Table 1. Old Versus New Paradigm in Biotechnology Collaborations

In addition, the negative considerations from large pharmaceutical partnerships are often overlooked, which begs the question: is it better to partner, or go alone?  To help address the topic, this article focuses on the oncology segment of the life science industry – one of the most popular therapeutic areas for partnering and merger & acquisition [M&A] activity.

Luck Vs Skill

Prior to addressing the question of whether or not a small biotechnology company should collaborate with a larger pharmaceutical organization, we solicited investor views regarding the process of corporate partnering.  Some of the feedback indicates there is a lack of transparency.

“As an investor, partnering activity is the most opaque part of our companies’ business,” said David Sable, portfolio manager, Special Situations Life Sciences Fund.  “Every small biotech CEO tries to create an image of limitless interest on the part of big pharma in each of the company’s projects, a dynamic that will inevitably result in a value-maximizing transaction.  Many management teams deliver on these promises; in retrospect, however, at least as many seem to have parked their molecule in the front yard with a ‘For Sale’ sign and hoped for the best.  While we can validate the importance of a molecular pathway, double-check market size predictions, run our own statistics and reality-check pricing assumptions, we have no way to identify talent in business development.”

Left at the Altar

One of the most important negative considerations for biotechnology companies looking to partner is that large pharmaceutical companies often shift resources and the focus of their pipeline development candidates over time, which may put their collaborators at risk.  Although sometimes done for strategic reasons rather than due to new clinical insight, the sudden departure of a large pharmaceutical partner can reflect poorly on an otherwise promising product candidate.

For example, Celldex Therapeutics, Inc. (CLDX) announced in September 2010 that the company would regain full worldwide rights to develop and commercialize rindopepimut [CDX-110] from Pfizer, Inc. (PFE).  The companies had entered into a global development and commercialization agreement in April 2008 for rindopepimut, an experimental therapeutic cancer vaccine that targets the tumor-specific molecule epidermal growth factor receptor variant III in patients with glioblastoma multiforme.  Pfizer informed Celldex that the rindopepimut program was no longer a strategic priority of Pfizer and terminated the agreement despite the fact that the product candidate met or exceeded all pre-determined safety and efficacy objectives across three clinical studies.  Shares of Celldex, which traded as high as $9.49 during 2010, reached a 52-week low of $2.91 on the news.

More recently, Transgene (TNG.PA) announced on February 22, 2011, that Roche Holding (ROG.VX) terminated their 2007 agreement under which Roche had been granted exclusive global development and commercialization rights to TG4001/RG3484, a therapeutic vaccine candidate currently in a 200 patient Phase IIb study to treat notably high grade cervical intraepithelial neoplasia [CIN] lesions [CIN2/3] caused by human papilloma virus [HPV] infection.  While Transgene stated that Roche’s decision to terminate the license agreement was based on strategic reasons and wasn’t data driven, the company’s shares reached a 52-week low on the news.

Hopes and Dreams Vs Revenue Streams

Another potential negative is that by partnering a product candidate, the “hope and dream” multiple of a potential partnership or acquisition may be replaced by the realities of a “revenue stream,” such as milestone payments and future product royalties.  By discounting the economics of a partnership deal for certain risk factors, investors can assign a net present value to the company that may be quite different than the speculative valuation in the absence of a partnership.  Representing a unique opportunity to review the effect of partnering on market capitalization, three separate deals were announced for late-stage product candidates aimed at treating prostate cancer during 2009, while two companies have remained independent [see Table 2].

As the first transaction announced that year, Johnson & Johnson’s (JNJ) acquisition of Cougar Biotechnology for nearly $1 billion in cash in May 2009 initially looked attractive.  However, following approval of Provenge® [sipuleucel-T] in April 2010, the market capitalization of Dendreon Corporation (DNDN) exceeded $7 billion, which demonstrates the potential benefit of remaining independent or retaining worldwide rights.  In contrast, more than a year after partnering their late-stage programs, the market valuations of two other companies, Medivation, Inc. (MDVN) and OncoGenex Pharmaceuticals, Inc. (OGXI), are $605 million and $150 million, respectively.

Using Dendreon’s valuation as an example, it isn’t surprising that Bavarian Nordic A/S (BAVA.CO) announced earlier today that the company is reviewing alternate options to maximize value for shareholders and fund the pivotal Phase 3 trial of its “off-the-shelf” therapeutic vaccine product candidate Prostvac® on its own.  Keeping its options open, however, Bavarian Nordic is exploring opportunities to pursue independent development in parallel with continuing partnership discussions.

Table 2. Late-stage Prostate Cancer Programs

A Means to an End

The biggest argument against partnering is the fact that some of the most successful biotechnology companies to date are those that have commercialized their own products, such as Amgen, Inc. (AMGN), Celgene Corporation (CELG), and several others.

“Celgene is a unique example of success by taking a slightly different approach,” said Charles Duncan, managing director and senior biotech analyst at JMP Securities LLC.  “The company built a pipeline and worldwide infrastructure for Revlimid® [lenalidomide] that was funded and supported through its early sales of Thalomid® [thalidomide].”

“We viewed partnering our lead product as a critical strategic decision that would shape the company and significantly impact our vision,” said Sol J. Barer, Ph.D., Executive Chairman of Celgene Corporation.  “We felt that our pursuing the development of Revlimid worldwide alone was the best option consistent with our vision a of becoming a major global biopharmaceutical company over the next few years.  We clearly recognized the short versus long term trade-offs in the decision; nevertheless, our belief in the product and in our ability to manage the product globally was important in our decision not to partner.”

Some companies have also partnered a specific program in certain geographies or disease settings and use the validation and resulting economics to help advance their own pipeline – sometimes even in competitive areas.  For example, Amgen originally developed Epogen® [epoetin alfa], which the company commercialized as a treatment for anemia in dialysis patients and partnered non-dialysis rights with Johnson & Johnson [sold as Procrit®].  Amgen later developed and commercialized Aranesp® [darbepoetin alfa], an erythropoiesis stimulating protein with a longer half-life and increased biologic activity that was not partnered.

Similarly, Oncothyreon, Inc. (ONTY) has granted a license to Merck KGaA of Darmstadt, Germany for the clinical development, manufacturing, and marketing of Stimuvax®.  Oncothyreon is eligible for cash payments based on the achievement of certain process transfer events, regulatory submissions in first and second cancer indications, regulatory approval for first and second cancer indications, and for sales milestones.  Oncothyreon will also receive a royalty based on net sales.  If successful in the clinic, Stimuvax could also help validate another Oncothyreon product candidate, ONT-10, which is a completely synthetic MUC1-based liposomal glycolipopeptide cancer vaccine that could compete with Stimuvax.  Merck KGaA has a right of first negotiation with respect to ONT-10.

Geographically Undesirable

Although selective encumbered assets can still attract buyers, partnering a product candidate in certain geographies with one large pharmaceutical company may preclude an acquisition by another that is only interested in worldwide rights or control of key markets.  On the other hand, some partnerships can later lead to an acquisition – a strategy employed by Bristol-Myers Squibb Company (BMY) on more than one occasion.

For example, Bristol-Myers Squibb and Medarex, Inc. formed a worldwide collaboration in 2004 valued at more than $530 million to develop and commercialize Yervoy® [ipilimumab, MDX-010], which was in Phase III clinical development at the time for the treatment of metastatic melanoma and multiple Phase II clinical trials in other oncology indications.  In 2009, Bristol-Myers Squibb acquired Medarex for $16.00 per share, a 90% premium over the prior day’s closing price of $8.40 per share, for an aggregate purchase price of approximately $2.4 billion.

What started as a lawsuit for infringement of its patents related to fusion protein technology in 2006, ZymoGenetics, Inc. signed a deal with Bristol-Myers Squibb in 2009 worth more than $1.1 billion for PEG-Interferon lambda, a novel type 3 interferon in Phase Ib development for the treatment of Hepatitis C, and its related development program.  The following year, Bristol-Myers Squibb acquired ZymoGenetics for $9.75 per share in cash [an 84% premium to the prior day close] in a transaction valued at approximately $885 million.

While ultimately thwarted by Eli Lilly & Co.’s (LLY) superior offer in October 2008, Bristol-Myers also attempted to acquire its partner ImClone Systems.  Back in September 2001, Bristol-Myers had entered into an agreement with ImClone to co-develop and co-promote Erbitux® [cetuximab, IMC-C225] in the United States, Canada and Japan.

All that Glitters is not Gold

Maintaining worldwide rights and commercializing a product without a partner doesn’t necessarily translate into a lofty market valuation.  Several companies have struggled to commercialize oncology products on their own.

Allos Therapeutics, Inc. (ALTH) developed Folotyn® [pralatrexate injection], a folate analogue metabolic inhibitor, and began commercializing the product in the U.S. for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma [PTCL] in October 2009.  Since the product’s launch, Folotyn sales have been below Wall Street analyst’s expectations and shares of Allos recently reached a 52-week low of $2.64.

Despite an inauspicious launch in the U.S., some analysts believe that Allos may finally be executing on a regional strategy with the recent filing of a Marketing Authorisation Application for European approval and the potential for a partner in Asia as highlighted during the company’s recent quarterly teleconference with investors.

“If Allos gets traction with an ex-U.S. approval and partnership, investor sentiment will most certainly improve as this will provide some external validation on the viability of a regulatory path and market opportunity in PTCL, despite it being a rare disease and there being emerging potential competition from Celgene’s Istodax® [romidepsin],” said Charles Duncan.  “At this point, all but the most patient, value-oriented investors have extricated themselves from the Allos story due to what we believe to be a lack of confidence in senior management, and having another company to shoulder the risk ex-U.S. will provide a much-needed boost to the capabilities and capital needed to profitably market Folotyn.  Perhaps this too could be an example where a collaboration discussion turns into an acquisition, although we anticipate that should such a scenario materialize, it would likely involve contingent-value rights [CVR’s] given the uninspiring early revenue trajectory.”

Summary

Looking ahead, the trade-off between equity dilution and asset dilution represents an important crossroad that many late-stage biotechnology companies will face in the near future [see Table 3 for a select list].  While one size doesn’t fit all, the fact that Dendreon has achieved the largest market valuation of any company in the late-stage prostate cancer segment of the market by commercializing its product without a partner helps support the notion that going alone may provide the highest value to stakeholders.  Such a strategy requires that the company can access resources and capital to develop and launch its product globally.  If not, a selective or global partnership may be the next best options – provided the terms are attractive and that there is a remaining pipeline to be leveraged in the future.  In the end, whether a company proceeds alone or with a partner, there is an attractive landscape of motivated buyers for late-stage and marketed products that may ultimately lead to M&A.

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Table 3. Select Companies with Phase III Oncology Programs Not Yet Partnered

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.

According to the American Cancer Society, pancreatic cancer is a devastating disease with the worst mortality rate and an overall 5-year survival rate lower than 5%.  Although accounting for only 3% of all cancers, this disease is the fourth leading cause of death and represents 6% of all cancer related deaths in the United States.

The disease remains one of the most difficult to treat due to late initial diagnosis and extreme resistance to treatment.  For example, about 50% of patients have locally advanced disease at the time of diagnosis, indicating that the cancer has grown beyond the confines of the pancreas to invade surrounding vital structures, and in 40% of patients the tumor has spread to distant sites, such as the liver and lungs [metastatic stage].  Case in point: Patrick Swayze was diagnosed with stage IV pancreatic cancer that had already spread to the liver in March 2008 and lost his battle with the disease in September 2009 at the age of 57.

The majority of pancreatic tumors [95%] are adenocarcinomas that mainly develop from exocrine cells in the tissues of the pancreas.  They are characterized by an aggressive behavior with a fast progression rate that makes them highly metastatic.  Neuroendocrine tumors [NET] of the pancreas [islet cell tumors] are much less common [1-2%] than exocrine pancreatic tumors and are considered less deadly.  For example, Steve Jobs, co-founder and chief executive of Apple Inc. (AAPL), was diagnosed with this rare, slow-growing pancreatic tumor in 2004.

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

For locally advanced or metastatic disease, treatment is still palliative rather than curative, and chemotherapy remains the only option.  Since its approval in 1997, Eli Lilly’s (LLY) Gemzar® [gemcitabine] is the current standard first-line treatment in the U.S.  It has been shown to improve the median time to disease progression and overall survival [OS].

Just like lupus, sepsis, and several others, pancreatic cancer has been referenced as one of those challenging diseases where good drugs [and companies…] go to die.  Since 2005, nine late-stage clinical trials have been performed to improve the efficacy of gemcitabine with little success in terms of improving survival outcomes [see Table 1].  Such failures resulted in at least two companies filing for bankruptcy [both Aphton Corp and Therion Biologics in 2006].  In fact, the only combination approved by the U.S. Food and Drug Administration [FDA] is gemcitabine plus Astellas Pharma’s Tarceva® [erlotinib], which increased the median OS from 6.0 to 6.4 months.

Table 1. Prominent Late-stage Pancreatic Product Failures

Despite past failures, drug developers continue to explore new options for treating pancreatic cancer and more than a dozen new molecular entities are currently being evaluated in clinical trials [see Table 2].  Several programs have recently demonstrated impressive results in Phase 2 studies and are now enrolling patients in pivotal trials.  While a comprehensive review of investigational pancreatic cancer therapies is beyond the scope of this article, we briefly review some of the more promising pancreatic treatments currently in clinical development:

Celgene Corporation (CELG)

Historically known more for its franchise in treating blood cancers, Celgene moved into the realm of solid tumors through its recent acquisition of Abraxis BioScience, Inc.  As a result, Celgene is now developing Abraxane® [paclitaxel protein-bound particles for injectable suspension] for the treatment of pancreatic cancer.  Updated overall survival findings from a phase I/II study of Abraxane given in combination with gemcitabine demonstrated increased survival of the first-line treatment of patients with advanced pancreatic cancer.  In 44 patients treated at the recommended dose of 125 mg/m² Abraxane plus gemcitabine [1000 mg/m²], the median OS time was 12.2 months, an impressive doubling of survival compared to historical control of gemcitabine administered alone.  The findings were discussed at the 101st Annual Meeting of the American Association for Cancer Research [AACR] in 2010. The combination of Abraxane and gemcitabine is now the treatment arm of a randomized Phase 3 clinical trial that is currently enrolling patients [ClinicalTrials.gov identifier NCT00844649].

Novartis AG (NVS)

In June 2010 at the12th World Congress on Gastrointestinal Cancer, Novartis reported that its RADIANT-3 Phase 3 study of Afinitor® (everolimus), plus best supportive care met its primary endpoint, showing that the drug more than doubled median progression-free survival [PFS], or time without tumor growth, from 4.6 to 11.0 months when compared with placebo in patients with advanced pancreatic NET.  More recently, Novartis presented data from a second Phase 3 study called RADIANT-2 at the 35th European Society for Medical Oncology [ESMO] Congress.  The study, which evaluated Afinitor® in combination with Sandostatin® LAR Depot (octreotide acetate for injectable suspension), demonstrated that everolimus plus octreotide LAR provided a clinically meaningful extension in the median time without tumor growth from 11.3 to 16.4 months when compared with placebo plus octreotide LAR.  However, the study did not meet its primary endpoint of PFS based on central radiologic review of the data (p=0.026 versus p=0.024 predefined).  According to the company, results from the two RADIANT trials will form the basis for regulatory filings later in 2010.

Amgen, Inc. (AMGN)

Amgen is developing AMG 479, an investigational fully human monoclonal antibody that targets type 1 insulin-like growth factor receptor [IGF-1R], which plays an important role in the regulation of cell growth and survival.  At the 2010 American Society of Clinical Oncology [ASCO] Annual Meeting, Amgen announced results from a Phase 2 study demonstrating that the addition of AMG 479 to gemcitabine resulted in an overall survival rate at six months of 57% versus 50% with gemcitabine alone and 39% versus 23% at 12 months. Median overall survival was 8.7 months versus 5.9 months in the gemcitabine arm.  AMG 479 is moving into a Phase 3 study for metastatic pancreatic cancer.

Threshold Pharmaceuticals, Inc. (THLD)

At the 2010 ASCO Annual Meeting, Threshold Pharmaceuticals presented results with its hypoxia-activated prodrug, TH-302, in combination with gemcitabine in thirty-four patients with advanced or metastatic pancreatic cancer that had at least one evaluable post-treatment tumor assessment.  One patient [3%] demonstrated a complete response as measured by RECIST [Response Evaluation Criteria In Solid Tumors] and 8 patients [24%] had a partial response.  Of the 34 assessed patients, 28 had elevated carbohydrate antigen CA19-9 levels at baseline and 17 of 28 [61%] had a CA19-9 reduction of greater than 50%.  This is important, as a greater than 20% decrease in levels of this tumor-associated antigen has been shown to correlate with improved overall survival. The biomarker CA19-9 has been shown to be highly specific and sensitive for pancreatic cancer and approximately three-quarters of all pancreatic cancer patients have elevated baseline serum CA19-9 level at baseline.

Neogenix Oncology, Inc. (private)

Neogenix Oncology is develping ensituximab, a novel, chimeric monoclonal antibody intended for the treatment of advanced pancreatic and colorectal cancer. Pre-clinical studies have demonstrated that NPC-1C specifically targets pancreatic and colorectal cancer sparing healthy tissue.  In 2010, the company initiated a multi-center Phase 1 trial in patients with late stage pancreatic or colorectal cancer being conducted at Johns Hopkins University Hospital, Duke University Medical Center, and North Shore University Hospital.  Neogenix is also exploring the diagnostic and prognostic utility of ensituximab using a new serum ELISA test in a prospective study.  Preliminary results demonstrate that the biomarker test can differentiate between blood serum of healthy donors and that of patients with colorectal or pancreatic cancer.  In addition, the results of the biomarker test indicate superior sensitivity as compared to commercially available CEA and CA19-9 assays.

Table 2. Select Pancreatic Products in Active Clinical Development*

* Based on ClinicalTrials.gov

Conclusion

In contrast to the prominent late-stage failures over the past five years, several drugs have recently shown promise for the treatment of pancreatic cancer.  Going forward, early detection using biomarkers, more effective treatments, and novel drug targets could provide new hope for the treatment of this deadly disease.

Standard frontline therapy for AML patients under the age of 60 consists of cytarabine  [AraC] combined with an anthracycline [such as daunorubicin or idarubicin] in what is commonly referred to as the 7+3 regimen.  While 45% of elderly patients with AML [70+ years old] achieved a complete response [CR] using this regimen, there was no improvement in overall survival and more than a third of patients died within the first eight weeks of treatment according to a recent study published in the journal Blood[i].  This is consistent with the CR rates of 40%–60% with conventional chemotherapy and disease-free survival of less than 20% at three years referenced in the literature[ii].

Since more than half of AML cases occur in patients over 60 years old, there is a need to develop better frontline therapies in this setting.  With five agents being investigated as frontline therapy for elderly AML patients in late-stage trials, the purpose of this article is to compare and contrast these programs – several of which have near-term catalysts for investors.

Hypomethylating Agents

SuperGen, Inc. (SUPG), Eisai Co. Ltd. (ESALF), and Johnson & Johnson (JNJ)

On June 30, 2010, preliminary results from a Phase III trial of Dacogen® [decitabine] as a frontline treatment for elderly patients [65+ years old] with AML were released.  While Dacogen did not meet the primary endpoint of overall survival, a trend was reported to be evident.  However, the failure to demonstrate an improvement in overall survival was surprising given the favorable Phase II results and the fact that the comparator arm received low dose AraC instead of the aforementioned 7+3 regimen.  Low dose AraC predominantly works in patients with favorable cytogenetics, so it should have been relatively easy for Dacogen to demonstrate a survival benefit.

Shares of SuperGen, which climbed as high as $2.89 on expectations for positive trial results, reached a new 52-week low of $1.71 in July.  Supergen receives a 20-30% royalty on worldwide sales of Dacogen from its development and commercialization partners – Eisai in North America and Johnson & Johnson outside of North America.

While investors appear to be discounting approval of Dacogen as a frontline therapy for elderly AML, there may be reasons for optimism.  For example, both Eisai and Johnson & Johnson are continuing to analyze the data and planning to move forward with North America and European regulatory filings in 2011 based on the primary analysis and secondary endpoints.  In addition, the Phase III study was conducted under a special protocol assessment [SPA] with the U.S. Food and Drug Administration [FDA].

Celgene Corporation (CELG)

In view of Dacogen’s negative Phase III trial results, investors may be skeptical about Vidaza® [azacitidine], another hypomethylating agent currently approved for the treatment of myelodysplastic syndromes [MDS], a pre-cancerous condition that can often progress to AML.  According to ClinicalTrials.gov [Identifier NCT01074047], Celgene is currently enrolling patients in a Phase III, multicenter, randomized, open-label, study of Vidaza versus conventional care regimens for the frontline treatment of elderly patients [65+ years old] with AML.

In December 2008, the European Commission granted marketing authorization for Vidaza as a treatment for patients with higher-risk MDS, chronic myelomonocytic leukemia [CMML], and MDS that transforms into AML with a blast percentage of 20-30% in the peripheral blood or bone marrow.  While Vidaza demonstrated a clinically relevant increase in median survival of 9.4 months [24.4 vs. 15 months] in these settings[iii], it is unclear how the drug will work in AML de novo patients with a higher blast percentage [greater than 50%] that represent half of the elderly patient population.  In view of the fact that Dacogen is more myelosuppressive than Vidaza [see Table 1], and for this reason may be preferred over Vidaza for off-label use in AML, the recent failure of Dacogen only adds to this uncertainty.

Table 1. Percentage of Patients with Myelosuppression from Prescribing Information

Monoclonal Antibodies

Seattle Genetics, Inc. (SGEN)

Seattle Genetics is developing SGN-33 [lintuzumab], an unconjugated IgG1 antibody for the treatment of AML.  Lintuzumab has been shown to induce cell death by both complement and/or antibody-directed cellular cytotoxicity, or as a direct effect of the engagement of the CD33 receptor, which is expressed in most leukemic blast cells but also in normal hematopoietic cells.

In a Phase II study in relapsed/refractory AML patients, single agent lintuzumab demonstrated efficacy in patients with advanced AML; however, the positive effects were confined to patients with low disease burden [blast percentage 5% to 30%].  This suggested that additional development of this agent would be best achieved by combining lintuzumab with chemotherapy.  However, while the addition of lintuzumab to salvage induction chemotherapy was safe, it did not result in a statistically significant improvement in response rate or survival in patients with refractory/relapsed AML in a subsequent Phase III trial[iv].

Seattle Genetics is now conducting a 210 patient Phase IIb study in frontline treatment of elderly patients [60+ years old] with AML with results expected in the August to October 2010 timeframe.  See ClinicalTrials.gov [Identifier NCT00528333] for more information.

While lintuzumab relies on a different mechanism of action, investor’s are understandably skeptical about the success of another anti-CD33 monoclonal antibody in AML.  In June 2010, Pfizer, Inc. (PFE) agreed to withdraw Mylotarg® [gemtuzumab ozogamicin] from the U.S. market, effective October 15.  Mylotarg is an IgG4 monoclonal antibody to CD33 linked to a cytotoxic agent from the class of calicheamicins.  Developed by Wyeth, the drug was fast-tracked to treat patients ages 60 and older with recurrent AML who were not candidates for other chemotherapy.  The FDA approved Mylotarg in May 2000 based upon a surrogate endpoint due to the fact it treated relapsed disease with no other viable therapy.

Four years later, a confirmatory trial was begun to confirm the results of the 142 patients who participated in the three previous clinical trials.  The 2004 trial showed that adding Mylotarg to existing chemotherapy for the treatment of AML provided no benefit and even showed a higher death rate.

Nucleoside Analogs

Genzyme Corporation (GENZ)

In September 2009, the FDA’s Oncologic Drugs Advisory Committee [ODAC] voted 9 to 3 that a randomized, controlled trial is needed to support the proposed label expansion for Clolar® (clofarabine) as a frontline treatment for elderly [60+ years old] patients with AML.  Consistent with the decisions for both Johnson & Johnson’s Zarnestra® [tipifarnib] and Vion Pharmaceuticals’ Onrigin® [laromustine], the committee determined that single-arm clinical study results were not sufficient for approval.

Despite the setback, Genzyme stated in a press release that the company remains committed to the clinical development of clofarabine in this patient population and that the drug is being investigated in clinical trials by most of the leading AML experts and major cooperative leukemia investigation groups in the United States and Europe.

Beyond the frontline setting, Genzyme is also conducting a randomized Phase III trial comparing clofarabine in combination with AraC to AraC alone in relapsed and refractory adult AML patients 55 years old or older [ClinicalTrials.gov Identifier NCT00317642]. Results are expected in 2011.

Note: At the time of writing, Sanofi-Aventis (SNY) has offered to acquire Genzyme for $69 per share.

Cyclacel Pharmaceuticals, Inc. (CYCC)

Cyclacel is developing sapacitabine for the treatment of AML, MDS and non-small cell lung cancer [NSCLC].  Sapacitabine is unique among the frontline, elderly AML landscape as it represents the only oral agent in late-stage clinical development and the only product candidate to demonstrate a survival benefit in a randomized study.

In December 2009, Cyclacel reported interim results from an ongoing Phase II study involving 60 patients aged 70 or older with either untreated AML [80%] or AML in first relapse [20%] randomized across three dosing schedules of sapacitabine [ClinicalTrials.gov Identifier NCT00590187].  The three-day dosing schedule in Arm C was selected for further clinical development in elderly patients with de novo AML based on a 1-year survival rate of 30% and an overall response rate of 35%.

In the first quarter of 2010, Cyclacel submitted a SPA request for a randomized, registration-directed, Phase III study of sapacitabine in elderly patients with AML and, pending the response, expects to initiate a pivotal Phase III study in 2010.

Summary

While many companies are developing therapies for AML [see Table 2], there is a need to focus on better frontline therapies for elderly patients given the lack of efficacy and significant toxicity associated with the current 7+3 treatment regimen.  Investors will be watching the following catalysts to help handicap which of the five product candidates [decitabine, azacitidine, clofarabine, sapacitabine, or lintuzumab] will win the race and become the first agent approved by the FDA in this setting:

• Phase IIb results for lintuzumab expected in the August to October 2010 timeframe
• FDA response to SPA request for Phase III study of sapacitabine; initiation of pivotal Phase III study in 2010
• Supplemental new drug application [sNDA] for decitabine by March 31, 2011 and subsequent response from FDA
• Results from frontline clofarabine clinical trials by AML experts and major cooperative leukemia investigation groups in the United States and Europe; relapsed/refractory AML Phase III results in 2011
• Phase III results for azacitidine expected around 2013

NEW – Click here to view this article in PDF format.

Table 2. Late-stage Therapeutic Landscape for AML

References

[i] Kantarjian H, Ravandi F, O’Brien S, Cortes J, Faderl S, Garcia-Manero G, Jabbour E, Wierda W, Kadia T, Pierce S, Shan J, Keating M, Freireich EJ.  Intensive chemotherapy does not benefit most older patients (age 70 years or older) with acute myeloid leukemia. Blood. 2010 Jul 28. [Epub ahead of print]

[ii] Amadori S, Suciu S, Willemze R, Mandelli F, Selleslag D, Stauder R, Ho A, Denzlinger C, Leone G, Fabris P, Muus P, Vignetti M, Hagemeijer A, Beeldens F, Anak O, De Witte T; EORTC leukemia group; GIMEMA leukemia group.  Sequential administration of gemtuzumab ozogamicin and conventional chemotherapy as first line therapy in elderly patients with acute myeloid leukemia: a phase II study (AML-15) of the EORTC and GIMEMA leukemia groups.  Haematologica. 2004 Aug;89(8):950-6.

[iii] Edlin R, Connock M, Tubeuf S, Round J, Fry-Smith A, Hyde C, Greenheld W.  Azacitidine for the treatment of myelodysplastic syndrome, chronic myelomonocytic leukaemia and acute myeloid leukaemia. Health Technol Assess. 2010 May;14 Suppl 1:69-74.

[iv] Eric J. Feldman, Joseph Brandwein, Richard Stone, Matt Kalaycio, Joseph Moore, Julie O’Connor, Nancy Wedel, Gail J. Roboz, Carole Miller, Raj Chopra, Joseph C. Jurcic, Randy Brown, W. Christopher Ehmann, Philip Schulman, Stanley R. Frankel, Daniel De Angelo, David Scheinberg.  Phase III Randomized Multicenter Study of a Humanized Anti-CD33 Monoclonal Antibody, Lintuzumab, in Combination With Chemotherapy, Versus Chemotherapy Alone in Patients With Refractory or First-Relapsed Acute Myeloid Leukemia. Journal of Clinical Oncology, Vol 23, No 18 (June 20), 2005: pp. 4110-4116.

With few exceptions, companies with monoclonal antibody platforms have significantly outperformed the NASDAQ Biotechnology Index® (NBI) since the end of 2008 [see Table 1].  Accordingly, the purpose of this article is to offer several key factors that help explain the above average returns for monoclonal antibody companies during this +18-month period – a trend that we believe is likely to continue.

Table 1: Select public companies with monoclonal antibody platforms

Higher rate of success

In order to determine the appropriate current value for a biotechnology company, an investor would normally consider projected future cash flows resulting from product sales, probability of success, and a discount rate to reflect the risks that the company faces.

With regard to probability of success, one of the greatest considerations for a biotechnology company is the fact that new drug candidates must receive approval from the Food and Drug Administration [FDA] before they can be marketed in the United States.  Receiving FDA approval is dependent, in part, on the drug candidate successfully passing a series of clinical trials that are generally conducted in three sequential phases.

Successfully transitioning from the early stages that establish safety [Phase I] to later phases where efficacy is demonstrated [Phase III] will improve the approval success rate [e.g., the odds that the drug will ultimately reach the market].  Interestingly, researchers from the Tufts Center for the Study of Drug Development at Tufts University recently analyzed the average approval success rates for investigational drugs first tested in humans from 1993 to 2004 [Ref 3] and found substantial differences between large molecules [32% success rate] and small molecules [13% success rate].  Monoclonal antibodies represented the largest group [47%] of the large molecules evaluated in the study.

In view of the fact that nearly one-third of large molecule product candidates entering the clinic ultimately receive FDA approval and that they are nearly 2.5-times more likely to ultimately receive approval than small molecule compounds, companies that are developing monoclonal antibodies should be awarded higher valuations due to the higher probability of success.

Reduced concerns from biosimilars

The Patient Protection and Affordable Care Act [PPACA], which was signed into law on March 23, 2010, included a provision amending the Public Health Service Act [PHSA] to permit approval of biosimilar biological products through an abbreviated biological license application [ABLA] submitted to the FDA.  Under the law, originators have a 12-year exclusivity period before a biosimilar is approved.

While many questions remain about the specifics of the ABLA process until the FDA releases its guidance, the PPACA does state that to support approval of a biosimilar, the sponsor must show that the product is “biosimilar to the reference product” based upon data derived from analytical, animal, and clinical studies.  As a result, it is unlikely that monoclonal antibody products will represent the first class of biosimilars on the market due to the fact that they have very specific binding properties and are typically larger and more complicated than other biologic drugs.

Regardless, according to a recent article by Ludwig Burger for Reuters, analysts expect price discounts of only 20 to 30 percent in markets affected by biosimilar competition, which compares with an average markdown of 90 percent for generic versions of small molecule drugs. This is likely due to the fact that development, production and marketing of a biosimilar costs more than making a generic copy of conventional chemical drugs.

Lastly, for those individuals that believe manufacturing biologic drugs is easy, a review of Genzyme Corporation’s (GENZ) recent challenges offers a different perspective.  See “Genzyme’s Manufacturing Disruption Highlights Investment Opportunities in Lysosomal Storage Disorders.”

Manufacturing processes have improved

In contrast to small molecule therapeutics that can be synthesized for $1 per gram and simple proteins like insulin that can be efficiently produced in bacterial hosts, monoclonal antibodies are normally produced in mammalian cells at a cost of $300-$5,000 per gram [Ref 4].

Fortunately, in parallel with the clinical and commercial success of monoclonal antibodies there have been major advances in cell line development, bioreactor construction and operation, purification strategies and analytics. For example, cell culture productivity has improved more than 100-fold in the last 15-years.  With these advances, global protein output using mammalian cell culture increased from under 500 kilograms in 2000 to 3,600 kilograms in 2005 and manufacturing costs have been reduced.

In addition to the aforementioned advances, new sources of inexpensive antibody production are being explored.  For example, antibodies have been expressed successfully in genetically modified plants and have been shown to retain their native functional forms.

Evolution from acute to chronic treatment

In the early 1980’s, most monoclonal antibodies were derived from mouse genes with major limitations such as inducing human anti-mouse antibody [HAMA] responses in patients, lack of effector functions and short plasma half-life [Ref 5].  Later that decade, genetic engineering techniques made chimeric and humanized versions available for study.  Until this point in time, most therapeutic monoclonal antibodies had been studied as acute treatments for cancer or immunological diseases [Ref 6].

By the late 1990’s, methods to produce human monoclonal antibodies were developed, including phage display and transgenic mice.  With the availability of human antibodies with reduced immunogenicity and increased efficacy, the biotechnology industry began studying monoclonal antibodies for the chronic treatment of non-life threatening diseases, which opened new market opportunities.

In this regard, KaloBios Pharmaceuticals, Inc. (private) is applying its proprietary Humaneering™ technology platform to produce antibodies that are close to human germ-line in sequence while retaining the specificity and improving the affinity of the reference antibody.  KaloBios is developing an anti-GM-CSF human monoclonal [KB003] for the treatment of patients with autoimmune and chronic inflammatory conditions, such as rheumatoid arthritis and asthma.  Sales of two marketed monoclonal antibodies indicated for the treatment of rheumatoid arthritis, Humira® [adalimumab] and Remicade® [infliximab], are projected to reach $15.8 billion in combined sales by 2016 according to Evaluate Pharma [Ref 2].

In January 2010, KaloBios partnered with Sanofi Pasteur, the vaccines division of sanofi-aventis Group (SNY), to develop the company’s Humaneered™ antibody fragment KB001 for the prevention and treatment of Pseudomonas aeruginosa (Pa) infections. KaloBios received an upfront payment of $35 million and is eligible for development, regulatory and commercial milestones totaling $255 million in addition to royalties on eventual product sales.

In addition, MacroGenics, Inc. (private) entered into a global strategic alliance with Eli Lilly & Co. (LLY) in October 2007 valued at approximately $500 million for teplizumab, a humanized anti-CD3 monoclonal antibody currently being studied in a global pivotal Phase II/III clinical trial for individuals with recent-onset type 1 diabetes.

Licensing, merger, and acquisition dynamics

The higher average approval success rates with large molecules compared with small molecules appears to be partially reflected in the economics of some recent licensing and M&A transactions.

For example, in June 2010 OncoMed Pharmaceuticals, Inc. (private) partnered with Bayer Schering Pharma AG (BAYRY.PK) to discover, develop and commercialize novel anti-cancer stem cell therapies including multiple antibody, protein therapeutics and small molecules targeting the Wnt signaling pathway.  For each drug candidate successfully developed through Phase III clinical trials and regulatory approval, OncoMed’s payments from Bayer could total up to $387.5 million for each biotherapeutic drug compared with $112 million for small molecule drugs.  Accordingly, potential payments for large molecules are 3.5 times greater than for the small molecules.

As another example, Eli Lilly & Co. (LLY) acquired ImClone Systems, Inc. for $6.5 billion [5x sales of $1.3 billion], while Astellas Pharma, Inc. paid $4 billion for OSI Pharmaceuticals, Inc. [3.3x sales of $1.2 billion].  Both ImClone and OSI received royalties on product sales from corporate partners.

ImClone’s marketed product Erbitux® [cetuximab] is a monoclonal antibody that inhibits the epidermal growth factor receptor [EGFR] and is indicated for the treatment of certain types of colorectal cancer and as a single agent or in combination with radiation therapy for head and neck cancer.  OSI’s comparable product Tarceva® [erlotinib] is a small molecule antagonist of EGFR and is indicated for the treatment of non-small cell lung cancer and pancreatic cancer.  While this is not an apples-to-apples comparison, it does help support the fact that premiums are being paid for monoclonal antibodies versus small molecules.

Investors are also likely placing M&A premiums on monoclonal antibody companies due to robust activity during the past five years [see Table 2].  In fact, there has been at least one deal announced each year during this period.

Table 2: Select M&A among monoclonal antibody companies

Access to capital

Despite a challenging financing climate, many public monoclonal antibody developers referenced in Table 1 have been able to raise capital through public offerings.  For example, ImmunoGen, Inc. (IMGN) raised $77.6 million at $8.00 per share in May 2010, Micromet, Inc. (MITI) raised $80.5 million at $7.00 per share in March 2010, and Seattle Genetics, Inc. (SGEN) raised $136 million at $10.75 per share in August 2009.  This demonstrates strong investor appetite for monoclonal antibody companies, which could bode well for future initial public offerings [IPOs] given the paucity of public options in the sector due to M&A activity over the past few years.

Summary

Biotechnology companies developing monoclonal antibodies have been outperforming the broader sector for the past 18-months, a trend that is likely to continue based on higher average approval success rates, reduced concerns from biosimilars, improvements in manufacturing and resulting impact on margins, broadening utility beyond treating cancer and inflammation, robust partnering and M&A activity, and access to capital.

References

1. Roche Annual Report 2009 (www.roche.com/gb09e.pdf)
2. Evaluate Pharma World Preview 2016 Report
3. DiMasi, JA. Et al. Clin Pharmacol Ther. 2010 Mar;87(3):272-7. Epub 2010 Feb 3.
4. Chen, C. Trends in Bio/Pharmaceutical Industry. 2009 5(3).
5. Chan, A. Et al. Nat Rev Immun. 2010 May;10.
6. Reichert JM. Curr Pharm Biotechnol. 2008 Dec;9(6):423-30.

While a comprehensive preview of AACR is beyond the scope of this article, we note that two companies working in the area of cyclin-dependent kinase [CDK] inhibition made headlines in the months leading up to AACR.  Further evidence of interest in the area is demonstrated by the fact that the 2001 Nobel Prize in Physiology or Medicine was awarded for the discovery of CDKs and cyclins and the complete description of cyclin and cyclin-dependent kinase mechanisms. 

By selectively interrupting the cell cycle regulation in cancer cells, inhibition of CDKs represents a promising strategy for cancer therapy.  Accordingly, with more than 50 abstracts related to CDK inhibition scheduled for presentation at this year’s AACR annual meeting, we provide an overview of the target and highlight some of the companies and programs being discussed.

CDK overview

Each time a cell divides it undergoes a series of events collectively known as the cell cycle.  Controlled and regulated cellular division is a normal part of cell physiology. 

Cancer is characterized by uncontrolled cellular division and growth, which can be caused by mutations in DNA resulting in the overexpression of cancer-promoting oncogenes or repression of tumor suppressor genes.  There are many examples of oncogenes and tumor suppressor genes but some of the more common ones include signaling proteins [PI3K], receptors [HER2], and DNA damage and repair regulating proteins that control cell cycle check-points such as p53 and BRCA. 

CDKs are a group of signaling kinases that play a direct role in the regulation and progression of the cell cycle.  CDK activity is dependent on the availability of their regulatory subunits called cyclins, which CDKs phosphorylate in order to stop cell cycle progression in cancerous cells.  Production and destruction of cyclins are tightly regulated in coordination with cell cycle progression.  Targeting CDK/cyclin macromolecular complexes is an attractive strategy for the design of novel anticancer drugs. 

There are over a dozen known CDK/cyclin complexes.  The most extensively studied subtypes are CDK2/cyclin E, CDK2/cyclin A, CDK7/cyclin H, and CDK9/cyclin T which are key components of the p53 pathway and CDK4 and CDK6 interacting with cyclin D1, which are key components of the retinoblastoma or Rb pathway.

Many tumor mutations interfere or deregulate the tight control of cyclin-CDK interactions leading to overactive CDKs, resulting in continuous cellular proliferation or unscheduled re-entry into the cell cycle.  In addition, deregulated CDK activity can result in genomic and chromosome instability, a feature observed in many advanced or aggressive tumors.

Early Failures

First generation, pan-CDK inhibitors have not demonstrated improved clinical outcomes.  Reasons for early failures include non-specific drug targets or suboptimal dosing and scheduling.    Also, pan-CDK inhibitors may not have an acceptable pharmacological window due to high toxic side effects or limited efficacy. 

For example, CDK7, CDK8, and CDK9 play a role in DNA transcription.  While it may be advantageous to target these CDK/cyclins as part of a multikinase drug profile, strong inhibition may result in the broad disruption of transcription, which is not desirable. 

This may have been the case with BMS-387032 [subsequently known as SNS-032], a small molecule cell-cycle modulator that targets CDKs 1, 2, 4, 7, and 9.  The compound demonstrated significant safety risks in Phase I studies conducted by Bristol-Myers Squibb (BMY), including increases in certain phases of the cardiac cycle, known as the QT interval. 

In 2005, Sunesis Pharmaceuticals, Inc. (SNSS) acquired rights to BMS-387032 for an up-front payment of $8 million in Sunesis’ stock, future milestone payments totaling $78 million, and royalties on net sales.  However, in December 2008, Sunesis notified Bristol-Myers that the company was terminating the license agreement for SNS-032 after no responses demonstrating efficacy were observed in a Phase I trial.

Next generation CDK inhibitors target select CDK sub-types and have shown improved potency along with other drug-like properties.  The various CDK sub-types are active at different points within the cell cycle and discrete cancers are dependent on specific CDK sub-types.  Therefore, each CDK inhibitor sub-type may be relevant to different tumors or genetic mutations. 

For example, CDK4 is frequently deregulated in glioblastoma and CDK2 activity is commonly altered in colon cancer.  Recently published evidence implicates certain cyclins and in particular cyclin E, the partner of CDK2, as a mediator of acquired resistance in several cancers, such as lung and breast cancer.  Some of these next-generation programs are highlighted below [also refer to Table 1]:

Pfizer, Inc. (PFE)

In late March 2010, Pfizer made headlines with a preclinical study published in the journal Cancer Research.  Results from the study demonstrated that PD-0332991, a drug being developed by Pfizer, could arrest the growth of glioblastoma multiforme [GBM] in animals.  PD-0332991 is an oral agent that inhibits certain CDKs, mainly CDK4 and CDK6.  Six abstracts related to PD-0332991 are scheduled for presentation at AACR.  Pfizer is managing and funding all clinical development of PD-0332991, which the company licensed from Onyx Pharmaceuticals, Inc. (ONXX).  PD-0332991 is the subject of various clinical trials in multiple myeloma, NHL, mantle-cell lymphoma, glioblastoma and breast cancer. 

Cyclacel Pharmaceuticals, Inc. (CYCC)

Cyclacel Pharmaceuticals, which is developing a clinical stage CDK inhibitor candidate, also made headlines earlier this year.  The company’s oral compound seliciclib [CYC202 or R-roscovitine], inhibits CDK2/E, CDK2/A, CDK7/H, and to a lesser degree CDK9/T.  Seliciclib is currently in Phase IIb clinical trials for non-small cell lung cancer [NSCLC] and nasopharyngeal cancer.

Shares of Cyclacel Pharmaceuticals jumped from $1 to more than $4 in January 2010 when independent investigators published data in the peer-reviewed journal Clinical Cancer Research showing that both seliciclib and a second-generation CDK inhibitor from Cyclacel reversed resistance to lung cancer cells with K-Ras or N-Ras mutations.  Cancers with Ras-activating mutations are thought to be among the most difficult to treat and are not responsive to modern targeted drug therapy, such as EGFR inhibitors.  The data also showed that lung cancer cells are addicted to cyclin E/CDK2.  Cyclacel expects to report top line results from its APPRAISE NSCLC Phase IIb trial with seliciclib later this year. 

A different investigator group also recently published data in the peer-reviewed journal Clinical Cancer Research demonstrating that seliciclib reversed resistance to the aromatase inhibitor Femara® [letrozole].  Seliciclib killed hormone receptor-positive breast cancer cells that had become insensitive to the effects of letrozole because of over expression of low molecular weight Cyclin E. 

At AACR, Cyclacel is introducing a second-generation CDK product candidate, which is currently in investigational new drug [IND]-directed development.  The undisclosed molecule is a second generation oral CDK inhibitor with increased potency.  Three abstracts related to both seliciclib and the second-generation compound are scheduled for presentation at AACR.

Sanofi-Aventis SA (SNY)

Sanofi-Aventis is developing its lead CDK inhibitor, flavopiridol [HMR-1275, alvocidib] for the treatment of both solid and hematologic malignancies.  Flavopiridol is a pan–CDK inhibitor that blocks CDK9, -2, -4, and -6 at nanomolar concentrations.  Published data from flavopiridol clinical trials suggest that its main toxicities are induction of neutropenia and secretory diarrhea.  Phase II studies of flavopiridol as a single agent have been completed in metastatic melanoma, endometrial adenocarcinoma, and multiple myeloma demonstrating limited efficacy as a monotherapy.  However, flavopiridol has shown promise as a combination therapy, with the best responses observed in CLL patients in combination with fludarabine and cyclophosphamide.  Four abstracts related to flavopiridol are scheduled for presentation at AACR.

Merck & Co., Inc. (MRK)

Merck is developing its lead CDK inhibitor, SCH 727965 [dinaciclib], for multiple indications including solid tumors, NHL, multiple myeloma, ACL, and ALL.  SCH 727965 is an intravenously-delivered CDK1, CDK2, CDK5, and CDK9 inhibitor.  The drug is administered by a 2-hour IV infusion once every 21 days.  Merck is currently recruiting patients for a Phase II study evaluating SCH 727965 to determine the activity of SCH 727965 in patients with breast cancer and in patients with lung cancer compared to standard treatment, capecitabine and erlotinib respectively.  One abstract regarding the activity of SCH 727965 in cell lines for childhood cancers is scheduled for presentation at AACR.

Bayer (BAY.DE)

Bayer will introduce its CDK inhibitor, BAY 1000394, in an abstract scheduled for presentation at AACR.  BAY 1000394 is a nanomolar pan-CDK inhibitor targeting CDK1/Cyclin B, CDK2/Cyclin E, CDK4/Cyclin D1, and CDK9/Cyclin T1.  The maximum tolerated dose for BAY 1000394 was found to be 2.0 mg/kg on QD schedule and 2.5 mg/kg on a BID intermittent schedule.  BAY 1000394 is being tested in a broad range of histological tumor subtypes.

Tragara Pharmaceuticals (private)

Tragara Pharmaceuticals is developing TG02 [also known as SB1317], an oral multi-kinase inhibitor that targets CDK 1, 2, 7 and 9, as well as two other kinases – JAK2 and FLT3.  TG02, which was licensed from S*BIO Pte Ltd in January 2009, is being prepared for IND filing in Q2 2010 with plans to proceed in hematology and solid tumors.  Tragara recently received a $1 million grant form the Multiple Myeloma Research Foundation [MMRF] to fund the early-stage drug development TG02 in treating multiple myeloma.  One abstract regarding the activity of TG02 in leukemia cell lines is scheduled for presentation at AACR.

Conclusion

 CDKs play a pivotal role in a cell’s entry into division; de-regulated CDK activity is a well-documented player in tumor progression and represents an attractive therapeutic anti-cancer option.   However, first generation CDK inhibitors have not demonstrated improved clinical outcomes.  Next generation CDK inhibitors, such as those being discussed at AACR, are CDK sub-type specific and have shown improved potency along with other drug like properties.  In addition, next generation CDKs are demonstrating their importance in several difficult to treat cancers, such as those dependent on Ras-activating mutations.

Table 1: Abstracts for CDK Inhibitors at AACR

Since the early 1990s, cancer immunotherapy has provided hope to patients, physicians, and investors as a new treatment modality with limited side effects and superior efficacy.  Cancer immunotherapy broadly includes passive immunization, active immunization, and immunostimulation [1]. 

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

Clinical results with mAbs were largely disappointing for the first 10 years of development[2].  In fact, it wasn’t until November 1997 that the first mAb for cancer therapy, Rituxan® [rituximab], was approved by the U.S. Food and Drug Administration [FDA].  Developed by IDEC Pharmaceuticals, Rituxan® is a chimeric monoclonal antibody against the protein CD20 that is currently approved for the treatment of chronic lymphocytic leukemia [CLL], non-Hodgkin’s Lymphoma [NHL], and rheumatoid arthritis [RA][3].  

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

While the success of Rituxan® spurred the development of other anti-CD20 mAbs, it wasn’t until October 2009 that Arzerra® [ofatumumab] was approved by the FDA for the treatment of CLL.  Ofatumumab, which was developed by Genmab A/S (GNMSF.PK) and GlaxoSmithKline plc (GSK), is a human mAb that targets an epitope different from Rituxan® and other anti-CD20 mAbs[4]. 

Today, passive immunotherapies represent one of the most successful therapeutic classes and there are currently ten mAbs approved for cancer therapy [see Figure 1: FDA Approval of cancer mAbs from 1997-2010].  Three blockbuster products sold by the Roche Group (RHHBY) – Avastin® [bevacizumab], Rituxan®, and Herceptin® [trastuzumab] – collectively represented nearly US$17 billion in revenue for 2009[5].  As useful as many of these mAbs have become in cancer therapy, they often have the greatest efficacy impact when used in combination with other therapeutic modalities, particularly cytotoxic agents[6]. 

Figure 1: FDA Approval of cancer mAbs from 1997-2010

Similar to passive immunotherapy with mAbs, the early development of active immunotherapies has proven to be an enormous challenge[7].  In fact, we identified nearly a dozen product candidates that failed in Phase III trials.  Active immunotherapies are therapies that contain a specific antigen or set of antigens that are designed to activate the patient’s own immune system to seek out and destroy cells that carry the same antigen.  They have no direct therapeutic action, but rather rely on the patient’s immune system to recognize and destroy the intended target. 

While no active immunotherapeutics are currently approved for the treatment of cancer, the FDA has assigned a Prescription Drug User Fee Act [PDUFA]) date of May 1, 2010, by which time it will respond to Dendreon Corporation’s (DNDN) amended Biologics License Application [BLA] for Provenge® [sipuleucel-T].  Dendreon is seeking licensure for Provenge® for men with metastatic castrate-resistant prostate cancer [CRPC].  This event has reignited enthusiasm for the field of active immunotherapy and shares of Dendreon, which traded below $5 in March 2009, recently hit all-time highs above $40 and a market capitalization greater than $5 billion. 

As with any first-in-class product, regulatory delays are possible.  For example, the BLA for Rituxan® was originally submitted on February 28, 1997, and the FDA requested additional data on certain aspects of the production process related to the bulk drug manufacture on August 29, 1997, which delayed approval until later that year [November 26, 1997].  In view of the complexities of manufacturing and distributing an autologous cancer therapy, a similar request by FDA for Provenge® would not be unexpected and would likely occur around the PDUFA date using Rituxan®’s history as a guide. 

If approved by the FDA, Provenge® would represent the first active immunotherapy for the treatment of cancer.  However, unlike Rituxan®’s market monopoly that lasted for nearly 12-years, Provenge® could face competition in a relatively short period of time.  Numerous active immunotherapies are in late-stage clinical development for prostate cancer – including a promising off-the-shelf vaccine set to begin a pivotal Phase III trial in 2010.  In fact, nine product candidates are in clinical trials for the treatment of prostate cancer, representing the largest therapeutic area within the active immunotherapy market 

Beyond Provenge®, there are a number of additional catalysts in 2010 that could ignite further interest in the field of cancer immunotherapy.  Nearly 50 clinical programs involving active cancer immunotherapies are currently underway, including nearly a dozen that are in pivotal Phase III development with several BLAs planned in 2010. 

For example, Bristol-Myers Squibb Company (BMY) has announced its intent to potentially file for regulatory approval for ipilimumab [with or without vaccine therapy] in metastatic melanoma in 2010 and has submitted Phase III data for presentation at the American Society for Clinical Oncology [ASCO] annual meeting held June 4-8, 2010.  In addition, GlaxoSmithKline plc (GSK) is conducting the largest ever Phase III clinical trial in lung cancer treatment with its investigational MAGE-A3 ASCI immunotherapy, with the possibility for data presentation at ASCO 2010.  Lastly, following the presentation of positive Phase III trial results at ASCO 2009, Biovest International, Inc. (BVTI.PK) expects to file a BLA for BiovaxID in NHL in 2010. 

Accordingly, in our latest industry report titled “Cancer Vaccine Therapies: Failures and Future Opportunities,” we provide an overview of the cancer immunotherapy market, feature profiles of nearly 40 companies, include interviews with several key opinion leaders, and review some of the scientific, medical, clinical, and financial aspects of the major industry participants.  For more information regarding the report, please click here or send an email to: info@mdbpartners.com

Objectives of the Report

Some of the objectives of this report are to:

• Provide an overview of the cancer immunotherapy market
• Identify disease indications currently being studied with cancer immunotherapy
• Identify the companies currently involved in cancer immunotherapy development
• Identify specific product candidates that offer the greatest market opportunities
• Assess the risks of cancer immunotherapy development and commercialization

Research Methodology

MD Becker Partners adopted a three-fold approach for this study:

• Primary research focused on interviews with key opinion leaders involved in the field of cancer immunotherapy
• Secondary research focusing on utilizing information from peer-reviewed journal articles and reports on cancer immunotherapy
• Quantitative and qualitative analysis of the primary and secondary data using our industry experience and knowledge of the marketplace 

References:  

1. Rüttinger, D. et al. Oncologist. 15(1): 112-8 (2010). 
2. Ritz, J. et al. Blood. 59:1-11 (1982). 
3. Rituxan® (rituximab) prescribing information (www.rituxan.com) 
4. Teeling, JL. et al. J Immunol. 177(1): 362-71 (2006). 
5. Roche Annual Report 2009 (www.roche.com/gb09e.pdf) 
6. Goldenberg, DM. Cancer. 116(4): 1011-2 (2010). 
7. Rescigno, M. et al. Biochim Biophys Acta. 1776(1): 108-23 (2007).

1. Nociceptive pain, which is caused by physical activation of pain receptors due to tissue damage, such as breaking a bone; or
2. Neuropathic Pain (NeP), which is caused by dysfunction of the somatosensory system resulting from abnormal nociceptive pathway signaling or nerve injury.

There are a number of disease states that lead to NeP including: diabetes, multiple sclerosis (MS), cancer, spinal cord injury, stroke, and HIV infection along with many others.

The NeP pain signal begins with sensory receptors [nociceptors] that are activated through pain stimulation.  NeP results from traumatic, inflammatory, ischemic, or metabolic insults directly to the nerve, often causing the pain receptors to fire spontaneously [1].   NeP is characterized by both chronic and acute pain or sensitivity.  The underlying pathophysiology of NeP is not completely understood and as a result pharmacotherapy is frequently unsatisfactory with only about 30% of Food and Drug Administration [FDA] approved pharmacological drugs meeting satisfactory endpoints [1,3]. NeP remains one of the most debilitating symptoms in the clinic and improvements, characterized by lessening pain and improving the overall quality of life, represent a large unmet medical need.

There are several FDA approved medications available today to treat NeP with a high variability of success [2].  Analgesics are often prescribed based on safety, tolerability, drug interaction, and cost and less on the efficacy of the drugs.  Lidocaine, secondary amine tricyclic antidepressants [off label use], selective serotonin and norepinephrine reuptake inhibitors, calcium channel ligands [gabapentin and pregabalin], and tramadol are first line therapies [2].

Many of the aforementioned analgesics have limited success and physicians often turn to opioids as a treatment option for NeP.  Opioid analgesics, including morphine and oxycodone can be very effective in treating patients with severe pain but have limited success in NeP.  Opioid analgesics, which have a wide range of adverse side effects such as nausea, clinical constipation, and addiction, produce pain relief mainly by stimulating opioid receptors in the central nervous system.

Despite the limitations for NeP medications, the market for pain therapies is large. In 2007, the worldwide sales of prescription opiods surpassed $9.5 billion and they are expected to grow to $11.9 billion in 2018 [4].  In the US alone, over 200 million prescriptions were written for opiod medications.  Yet there remains a large opportunity for new drugs with greater efficacy and reduced side effects to address the unmet need.

The development of drugs to treat patients with NeP is challenging with many pharmacotherapy development failures. For example, neurokinin antagonists demonstrated very strong preclinical efficacy yet proved to be a huge failure in clinical development. There are several reasons that finding a truly effective therapy for NeP has been elusive:

• Clinical trials for pain drugs often have a high placebo rate, which makes it difficult to demonstrate efficacy and regulatory approval.
• Abuse potential is a major factor for the opioids, especially oxycodone and the FDA is requiring drug companies to submit a risk management program.
• Responses to single drugs are very rare.  This is because of the complexity of NeP disease and the high inter-patient variation of disease mechanism*.
• The mechanism may change based on the underlying disease course.
• Difficulty in diagnosing and measuring pain for physicians.
• Failure to understand conditions which influence pain response.
• High drug-drug interactions, especially given that most patients are on medications to treat the underlying disease state.

The challenges and opportunities for NeP drug development create optimal conditions for large pharmaceutical companies to license compounds from smaller development-stage biopharma companies.  Large pharmaceutical companies may be better equipped to design and implement the requisite clinical studies, while development-stage biotechnology companies may be more adept at drug discovery. In the text that follows, we highlight a few biopharmaceutical companies with promising technologies or products that are collaborating with large pharma, as well as a few companies that may be the next to partner:

Icagen, Inc. (ICGN)

Icagen is a biotechnology company with scientific experts in ion channel discovery and ion channel drug development.  Icagen has a collaboration with Pfizer, Inc. (PFE) for some of its ion channel pain targets.  Icagen has cloned over 300 ion channel genes and has developed a proprietary ion channel high-throughput screening and development technology allowing for the discovery of small molecules that modulate the state of each receptor.  One area of focus for Icagen are small molecules that activate potassium channels of the neurons. Icagen’s lead compound for NeP is ICA-105665, which specifically activates the KCNQ ion channel leading to increased neuron polarization thereby decreasing the excitability state of the nerve cells.  By shifting the membrane potential to be more negative, ICA-105665 is most effective when the neurons are actively firing in response to painful stimuli making the mechanism of action very specific for active neurons.  KCNQ channels are attractive drug targets because these ion channels are found at key areas of the peripheral and central nerve terminals as well as in the brain region involved in pain processing.  ICA-105665 has completed its Phase I safety study and the company expects to begin a proof of mechanism study later in 2009.

Adolor Corporation (ADLR)

Adolor, also in collaboration with Pfizer, is developing novel, first in class, small molecule agonists that selectively stimulate the human delta opioid receptor, a key receptor in the modulation of pain.  Adolor’s technology involves selecting novel agonists that specifically activate the delta opioid receptor without the side-effect profiles of other opioid receptor agonists including drug dependency. Adolor’s lead compound, ADL5859, is currently being developed for neuropathic pain with acceptable preclinical safety and toxicology profiles.  ADL5859 is in Phase IIa clinical trials for patients with neuropathic pain associated with diabetic peripheral neuropathy.  Adolor and Pfizer plan to re-formulate ADL5859 before commencing additional Phase IIa clinical trials.

Xenoport, Inc. (XNPT)

Xenoport, in collaboration with GlaxoSmithKline plc (GSK), recently presented its top-line results from its Phase IIb clinical trial of XP13512 for the treatment of NeP associated with Post-Herpetic Neuralgia or shingles.  XP13512, also known as Solzira [gabapentin enacarbil], is being co-developed for restless leg syndrome.  Solzira is a gabapentin pro-drug with several advantages over gabapentin such as dose proportional and sustained exposure through high-capacity transport mechanisms in the gastrointestinal tract. Gabapentin is a GABA analogue with actions on voltage gated Ca2+ ion channels that increase the synaptic and non-synaptic release of GABA.  In the phase IIb study involving 376 patients, XP13512 showed a significant improvement in pain intensity score compared to placebo and was generally well tolerated with only minor adverse events.

Endo Pharmaceuticals (ENDP)

Endo Pharmaceuticals is a specialty pharmaceutical company engaged in the research, development, sale and marketing of branded and generic prescription pharmaceuticals used primarily to treat and manage pain. The company is developing axomadol, a patented new chemical entity licensed from German analgesics and oral contraceptives producer Grunenthal, which is currently in Phase II development for the treatment of moderate to moderately severe chronic pain and diabetic peripheral neuropathic pain. Preclinical studies of axomadol demonstrated excellent efficacy in the treatment of pain in arthrosis and a reduced side-effect spectrum. Moreover, it has been found that in the chronic inflammation pain model, axomadol shows a better analgesic efficacy compared to conventional analgesics such as morphine, oxycodone and tramadol.

Allergan, Inc (AGN)

Allergan, in collaboration with ExonHit Therapeutics (Alternext: ALEHT) is developing AGN 0001 for the treatment of NeP. Phase I studies have been completed and the compound is now being considered for Phase II development.

In a separate collaboration with ACADIA Pharmaceuticals, Inc. (ACAD), Allergan is developing small molecules that activate the alpha adrenergic receptor as a novel pain therapy target including the lead molecule AGN XX/YY. Preclinical studies have demonstrated highly effective pain relief without the side effects of current pain therapies.  Allergan has completed Phase I studies for AGN XX/YY and is currently conducting Phase II development. Allergan has reported preliminary data from its Phase II program, including positive proof-of-concept in a visceral pain trial in patients that had hypersensitivity of the esophagus, and efficacy signals in two chronic pain trials in the areas of fibromyalgia and irritable bowel syndrome.

Avigen, Inc. (AVGN)

AV411 is Avigen’s lead molecule for the treatment of neuropathic pain. AV411’s active ingredient is ibudilast, a drug found in Japanese markets for the treatment of asthma with a well-experienced safety profile.   However, Avigen holds the patent for ibudilast for the treatment of NeP in the US and Europe.

Glial cells surround neurons and play an important role as mediators of NeP by enhancing the release of neurotransmitters and by increasing the excitability of neurons. Glial cells also release pro-inflammatory cytokines such as TNFa and IL-1, which are upregulated in NeP.  AV411 blocks the release of several Glial cell derived cytokines through the inhibition of MIF and TLR-4.  Preclincal studies by members of Avigen have demonstrated that blocking the activation of glial cells reduces pro-inflammatory cytokines and reverses pathological pain. AV411 is currently in a Phase IIa clinical trial.

Newron Pharmaceutics SPA (Swiss: NWRN.SW)

Newron is currently developing three compounds at various stages for the treatment of NeP.  Newron’s lead compound is ralfinamide, a potential first in-class therapy for Neuropathic Low Back Pain [NLBP] with potential in other neuropathic pain conditions. Ralfinamide is an inhibitor of several ion channels including Nav 1.7, N-type Calcium channels and the NMDA receptor. Several models of NeP have indicated that these ion channels are overactive leading to hyperexcitability and increased pain sensation.   NAV1.7 is an attractive target for pain inhibition due to its role in nerve excitability state and lack of cardiac side effects.  Newron recently initiated a Phase IIb/III study [SERENA] with Ralfinamide in patients with NLBP.  The market for NLBP is estimated at over 55 million patients.

Phosphagenics Limited (PPGNY)

Phosphagenics is investigating new ways to improve upon opioid therapies.  Phosphagenics has developed a platform delivery technology called alpha tocopheryl phosphate mixtures [TPM] that allows for improved delivery and formulation control using Vitamin E phosphates.  Applying TCM technology, Phosphagenics has demonstrated in their preclinical and Phase I studies that their reformulated oxycodone can be delivered non-invasively in a non-irritating patch.  In addition, Phosphagenics is applying their TPM technology to the $750 million lidocaine market.  Their human trial using the TPM technology has demonstrated significantly increased dermal [local] levels of TPM/lidocaine compared to lidocaine with no changes in systemic levels.  Phosphagenics plans to file an IND and initiate a Phase I clinical trial early next year.

Aegera Therapeutics, Inc.

Privately held Aegera Therapeutics recently initiated a phase 2a clinical trial for AEG33773, an orally bio-available small molecule for diabetic NeP.  AEG33773 is a first-in-class oral small molecule allosteric HSP90 modulator/JNK pathway inhibitor. It is efficacious in multiple preclinical models of neuropathic and inflammatory pain. Aegera recently completed a multiple dose Phase I trial.  The Phase 2a study, entitled A Multicenter, Randomized, Double-Blind, Placebo-Controlled Study Comparing the Safety and Efficacy of AEG33773 versus Placebo in Patients with Painful Diabetic Peripheral Neuropathy will evaluate the efficacy, safety and tolerability of three dose levels of AEG33773 in diabetic patients suffering from significant neuropathic pain.

NsGene A/S

NsGene, which was founded in December 1999 as a spin-off from NeuroSearch A/S (OMX CPH: NEUR), recently initiated a 28 patient Phase I study in Australia for NeP.  The company’s lead molecule, Neublastin, is a GDNF neurotrophic factor that has been shown to increase survival and function of peripheral sensory neurons.  NsGene has a collaboration with Biogen Idec, Inc. (BIIB) for Neublastin, but has retained rights to develop Neublastin for the treatment of other diseases of the central nervous system.

Nitec Pharma AG

Nitec Pharma, a spin-out of Merck KGaA , is developing TruNoc™, an NFk-B and AP-1 specific inhibitor for the treatment of NeP.  Activation of NFk-B and AP-1 have both been shown to be critical pathways in the initiation of pain signaling.  TruNoc’s parent compound is flurbiprofen, which has been marketed in the US since 1977; however TruNoc is the R enantiomer from this known analgesic. Unlike fluribiprofen, TruNoc does not possess COX I/II inhibition and the associated harmful side effects. TruNoc is currently in Phase II proof-of-concept studies.

NeP remains a large market with a huge unmet medical need, yet developing medicines to treat these patients has been difficult.  This has created an environment where large pharma is de-risking the initial proof of concept phase by acquiring later stage products from companies that cannot afford the costly clinical trials.  The small and  development stage biotech/biopharmaceutical companies  may retain rights  to market  their NeP compounds to physcian specialist  niche markets and/or  selective geographic  territories  as well as manufacturing rights.  While several excellent collaborations already exist, we expect the number of acquisitions and licensing deals in the NeP segment to increase.

* There is growing scientific evidence that biological changes in neurons play an integral role in the progression of NeP.  For example, NMDA receptor levels and Protein Kinase C [PKC] are elevated in several animal models of NeP.  As more information is known about several of these pathobiological changes, new targets are being explored with the potential to alter the way NeP is treated.

References

1. Finnerup NB et al., Algorithm for neuropathic pain treatment: an evidence based proposal. Pain 2005; 218 289-305
2. McGreeney BE, Pharmacological Management of Neuropathic Pain in Older Adults: An update on Peripherally and Centrally Acting Agents
3. Mizoguchi H et al., New Therapy for Neuropathic Pain. International Review of Neurobiology. 2009 Vol 85.
4. March 2009 Data Monitor Report

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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.

In healthy patients, insulin is released from pancreatic B cells in response to elevated glucose which causes depolarization through the closing of ion gated K+ channels and opening of Ca2+ channels.  The increased intracellular Ca2+ levels results in insulin release from the B cells entering the circulation.  The primary target of insulin is the insulin receptor found in many tissues including the liver, brain, and muscle.  Activation of this receptor initiates a complex signaling network resulting in energy storage, cell growth, and metabolism. Circulating insulin is cleared through the liver (60%) and the kidneys (40%).

Diabetes is a chronic, long-term disease with treatments focusing on disease management.  This includes drugs and devices that alter and monitor insulin levels.    Patients with abnormal insulin levels or who are insulin resistant may develop a series of complications as a result of metabolic derangements such as cardiovascular disease, stroke, nephropathy, retinopathy, peripheral neuropathy, renal failure, and amputations of the extremities. Therefore, new medications that allow for tighter control of insulin levels are needed. 

There are a number of drugs available for patients with type-2 diabetes mellitus. The oral anti-diabetic agents are categorized in four classes based on the mechanism of action: biguanides (reduced gluconeogenesis) thiazolidinediones (PPAR-g ligands), insulin secretagogues (closure of K+ channels on B cells), and a-glucosidase inhibitors (inhibitors of a-glucosidases).  Many of these drug classes have more established profiles such as the insulin secretagogues and biguanides and are the first line of therapy for early stage type-2 diabetes.  In addition, several of these drugs are available in generic forms.  Many patients with type-2 diabetes unable to make lifestyle modifications are unable to achieve normal glucose levels and require a combination of oral anti-diabetic medicines and insulin analogs. 

Several different insulin analogs are available for type-1 and advanced type-2 diabetic patients.  The injected insulin types differ in their onset and duration.  The main players in this area are many of the larger pharmaceutical companies including Lilly (LLY), Sanofi-Aventis (SNY), Novo Nordisk (NVO) and Pfizer (PFE).  Total sales of insulin analogs in 2006 were greater than $4 billion. 

Current strategies for physicians treating diabetics are through the drug classes mentioned above resulting primarily in diabetes management.  Many new insulin altering drugs have entered the market in the past 10 years, but there is mixed evidence that these new drugs are superior to more established therapies (Ref 2-5) probably because many of these drugs are active on the same molecular sights as previously approved drugs.  Importantly, as the number of patients with diabetes increases, developing new medicines that reduce the cost of long-term treatment for this chronic disease will become a necessity. 

PPAR and GLP-1 receptor agonists

As discussed at the recent ADA meeting, new technology and approaches for treating these patients is changing and the competition to secure the growing market is fierce (see Table 1 below for a summary). Eli Lilly and Co. and Amylin Pharmaceuticals Inc. (AMLN), makers of Byetta, recently announced a new formulation of this drug that changes the dosing from twice daily to weekly.  Positive results from this clinical trial are encouraging for many of the patients who are non-compliant with this medication.  Roche (RHHBY) also announced that it would begin a phase 3 trial for its PPAR-g agonist R1439, which demonstrated improved cardiovascular morbidity in high-risk diabetes patients.

Xoma

XOMA (XOMA) presented data from one of its diabetes antibody candidates XOMA-52, which is a clinical stage IL-1b antibody for patients with type-2 diabetes.  IL-1b plays a role in the auto-inflammatory response leading to decreased beta cell function.  XOMA-52 is unique to other IL-1b inhibitors because of its high affinity (K_D is fM) and long half-life (22 days).  As a result, patients need to be injected with XOMA-52 once monthly and should increase patient compliance.    In addition to safety and pharmacokinetic data, the Phase I trial demonstrated decreased HbA1c levels, a key indicator of blood sugar control, and improved beta cell function.  XOMA-52 is an attractive drug candidate because it preserves endogenous insulin production in patients with advancing type-2 diabetes. In addition to clinical data, XOMA also presented detail mechanistic rodent and in vitro data on XOMA-52, confirming the results seen in the clinical study.   

Halozyme

For patients with type-1 diabetes, Halozyme (HALO) recently presented Phase 2 data that showed improved pharmacokinetics and glucodynamics with patients receiving Lilly’s Humalog and co-administration of Halozyme’s PH20 enzyme. PH20 is a recombinant hyaluronidase enzyme that catalyzes the hydrolysis of hyaluronic acid, a major constituent of the interstitial barrier, and increases tissue permeability. This study demonstrated an improved blood glucose metabolism profile in patients taking the combination therapy, reflecting a more physiologic glucose profile thereby likely reducing the amount of exogenous insulin needed along with some potential complications such as hypoglycemia.

Appetite Control

In addition to reformulations, several companies presented data on new drug targets and technologies. VIVUS, Inc. (VVUS) presented data from a year-long Phase 2 trial with Qnexa demonstrating reduced HbA1c levels and helped patients achieve and maintain significant weight loss through appetite suppression.  Qnexa is a combination therapy of FDA approved phentermine and topiramate, which in combination have synergistic effects through unique molecular targets resulting in reduced appetite and increased satiety.  Arena Pharmaceuticals, Inc. (ARNA) presented Phase 3 data from its BLOOM (Behavioral modification and Lorcaserin for Overweight and Obesity Management), demonstrating significant weight loss and reduced secondary endpoints associated with cardiovascular disease after one year of treatment compared to placebo. Lorcaserin is a novel serotonin 2C receptor agonist; selective activation of this Gq-coupled GPCR in the hypothalamus leads to appetite control and increased metabolism. 

Isis

Isis Pharmaceuticals, Inc. (ISIS) presented preclinical data on ISIS-SGLT2Rx, an antisense biologic targeting knockdown in sodium dependent glucose co-transporter type 2 (SGLT2) levels that resulted in a significant reduction in blood glucose levels in multiple animal species. Isis is experienced in RNA targeting drugs and has already commercialized the world’s first antisense drug.   This novel technology allows Isis to target dysfunctional proteins through decreased transcriptional levels thus modifying signaling pathways not attainable through small molecule inhibition.  Antisense technologies may play a key role in finding drugs with unique targets previously unreachable ultimately leading to improved disease management and quality of life.  

Sangamo

Sangamo BioSciences, Inc. (SGMO) presented data from its Phase 2 trial for SB-509 as a treatment for diabetic neuropathy (DN) resulting in statistically significant and clinically relevant improvements in subjects. DN is a severe physiological consequence of chronic elevated blood glucose levels and is seen in many patients with advanced diabetes.  SB-509 is an injectable plasmid encoding a DNA-binding Zinc Finger DNA-binding Protein (ZFP) Transcription Factor (ZFP TF™) designed to upregulate the endogenous expression of the gene encoding vascular endothelial growth factor (VEGF), a peptide responsible for angiogenesis. 

The preclinical and clinical data presented at the ADA gives investors, physicians, and patients a preview of the new drugs and technologies to come.  Many of these drugs are several years away from commercialization; however, because of the new technology, new target, or new delivery method, the outlook remains positive for these drugs and companies in the expanding market of diabetes control.

Table 1: Summary

References

1. Canaccord Adams. Diabetes 2007 and Beyond: Innovation, Demographics and Lifestyle Trends Drive Industry Growth. August 2, 2007
2. UK Prospective Diabetes Study Group. Effect of intensive blood-glucose control with metformin on complications in overweight patients with type 2 diabetes (UKPDS 34). Lancet 1998; 352: 854–65.
3. UK Prospective Diabetes Study Group. Effect of intensive blood-glucose control with sulphonylureas or insulin compared with conventional treatment and risk of complications in patients with type 2 diabetes (UKPDS 33). Lancet 1998; 352: 837–53.
4. Kahn SE, Haffner SM, Heise A, et al, for the ADOPT Study Group. Glycemic durability of rosiglitazone, metformin or glyburide as monotherapy in type 2 diabetes. N Engl J Med 2006; 355: 2427–43.
5. Nathan DM. Finding new treatments for diabetes—how many, how fast… how good? N Engl J Med 2007; 356: 437–40.

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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.

Investor enthusiasm may be warranted, as this pathway is mutated or amplified more frequently than any other pathway in cancer. Activation of the PI3K-AKT-mTOR pathway is associated with cell survival, malignant transformation, tumor invasiveness, and resistance to chemotherapy, radiation therapy and other agents.

In terms of hierarchy, PI3K is at the top, AKT in the middle, and mTOR resides furthest downstream in the pathway. Generally speaking, activation of PI3K results in activation of AKT, which ultimately leads to activation of mTOR in a sequential manner.

Helping to validate the pathway, earlier this year Novartis (NVS) received Food and Drug Administration (FDA) approval for Afinitor® (everolimus), an oral inhibitor of mTOR, for patients with advanced renal cell carcinoma after failure of treatment with Pfizer Inc.’s (PFE) Sutent® (sunitinib) or Nexavar® (sorafenib) by Bayer HealthCare Pharmaceuticals, Inc. and Onyx Pharmaceuticals, Inc. (ONXX). Afinitor® is expected to generate several billion dollars in annual sales, as Phase 3 trials are underway to explore potential of the product in treating multiple additional cancers.

Unfortunately, it has previously been demonstrated (Cancer Res. 2008 Sep 15;68(18):7409-18) that inhibition of downstream targets such as mTOR can activate upstream targets such as AKT through various feedback mechanisms, which may eventually counteract the anticancer efficacy of mTOR inhibitors. In other words, although mTOR inhibition may initially treat the disease, it ultimately turns on a part of the pathway that leads to enhanced tumor survival.

Accordingly, the apex of the pathway (either PI3K or AKT) might be a more effective target and less susceptible to the effects of feedback loops associated with mTOR inhibition. This may explain why Sanofi-aventis (SNY) recently entered into a collaboration with Exelixis, Inc. (EXEL) that could be worth more than $1 billion for the discovery of inhibitors of PI3K for the treatment of cancer. Under the agreement, Exelixis receives an upfront payment of $140 million and guaranteed research funding totaling $21 million over three years.

The Sanofi-aventis/Exelixis collaboration appears consistent with other recent PI3K transactions. In April 2008, Roche acquired Piramed Limited, a privately-owned UK company focusing on therapeutics targeting PI3K, for approximately $175 million in cash. Back in November 2005, Piramed entered into a collaboration with Genentech, Inc. (now Roche) for the development of compounds targeting PI3K for the treatment of cancer. Under the terms of that agreement, Piramed received an undisclosed upfront payment and was eligible for milestone payments during development and on product approval up to a potential aggregate of approximately $230 million.

So it is not surprising that Keryx Biopharmaceuticals, Inc. (KERX) became yet another major beneficiary of the ASCO-effect when the company announced positive data from a Phase 2 combination study of its novel AKT inhibitor (KRX-0401, also known as perifosine) for the treatment of advanced metastatic colon cancer. Keryx also presented positive single agent Phase 2 data of perifosine in the treatment of advanced metastatic renal cell cancer – especially in patients that had previously failed treatment with mTOR inhibitors (either everolimus or temsirolimus). The company’s stock, which was trading around $0.25 at the end of April 2009, recently traded as high as $1.45 on the news. However, even with the recent increase, Keryx has a current market capitalization of just over $60 million.

The stock of AEterna Zentaris Inc. (AEZS) also rose on the news. AEterna licensed North America perifosine rights to Keryx, but kept the rest of the world rights and is seeking partnerships for Asia.

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.