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.

Michael D. Becker, moderator and president and chief executive officer of MD Becker Partners, made a number of key points and observations in his opening remarks, beginning with some upbeat comments regarding the approximate 2,000-point rebound in the Dow Jones Industrial Average (DJIA) from its low in March 2009. He also indicated that some biotechnology companies have been able to successfully access the capital markets. Specifically, investors have been backing companies with later stage pipelines that have been executing on their milestones and have solid management. Examples of financing transactions cited at the time were Allos Therapeutics, Inc. (ALTH), Micromet, Inc. (MITI), and Seattle Genetics, Inc. (SGEN).

Mr. Becker also observed improving trends in clinical trial results and regulatory approvals, such as the recent Phase 3 results for a prostate cancer vaccine by Dendreon Corp. (DNDN) and the FDA approval of a schizophrenia product by Vanda Pharmaceuticals, Inc. (VNDA).

The roundtable session that followed was an open discussion for participants from diverse backgrounds to offer shared insights and perspectives on strategies to enhance visibility and access capital. There was general agreement among the expert panelists on five key principles that biotechnology companies may want to consider in order to not only survive – but thrive – in the current environment. Participants underscored the following:

1) Communicate simply, succinctly and consistently

Biotechnology companies would benefit by embracing Albert Einstein’s famous quote “nothing is so complex that it cannot be explained simply.” In contrast to direct communications with more sophisticated investors, press releases, informal pitches for media coverage, and other general communications are not times to showcase technical terms, acronyms, and professional jargon. In a complex industry, such as biotechnology, there is a delicate balance between providing the information simply and concisely while including key scientific data. “It helps to talk to somebody who understands the business of communication,” says James E. Dentzer, Chief Financial Officer at Amicus Therapeutics, Inc. (FOLD). “Walk them through your business model and ask them for advice.”

But be succinct. “I also get a lot of people who write a pitch where they start out with a paragraph of background – most of which I already know – and I’m still looking, “where is the news, where is the news?” says Linda A. Johnson, Health/Business Writer at The Associated Press. “The best thing you can do is at the top of your press release, which should be written in English, put three maybe four sentences summing up what your news is and why it’s important. That’s the way to get a reporter to pay attention.”

Consistency is also critical, especially taking into consideration how the internet has immortalized certain aspects of investor relations. People can go online and find a wealth of past and present information about a company.

2) Engage competent and experienced external advocates

In the current environment, businesses are faced with decreasing human and financial resources, which is increasing the strain on management’s limited time and attention. Outsourcing can help a company shift its focus from peripheral activities toward work that serves the underlying enterprise of the business, which in biotech is science. For smaller organizations, outsourcing can also help companies act “big” by giving them access to the same level of expertise that large companies enjoy.

Panelists agreed that competency and experience are key criteria to look for when a company is considering outsourcing – especially when it comes to handling investor or public relations. Look for a person or firm that brings the breadth of real-world, in-house experience necessary – expertise in financial, scientific, medical and communications – all operating within the legal parameters required. “I want someone who, when I ask questions, can actually answer them instead of having to say I’ll get back to you, I’ll find out, I’ll ask someone,” says Linda A. Johnson, Health/Business Writer at The Associated Press. “That’s wasting my time. So you need somebody who really knows their stuff and who is prepared.”

Cost-cutting may be another reason for companies to outsource. Outsourcing converts fixed costs into variable costs, releasing capital for investment elsewhere in the business. This may be especially important for early-stage companies.

3) Credibility and management experience

With the crisis in confidence, now more than ever companies need to establish personal relationships with the financial community. Investors are increasingly focused on credibility. Are you achieving milestones, are you putting out information in timely fashion, are you being forthright with your investors? “Once companies lose their credibility, whether it is data release or just over embellishing a situation, it’s very hard to get that credibility back,” says Michael A. Margolis, R.Ph., Managing Director at Merriman Curhan Ford (MERR).

Be upfront, be honest, and do not hide the bad stuff. “If somebody tries to slip something by, that does create a lasting memory and you will look at what they file a little more closely,” says John George, Biotechnology Staff Writer at the Philadelphia Business Journal.

Just how important is the credibility or experience of the management team in contrast to the science and the market opportunity? “I think we’re all going to say the same thing because it’s a very critical – it’s probably the most critical – aspect of the business,” says Todd C. Brady, M.D., Ph.D., Principal at Domain Associates.

4) Be proactive

Companies have different philosophies and different approaches to investor relations, with some viewing it as largely reactive – responding to inquiries from analysts or investors as they come in. “For companies, I think one thing to be very careful of though, is to keep in mind that investor relations has to be an active – not a passive – event,” says John W. Chambers, Managing Director at Merriman Curhan Ford (MERR). “The folks that have had a reasonable investor relations campaign that’s been in existence not just in the bad market – they’re not going in for the first time in this type of market to see someone – are getting an audience.”

In the current environment, another common mistake by companies is to reduce their investor relations activity or curtail outreach to the investment community. When competing for capital, however, a company must have the proper resources to distinguish itself in the market. The more a company makes investors aware of its existence, business, and strategies – the more likely it is to be rewarded with access to capital, potential partnerships, and a fair valuation.

The process of raising capital is much longer than companies are used to in the past where they could have raised money in a matter of days or weeks. In addition, it is unusual for investors to invest in a company after hearing the story for the first time. Accordingly, time and effort spent now to get in front of investors is time well spent.

5) Growing stronger through adversity

At the start of the year, MD Becker Partners 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. Some of the panelists agreed and even hinted at a stronger biotechnology industry going forward.

“If we’re going to weather the tsunami, I see the end kind of coming because you’re seeing fundamental investors that are willing to take meetings, they’re willing to see a differentiated story,” says John W. Chambers, Managing Director at Merriman Curhan Ford (MERR). “The type of investors that folks are targeting has changed while we’ve gone through this financial upheaval, but I think we’re on a very good track to create a stronger, fundamental driven and institutionally driven market place for life sciences once we get out the other end.”

“I would expect that we are going to see the market get better over time,” says James E. Dentzer, Chief Financial Officer at Amicus Therapeutics, Inc. (FOLD). “It’s not going to get better overnight, and it’s going to be led by people who are investing in companies they already know well.”

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The roundtable was successful in producing valuable information and insights as well as suggestions for the future. Click here to request a complimentary electronic reprint of the 19-page “Successful Strategies for Raising Visibility and Capital” event transcript.

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/

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.