With more than 200 abstracts being presented on the topic, the meeting provided an opportunity to validate some of the conclusions from our recent “Graft Versus Host Disease: Failures and Future Opportunities” article.  In particular, we reviewed data presented during the meeting and interviewed several experts in the area of Graft-versus-Host disease [GvHD] to reconfirm our three key findings:

1. Treatment of GvHD remains a large, unmet medical need
2. Low-risk, steroid-sparing approaches are favored in the short-term
3. High-risk strategies with immunomodulatory agents have been prone to failure

Unmet Medical Need

According to the National Marrow Donor Program, approximately 20,000 allogeneic hematopoietic cell transplants [bone marrow, peripheral blood hematopoietic cells, or cord blood transplants] are performed annually worldwide.  Despite the use of prophylactic therapies, GvHD still develops in 30%-80% of patients in the second month following transplant. 

 “A typical complication of patients who have a transplant with a related or an unrelated donor is GvHD of the mouth, esophagus, etc.,” said bone marrow transplant survivor Susan Stewart with BMT InfoNet, a not-for-profit organization that provides information and support services to patients that are going through transplant or have survived a transplant as well as their family members and their donors.  “It’s a serious complication – very hard to manage, very painful – so any topical or enteric medication that becomes available to help reduce it or the pain or the actual incidence of the complication is very welcome.”

While steroids, including prednisone, remain the gold standard therapy for GvHD treatment, only 25% to 41% of patients treated have complete GvHD remission.  In addition, systemic treatment with prednisone or other steroids can lead to severe side effects and mortality.

“The root cause of the biology of GvHD still is a work in progress so that unless and until we can find a particular pathway to knock out, then what we’ll be doing is probably knocking out more immune system pathways then is needed to control GvHD,” said Keith M. Sullivan, M.D., James B. Wyngaarden Professor of Medicine, Division of Cellular Therapy at Duke University Medical Center.  “Steroids for example, just knock about everything in its path down and thus the likelihood for increased infections and complications.”

While the use of prednisone is designed to suppress the T-cell mediated immune onslaught on the host tissues, it can raise the risk of infections and cancer relapse.  For example, systemic treatment with steroids is associated with increased opportunistic infections, which are caused by bacteria, fungi or viruses that do not normally cause infections in people with healthy immune systems.  Systemic steroid use may also reduce the graft-versus-tumor effect and increase the risk of cancer relapse.

“Some people will definitely relapse from their original disease and die, but many people will die from GvHD because their immune system is compromised in order to control the GvHD,” said Ms. Stewart.  “In order to control the GvHD you have to put them on immunosuppressive drugs.  That makes them susceptible to opportunistic infections and they die.”

Currently, no therapies are approved by the United States Food and Drug Administration [FDA] for either prevention or treatment of GvHD.  GvHD represents a growing problem due to an increasing number of allogeneic hematopoietic cell transplants procedures.  As a result there is an urgent need to find therapies for this disease.

“Is this an important area of continued investigation of new therapies for control and prevention of GvHD, the answer is yes,” added Dr. Sullivan.

Low Risk Approaches

Soligenix, Inc. (SNGX)

In view of how little is known about the biology of GvHD, lower-risk, steroid-sparing approaches have a higher likelihood of success in the short-term given the complexity of the disease based on our recent discussions with key opinion leaders.

In this regard, Soligenix, Inc. (SNGX), which sponsored a GvHD working committee in connection with the 2010 BMT Tandem Meetings, is developing orBec® [oral beclomethasone dipropionate] for the treatment of acute  gastrointestinal [GI] GvHD.  Beclomethasone [BDP] is a corticosteroid with potent topical activity used for inflammatory disorders affecting mucosal surfaces, such as the GI tract.  While oral BDP’s mechanism of action is similar to other corticosteroids, it does not enter into the circulation thus avoiding many of the aforementioned negatives associated with systemic steroid uses.

“In 30 years worth of controlled trials for acute GvHD treatment, there is only one agent in two publications, two different trials, that has shown an advantage of controlling GvHD and an advantage of improving survival, and that agent is oral beclomethasone,” said Dr. Sullivan.

Formulated for oral administration as a single product, orBec is a single product consisting of two separate pills.  One tablet is intended to release BDP in the upper portions of the GI tract, and the other tablet is intended to release BDP in the lower portions of the GI tract.  This novel delivery system ensures that BDP is delivered to the entire GI tract – an important competitive advantage.

“There are two phenotypes of the disease, there’s what I call the upper gut phenotype, which is 60-70% of all GvHD – people just lose their appetites, can’t eat, start getting nauseated and in the severe case have a lot of vomiting,” said George B. McDonald, MD, Professor of Medicine, University of Washington School of Medicine and Head, Gastroenterology/Hepatology Section, Fred Hutchinson Cancer Research Center.  “Then there’s the mid gut phenotype, with lots of diarrhea and intestinal ulceration and bleeding.  These two phenotypes appear to me as different sorts of diseases.  The upper gut phenotype is what the orBec is being aimed at, which is the dominant phenotype in gut GvHD.”

In a prior Phase III trial with orBec, the primary endpoint was the “time to GvHD treatment failure through study day 50,” which included a 10-day induction period of high-dose prednisone, noted David M. Hockenbery, M.D., Member, Division of Clinical Research, Fred Hutchinson Cancer Research Center, and Professor, Department of Medicine, University of Washington.  Unfortunately, twice as many prednisone “failures” during the initial 10 days of the trial counted against orBec and the primary endpoint was not achieved [p=0.1177].  By designating the first 10 days of treatment as a guarantee period, the risk of GvHD treatment failure by study day 50 was statistically significantly reduced for the orBec group relative to placebo (p=.009).  For the entire 80-day study period in the prior Phase III trial, the risk of treatment failure was statistically significantly reduced for patients in the orBec group relative to placebo (p=.02) and even further strengthened in an analysis using the 10-day guarantee period (p=.001).

“You have data suggesting that this is very effective, it’s very safe, and our mortality data from two different randomized trials showed that this approach, which spares prednisone, reduces mortality by 45%,” said Dr. McDonald.  “Two different randomized trials with the identical mortality result.  So, if you use less prednisone, you have less cytomeglaovirus, less mold infections, less bacteremia, and for some reason that still escapes me the FDA didn’t view that as a hard enough endpoint.”

In October 2009, Soligenix began enrolling patients in a confirmatory, pivotal Phase III trial under a special protocol assessment [SPA] cleared by the FDA.  The European Medicines Agency also agreed that should the new confirmatory Phase III study produce positive results, the data would be sufficient to support a marketing authorization approval in all 27 European Union member states.  The primary endpoint for this new study, treatment failure rate at day 80, is more clinically relevant and was statistically significant in the prior Phase III trial [p=0.005]. 

Soligenix has partnered with Sigma-Tau Pharmaceuticals, Inc. for commercialization of orBec, which is now the only product candidate for the treatment of acute GvHD in active Phase III development.

High Risk Approaches

Osiris Therapeutics, Inc. (OSIR)

During the 2010 BMT Tandem Meetings, Osiris Therapeutics, Inc. (OSIR) presented results from its Phase III trial evaluating Prochymal, a preparation of adult mesenchymal stem cells, for the treatment of steroid-refractory acute GvHD [abstract #41].  In September 2009, Osiris Therapeutics announced that neither of its two Phase III trials evaluating Prochymal for the treatment of GvHD achieved its primary endpoint.  There was no statistical difference between Prochymal and placebo for the steroid-refractory (35% vs. 30%, n=260) or first-line GVHD trials (45% vs. 46%, n=192), which did not come as a surprise to some researchers. 

“We participated in the mesenchymal stem cell trials, which were negative, and the dog mesenchymal stem cell studies done here were totally negative, so I don’t think we’re particularly surprised that the human studies were negative,” said Dr. McDonald.  “The model that best mimics human GvHD is the dog model, whereas the mouse models have given lots of false leads.  Mouse GvHD, in the intestine in particular, is not the same as human GvHD and things that look marvelous in the mouse, for example keratinocyte growth factor, failed miserably in human trials.  So I think there is a word of caution there about transposing animal species results to human beings.”

However, in patients with steroid-refractory liver GVHD, treatment with Prochymal significantly improved response [76% vs. 47%, p=0.03, n=61] and patients treated with Prochymal had significantly less progression of liver GvHD compared to placebo [37% vs. 65%, p=0.05].  While Osiris Therapeutics previously disclosed plans to file an amendment with the FDA to its current expanded access program, broadening the entry criteria to include patients with severe GvHD of the liver, some physicians expressed skepticism about the significance of liver GvHD.

“For GvHD, the three primary target organs are the skin, the liver, and the gastrointestinal tract,” said Dr. McDonald.  “Severe liver GvHD has become a thing of the past and that’s largely because of a drug called ursodeoxycholic acid [ursodiol], which is a bile acid that hepatologists use for cholestatic liver disease.  It’s almost completely wiped out liver GvHD.”

Indeed, previously published results [Blood. 2002 Sep 15;100(6):1977-83] demonstrated that treatment with ursodiol reduced hepatic problems and severe acute GvHD and improved survival.  Among the patients given ursodiol, the survival at one year was significantly better, 71% versus 55% (P =.02), and the non-relapse mortality rate was lower, 19% versus 34% (P =.01), than in the control group.

“There was a highly statistically significant lowering of mortality in the Nordic Study Group’s ursodiol trial,” said Dr. McDonald.  “So, if you’re not using that therapy and you’re doing trials aimed at liver GvHD I think there’s some ethical issues there, I mean there’s a way of preventing it that’s way simpler than mesenchymal stem cells.”

Celgene Corporation (CELG)

These same alloreactive donor T cells that cause GvHD can provide a beneficial graft-versus-tumor effect.  Because regulatory T cells [Tregs] have been shown to suppress GvHD while preserving the graft-versus-tumor effect, their use in the allogeneic transplant setting may represent a promising strategy to treat GvHD.   

“Back in the day, 30 years ago, it was assumed that the reason people got cured of end stage leukemia with a hematopoietic stem cell transplant was because of the massive doses of chemotherapy and sometimes radiation that is given upfront,” said Dr. McDonald.  “We’ve now discovered that is only half of it.  Most of the leukemia killing comes from what’s called a graft-versus-tumor effect.  That is, the donor cells that are causing GvHD are also seeking out leukemia and leukemia stem cells and immunologically curing the leukemia.”

During the 2010 BMT Tandem Meetings, Celgene Corporation (CELG) presented data [abstract #383] demonstrating that administration of the company’s DNA methyltransferase inhibitor azacitidine [Vidaza®] after allogeneic stem cell transplant dramatically reduced GvHD while maintaining both donor engraftment and a potent graft-versus-tumor effect in a murine bone marrow transplant model.  While the results provide a foundation for future human clinical trials, recall Dr. McDonald’s caution that the model that best mimics human GvHD is the dog model, whereas the mouse models have given lots of false leads.

Conclusion

Based on a review of data presented at the 2010 BMT Tandem Meetings and our discussions with several experts in the area of GvHD, we believe that the disease remains a large, unmet medical need.  Among the novel agents currently in clinical development, low-risk, steroid-sparing approaches are favored in the short-term as opposed to high-risk strategies with immunomodulatory agents that have been prone to failure.  Future results from Soligenix’s ongoing pivotal trial could provide optimism for both patients and investors in the GvHD space.

Disclosures:

Keith M. Sullivan, M.D., is a scientific advisor to Soligenix, Inc. and investigator in the pivotal Phase III trial.

George B. McDonald, M.D., is the inventor of orBec, Chair of Soligenix’s North American Medical Advisory Board, and maintains an equity position in Soligenix.

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

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

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

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

Merger and Acquisitions

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

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

Licensing and Partnering

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

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

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

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

Financing

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

Outlook

At the start of 2009, we provided a positive outlook for biotechnology, citing the sector’s defensive characteristics, favorable technical aspects, and improving fundamentals, such as the number of new product approvals, products in clinical trials and the brisk pace of industry consolidation and licensing transactions.  The latter was quickly reinforced by M&A transactions with an aggregate value of $702 million and licensing & partnering deals worth more than $2.4 billion in aggregate value announced January 12-15, 2009, during the JP Morgan Healthcare Conference. 

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

With 2009 officially on the books, it appears an appropriate time to review the sector’s performance along with some of the themes highlighted in our previous articles.

Big Versus Small

The twenty-member NYSE Arca Biotechnology Index (BTK) was up 46% in 2009, while the broader NASDAQ Biotech Index (NBI) was only up 16%, underperforming the Dow Jones Industrial Average (INDU), S&P 500 (SPX), and NASDAQ Composite (COMP), which were up 19%, 24%, and 44%, respectively.  Why the huge discrepancy in returns between these two major biotechnology indices?  Unlike the equal-weighted NYSE Arca Biotechnology Index, the NASDAQ Biotech Index is market value-weighted, taking into account the total market capitalization of the companies it tracks and not just their share prices.  Accordingly, companies with the largest market capitalizations, or the greatest values, will have the highest weighting in the index.

During 2009, large capitalization biotechnology companies [greater than $10 billion] dramatically underperformed their smaller peers.  For example, Celgene Corporation (CELG) was essentially flat, Amgen, Inc. (AMGN) was down 2%, Gilead Sciences, Inc. (GILD) declined by 15%, and Genzyme Corporation (GENZ) dropped 26% [earning Henri Termeer the coveted Nance Trophy for worst biotech CEO of 2009 by TheStreet.com’s Adam Feuerstein].  Some of the reasons for this poor performance include concerns over generic competition and pipeline progress – ironically some of the same issues that have plagued big pharma.

Accordingly, the relative underperformance of large capitalization biotechnology companies in 2009 masked the fact that many smaller, innovative companies performed well, with 20 of the 125 companies comprising the NASDAQ Biotech Index producing triple-digit returns during the period.  In fact, two biotechnology companies were among the largest percentage gainers in the NASDAQ Composite with their staggering quadruple-digit returns: Vanda Pharmaceuticals, Inc. (VNDA) +2,150% and Human Genome Sciences, Inc. (HGSI) +1,342%.  See Table 1 for a list of the top ten gainers from the NASDAQ Biotech Index in 2009.

Table 1. Top ten gainers from NASDAQ Biotech Index (NBI) in 2009

Oncology: Prostate Cancer Spotlight

Driven by positive Phase 3 results from Dendreon Corporation (DNDN) regarding its prostate cancer vaccine study, investors gravitated towards biotechnology companies working in the field of prostate cancer treatment as noted in our May 2009 article.  This enthusiasm only increased when Johnson & Johnson (JNJ) announced in May 2009 that it would acquire Cougar Biotechnology, Inc., a development stage company with an oral prostate cancer treatment being studied in two Phase 3 clinical trials, for approximately $1 billion. 

While not a member of either major biotechnology index, shares of Oncogenex Pharmaceuticals, Inc. (OGXI) started the year around $3.00 and ended above $22 for a 643% return.  Oncogenex is developing OGX-011, which is designed to inhibit the production of clusterin, a protein that is associated with cancer treatment resistance, and has completed Phase 2 clinical trials in prostate, lung and breast cancer.  OGX-011 received Fast Track designation from the FDA for the treatment of progressive metastatic prostate cancer in combination with docetaxel.  Shares of Oncogenex had traded higher than $42 in August 2009, but the stock price declined following a license agreement with Teva Pharmaceutical Industries (TEVA) for OGX-011 that apparently did not meet investor’s expectations.

Not all biotechnology companies working in the area of prostate cancer were as fortunate as Dendreon, Cougar, and Oncogenex.  Shares of GTx, Inc. (GTXI) were the second largest industry decliner for 2009 due to a complete response letter from the Food and Drug Administration [FDA] that cited clinical deficiencies regarding the company’s New Drug Application [NDA] for toremifene 80 mg to reduce fractures in men with prostate cancer receiving androgen deprivation therapy.  See Table 2 for a list of the top ten decliners from the NASDAQ Biotech Index in 2009.

Shareholder Activist Wins

In view of past major coups with MedImmune and ImClone, in August 2009 we reviewed Carl Icahn’s biotechnology holdings as reported in SEC filings and identified three companies that significantly underperformed the NASDAQ Biotechnology Index over the past five years, but with recent successful shareholder activist outcomes that could positively impact future performance.  In particular, we noted that Alexander Denner, who has served as Managing Director of entities affiliated with Carl Icahn and as a director of ImClone, had recently been elected as a director at each company.

During 2009, those three companies, Biogen Idec, Inc. (BIIB), Amylin Pharmaceuticals, Inc. (AMLN), and Enzon Pharmaceuticals, Inc. (ENZN) produced positive returns of 12%, 31% and 81%, respectively.  While Biogen Idec underperformed the sector, it notched the highest return among large capitalization biotechnology companies.

In other shareholder activist news, holders of Vanda Pharmaceuticals (VNDA) are likely pleased that the company’s Board of Directors spurned a request by Tang Capital Partners, LP to liquidate the company in February 2009.  Shares of Vanda were up 2,150% for the year [see Table 1] following FDA approval in May 2009 to market the company’s Fanapt™ [iloperidone], a novel antipsychotic for the acute treatment of adult patients with schizophrenia, and a subsequent marketing agreement for the product with Novartis AG (NVS).

CNS: Developments for Parkinson’s Disease

Vanda Pharmaceuticals wasn’t the only company working in the area of central nervous system [CNS] disorders to make news.  Shares of Impax Laboratories, Inc. (IPXL), which were trading around $7.50 at the time we published our August 2009 article titled “Treating Parkinson’s Disease: Investment Opportunities and Challenges,” continued to reach new 52-week highs and ended up 172% for the year [see Table 1].  Impax recently initiated the second of two Phase 3 studies designed to support marketing approval of its IPX066 product candidate for the treatment of Parkinson’s disease.  IPX066 is an investigational extended release carbidopa-levodopa product intended to rapidly achieve and then sustain effective blood concentrations of levodopa, potentially improving clinical symptom management.

Gastrointestinal Disease: 3 Hits, 3 Misses

First, the good:

Both Salix Pharmaceuticals, Inc. (SLXP) and Santarus, Inc. (SNTS) appear in the list of top ten biotechnology gainers for 2009 with triple-digit returns due to favorable regulatory progress reported during the year [see Table 1].  In September, Salix announced the successful outcome of two Phase 3 trials to evaluate the efficacy and safety of Xifaxan® [rifaximin] for the treatment of non-constipation irritable bowel syndrome.  Salix is planning an NDA submission for the first half of 2010.  In December, Santarus announced that the FDA approved the company’s New Drug Application [NDA] for its prescription tablet product for all of the indications being sought, including for the treatment of heartburn and other symptoms associated with gastroesophageal reflux disease. 

While not a member of either major biotechnology index, shares of Soligenix, Inc. (SNGX.OB) increased 317% during 2009.  In January, the company reached agreement with the FDA on the design of a confirmatory, pivotal Phase 3 clinical trial evaluating its lead product orBec® for the treatment of acute gastrointestinal Graft-versus-Host Disease [GVHD].  The following month, Soligenix announced a potential $30 million North American partnership agreement with Sigma-Tau Pharmaceuticals for orBec and in October 2009 initiated patient enrollment in the confirmatory Phase 3 trial that is expected to complete with clinical data available in the first half of 2011.

Next, the bad:

As discussed in our December 2009 article “Graft Versus Host Disease: Failures and Future Opportunities,” Osiris Therapeutics, Inc. (OSIR) recently reported preliminary results from two Phase 3 trials evaluating its Prochymal product candidate for the treatment of acute GVHD.  Unfortunately, neither trial reached its primary endpoint, sending shares from $14 to a 52-week low of $5.35 by November 2009, earning the company a spot in the top ten decliners for the year [see Table 2]. 

The other two casualties working in the area of gastrointestinal disease and appearing in the top ten decliners for 2009 are:

• Progenics Pharmaceuticals, Inc. (PGNX), which announced in October 2009 that the company regained worldwide rights to Relistor® [methylnaltrexone bromide] for the treatment of opioid-induced constipation from Wyeth Pharmaceuticals.  Global net sales of Relistor for the third quarter of 2009 were a mere $3.3 million, as compared to $3.2 million in sales for the previous quarter.
• In the absence of any negative clinical or regulatory news, NPS Pharmaceuticals, Inc. (NPSP) stated it remains on track to reach full patient enrollment before the end of the first quarter of 2010 for a confirmatory Phase 3 trial with Gattex™ (teduglutide), the company’s proprietary analog of naturally occurring human glucagon-like peptide 2 [GLP-2], for the treatment of short bowel syndrome [SBS].  NPS believes that positive results from the trial, expected to complete in October 2010 according to ClinicalTrials.gov, will enable the company to seek U.S. marketing approval for Gattex.

Table 2. Top ten decliners from NASDAQ Biotech Index (NBI) in 2009

2010 Outlook

The capital markets remain turbulent and there may be casualties along the way among undercapitalized companies, but many of the biotechnology industry’s fundamentals, such as the number of products in clinical trials, new product approvals, profitable biotech companies and industry mergers & acquisitions remain favorable for 2010. Similar to 2009, small capitalization companies with clinical or regulatory catalysts should continue to outperform their larger industry peers in the year ahead.

What is your outlook for the biotechnology industry in 2010?  Take a moment to complete our survey, which is only ten questions long and will take just minutes to complete.  The results of this important survey along with our industry outlook will be communicated in early 2010 through a future article.  Take the survey now by clicking here.

What is GVHD? 

When a cancer patient with myeloma, lymphoma, or other blood-borne diseases does not respond to traditional pharmacological therapies, hematopoietic stem cell transplantation [HCT] is often used as a last line of defense.  HCT is the transplantation of blood stem cells derived from the bone marrow or peripheral blood to the patient.  There are two types of HCT:

• Autologous : stem cells come from patient’s own blood or bone marrow
• Allogeneic: stem cells come from another person

While HCT remains a risky procedure with many possible complications, technological advances have resulted in diminished transplant-related deaths.  As a result, the number of allogeneic HCTs performed continues to rise, with greater than 25,000 procedures currently performed annually and the number is expected to double within five years [ref 1].

One of the major complications associated with allogeneic HCTs is GVHD.  GVHD is an immunological disorder that affects many organ systems including the gastrointestinal [GI] tract, skin, liver, and lungs.  If it happens within 3 months, it is called acute GVHD.  If it happens after 3 months, it is called chronic GVHD and may take as long as 3 years to go away.

GVHD arises when donor immune cells attack defined proteins on the host cells resulting in an array of clinical features ranging from mild [grade 1] to very severe [grade 4].  Severe GVHD [grade 3] has poor prognosis, with 25% long-term survival and only 5% for very severe GVHD [ref 1].

Within the GI tract, GVHD usually presents as bleeding, diarrhea, vomiting, anorexia, and abdominal pain.  The clinical symptoms of GI GVHD are those of typical inflammatory mechanisms and thus can be summarized into three sequential steps: 1) activation of antigen-presenting cells, 2) immune cell proliferation, and 3) target tissue destruction.  

The primary pharmacological strategy to prevent GVHD is the use of cyclosporine and tacrolimus in combination with other immunosuppressants.  Despite these prophylactic therapies, GVHD still develops in 30%-80% of patients in the second month following HCT [ref 2].  Steroids, including prednisone, remain the gold standard therapy for GVHD treatment but only 25% to 41% of patients treated have complete GVHD remission [ref 3].  In addition, systemic treatment with prednisone or other steroids can lead to severe side effects such as opportunistic infections, electrolyte imbalances, and lymphoproliferative disease.

Currently, no therapies are approved by the United States Food and Drug Administration [FDA] for either prevention or treatment of GVHD [ref 4].  GVHD represents a growing problem due to an increasing number of HCT procedures and HCT survival with no change in the morbidity and mortality of this complication [ref 4].  As a result there is a great-unmet medical need to find therapies for this disease.

Past Failures

While several companies have brought new therapies into late-stage clinical development, no FDA approved treatments are currently available for the treatment or prevention of GVHD.  There are three primary reasons for this:

1. One of the difficulties in finding new GVHD therapies is due to a lack of understanding of the pathophysiology of the syndrome.  Many different triggers can cause immunological diseases and the best therapeutic target has not been determined.  However, the very complexity of GVHD affords the opportunity to treat it by attacking its many different levels.
2. The second reason for the high number of failures relates to the delicate balance between the harmful consequences of GVHD and the beneficial effects incurred when donor T cells attack malignant cells, a process referred to as the graft versus leukemia effect [GvL] and the underlying reason for performing HCT.  With the use of immunomodulatory agents to treat GVHD, consideration must be given to the need to control the immune response of GVHD without compromising the disease-fighting role of the donor immune cells.
3. Thirdly, there are inherent difficulties in conducting human clinical trials.  The difficulty of demonstrating clinical benefits from objective parameters, such as survival and morbidity, and the subjectivity of grading acute GVHD, emphasize the need for blinded assessments in clinical trials of GVHD treatment [ref 5]. 

Regardless of the specific cause, there have been many high-profile, late-stage clinical trial failures, several of which are summarized below in reverse chronological order:

Osiris Therapeutics, Inc. (OSIR)

In September 2009, Osiris Therapeutics announced preliminary results from its two Phase III trials evaluating Prochymal for the treatment of GVHD.  The active ingredient of Prochymal is adult mesenchymal stem cells [MSCs].  The cells are from normal healthy adult volunteer donors and are not derived from a fetus, embryo or animal.  Studies have shown that these cells are universally compatible.  Similar to Blood Type O, these MSCs may be used without tissue type matching for specific patients.  Prochymal is produced in a controlled setting and is tested for possible infectious agents [such as viruses, bacteria, etc.] before it is given by infusion into a vein.

While Prochymal showed improvements in response rates for GI GVHD, neither trial achieved its primary endpoint.  There was no statistical difference between Prochymal and placebo for the steroid-refractory (35% vs. 30%, n=260) or first-line GVHD trials (45% vs. 46%, n=192).  However, in patients with steroid-refractory liver GVHD, treatment with Prochymal significantly improved response (76% vs. 47%, p=0.026, n=61) and durable complete response (29% vs. 5%, p=0.046). Osiris plans to meet with the FDA to evaluate the trial and discuss the next steps for moving forward with Prochymal.

SangStat Medical Corporation (SANG) and Abgenix (ABGX)

In February 2003, SangStat [subsequently acquired by Genzyme Corporation (GENZ)] and Abgenix [subsequently acquired by Amgen, Inc. (AMGN)] presented data from their Phase II/III study for evaluating ABX-CBL in patients with steroid-resistant GVHD.  The data presented showed that patients treated with ABX-CBL, an anti-CD147 monoclonal antibody, were similar to the control arm [antithymocyte globulin].  The primary endpoint of this study was to demonstrate superior survival with ABX-CBL, thus the primary endpoint was not met.  Further development of ABX-CBL for GVHD is not expected.

Roche (OTCQX: RHHBY) and Protein Design Labs, Inc. (PDLI) 

In 1995, Roche and Protein Design Labs presented the results of a study using Zenapax™ [daclizumab], a humanized monoclonal antibody against the interleukin-2 [IL-2] receptor, for the prevention of GVHD following bone marrow transplantation. The 102 patient study was halted after a planned interim analysis showed a significantly worse 100-day survival in the group receiving corticosteroids plus daclizumab (77% vs. 94%; p=0.02).  Overall survival at 1 year was also inferior in the combination arm (29% vs. 60%; p=0.002).  Both relapse- and GVHD-related mortality contributed to the increased mortality in the combination group.  Roche concluded that Zenapax is not effective in reducing the incidence of GVHD in the population of patients included in this study.

XOMA Ltd. (XOMA)

In December 1994, results of a Phase III trial of Xoma’s CD5 Plus™, a CD5-specific immunotoxin, for the treatment of GVHD were presented at the annual meeting of the American Society of Hematology.  A total of 243 patients were included in the trial, all of whom developed acute GVHD after allogeneic bone marrow transplantation. The trial compared CD5 Plus and a standard steroidal immunosuppressant therapy [methylprednisolone] versus placebo and steroids as initial therapy. The primary endpoint was defined as no evidence of acute GVHD at day 43 post starting treatment.

While the percentage of patients with no evidence of GVHD was higher in the CD5 Plus group than in the placebo group during the entire 43-day period of observation, at 6 weeks the difference was not statistically significant [44% of patients assigned to the CD5 group had complete response as compared with 38% in the placebo group, p=0 .36].  Xoma discontinued development of CD5 Plus.

New Opportunities

Despite the challenges in developing GVHD therapies, several companies are continuing with both preclinical and clinical programs.  The approaches range from novel, locally acting steroids [lower risk] to more complex immunomodulatory agents and cell cycle regulators [higher risk].  Several companies with promising programs in the GVHD space along with their technology and clinical development status are as follows:

Novel, Locally Acting Steroids

Soligenix, Inc. (SNGX) is developing orBec® [oral beclomethasone dipropionate] for the treatment of acute GI GVHD.  Beclomethasone [BDP] is a corticosteroid with potent topical activity used for inflammatory disorders affecting mucosal surfaces, such as the GI tract.  BDP’s mechanism of action is similar to other corticosteroids acting as an inhibitor of inflammatory cytokine production of immune cells.  One of the clear advantages of BDP versus other steroids is that oral BDP does not enter into the circulation thus avoiding many of the side effects associated with systemic steroid uses.  Pharmacokinetic studies have shown that BDP is metabolized in the intestinal mucosa and only the inactive metabolite is found in the circulation.  Additionally, the safety profile of BDP is well studied as it is approved by the FDA for three indications:

• Becloforte®: inhalant marketed by GlaxoSmithKline plc (GSK) and used to treat asthma
• Beconase®: nasal spray marketed by GlaxoSmithKline for rhinitis
• Propaderm®: topical cream for psoriasis

Formulated for oral administration as a single product, orBec is a single product consisting of two separate pills.  One tablet is intended to release BDP in the proximal portions of the GI tract, and the other tablet is intended to release BDP in the distal portions of the GI tract.  This novel delivery system ensures that BDP is delivered to the entire GI tract.

Soligenix recently completed a 129-patient randomized, double blind, placebo-controlled, multicenter trial Phase III trial for orBec.  While the primary endpoint of this trial, time-to-treatment failure through day 50, did not reach statistical significance [p=0.1177], orBec did meet statistical significance for all of the secondary endpoints, such as the proportion of patients free of GVHD at Day 50 (p=0.05) and Day 80 (p=0.005) and the median time-to-treatment failure through Day 80 (p=0.0226).

Importantly, among all of the late-stage clinical trials for GVHD listed in Table 1, orBec is the only product to demonstrate a reduction in mortality.  In the Phase III trial, there was a 66% reduction in mortality among patients randomized to orBec at 200 days post-transplant with only 5 patient [8%] deaths in the orBec group compared to 16 patient [24%] deaths in the placebo group (p=0.0139).  At one year post-randomization in the Phase III trial, 18 patients [29%] in the orBec group and 28 patients [42%] in the placebo group died within one year of randomization [46% reduction in mortality, hazard ratio 0.54, 95% CI: 0.30, 0.99, p=0.04, stratified log-rank test]. 

Soligenix received a special protocol assessment [SPA] for a confirmatory, pivotal Phase III clinical trial cleared by the FDA.  The European Medicines Agency [EMEA] also agreed that should the new confirmatory Phase III study produce positive results, the data would be sufficient to support a marketing authorization approval in all 27 European Union [EU] member states.  Importantly, the primary endpoint for this study, treatment failure rate at day 80, was statistically significant in the prior Phase III trial [p=0.005].  The trial is enrolling patients and Soligenix has partnered with Sigma-Tau Pharmaceuticals, Inc. for commercialization of orBec.

Immunomodulatory Agents

In July 2009, results were published from a randomized, 4-arm, Phase II trial of 180 patients designed to identify the most promising agent(s) for initial therapy for acute GVHD [ref 3].  Patients were randomized to receive methylprednisolone 2 mg/kg per day plus etanercept [Enbrel® by Amgen, Inc. and Wyeth Pharmaceuticals], mycophenolate mofetil [MMF, CellCept® by Roche], denileukin diftitox [denileukin, Ontak® by Eisai Co., Ltd.], or pentostatin [Nipent® by Hospira, Inc.].  Day 28 complete response rates were etanercept 26%, MMF 60%, denileukin 53%, and pentostatin 38%.  Corresponding 9-month overall survival was 47%, 64%, 49%, and 47%, respectively.  Cumulative incidences of severe infections were as follows: etanercept 48%, MMF 44%, denileukin 62%, and pentostatin 57%.  Efficacy and toxicity data suggest the use of Roche’s MMF plus corticosteroids is the most promising regimen to compare against corticosteroids alone in a definitive Phase III trial.  The Phase II study is registered at ClinicalTrials.gov [identifier NCT00224874].

Cell Cycle Regulators

GVHD is initiated when host antigen-presenting cells are detected by donor T-cells leading a cascade of cellular signaling events resulting in the expansion of donor immune cells and release of cytokines and chemokines, resulting in physiological damage to the GI tract and presentation of GVHD clinical symptoms. 

Cyclacel Pharmaceuticals, Inc. (CYCC) is developing seliciclib [CYC202 or R- roscovitine] for the treatment of acute GVHD.  Seliciclib is an inhibitor of cyclin-dependent kinases [CDKs], such as CDK2, CDK7 and CDK9.  Although seliciclib is in preclinical development for GVHD, the product is also in Phase II trials for nasopharyngeal cancer and non-small cell lung cancer.

CDKs have been shown to be central kinases involved in the regulation and progression of the cell cycle.  Inhibition of CDK2 leads to cell cycle arrest and apoptosis and CDK7 and CDK9 to suppression of transcription in aberrantly proliferating cells.  Investigators from Harvard Medical School have recently published in vitro and in vivo evidence that CDK inhibition by seliciclib suppressed activation and expression of T cells and resulted in protection from acute GVHD [ref 6].  Seliciclib’s mechanism had three primary consequences in the context of GvHD:

1. Inhibition of CDKs resulting in blocking the cell cycle
2. Inhibition of RNA polymerase 2 resulting in apoptosis
3. Prevention of TNF alpha dependent NFkB activation, a pathway shown to be activated in GVHD

Together, seliciclib may be able to specifically target the allo-reactive T cells preventing the progression of GVHD without targeting the immune cells needed for GvL or other pathogens.

Conclusion

A number of novel agents have been investigated to target various aspects in GVHD.  The majority of previous clinical trial setbacks have been immunomodulatory agents, which may favor lower-risk, steroid-sparing approaches in the short-term given the complexity of GVHD.  Ultimately, there appears to be potential synergies between different therapies, as they all possess different mechanisms and targets.  Future results from an ongoing pivotal trial and additional clinical results could provide optimism for both patients and investors in the GVHD space.

Table 1: Late-Stage, Completed GVHD Trials

References:

1. Lancet 2009; 373: 1550–61
2. Expert Opin Investig Drugs. 2008 Sep;17(9):1389-401
3. Blood. 2009 Jul 16;114(3):511-7
4. Blood. 2005 Jun 1;105(11):4200-6
5. Biol Blood Marrow Transplant. 2009 Jul;15(7):777-84.
6. Cell Cycle 8:11, 1794-1802; 1 June 2009