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

Difficult Disease

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

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

Treatment for Organ Confined Disease

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

Treatment for Locally Advanced/Metastatic Disease

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

Beyond Single Agent Gemcitabine

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

Hope on the Horizon

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

Amgen, Inc. (AMGN)

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

Celgene Corporation (CELG)

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

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

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

Clovis Oncology, Inc. (private)

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

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

Novartis AG (NVS)

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

Threshold Pharmaceuticals, Inc. (THLD)

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

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

Conclusion

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

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

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

References

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.

Early this morning, Celgene Corporation (CELG) announced the acquisition of privately-held Gloucester Pharmaceuticals for $340 million in cash plus another $300 million in future U.S. and international regulatory milestone payments.  Gloucester’s Istodax® (romidepsin) was approved in November 2009, by the U.S. Food and Drug Administration [FDA] for the treatment of cutaneous T-cell lymphoma [CTCL] and is being developed for other hematological malignancies, including peripheral T-cell lymphoma [PTCL].

While many potential acquirers may have been sitting on the sidelines watching the market valuations of cash-poor companies continue to decline throughout the year, those depressed share prices may not last much longer.  Improving capital markets for small-cap life sciences companies, evidenced in part by this month’s $48 million follow-on financing by ZIOPHARM Oncology, Inc. (ZIOP), could accelerate merger and acquisition activity in the sector as larger companies race to fill anticipated patent expirations and gaps in their product pipelines.  Indeed, a favorable climate for merger and acquisition activity was one of the main tenets of our positive perspectives for biotechnology in 2009.

Following Celgene’s acquisition of Gloucester, we revisited the baker’s dozen of public biotechnology companies announcing upcoming clinical data presentations at ASH [as of November 27, 2009] from our recent article and identified three small-cap [eg, market capitalization less than $1 billion] biotechnology companies with unpartnered, late-stage [eg, marketed or entering pivotal trials] hematological malignancy programs:

• Allos Therapeutics, Inc. (ALTH): The company is commercializing Folotyn™ (pralatrexate injection), an antimetabolite approved for the treatment of patients with relapsed or refractory PTCL.  While Allos has retained exclusive worldwide rights to Folotyn, which became available in the United States in October 2009, potential competition from Istodax by Celgene/Gloucester may be a concern as a supplemental NDA for PTCL is expected by year-end 2010.  Further, the company was the subject of an article in the December 4, 2009, New York Times questioning its pricing for Folotyn.
• Seattle Genetics, Inc. (SGEN): In February 2009, the company initiated a pivotal trial of its brentuximab vedotin product candidate in patients with relapsed or refractory Hodgkin lymphoma under a Special Protocol Assessment with the FDA.  Seattle Genetics expects to submit both a New Drug Application [NDA] with the FDA under the accelerated approval regulations and a Marketing Authorization Application with the European Medicines Agency for conditional marketing authorization in the first half of 2011.  The company has retained exclusive worldwide rights to brentuximab vedotin.
• Cyclacel Pharmaceuticals, Inc. (CYCC): At the ASH meeting, Cyclacel reported promising 1-year survival data from a Phase 2 randomized trial of its oral sapacitabine capsules in elderly patients with acute myeloid leukemia [AML] and separately interim response data in myelodysplastic syndromes [MDS].  The company is planning to start a pivotal trial with sapacitabine in 2010 and has retained exclusive worldwide rights with the exception of Japan where Daiichi-Sankyo has a right of first refusal to market the drug under terms to be negotiated.

In this regard, Celgene Corporation (CELG) recently announced that data from more than 200 clinical trials involving the company’s products will be presented at the ASH annual meeting.  After reaching a 52-week low of $36.90 in April 2009, shares of Celgene have rebounded nearly 50% to close at $54.97.  As a result, investors may gravitate to other biotechnology companies specializing in the area of hematology to uncover similar investment opportunities.

Accordingly, we recently reviewed press releases from a baker’s dozen of public biotechnology companies also announcing upcoming clinical data presentations at ASH [as of November 27, 2009].  Further, to determine which topics are likely to generate significant visibility and investor interest, we tallied the number of abstracts accepted for each company, identified the product development stage(s), and consolidated the therapeutic classes into the following four general categories:

1. Kinase inhibitors
2. Biologic agents [monoclonal antibodies and small modular immunopharmaceuticals]
3. Chemotherapeutics [antimetabolites, nucleoside analogues topoisomerase inhibitors, and HDAC inhibitors]
4. Others [proteasome inhibitors and anticoagulants]

 See Table 1 below for the results from the 32 abstracts referenced in the press releases.

 Table 1. Baker’s dozen of public biotechnology companies issuing press releases regarding clinical data presentations at ASH

Note: One abstract is listed under both Keryx Biopharmaceuticals and AEterna Zentaris, as perifosine rights have been licensed to Keryx Biopharmaceuticals for North America, while AEterna Zentaris has the rest of world rights.  Two abstracts are listed under both Trubion Pharmaceuticals, Inc. and Facet Biotech Corporation, as the companies entered into a worldwide development and commercialization agreement for TRU-016.

Kinase Inhibitors

Inhibitors of intracellular kinases have the potential to be synergistic with several classes of chemotherapeutic and immunotherapeutic agents.  For example, different cancers have mutations on a few key kinases [such as PI3K], many of which lead to increased cellular growth, proliferation, angiogenesis, and survival.  In addition, many kinases have elevated expression levels or increased activity with several cancers.  Also, while antibodies may target one specific receptor, often multiple receptors are overactive in cancer cells; however, the different receptor signals may converge upon a central nodal signaling point making pharmacological intervention possible. 

Intracellular kinase inhibitors vary not only by their target [and isoform selectivity] but also by their inhibition mechanism.  For example, some small molecule inhibitors are ATP analogs, catalytic domain inhibitors, non-catalytic domain inhibitors, or target ligand inhibitors.  Some of the most studied intracellular kinases include PI3K, mTOR, AKT, SRC, JNK, and others.

One of the major drug development problems to date is that inhibition of one pathway leads to upregulation of a parallel signaling pathway.  It will be important for researchers to decipher the roles of redundant parallel pathways and feedback loops. Together, inhibition of the necessary intracellular signals needed for a cell to respond to external growth and survival factors have the potential to prevent further cancer growth. 

Due to significant interest in PI3K inhibitors, such as Keryx Biopharmaceuticals’ perifosine, we have also listed two private companies presenting Phase I clinical data at ASH.

Table 2. Kinase Inhibitor Presentations

Biologic Agents

Therapeutic applications of monoclonal antibodies [MAbs] are the most widely used form of immunotherapy for cancer at this time.  Examples of MAb mechanisms include prevention of ligand-receptor interaction, antibody dependent cellular cytotoxicity, complement mediated cytotoxicity, and immune modulation.  Most MAbs target cellular receptors that are overexpressed or specific to certain cancers.  New technology in MAbs has allowed for improved conjugations and increased penetration.

In view of significant interest in the area of MAbs, we have also included a private company presenting preclinical data demonstrating proof-of-concept at ASH with an IND planned for Q1 2010.

Table 3. Biologic Agent Presentations

Chemotherapeutics

Antimetabolites have well established anti-cancer profiles with actions on intermediary metabolism of proliferating cells.  The mechanism of action of antimetabolites is through the inhibition of nucleotide and nucleic acid synthesis.  Many of these drugs have delayed toxicity and are subject to drug resistance.  Examples of approved therapies include methotrexate, 5-FU, and more recently Allos Therapeutics’ Folotyn™ [pralatrexate injection]. 

Nucleoside analogues are similar in mechanism to alkylating agents.  Many nucleoside analogues kill cells by binding to DNA and forming strand breaks leading to an inhibition of DNA synthesis and function.  Nucleoside analogues are associated with nephrotoxicity but have shown to be synergistic with other therapies such as vinblastine.  Examples of approved nucleoside analogues include cisplatin and carboplatin.   In terms of development candidates, Cyclacel recently reported topline survival data from a Phase II study of its oral nucleoside analog, sapacitabine, in elderly patients aged 70 or older with either newly diagnosed acute myeloid leukemia [AML] or AML in first relapse.  The study was a three-arm, randomized trial evaluating three dosing schedules of sapacitabine.  The primary endpoint of one-year survival was approximately 30% in two out of the three schedules tested and further details of the study will be presented at ASH.

Histone deacetylase enzymes [HDACs] are a group of proteins that deacetylate lysine residues on core histones resulting in chromatin condensation and gene repression.  In addition, HDACs have been shown to inhibit transcription factors and interact with other proteins including p53 and c-myc.  There are three classes of HDACs each with unique domains and cellular expression profiles [and cancer expression profiles].  Thus, HDACs have a diverse and complex role in cellular activity.  HDAC inhibitors have shown to induce apoptosis, while it is not clear if HDAC specific or pan-HDAC inhibitors, such as Pharmacyclics’ PCI-24781, will have the best clinical outcome.   An example of an FDA approved HDAC inhibitor is Merck & Co.’s (MRK) Zolinza® [vorinostat].

Table 3. Chemotherapeutic Presentations

Others

In 2003, Velcade® [bortezomib] by Millennium Pharmaceuticals, Inc., a wholly-owned subsidiary of Takeda Pharmaceutical Company Limited, became the first proteasome inhibitor to be approved for use in the U.S.  Bortezomib disrupts normal protein homeostasis by targeting the proteasome, the final enzyme in the proteolysis cycle that is critical for normal protein turnover and homeostasis.  Proteasome inhibitors are linked with decreased NF-kappaB [NFkB] activity, which has been shown to be a central transcription factor involved with this disease.  In addition to NFkB, proteasome inhibition has other antitumor activity such as p53 stabilization.  Because the proteasome has been validated as a target for myeloma, other drugs, such as Onyx Pharmaceuticals’ carfilzomib, are in development with novel features such as decreased toxicity and increased potency.

In August 2009, Gentium S.p.A. announced top-line results from a Phase III trial designed to evaluate the safety and efficacy of 25 mg/kg/day of defibrotide, a deoxyribonucleic acid derivative derived from cow lung or porcine mucosa, for the treatment of severe veno-occlusive disease in hematopoietic stem cell transplant patients.  The results did not reach the protocol-specified levels of significance for the primary and secondary endpoints at 100 days.  The Company plans to present full results from the trial at ASH.

Table 4. Other Presentations

Summary

Stocks to watch at ASH by conference/presentation date:

Saturday, December 5, 2009: IMGN, FACT, CYCC, SNSS, TRBN, KERX, AEZS, ALTH

Sunday, December 6, 2009: IMGN, PCYC, SGEN

Monday, December 7, 2009: FACT, IMGN, ARIA*, TRBN, SNSS, GENT, PCYC, ONXX*, ALTH, SGEN

Tuesday, December 8, 2009: ALTH

* Company has announced plans to host an investor teleconference in connection with the ASH presentation(s)

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

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

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

1) Communicate simply, succinctly and consistently

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

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

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

2) Engage competent and experienced external advocates

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

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

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

3) Credibility and management experience

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

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

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

4) Be proactive

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

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

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

5) Growing stronger through adversity

At the start of the year, MD Becker Partners provided a positive outlook for the biotechnology industry in 2009, citing the sector’s defensive characteristics, favorable technical aspects, and improving fundamentals, such as the number of new product approvals, products in clinical trials and the brisk pace of industry consolidation and licensing transactions. Some of the panelists agreed and even hinted at a stronger biotechnology industry going forward.

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

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

# # #

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

About MD Becker Partners LLC

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