuclides other than isotopes of iodine.

Ethyol® [amifostine], a prescription drug by MedImmune, a member of AstraZeneca plc (AZN), is administered as a 15-minute i.v. infusion prior to each postoperative radiation treatment session for head and neck cancer when the radiation area includes a large part of the parotid glands.  Ethyol is used to lower the rate of moderate to severe xerostomia [dry mouth] and is not approved for use in combination with other radiation therapy.

Investigational Approaches to Treat ARS

In view of the fact that many potential chemical, biological, radiological, and nuclear [CBRN] terrorism agents lack available countermeasures, the Project BioShield Act was passed into law in July 2004.  Subsequently, Congress has passed additional measures to further encourage countermeasure development.  For example, the 109th Congress passed the Pandemic and All-Hazard Preparedness Act, which created the Biomedical Advanced Research and Development Authority [BARDA] in the Department of Health and Human Services [HHS].  This office oversees all of HHS’ Project BioShield activities, among other duties.

Project BioShield Act has three main provisions: (1) relaxing procedures for some CBRN terrorism-related spending, including hiring and awarding research grants; (2) guaranteeing a federal government market for new CBRN medical countermeasures; and (3) permitting emergency use of unapproved countermeasures [reference 6].  The HHS has used each of these authorities, including the approval of BARDA contract awards for the development of new treatments for radiation exposure and using its authority to guarantee a government market to obligate approximately $2.3 billion to acquire countermeasures against anthrax, botulism, radiation, and smallpox.

Several companies developing product candidates for the treatment and/or prevention of ARS have received government awards under the Project BioShield Act, including those referenced in Table 2.

Table 2. Select Companies with Government Contracts for ARS

Summary

What is now happening with troubled nuclear power plants in Japan could happen in the U.S., as there are nuclear power plants situated near significant seismic areas in the Midwest [reference 7].  This risk is much greater than other places, like California, because seismic energy is conveyed over 10-times more efficiently due to less fractured basement rocks.  Combined with the threat of nuclear terrorism, there is a worldwide concern about exposure to radiation.  Given the lack of prophylactic treatment options and the fact that management of ARS is mainly supportive, a large unmet need exists in this area.

References:

1. The importance and unique aspects of radiation protection in medicine. Holmberg O, Czarwinski R, Mettler F. Eur J Radiol. 2010 Oct;76(1):6-10. Epub 2010 Jul 17.
2. Medical response to a major radiologic emergency: a primer for medical and public health practitioners. Wolbarst AB, Wiley AL Jr, Nemhauser JB, Christensen DM, Hendee WR. Radiology. 2010 Mar;254(3):660-77. Review.
3. Acute radiation syndrome: assessment and management. Donnelly EH, Nemhauser JB, Smith JM, Kazzi ZN, Farfán EB, Chang AS, Naeem SF. South Med J. 2010 Jun;103(6):541-6. Review.
4. Medical management of the acute radiation syndrome: recommendations of the Strategic National Stockpile Radiation Working Group. Waselenko JK, MacVittie TJ, Blakely WF, Pesik N, Wiley AL, Dickerson WE, Tsu H, Confer DL, Coleman CN, Seed T, Lowry P, Armitage JO, Dainiak N; Strategic National Stockpile Radiation Working Group. Ann Intern Med. 2004 Jun 15;140(12):1037-51.
5. Radiation effects on the respiratory system. Hill RP. BJR Suppl. 2005;27:75-81.
6. CRS Report for Congress, Prepared for Members and Committees of Congress, dated July 6, 2009, “Project BioShield: Purposes and Authorities” by Frank Gottron, Specialist in Science and Technology Policy. http://www.fas.org/sgp/crs/terror/RS21507.pdf
7. Overview of likely consequences of a magnitude 6.5+ earthquake in the central United States. J. David Rogers, Missouri University of Science & Technology. http://web.mst.edu/~rogersda/nmsz/Rogers-Consequences%20M6.5+%20Quake%20in%20CEUS.pdf

While the FDA usually follows advice stemming from its AdCom meetings, it isn’t required to do so.  In fact, there have been several high-profile situations where the FDA has gone against such recommendations.

For example, many investors recall the volatility of Dendreon Corporation’s (DNDN) stock around the time of an AdCom meeting for the company’s Provenge® [sipuleucel-T] product candidate back in March 2007.  Share of Dendreon, which were trading below $5 per share before the AdCom meeting, reached $25 following a positive 13-4 vote in favor of the product’s efficacy.  Several months later, however, shares of Dendreon once again traded at $5 after the company received a CRL from the FDA.

More recently, InterMune, Inc. (ITMN) suffered a similar fate with its EsBriet™ [pirfenidone] product candidate for the treatment of mild to moderate idiopathic pulmonary fibrosis [IPF], a progressive and fatal lung disease.  Despite a 9-3 AdCom vote in favor of approving the drug, InterMune received a CRL from the FDA in May 2010, causing the value of its stock to decline from nearly $50 per share to less than $10.  Ironically, shares of InterMune rebounded significantly in December 2010 following a positive recommendation from the scientific body of the European Medicines Agency [EMA], which is responsible for reviewing all Marketing Authorization Applications [MMAs].

With this in mind, we tabulated the results from select FDA AdCom meetings conducted during 2010-2011 and compared the outcomes with the FDA’s ultimate decision to gauge how often the agency goes against its AdCom recommendations.  For the period, we found outcomes from 27 AdCom meetings for new drug applications [NDAs].  Of the 27 AdCom meetings, the FDA has not yet ruled on seven NDAs.  See Table 1 for details.

No Means No

Of the 20 AdCom meetings with corresponding decisions from the FDA, the agency agreed with all 9 of the negative AdCom recommendations and sent each of the sponsors a CRL.  In other words, a “no” vote from an AdCom meeting was unlikely to be overturned by the FDA during the period.  This doesn’t bode well for Eli Lilly & Co.’s (LLY) liprotamase product candidate for pancreatic insufficiency, which received a negative AdCom recommendation in January 2011 and is awaiting final FDA action.

In one situation where the AdCom vote was negative, the sponsor took action before the FDA rendered its final decision.  On December 17, 2010, King Pharmaceuticals, Inc. (KG) and Acura Pharmaceuticals, Inc. (ACUR) submitted an NDA for Acurox® (oxycodone HCl) without niacin following a 19-1 AdCom vote in April 2010 against approval of Acurox® with niacin.

Yes Means Maybe

During the period, the FDA went against the positive recommendation of its AdCom members 5 out of 10 times [50%] and issued a CRL to the sponsor.  This includes one unanimous vote [13-0] in favor of the efficacy for ezogabine, which is being developed by GlaxoSmithKline plc (GSK) and Valeant Pharmaceuticals International, Inc. (VRX) for the adjunctive treatment of adults with partial-onset seizures.  GlaxoSmithKline and Valeant indicated that the FDA cited non-clinical reasons for the CRL, but investors aren’t privy to the content of such documents.

The FDA is transparent with regard to drug approvals and withdrawals, but the contents of CRL’s are considered confidential because they represent part of an ongoing dialog between the agency and drug sponsor.  While many companies disclose whether or not a CRL contains a request for new clinical studies, translating into an investment of more capital and time, ambiguous phrases describing the contents of a CRL often leave investors in the dark with regard to handicapping the sponsor’s ability to address the issues in a timely and efficient manner – if at all.  Such secrecy has come under fire by members of the media, as evidenced by an October 2010 Forbes article titled “Why FDA Communications Must Be Public.”

For now, investors are warned that in the face of a positive AdCom recommendation, there is only a 50/50 chance that the FDA will promptly approve a product based on recent data.

Going Forward

The FDA has yet to rule on 7 product candidates with recent AdCom meetings, as indicated by “TBD” under FDA Action in Table 1.  While many of these AdCom meetings have positive outcomes, industry observers can flip a coin to determine whether or not the FDA will ultimately follow the AdCom’s advice in these situations based on recent data.  Even unanimous, favorable recommendations from AdCom members do not necessarily guarantee success with the FDA, although both Bayer AG (BAYRY.PK) and Oceana Therapeutics, Inc. (private) received such support for approval of their respective product candidates.

Investor’s expectations are very high for Human Genome Sciences, Inc. (HGSI), which was among the largest percentage gainers in the NASDAQ Composite with a staggering quadruple-digit return of +1,342% in 2009 following positive Phase 3 study results with its Benlysta® [belimumab] product candidate for the treatment of systemic lupus erythematosus [SLE].  The FDA is expected to render its decision by the Prescription Drug User Fee Act [PDUFA] date of March 10, 2011, and the company’s stock remains relatively unchanged around $25 per share following a positive 13-2 AdCom vote in November 2010.

Of the pending group, MELA Sciences, Inc. (MELA) appears to have the lowest probability of success with the FDA in view of the very narrow 8-7 AdCom vote in favor of the product candidate’s safety, efficacy and risk/benefit ratio, which led to new 52-week lows for the company’s stock.  The company is developing MelaFind®, a non-invasive and objective multi-spectral computer vision system designed to aid physicians in the detection of early melanoma, or skin cancer.

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Table 1: AdCom Meetings and FDA Outcomes During 2010-2011

The tale seems fitting to illustrate the evolution of drugs that target the phosphatidylinositol 3-kinase [PI3K] pathway [see Table 2 for a listing of compounds in clinical development].  Despite ample evidence that pan-PI3K inhibitors and dual PI3K/mTOR inhibitors might offer a therapeutic advantage, tailors continue to weave new compounds targeting individual components of the pathway with presumably superior properties.  But does the “mTOR” really have new clothes?

Pathway Layout

The PI3K pathway regulates cell growth, survival, proliferation, migration, and the process of angiogenesis and is frequently deregulated in cancer, which makes it one of the most attractive targets for anticancer therapy.  Big pharma’s interest in the target is evidenced in part by Sanofi-aventis’ (SNY) licensing of two early-stage PI3K inhibitor programs [XL147 and XL765] from Exelixis, Inc. (EXEL) in May 2009 that could result in development, regulatory and commercial milestone payments to the company that total over $1 billion in the aggregate [including $140 million in cash upfront], as well as royalties on sales of any products commercialized under the license.

In general, the pathway comprises the following three components starting near the cell membrane and continuing towards the nuclear machinery at the heart of cellular processes:

1.     PI3K

-       Held in check by the phosphatase PTEN, PI3K can be activated by upstream tyrosine kinase receptors

-       Four class I isoforms of PI3K [α, β, γ, δ, or alpha, beta, gamma, delta]

2.     Akt

-       Gets recruited to the proper location in the cell needed for activity [cell membrane] and is changed into the required active conformational state by phosphorylation of T308 by the action of PI3K

3.     mTOR

-       Promotes increased protein synthesis in part driven by activated Akt

-       Forms complexes called mTORC1 and mTORC2, of which mTORC2 directly increases Akt by phosphorylation on S473

Dysfunction of PI3K, Akt, and/or mTOR is associated with cancer and while cellular signaling becomes more complex on almost a daily basis, much has been discovered about the best way to effectively block the pathway in cancer cells.  Accordingly, the purpose of this article is to highlight some of the latest advances in our understanding of the PI3K pathway along with the leading companies working in this market segment.

Good, Better, and Best

Pfizer, Inc.’s (PFE) Torisel® [temsirolimus] and Novartis AG’s (NVS) Afinitor® [everolimus], both for the treatment of renal cell carcinoma, were among the first PI3K pathway inhibitors [via inhibition of mTORC1] to reach the market – Torisel in May 2007 and Afinitor in March 2009.  While inhibition of mTORC1 through rapamycin or the rapalogs [“Good”] demonstrated sufficient clinical activity for U.S. Food and Drug Administration [FDA] approval, there is clear evidence that blocking only mTORC1 activity paradoxically leads to activation of the PI3K pathway through redundant or alternative signaling mechanisms.  For example, mTORC2 can activate Akt by phosphorylation on the S473 position.  This led to the design of mTOR complex catalytic site inhibitors [“Better”] that block the activity of both mTORC1 and mTORC2.  While effective in shutting down mTOR activity, this approach still provides for partial activation of Akt on T308 by PI3K.  Therefore, simultaneous inhibition of both PI3K and mTOR kinase activity with a dual PI3K/mTOR inhibitor [“Best”] would be expected to more effectively shut down PI3K-Akt-mTOR signaling and such an agent could remain effective in situations where the activity of mTOR inhibition has been circumvented.

Isoform Selectivity: Is Less Really More?

In addition to the benefits of dual PI3K/mTOR inhibition as described in the prior section, there is also compelling biological rationale for inhibiting all four of the class one PI3K isoforms [α, β, γ, δ, or alpha, beta, gamma, delta] rather than inhibiting only a subset.  The most compelling support for pan-PI3K inhibition is the recent disclosure that the activity of any class 1A PI3K isoform [alpha, beta, or delta] can sustain cell proliferation and survival [ref 1].  Additionally, both in vitro and in vivo studies indicated that for PTEN-negative tumors inhibition of the beta isoform is needed [ref 2].  Moreover, evolving analyses of cancer tissues provides additional rationale for inhibiting the various isoforms as for example the recent finding that the gamma isoform has tumor-specific overexpression in pancreatic cancer [ref 3].

The role of PI3K in a wide range of normal biologic processes raised potential toxicity concerns about pan-PI3K inhibitors and dual PI3K/mTOR inhibitors, which led to the development of isoform-selective inhibitors.  However, clinical data presented at the 2010 American Society of Clinical Oncology [ASCO] annual meeting demonstrated relatively consistent toxicity profiles among pan-PI3K, dual PI3K/mTOR, and isoform-selective PI3K inhibitors, with no discernable safety advantage among the class [see Table 1 below].  The most common side effects reported with these inhibitors included diarrhea, nausea, vomiting, and fatigue [ref 8].  Liver damage, as evidenced by elevated aspartate aminotransferase [AST] and alanine aminotransferase [ALT] levels, were reported only with orally administered pan-PI3K, dual PI3K/mTOR, and PI3K delta isoform-specific inhibitors and were dose limiting in some cases.  Interestingly, insulin resistance [hyperinsulinaemia or hyperglycaemia] was originally predicted to be one of the most likely toxicities resulting from on-target effects of PI3K inhibitors, but has not been widely observed in clinical trials to date.

Table 1. Adverse Event Profiles as Reported at 2010 ASCO Annual Meeting

+ = Adverse event listed among the top five most frequent Grade 1 or 2 in the trial

++ = Dose limiting toxicities

* = For GDC-0941, results are from GDC4254g study; for PX-866, AST/ALT toxicity is only in the continuous daily dosing arm

n/r = Grade 1 and 2 data has not been reported

Helping explain the lack of variation between pan-PI3K, dual PI3K/mTOR, and isoform-selective PI3K inhibitor toxicity profiles is the translation of data from in vitro potency to in vivo settings.  For example, while Calistoga Pharmaceuticals’ (private) CAL-101 product candidate demonstrates relative selectivity for the PI3K delta isoform using traditional two-dimensional [2D] monolayers of cancer cells, the significant blood levels seen clinically suggest that all isoforms may be inhibited at least part of the time.  In addition, in a PTEN-null PC3 xenograft model Roche Holding AG’s (RHHBY.PK) PI3K inhibitor GDC-0941 at 75mg/kg daily [ref 4] showed similar inhibition of about 80% of tumor growth as Semafore Pharmaceuticals’ (private) dual PI3K/mTOR inhibitor SF1126 at 20mg/kg three times per week [ref 5] even though SF1126 is reported to be at least 10-times less potent on all PI3K isoforms.  Two recent publications help further support the dramatic differences between 2D and 3D cell cultures and perhaps shed some light on how potency translates, or fails to translate, into in vivo models [refs 6,7].

Future Directions

Prodrugs

One of the most widely studied PI3K inhibitors, LY294002 possesses a unique mechanism of drug action through dual inhibition of all Class 1 PI3K isoforms and mTOR, inhibition of additional cancer kinases such as PIM1, DNA-PK, and PLK1, and the molecule’s ability to induce apoptosis and oxidative stress through other mechanisms.  However, the strong hydrophobicity of LY294002 drastically limits its use in natural form.  In addition, there is the aforementioned concern for toxicity through the non-specific, indiscriminate inhibition of the PI3K pathway in normal cells.  Therefore, Semafore Pharmaceuticals sought to improve the use of LY294002 by enhancing its solubility, selectivity and in vivo delivery by preparing a functional prodrug that selectively accumulates in tumor areas to maximize efficacy and minimize toxicity.  The resulting new chemical entity, SF1126, has been tested in more than 50 patients in Phase 1 trials.

Disease Settings and Biomarkers

In general, the standard paradigm for early drug development is to test compounds in a broad range of cancers to identify those in which the compounds work, which then forms the basis for future clinical development and regulatory strategy.  Such has been the case with development of PI3K inhibitors.

Across the nine mixed solid tumor Phase 1 studies reported at ASCO 2010, 114 out of 469 patients [24%] showed stable disease, prolonged in some cases, as the best response [ref 8].  Only 5 partial responses out of 469 patients [1%] of unknown duration were reported from the group in total.  Of these 3 were in breast cancer patients, one was in non-small cell lung carcinoma [NSCLC], and one was in a patient with lung cancer/Cowden disease.   On this basis, there is no clear direction for development of PI3K inhibitors in the solid tumor setting.

In contrast, significant responses in hematological cancers have been reported with PI3K inhibitors.  For example, Calistoga Pharmaceuticals’ delta selective PI3K inhibitor CAL-101 demonstrated overall response rates of 57%, 67%, and 30% in indolent non-Hodgkin’s lymphoma [NHL], mantle cell lymphoma [MCL], and chronic lymphocytic leukemia [CLL], respectively.  However, in acute myeloid leukemia [AML], multiple myeloma [MM] and diffuse large B-cell lymphoma [DLBCL] there were no responses and no stable disease.  Accordingly, several pan-PI3K inhibitors and dual PI3K-mTOR inhibitors are advancing clinical development in the responsive B-cell malignancies both alone and in combination with potentially synergistic agents.  Updated clinical data from various PI3K inhibitor programs is expected at the upcoming American Society of Hematology [ASH] annual meeting held December 4-7, 2010, in Orlando, FL.

Instead of testing compounds in mixed patient populations, another strategy is to use the most compelling preclinical data to guide genotype-directed trials.   For example, preclinical work suggests that cancers with PIK3CA mutations might be most sensitive [ref 9] and cancers with KRAS mutations might be difficult to treat with single agent PI3K inhibitors [refs 10,11].

Dual Pathway Inhibition – Better than Best?

Beyond the aforementioned PI3K pathway redundancies highlighting the potential benefits of dual PI3K/mTOR inhibition, recent data demonstrate crosstalk between the mitogen-activated protein kinase [MAPK] pathway and PI3K pathway.  This can serve as a back-up pathway to survival, particularly in the case of mutations in the MAPK pathway such as KRAS mutations [ref 10].

This discovery has led to the unusual step of evaluating clinical combinations of unapproved PI3K and MAPK inhibitors.  For example, Novartis’ PI3K inhibitor BKM120 is being combined with GlaxoSmithKline plc’s (GSK) MEK inhibitor GSK1120212 in a Phase 1 study focused on tumors with RAS/RAF mutations and triple negative breast cancer [ref 12].  In addition, Merck & Company, Inc.’s (MRK) allosteric Akt inhibitor MK-2206 is being combined with AstraZeneca plc’s (AZN) MEK inhibitor AZD6244 [ref 13] and Roche Holding AG has a trial combining their PI3K inhibitor GDC-0941 and MEK inhibitor GDC-09773 [ref 14].

Developing one investigational drug is challenging enough, but developing two investigational compounds simultaneously can be daunting.   Complexities can arise from trying to match different administration schedules and differing pharmacokinetics [PK], distribution, and metabolism profiles between the combined agents.  A single molecule that simultaneously inhibits both PI3K and MAPK would therefore be preferable and the following three companies are currently pursuing this single-molecule, dual pathway inhibition strategy with their respective preclinical product candidates:

1.     AEterna Zentaris, Inc. (AEZS): preclinical molecule [AEZ132] that inhibits PI3K and Erk

2.     Progenics Pharmaceuticals, Inc. (PGNX): preclinical molecule [PGNX-01/02] that inhibits mTOR/PI3K and MNK [downstream of Erk]

3.     Semafore Pharmaceuticals: preclinical molecule [SF2626] that inhibits PI3K and MEK

Conclusion

Our understanding of the PI3K pathway has advanced significantly since the FDA approved the first mTORC1 inhibitors for the treatment of renal cell carcinoma in 2007/2009.  Promising results have been demonstrated in the area of hematological malignancies with next-generation PI3K inhibitors and new insights into the pathway biology has led to the development of new molecules and combination approaches that will allow us to realize the ultimate potential of this pathway as a therapeutic target for a variety of diseases.

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Table 2: Select PI3K Pathway Inhibitors in Clinical Development

REFERENCES:

1. Lazaros C. Foukasa, Inma M. Berenjenoa, Alexander Grayb, Asim Khwajac, and Bart Vanhaesebroeck  “Activity of any class IA PI3K isoform can sustain cell proliferation and survival”, Proceedings of the National Academy of Sciences, June 22, 2010; vol. 107, No. 25, 111381-11386.
2. Kyle A. Edgar, Jeffrey J. Wallin, Megan Berry, Leslie B. Lee, Wei Wei Prior, Deepak Sampath, Lori S. Friedman, and Marcia Belvin, “Isoform-Specific Phosphoinositide 3-Kinase Inhibitors Exert Distinct Effects in Solid Tumors”, Cancer Research, February 1, 2010; vol.70, No. 3, 1164-1171.
3. Charlotte E. Edling, Federico Selvaggi, Richard Buus, Tania Maffucci, Pierluigi Di Sebastiano, Helmut Friess, Paolo Innocenti, Hemant M. Kocher, and Marco Falasca, “Key Role of Phosphoinositide 3-Kinase Class IB in Pancreatic Cancer”, Clinical Cancer Research, published OnlineFirst on September 28, 2010 as 10.1158/1078-0432.CCR-10-1210.
4. See Figure 5 of Reference 2.
5. Joseph R. Garlich, Pradip De, Nandini Dey, Jing Dong Su, Xiaodong Peng, Antoinette Miller, Ravoori Murali, Yiling Lu, Gordon B. Mills, Vikas Kundra, H-K. Shu, Qiong Peng, and Donald L. Durden, “A Vascular Targeted Pan Phosphoinositide 3-Kinase Inhibitor Prodrug, SF1126, with Antitumor and Antiangiogenic Activity”, Cancer Research, January 1, 2008; vol. 68, No. 1, 206-215.
6. Ville Harma, Johannes Virtanen, Rami Makela, Antti Happonen, John-Patrick Mpindi, Matias Knuuttila, Pekka Kohonen, Jyrki Lotjonen, Olli Kallioniemi, Matthaias Nees, “A Comprehensive Panel of Three-Dimensional Models for Studies of Prostate Cancer Growth, Invasion and Drug Responses”, PLoS ONE May 2010, vol. 5, e10431
7. Maria Laura Polo, Maria Victoria Arnoni, Marina Riggio, Victoria Wargon, Claudia Lanari, Virginia Novaro, “Responsiveness to PI3K and MEK Inhibitors in Breast Cancer.  Use of a 3D Culture System to study Pathways Related to Hormone Independence in Mice”, PLoS ONE May 2010, vol. 5, e10786.
8. Joseph Garlich, Candace Shelton, Wenqing Qi, Xiaobing Liu, Laurence Cooke, Daruka Mahadevan,”Update on the Novel Prodrug Dual nTOR-PI3K Inhibitor SF1126″, Poster presented at: Next-Gen Kinase Inhibitors Oncology and Beyond, June 21-23, Cambridge, MA.  Poster available at: http://www.semaforepharma.com/publications.html.
9. Shingo Dan, Mutsumi Okamura, Mariko Seki, Kanami Yamazaki, Hironobu Sugita, Michiyo Okui, Yumiko Mukai, Hiroyuki Nishimura, Reimi Asaka, Kimie Nomura, Yuichi Ishikawa, and Takao Yamon, “Correlating Phosphatidylinositol 3-Kinase Inhibitor Efficacy with Signaling Pathway Status: In silico and Biological Evlauations”, Cancer Research, June 15, 2010; vol. 70, No. 12, 4982-4993.
10. Martin L. Sosa, Stefanie Fischera, Roland Ullrich, Martin Peifer, Johannes M. Heuckmann, Mirjam Koker, Stefanie Heynck, Isabel Stuckrath, Jonathan Weiss, Florian Fischer, Kathrin Michel, Aviva Goel, Lucia Regales, Katerina A. Politi, Samanthi Perera, Matthaus Getlik, Lukas C. Heukamp, Sascha Ansen, Thomas Zander, Rameen Beroukhim, Hamid Kashkar, Kevan M. Shokat, William R. Sellers, Daniel Rauh, Christine Orr, Klaus P. Hoeflich, Lori Friedman, Kwok-Kin Wong, William Pao, and Roman K. Thomasa, “Identifying genotype-dependent efficacy of single and combined PI3K- and MAPK-pathway inhibition in cancer” Proceedings of the National Academy of Sciences, October 27,2009; Vol.106, No. 43, 18351-18356.
11. Nathan T. Ihle, Robert Lemos, Jr., Peter Wipf, Adly Yacoub, Clint Mitchell, Doris Siwak, Gordon B. Mills, Paul Dent, D. Lynn Kirkpatrick, and Garth Powis, “Mutations in the Phosphatidylinositol-3-Kinase Pathway Predict for Antitumor Activity of the Inhibitor PX-866 whereas Oncogenic Ras is a Dominant Predictor for Resistance, Cancer Research, January 1, 2009; Vol. 69, No. 1, 142-150.
12. Source:  www.clinicaltrials .gov website. Clinical Trials.gov identifier number NCT01155453, started April 2010.
13. Source:  www.clinicaltrials .gov website. Clinical Trials.gov identifier number NCT01021748, started November 2009.
14. Source:  www.clinicaltrials .gov website. Clinical Trials.gov identifier number NCT00996892, started November 2009.

* MD Becker Partners reporting live from the JP Morgan Healthcare Conference

This week, nearly 6,500 registrants gathered in San Francisco, California for the JP Morgan Healthcare Conference to hear 25-minute presentations from 338 life science companies.  For industry executives and investors, the annual event serves as a good barometer for the rest of the year.

We roamed the familiar halls of the Westin St. Francis Hotel to assess the mood among participants and also monitored online media commentaries throughout the event.  In general, there was a flurry of activity, the plane flights and networking receptions were crowded as usual, and several industry observers “Tweeted” a sense of optimism for 2010.  However, we sought to construct a less subjective assessment by analyzing year-over-year statistics from the conference.

Accordingly, we extensively reviewed company press releases issued during the JP Morgan Healthcare Conference in both 2009 and 2010, with a particular focus on identifying the number of merger & acquisitions, licensing & partnering transactions, and financing deals announced each year during the four day event.

Merger and Acquisitions

In contrast to the absence of any significant M&A deals announced during the JP Morgan Healthcare Conference in 2010, several large M&A transactions with an aggregate value of $702 million were disclosed during the first two days of the event in 2009 [January 12-15, 2009].  The largest deal went to Cephalon, Inc. (CEPH), which announced an agreement providing the company with an option to purchase all outstanding capital stock of Ception Therapeutics, Inc., a privately held biopharmaceutical company.  Under the terms of the option agreement, Cephalon paid Ception $100 million upfront for the option.  If Cephalon exercises its option, the company will purchase all of the outstanding capital stock of Ception for $250 million along with additional payments related to clinical and regulatory milestones.  Other transactions announced that year included:

• Medtronic, Inc.’s (MDT) acquisition of privately held Ablation Frontiers, Inc. for an initial payment of $225 million plus potential additional payments contingent upon achievement of certain clinical milestones
• The Medicines Company’s (MDCO) merger agreement with Targanta Therapeutics Corporation for $42 million in cash and additional regulatory and commercial milestone payments
• NuVasive, Inc.’s (NUVA) option to acquire Progentix Orthobiology BV, a Netherlands based company focused on developing novel orthobiologics, consisting of an upfront investment of $15 million along with the obligation to purchase the remaining equity of Progentix for $45 million upon accomplishment of certain development milestones [with additional potential payments of up to $25 million upon the achievement of additional milestones and based upon NuVasive's sales success]

Licensing and Partnering

Kicking off the JP Morgan Healthcare Conference in 2010, privately held KaloBios Pharmaceuticals, Inc. announced a $290 million agreement with Sanofi Pasteur, the vaccines division of the sanofi-aventis Group (SNY), for the development and commercialization of KB001, an investigational new biologic for the treatment or prevention of Pseudomonas aeruginosa [Pa] infections.  KaloBios, which is developing first-in-class human antibody therapeutics that offer advantages over other methods of human antibody creation in terms of immunogenicity, potency, and manufacturing yields, will receive an upfront payment of $35 million, plus development, regulatory and commercial milestones for a potential further $255 million, as well as royalties on eventual product sales.

While other licensing and partnering transactions were announced during the JP Morgan Healthcare Conference in 2010, they were substantially smaller or specific financial terms were not disclosed.  These include:

• Proteus Biomedical Inc. announced an exclusive worldwide license and collaboration agreement with Novartis AG (NVS) to develop and commercialize pharmaceutical products that incorporate Proteus’ novel sensor-based technologies in the field of organ transplantation along with certain option rights in cardiovascular and oncology product applications.  Under the terms of the agreement, Novartis will make upfront cash and equity investments in Proteus totaling $24 million and Proteus will also receive royalties on worldwide net sales of any Novartis products incorporating its sensor-based technology.
• Trillium Therapeutics, Inc., a biopharmaceutical company developing innovative immune-based biologics, announced that it has entered into a definitive license agreement with Biogen Idec, Inc. (BIIB), granting the latter exclusive worldwide rights to one of Trillium’s development programs.  Under the terms of the agreement, Trillium will receive an upfront payment and is eligible to receive milestone payments based on achievements of specified clinical, regulatory and commercial accomplishments.  Trillium will also receive royalties on global product sales.  Biogen Idec will be solely responsible for clinical development, regulatory approvals, manufacturing and commercialization.
• MedGenesis Therapeutix Inc., a biopharmaceutical company developing and commercializing innovative treatments for patients with serious central nervous system [CNS] diseases, announced an agreement with Amgen, Inc. (AMGN) that provides MedGenesis with an exclusive, worldwide license for glial cell line-derived neurotrophic factor [GDNF] protein in CNS and non-CNS indications.  As part of the license agreement, Amgen now holds a small equity stake in MedGenesis.  In parallel, Biovail Corporation (BVF) and MedGenesis concluded an agreement to collaborate on the development of GDNF in Parkinson’s disease and potentially other CNS indications.  GDNF is a naturally-occurring growth factor capable of protecting and promoting the survival of dopamine producing nerve cells.
• AstraZeneca Plc (AZN) and CrystalGenomics announced a research collaboration to discover and develop a novel anti-infective for use as a potential antibacterial agent.  Under the terms of this agreement, Korea-based CrystalGenomics will receive research funding from AstraZeneca for two years.  CrystalGenomics will also be eligible to receive future milestones and royalty payments associated with development and commercialisation of a drug candidate.
• AnaptysBio, Inc., a privately-held therapeutic antibody platform and product company, announced it has signed an agreement with Roche (RHHBY) for the development of novel antibody therapeutics.  Under the terms of the agreement, AnaptysBio will be responsible for generating novel antibodies using its proprietary somatic hypermutation platform and Roche will receive a worldwide license to develop and commercialize antibodies optimized by AnaptysBio.  In addition to a signing fee paid by Roche, AnaptysBio will be eligible to receive milestone payments and royalties upon product sales.

The six transactions announced during the JP Morgan Healthcare Conference in 2010 with reported financial terms totaling $314 million pale in comparison to the ten deals reported at the meeting during 2009 worth more than $2.4 billion in aggregate value.  These included a $1.1 billion deal between ZymoGenetics, Inc. (ZGEN) and Bristol-Myers Squibb Company (BMY), a $500 million deal between Peptimmune, Inc. and Novartis AG, a $396 million deal between Micromet, Inc. (MITI) and Bayer AG (BAYZF.PK), and a $200 million deal between FORMA Therapeutics the Novartis Option Fund to develop inhibitors for an undisclosed protein-protein interaction target in the field of oncology, among others.

Financing

The quantity and aggregate dollar value of public and private financing transactions announced during the JP Morgan Healthcare Conference were essentially flat in 2010 compared with the prior year as reflected in the table below.

Outlook

At the start of 2009, we provided a positive outlook for biotechnology, 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.  The latter was quickly reinforced by M&A transactions with an aggregate value of $702 million and licensing & partnering deals worth more than $2.4 billion in aggregate value announced January 12-15, 2009, during the JP Morgan Healthcare Conference. 

While we believe that a positive outlook for 2010 is once again warranted, and the first two weeks of the year don’t necessary indicate a trend, hopefully the paucity of M&A activity coupled with the decline in both the quantity and value of licensing & partnering transactions announced during the JP Morgan Healthcare Conference in 2010 is simply the pause that refreshes and the action improves throughout the year.

Perhaps the most prominent shareholder activist in biotechnology is billionaire investor Carl Icahn, largely through his Icahn Management LP investment fund.  He has created value for some biotechnology stakeholders, including a very quick return with MedImmune, Inc. and a longer-term payoff with ImClone Systems, Inc.

MedImmune, Inc.

On February 14, 2007, Icahn Management LP disclosed that it purchased 2.8 million shares of MedImmune, Inc., or just over one percent of the company.  The stock had ranged from $25 to $37 over the prior 12-months and Icahn had threatened to nominate a slate of opposing directors to MedImmune’s board unless the company put itself up for sale, adding that the firm suffered from “very lackluster management.”  In less than two months, MedImmune announced that the company hired investment bank Goldman Sachs to help evaluate whether third parties would have an interest in acquiring the company at a price and on terms that would represent a better value for its stockholders than having the company continue to execute its business plan on a stand-alone basis.  Less than two weeks later, AstraZeneca plc (AZN) announced the $15.6 billion acquisition of MedImmune Inc. for $58 per share in cash, representing a premium of approximately 53% to MedImmune’s share price the day before it was disclosed that the company was for sale.  At the time, MedImmune had several marketed products and posted $1.3 billion in 2006 sales.

ImClone Systems, Inc.

Icahn Management LP’s success with ImClone Systems, Inc. took a little longer to materialize – in fact, nearly a decade.  Icahn first reported a 5.1% stake in ImClone in October 1999 through a Securities and Exchange Commission [SEC] filing, including the purchase of 594,100 shares from September 29, 1999 to October 10, 1999 at prices ranging from $22.09 to $32.05 a share.  At that time, Icahn Management LP reported owning a total of 1.29 million shares of ImClone.

The price of ImClone’s stock reached a high of $74 in early December 2001, but dropped to $14 by February 2002 after the U.S. Food and Drug Administration [FDA] raised serious doubts about test results for the company’s Erbitux® (cetuximab) product candidate for the treatment of colon, head and neck cancers.  Investigations, scandals [eg, Martha Stewart] and lawsuits ensued.

By March 2002, Icahn received clearance from the Federal Trade Commission and the Department of Justice under the Hart-Scott-Rodino Act to acquire up to $500 million of ImClone’s stock, or about 40% of the company.  In August 2006, Icahn reached an agreement with ImClone to avoid a possible proxy contest by accepting the company’s offer to have him and three of his recommended candidates on the management slate of director nominees for the 2006 annual stockholders meeting.  The three nominees were Alexander Denner, a current ImClone director, as well as Charles Woler and Richard Mulligan.  Icahn replaced David M. Kies as chairman of ImClone and ousted Joseph L. Fischer, ImClone’s interim chief executive officer [CEO].  At the time, Icahn also reported in the filing that he increased his stake in ImClone to 12.89%.

It wasn’t until October 2008 that Eli Lilly (LLY) agreed to pay $70 per share in cash for a total of $6.5 billion for ImClone Systems, a 51% premium to ImClone’s closing price on July 30, 2008, the day before an initial $60 per share offer by Bristol-Myers Squibb (BMY) was made public.  At the time, ImClone had one drug on the market, Erbitux, which posted $1.3 billion in 2007 sales worldwide, up 18% from 2006.

Three Recent Activist Wins

In view of major coups with MedImmune and ImClone, we reviewed Icahn’s current biotechnology holdings as reported in SEC filings (see Table 1) and identified three companies that have significantly underperformed the NASDAQ Biotechnology Index (NBI) over the past five years, but have very recent successful activist outcomes that could positively impact future performance.  In particular, Alexander Denner, who has served as Managing Director of entities affiliated with Carl Icahn and as a director of ImClone, has recently been elected as a director at each company.  Consider the following:

• Biogen Idec Inc. (BIIB): On June 9, 2009, Biogen Idec Inc. reported that Icahn won two seats on the board, giving him leverage to push for change at the company.  Alexander Denner and Richard Mulligan, both formerly with Icahn at ImClone, were appointed to Biogen Idec’s board.  Icahn owns about 5.6% of Biogen Idec, his largest current biotechnology holding, and has urged the company to consider a break-up or sale to a large pharmaceutical company.  Biogen Idec, with more than $4 billion in annual revenue for 2008, sells three FDA approved drugs for cancer, multiple sclerosis [MS] and rheumatoid arthritis.  While Biogen Idec possesses a strong pipeline with several drugs in Phase 2 and Phase 3 development, the company’s flagship product Avonex® (interferon beta-1a) will soon face competition from Extavia®, a branded version of interferon beta-1b by Novartis AG (NVS) for the treatment of MS that will be introduced this fall.  Avonex represented more than half of Biogen Idec’s revenue in 2008.
• Amylin Pharmaceuticals, Inc. (AMLN): On August 24, 2009, three months after a high profile proxy battle resulted in the ouster of its chairman, Joseph C. Cook, Jr., Amylin Pharmaceuticals announced the appointment of a new chairman.  Paulo F. Costa, who formerly headed the U.S. operations of Novartis AG as President and Chief Executive Officer of Novartis U.S. Corporation, took over as chairman after gaining a seat on Amylin’s board in May 2009.  At that time, two board members recommended by Icahn and Eastbourne Capital Management, Kathleen Behrens and Alexander Denner, were also elected.  Amylin’s top drug Byetta® (exenatide), which it sells with partner Eli Lilly & Co (LLY), is a GLP-1 agonist for patients with type 2 diabetes that is administered twice daily as a subcutaneous injection.  Amylin, with more than $840 million in annual revenue for 2008, has set a goal of becoming operating cash flow positive by the end of 2010.  An important near-term catalyst for the company, Amylin, Eli Lilly, and Alkermes, Inc. (ALKS) are working together to develop exenatide once weekly, which would represent the first weekly therapy to treat type 2 diabetes with glucose control and weight loss.  A New Drug Application [NDA] for exenatide once weekly was accepted for review by the FDA in July 2009.
• Enzon Pharmaceuticals, Inc. (ENZN): In May 2009, Alexander Denner and Richard Mulligan, both formerly with Icahn at ImClone, were appointed to Enzon’s board.  More recently, on July 23, 2009, Enzon appointed Alexander Denner as non-executive Chairman of the Board, separating the role of CEO and Chairman.  Jeffrey H. Buchalter, who previously served as executive Chairman, continues to serve as a Director as well as President and CEO.  DellaCamera Capital, which beneficially holds approximately 8.3% of the shares of Enzon had been making a case for removal of Jeffrey Buchalter as CEO due to excessive compensation, poor stock performance, and questionable expense levels.  DellaCamera recently withdrew its consent solicitation to remove the CEO in order to better allow the Company`s new Chairman and new independent director to bring positive change to the Board.  Enzon, with more than $48 million in annual revenue for 2008, has a portfolio of four marketed products, Oncaspar®, DepoCyt®, Abelcet® and Adagen® along with a royalty revenue stream from licensing partnerships for other products developed using Enzon’s PEGylation technology.

Table 1: Icahn’s biotechnology holdings (as of 6/30/09)

A Word of Caution

Not all of Icahn’s biotechnology investments turn out like MedImmune and ImClone, so investors should conduct their own due diligence regarding Biogen Idec, Amylin, and Enzon before blindly following the billionaire investor.  For example, shares of Telik, Inc. (TELK) plunged more than 70% in a single trading session – falling from over $16 per share to below $5 per share – in late December 2006 after the company reported that its most advanced development compound, Telcyta® (canfosfamide HCI), failed to improve survival in patients with advanced lung cancer or in patients with ovarian cancer.  At one point, Icahn Management LP reported nearly a 10% holding in Telik but reported holding zero shares as of December 31, 2008.  Shares of Telik recently traded below a dollar.

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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.