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BioWorld I N N O VAT I O N S I N BIOTECHNOLOGY 2011

NEW SCIENCE, E M E R G I N G C O M PA N I E S , R I S I N G S TA R S

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BioWorlds innovations in Biotechnology 2011

BioWorld innovations in Biotechnology 2011: neW science, emerging companies, rising stars Copyright 2011 BioWorld AHC Media 3525 Piedmont Road Building Six, Suite 400 Atlanta, GA 30305 U.S.A. All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. ISBN 978-1-934863-47-3
BioWorld innovations in Biotechnology 2011: neW science, emerging companies, rising stars is published by AHC Media, a division of Thompson Media Group LLC, 3525 Piedmont Road, Building Six, Suite 400, Atlanta GA 30305 U.S.A. Opinions expressed are not necessarily those of the publication. Mention of products or services does not constitute endorsement. BioWorld is a trademark of AHC Media. (GST Registration Number R128870672) Executive Editor, BioWorld Market Reports: Michael Harris. Production Editor: Amanda Lanier. Managing Editor: Lynn Yoffee. Assistant Managing Editor: Jennifer Boggs. Senior Staff Writer: Karen Pihl-Carey. Staff Writers: Trista Morrison, Tom Wall. Washington Editor: Mari Serebrov. Science Editor: Anette Breindl. European Editor: Nuala Moran. Contributing Writers: Marie Powers, Catherine Shaffer, Cormac Sheridan. Senior Vice President/Group Publisher: Donald R. Johnston. Director of Product Management: Jane Cazzorla. Marketing Manager: Sarah Cross. Account Representatives: Matt Hartzog, Chris Wiley, Scott Robinson. Customer Service: (800) 888-3912 or (404) 262-5476 Please visit our website: www.bioworld.com Follow us on Twitter: www.twitter.com/bioworld

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About bioWorld

BioWorld Today delivers actionable intelligence on the biotech science that drives the business, which funds the means to heal disease. With writers and editors stationed around the globe, BioWorld Today reports the breaking news and provides key perspective on hundreds of medicines in development, the companies behind those therapeutic candidates, the business development transactions that evolve the market, and the regulatory hurdles that both challenge and guard the process. Daily news coverage includes: Therapeutic product development from early to late stage Strategic alliances, mergers and acquisitions Corporate financings, both public and private Biotech company advancements and setbacks Scientific milestones Global regulatory updates Profiles of new and mature biotech and specialty pharmaceutical firms Big pharmas growing involvement in biotech

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The BioWorld execuTive compensaTion reporT An annual report revealing executive compensation data at biotechnology companies in the U.S. BioWorld snapshoTs An exclusive online product updated daily with market data, such as collaborations, mergers, acquisitions, financings, market cap rankings and more. BioWorld markeT reporTs Each year BioWorld shines a spotlight on selected cutting edge topics such as biotech developments in China, innovative new companies, biomaterials and more. medical device daily - The daily medical technology newspaper. Available every business morning online at www.medicaldevicedaily.com. Also: Join the discussion on BioWorlds blog at www.bioworld.blogs.bioworld.com and follow us on Twitter at www.twitter.com/bioworld. BioWorld Today, the recognized leader in biotech news for more than 20 years. For more information on BioWorld, please contact: Donald R. Johnston, Sr. VP/Group Publisher BioWorld Today AHC Media 3525 Piedmont Road Building Six, Suite 400 Atlanta, GA 30305 USA Phone: 404-262-5439 E-mail: don.johnston@ahcmedia.com Website: www.bioworld.com

BioWorlds innovations in Biotechnology 2011

tAble

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contents

Chapter 1: Introduction Discovery Is Still the Big Bang Stage Chapter 2: Cancer and Tumors Multi-Platform Gliknik Tackling Cancer, Immune Disease Markets Catherex Oncolytic Virus Drugs Targeting Brain, Liver Cancers Kinagen Targets Inactive Kinases; Puts a New Spin on Raf in Cancer Igenica Raises $24M in Series B to Expand Antibody Platforms Esperances Membrane Disrupting Peptides Seek and Destroy Cancer Amplyx Improving HIV, Cancer Drugs Through Better Targeting Korean Firm KAEL-GemVax Advancing Cancer Vaccine Del Mar Pharma Bets on Glioblastoma Salvage Therapy Certus Deploys Nanoparticles for Targeted Tumor Delivery GenSpera Testing Plant-Based Poison to Zap Solid Tumors Actis Biologics to Raise $380M, for Malaysia, India Ventures Ensysce Aims Nanotubes to Deliver Precise Therapeutics Concordia Pharmaceuticals First Off the Line in Ras Race Centrose Seeks Funds for Low-Tox EDC Phase I Trials Apogee Poised to Enter Clinic; SK Inhibitor Aimed at Cancer New Genesis for Viragens Anti-CD55 Cancer Program Jantibody Heats Up Antibody and Vaccine Fields with HSP70 Apexigen Exploits Unique Rabbit Physiology to Make Antibodies Chapter 3: Drug Screening and Delivery Senex Targets Aging Diseases with CKI Pathway Inhibitors Fabrus Forges Ahead with Therapeutic Antibody Platform CRO + Drug Discovery Helps DiscoveryBioMed Survive Acylin Pharma Explores Blooming Acetylation Field Ligon Turns Microarray Screening Upside Down Chapter 4: Cardiovascular and Related Diseases Verio Taking Regenerative Road to Develop Muscle, Cardiac Drugs More Oxygen, Please; NormOxys Targeting Disease Via Hypoxia Swedish Firm Cardoz Tackling Oft-Underdiagnosed Triple-A ElexoPharms First License Deal Worth Up to $41.6M from Merck InVasc Seeks Path for CKD Combo, New Targets Next Radical Therapeutix Works to Protect Precious Heart Tissue FerroKin to Eliminate Iron Overload with 1 Dose/Day

9 11 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79

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Chapter 5: Neuroscience Afraxis Stabilizes Synapses in Fragile X, Autism, Alzheimers First Deal a Good One for NeurOp; Up to $74M for CNS Discoveries Start-Up AgeneBio Aims to Treat MCI by Inhibiting Neural Activity Sinapis Pharma Sees New Use for Meth in Stroke, Brain Injury Embera Compound Takes New Addiction Treatment Tack Chapter 6: Stem Cells and Regenerative Medicine Calling All Stem Cells; Juventas Boosts SDF-1 for Cardiac Repair Bioprinting Press: Organovos Technology to Build New Tissues Garnet Seeking Additional Funds to Advance Lead Cell Therapy Multiplatform Taiga Scores NIH Funding for HSC Technologies Chapter 7: Genetics and Genomics Blockmir Technology Gets Seed Funding, Comes Out of Stealth Molecular Templates Develops Drugs Via Toxin-Based Method Sirnaomics Takes Multitarget Approach to Gene Silencing Integrated Diagnostics Takes Proteomic Approach Alternative to Surgery for Refractory Epilepsy? Tivorsan Ready to Raise Funds for Biglycan DMD Candidate BMT Takes Shorter Approach to Develop RNAi-Based Drugs Gene Therapy Firm Renova Created from Collateral Vein Chapter 8: Immune System and Infectious Diseases VBL Turns Sights on Inflammatory Market with Novel Phospholipids JDP, with New CEO on Board, Goes for PC, Allergy Markets Daring TB Different; Early Stage Aarden Working on PTP Drugs Low-Profile Marcadia Moving Diabetes Candidate Forward ViroXis Gaining a Foothold as it Tries to Bark Up the Right Tree Inhibikase Taking on Bacteria, Viruses with Single Approach $39.6M Series A Inflames Catabasis Effort in Diabetes Immunome Harnessing Immune Systems Natural Curative Ability RetroVirox Building Antiviral Candidates for Others to Grow Western States Goes East to Advance Immune Modulators Excelimmune Aims Polyclonal Antibodies at Bacterial Disease Former Amgen Execs Fusing Antibodies, IFN at ImmunGene MabVax Pursues Two-Pronged Approach to Immunotherapies Maxygen Technology Breeds Vaccine Efforts at AltraVax Chapter 9: InflammatoryDiseases Look Out, Roche! Fast-Follower Femta Is Chasing Actemras Tail With Fibrosis Making Headlines, Promedior Closes $12M Series C Swedens BioChromix Pharma Tackles ADs Amyloid Cascade

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Genentech Colleagues Reunite to Bring Eye Drug to Market Resolve Therapeutics Targets Upstream Interferon-alfa Pathway Chapter 10: Dermatologics $12M Series A Moves Ablexis Toward Better Mouse Platform Vicept Aims to Get Red Out, Adds $10M for Rosacea Trials Valocor Says Beat It to Acne, Atopic Dermatitis and Vitiligo Chapter 11: Obesity Halsa ZAGs While Others ZIG: A New Mechanism in Obesity Litheras Phase II Fat Reduction Drug Aims to Follow Botox Model Chapter 12: Eye Diseases Aerie Sets Sights on Glaucoma With Phase II ROCK Inhibitor Altheos Raises $20M; Gets Into Glaucoma ROCK Inhibitor Game Chapter 13: Foundations Biotech VC Larry Bock Uses Start-up Spirit in Science Fest Clearitys Mission: To Change Ovarian Cancer Outcomes Myelin Repair Group Works to Develop Drugs, Cure MS OneWorld Health Seeks Biotech Solutions for Developing World

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chapter 1:

Introduction

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discovery is still

the

big bAng stAge

Thats not a theory; rather its a fact in the evolution of biotechnology drug development in the journey from concept to commercialization. Success in the biotechnology drug development world may advance with capital and culminate with cash, but it always begins with creativity. Brainstorming is relatively the easy part for the purveyors of innovative R&D, while becoming disarming VC whisperers is often more challenging than breaking down molecules for these wunderkind researchers. These companies and researchers covered in this publication are just some of the bright and optimistic young biotechs seeking to take their ingenuity to the next level by capitalizing on their newsworthy research endeavors or business development agendas to attract big pharma partners or entice VC investment. Innovation is frequently impressive to industry observers and very self-satisfying for the inventor, although it customarily comes with prospective opportunity, it has a most difficult time attracting money. Seed-stage companies usually have a great idea or two, but dont yet have a dependably accountable revenue stream or even a proof-of-concept. Early stage hopefuls have more of a foundation with advanced R&D programs, but also face a forbidding reception from VCs and big pharmas when they come calling for financial support. In the drug development world of sevenfigure funding and 10-figure profits, super angels, micro-VCs, business accelerators (aka incubators) and government grants are still the

best-friend funding options for discovery-level innovators, but such friendships usually come in four- and five-figure relationships that are patently designed to limit risk and compensate achievement before making a next-stage financial commitment. Indeed, this model is increasingly being adopted for many late-stage R&D projects; therefore, it is unlikely to change as the prototype for the early stage innovator/investor relationship or the start-up funding model. This indicates a likely continuation of the arduous process to acquire operating revenue for bright-but-broke embryonic drug development researchers. The principal issue for start-ups, early stagers and impoverished nascent bio-geniuses is still funding how much is available, whos providing it, and how much of your company is appropriate to give up to obtain it? The permeating trends in research discovery, funding models and partnering structures relative to front-stage drug developers, investors and collaborators is observable in the news that BioWorld has published on this critical market sector over the past year and continues to cover as an ongoing responsibility. Those trends indicate that innovation continues to be a burgeoning dynamic in the market cycle, but also one that continues to daunt those with the most money and resources. Fortunately, biotech gets paid to think and has continued to be uncompromisingly creative in that manner, as pharmas woes continue to include R&D stagnation and as the traditional venture capitalists acutely hone in on the mostlikely-to-not-lose-money undertakings.

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News on the most current and aggressive R&D programs and corporate initiatives from fresh and ambitious biotechnology entrepreneurs has been perceptibly advantageous in revealing the future of biotechnology and bringing together the cohorts that will overcome the inherent drug development challenges and facilitate the clinical and organizational progress that characterize every eventual success in the drug development market. As the global economy continues its less-thanconvincing effort to meticulously rebound from recession in dithering swings, innovation remains the most reliable and underfunded phase of the biotechnology drug development market, continuing to spin out bright-idea R&D in a dark economy. But the trends suggest venture firms are increasingly shying away from companies in the seed stage of life. During the second quarter of 2010, for instance, the U.S. venture industrys average seed investment was $6.8 million, according to the National Venture Capital Association. The following quarter, that number had fallen to $3.5 million. Conversely, investment in seed-stage biotech companies is increasing from literally every funding source, except the big pharma drug makers and fundamental venture capitalists. Non-profits, governments, special interests, philanthropists and angel investors are more committed than ever to address the rare and neglected disease markets that are predominantly the territory of new or emerging biotechs. The pharma and VC reasoning acknowledging the too-long-to-approval-time is understandable, but the long history of drug approval also confirms the patent fact that all drugs on the market began in the seed stage or evolved as secondary-indication therapeutics from drugs that still originated in that

phase. The road to market has a beginning that is impossible to circumvent and the newsmakers presented here embody the companies that toil in that research landscape. The fact remains evident that creative or emerging companies such as the ones covered here represent a significant opportunity for growth and profit for the immediate and impending biotechnology market, as well as for the uncertain and mired pharmaceutical market, and for the morecircumspect-than-usual investment community. Speculating on the innovation stage may be the least risky phase for investment or partnering, as it usually requires much less capital than late-stage venturing, in which any setback is a game changer, if not a game killer. However, collaboration or sponsorship opportunities with fertile-minded young innovator companies represent groundfloor opportunities that usually do not lock the investor or partner into untenable long-range commitments to see a project through to the end. Government Hopes to Lead Big Pharma and VCs by Example In May 2011, the FDA released a list of its strategic priorities for the next five years to address new global challenges and cited that the FDAs job is fundamentally different than it has been in previous eras, but that the agency will address these challenges and aim to fulfill our mission by embracing innovation and actively pursuing partnerships with federal, state, and local agencies, international authorities, academia, nongovernment organizations, and the private sector. FDA Commissioner Margaret A. Hamburg went on to convey the agencys objective to advance science and innovation by facilitating the progression of originality in its earliest stages of development. In 2011, the National Institutes of Health (NIH) has been funding early stage research projects at an increased rate and has

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increased the amounts of its biggest outlays, as well as the durations of its collaborations, to seedstage and early stage in recent months. NIH is making a documented pledge to significantly increase its funding for such projects and companies, despite the enduring prospect of budget cuts that the agency perpetually faces. Early stage clinical approvals may not be a dime a dozen, but they are more forthcoming from regulatory entities such as the FDA and EMA than the number of their late-stage sanctions, which carry more critical stakes and hold greater implications for a mass patient population of millions than a Phase I trial has on test subject groups that number only in the tens or hundreds. The promise to increase federal funding to early stage projects is a boost for young innovators, but also may be regarded as a wake-up reminder to traditional VCs and established drug companies to consider the lower-risk alternative of discoverystage investments that afford a greater window of opportunity to cash out or end a business agreement without the harsher consequences that are often intrinsic in Phase II and Phase III commitments. The FDA and its counterparts hope that is the case. Francis Collins, the NIH chief, has pledged to fund more of the early stage research and promising

compounds that the big drugmakers traditionally are disinclined to invest in too early. Its a stage that is referred to as the valley of death inasmuch as many of those early research projects fold. The valley of death needs to become a valley that leads to life, Collins said. The time is right even in a difficult budget environment, maybe especially in a difficult budget environment. He referred to recent research that found that 20 percent of innovative new therapeutics approved in recent years were derived from NIH-funded research, while the drug industrys own R&D productivity has declined. This is not an effort to turn NIH into a drugdevelopment company, Collins said. The idea is to move projects just far enough along for them to be attractive to commercial investment. With its coverage of some of the new and inventive faces of biotech, Innovations in Biotechnology 2011: New Science, Emerging Companies, Rising Stars is making an effort that BioWorld believes will prove advantageous in the identification of budding R&D and for the business development opportunities that it carries for participants.

Michael Harris Executive Editor, BioWorld Market Reports

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chapter 2:

Cancer and Tumors

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Multi-PlAtforM gliknik tAckling cAncer, iMMune diseAse MArkets


Despite its small size only five employees young biotech firm Gliknik Inc. has some big goals. Founded in 2007 by friends CEO David Block and Scott Strome, a scientist at the University of Maryland School of Medicine, Glikniks work is powered by three platform technologies, each of which has the potential to target the large cancer and immune disease markets. The Stradomer platform is designed to produce recombinant drugs that mimic IVIG, the Stradobody platform develops compounds similar to monoclonal antibodies but with increased immune cell response and the Immunomodulator platform is working on peptide therapeutic vaccines. All the technology was licensed from the University of Maryland, Baltimore, and the Mayo Clinic. Those are a lot of assets for a company of our size, Block acknowledged. And whats nice about the Stradomer and Stradobody platforms is that theyre relatively low risk, which could make them attractive to investors and partners alike. But the firms immunomodulator work is the most advanced to date, building on what we have learned from some of the failures of cancer vaccines over the last couple of decades, Block said. Glikniks vaccines are designed to boost CD4, CD8 and antibody immune responses against cancer by targeting specific antigens. Its two lead compounds GL-0810, designed to target human papillomavirus (HPV-16), and GL-0817, designed to target MAGE-A3 both have shown promise in head and neck cancer, for which the FDA granted orphan designation in 2009. Were looking to get clear proof of concept in that [indication] first, Block told BioWorld, but the vaccines could later be moved into additional cancer types. For instance, London-based GlaxoSmithKline plc has shown promising early data with its MAGE13-targeting immunotherapeutic in lung cancer. And MAGE also has been implicated in breast cancer, Block said. Gliknik planned to start a second trial with its vaccines in 2010. Also in 2010, the firm hopes to advance the first Stradomers into preclinical testing. Whats exciting about this [program] is that we expect to get proof of concept in Phase I, Block said. IVIG (human intravenous immunoglobulin) currently is used to great more than 50 autoimmune conditions and represents a $3 billion market. But its based on plasma pooled from donors, which puts it at supply risks and can result in potentially serious reactions. Gliknik has been able to create a recombinant version of IVIG, designated GL-2045. And early work in animal models has shown a more robust response compared to IVIG in treating immune disorders, Block said. The companys third platform, Stradobodies, also aims at creating improved products in this case, antibodies. They are designed to change the back end, the Fc end, of the monoclonal antibody to induce stronger immune cell response, Block said.

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Though it intends to begin development of its own internal Stradobody in 2011 or so, the technology platform might prove particularly suitable for partnerships since it appears to be applicable to every antibody that acts through antibodydependent cell cytotoxicity. Glikniks raised $4 million in investor money to date and has secured grant funding, including federal grants that are supporting the ongoing trials of immunomodulators GL-0810 and GL-0817. Block said plans are under way to seek additional financing to support further R&D work, but the

company hopes to bring in additional money via partnering deals. Within the next couple of years, we expect to enter one or more pharmaceutical partnerships, he said. Gliknik is headquartered at the University of Maryland BioPark BioInnovation Center. In addition to Block and Strome, the companys management team is rounded out with Henrik Olsen, principal scientist.

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cAtherex oncolytic virus drugs tArgeting brAin, liver cAncers


Philadelphia start-up Catherex Inc. is seeking to raise $5 million in a Series A financing to fund clinical trials of two candidate therapies for bladder and brain cancer, a pair of oncolytic virus assets that the company gained through a recent portfolio spin out from Germanys MediGene AG. The founders of Catherex originated much of the technology behind the companys pipeline of oncolytic herpes simplex virus (oHSV)-based therapies, in which the virus is used to potentially kill a significant portion of the tumor. Michael Christini, president and CEO of Catherex, noted that the team that worked on the technology has been together for a long time and has first-hand experience with the oncolytic virus approach. The technology originally was developed by Bernard Roizman at the University of Chicago, and colleagues, who are now involved in the new venture. In addition to Christini and Roizman, the companys founders include Richard Whitley, G. Yancey Gillespie and James Markert, all of the University of Alabama, Birmingham; Ralph Weichselbaum, of the University of Chicago; and Gabriella Campadella Fiume, of the University of Bologna, in Italy. We have a straight oncolytic virus, Christini said of the two lead products, both of which are traditional oncolytic viruses. They dont express any genes he said, rather they use virus replication to spread through and kill the tumor. Oncolytic viruses are engineered to selectively infect and kill tumor cells, while causing little if any damage to healthy tissues. MediGene gained ownership of the program via its purchase of NeuroVir Therapeutics Inc., of San Diego, a decade ago, in a stock-based deal then valued at $77 million. MediGene maintains a 40 percent ownerhip in Catherex. Drug candidate G207 has completed early stage clinical trials in glioblastoma, and NV1020 has undergone clinical studies as a treatment for liver metastases. Each of the two products has been safely administered to more than 40 patients. Catherex aims to move NV1020 into a Phase I/II trial in bladder cancer and to move G207 into a Phase II trial in brain cancer. A related product, M032, licensed from the University of Alabama, will also be studied in brain cancer initially and could offer greater potency than G207, as it expresses the human cytokine interleukin-12. There is a relatively crowded field of companies in the early stages of developing oncolytic viral cancer therapies. Among the companies that are further along in development is Biovex Inc., of Woburn, Mass., which has a Phase III candidate, OncoVex, for metastasic melanoma. A Phase II study in squamous cell carcinoma of the head and neck was due to get under way in 2010. Crusade Laboratories Ltd., of Glasgow, Scotland, has a Phase II/III product candidate, Seprehvir, for glioblastoma that is similar to Catherexs G207 candidate and Canadas Oncolytics Biotech Inc. has Phase III study in head and neck cancer. Others developing oncolytic viral therapies include BioVex Inc., of Woburn, Mass., whose OncoVEX product is undergoing a Phase III

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trial in metastatic melanoma. A Phase II study in squamous cell carcinoma of the head and neck was due to get under way in 2010. Other players in the space include San Franciscobased Jennerex Inc., which uses a vaccinia virus strain to target tumors, and Wellstat Biologics Corp., of Gaithersburg, Md., which has Phase II oncolytic virus programs in colorectal and cervical cancer. In addition, there are numerous earlier stage academic programs focused on oncolytic virusbased cancer therapies. One of the potential advantages of oncolytic HSv therapy being developed by Catherex is that the

treatment regimen developed by the companys scientists involves precise and timely delivery of radiation and virus to achieve a synergistic effect and enhanced efficacy, according to the company. In addition, non viral genes such as cytokines can be stably incorporated into the viral genome to overcome the resistance of some tumors to oncolytic virus therapy. The company expects that its oncolytic HSV therapies could be administered repeatedly without impairing the efficacy of treatment. Catherex also expects that side effects will be significantly more benign than widely used cytotoxic chemotherapy products.

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kinAgen tArgets inActive kinAses; Puts A neW sPin on rAf in cAncer


Theres no shortage of drug makers targeting the Raf kinase, which is often mutated in melanoma and other solid tumors. FDA-approved kidney and liver cancer drug Nexavar (sorafenib, Bayer AG and Onyx Pharmaceuticals Inc.) targets Raf, among several other kinases, and more selective efforts are underway at Bristol-Myers Squibb Co., Eli Lilly and Co., Biogen Idec Inc., Debiopharm Group and many other firms. At the American Society of Clinical Oncology (ASCO) annual meeting, Plexxikon Inc. and Roche AG made waves with PLX4032 (RG7204), their Phase III B-Raf inhibitor for melanoma. David Slack, president and CEO of start-up Kinagen Inc., noted that PLX4032s ability to give patients a few more months of life should not be discounted, but the drugs duration of effect is limited. Additionally, recent publications indicate that Raf inhibitors shouldnt be used in patients with certain Ras mutations, and neither should EGFR inhibitors like Erbitux (cetuximab, Eli Lilly and Co.), Tarceva (erlotinib, Roche AG and OSI Pharmaceuticals Inc.) and Vectibix (panitumumab, Amgen Inc.). In these patients, the kinase inhibitors compete with the natural substrate of ATP, triggering B-Raf dimerization with C-Raf and eventually increasing Raf signaling and tumor proliferation. Kinagen is hoping to address these and other shortcomings of existing kinase inhibitors. The San Diego firm was founded in 2007 by Slack, former vice president of business development at Isis Pharmaceuticals Inc., along with David Cheresh, Eric Murphy and Wolf Wrasidlo of the Moores UCSD Cancer Center. Kinagen developed a discovery platform that can stabilize kinases in their inactive state. Slack explained that kinases are more structurally diverse when inactive, allowing for the design of highly selective inhibitors. Additionally, targeting inactive kinases eliminates the need to compete with ATP, leading to better efficacy. And inhibitors of inactive kinases are sometimes able to influence the roles that these molecules play outside of their traditional kinase signaling pathways. Slack said Kinagen is the only firm he is aware of that focuses primarily on the inactive conformation of targeted kinases. The first compound to emerge from the platform, dubbed RAF Blockade, is poised to begin investigational new drug application enabling studies and get into the clinic in 2011. Slack explained that in addition to its traditional kinase signaling role, Raf has a pro-survival function that inhibits apoptosis in tumor cells and supports angiogenesis in vascular endothelial cells. Kinagens drug, which targets inactive Raf, has a unique mechanism of action that inhibits all three roles. So even if a tumor mutates and finds a way to work through a different kinase pathway, RAF Blockade should still exert its pro-apoptotic and anti-angiogenic effects in the tumor stroma, resulting in a more durable effect, Slack said. Additionally, because RAF Blockade doesnt compete with ATP, it inhibits the B-Raf/C-Raf dimerization that causes resistance to traditional kinase inhibitors. Slack said Kinagen expects its drug to benefit patients with normal or mutated

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Raf as well as those with mutated Ras. In human tumor cell lines and animal models, RAF Blockade demonstrated single agent antitumor, anti-angiogenic and anti-lymphangiogenic effects, even in cells that were refractory to treatment with other Raf inhibitors. Kinagen also has a preclinical program targeting the alpha and beta subtypes of PDGFR with the goal of preventing restenosis after angioplasty or vascular grafts. The program also may be applicable in treating fibrotic diseases. Slack noted that the use of kinase inhibitors outside of cancer has been limited due to their lack of selectivity and subsequent side effects, but Kinagens platform has the potential to overcome these obstacles. Since its founding, Kinagen has survived on grant money and investments from its founders. The virtual firm relies on academic collaborations and CROs to do much of its preclinical work. Slack noted that the biotechs scientific advisory

board which includes Cheresh as well as former Lilly oncology R&D chief Homer Pearce, former Boehringer Ingelheim GmbH development head Peter Farina, former OSI Pharmaceuticals Inc. oncology discovery head Lee Arnold and Mass General kinase expert Keith Flaherty is not window dressing; were putting these guys to work. Yet Kinagen is in discussions to complete either a venture round or a corporate partnership within three to six months, Slack said. He noted that neither precludes the other, and Kinagen might end up doing both. On the partnering side, the firm is open to a broad discovery partnership or potentially a licensing deal. On the venture side, Slack is aiming for about $18 million, which he said would be enough to take the RAF Blockade program through clinical proof-of-concept, get the PDGFR program clinicready, and turn the crank again to see what Kinagens platform can churn out.

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igenicA rAises $24M in series b to exPAnd Antibody PlAtforMs


Igenica Inc. has completed a $24 million Series B financing that will allow the Burlingame, Calif.based firm to significantly accelerate its efforts to discover and develop antibody-based cancer medicines. The company is using two platform technologies that collectively drive Igenicas drug discovery efforts and will be used to identify new and potentially more effective cancer therapeutics. That entire process can take more than a year or two to complete. But Igenica hopes to whittle the time down to a couple months with fewer resources than is currently used for target discovery and screening of therapeutic antibodies. The sTAg platform is a proteomics-based technology designed to identify surface antigens that could be tracked with an antibody in cancer setting. The iTAb technology, a monoclonal antibody discovery platform, is focused on screening for antibody drug candidates that are effective in eliminating or controlling cancer. CEO Mike Rothe told BioWorld that the Series B funds would be used to expand the technology, allowing the company to crank out a significant amount of targets and to identify clinical candidates. Only a handful of monoclonal antibody-based therapeutics are on the market today for cancer such as Erbitux (cetuximab, Bristol-Myers Squibb Co.) and Vectibix (panitumumab, Amgen Inc.), both of which target the EGF receptor and Herceptin (trastuzumab, Genentech), targeted at HER2. Igenicas technology is ideally positioned to develop cancer antibodies that will function as first-in-class and best-in-class therapeutics on their own or in combination with current treatments, said David V. Goeddel, managing partner at The Column Group and chairman of the board of Igenica. Rather than going after some of the proven targets for antibody-based cancer drugs, Igenica is focusing its attention on targets on the cell surface that may have been missed that could lead to improved antibodies, Rothe told BioWorld. Our goal is to get away from the well threaded path. Overall, he said that antibodies have evolved quite a bit since the days of Herceptin. Now, antibodies have become one of the major drug classes in cancer. But Igenica sees room for even better targets. It hopes identify new unique markers for the tumor cells and screen for more effective antibodies. The Series B round was led by The Column Group, OrbiMed Advisors and 5AM Ventures. The company, which started operations in 2009, closed a Series A round that year with the same investors.

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esPerAnces MeMbrAne disruPting PePtides seek And destroy cAncer


With $15 million of venture funding in its pockets and technology licensed from Louisiana State Universitys Pennington Biomedical Research Center, Esperance Pharmaceuticals Inc. is advancing through early clinical trials with cancertargeted membrane disrupting peptides. Hector Alila, president and founder of the Baton Rouge, La.-based start-up, explained that each drug candidate consists of two parts: a binding moiety and a payload of membrane disrupting peptides. Cancer cells are more negatively charged than normal cells, and Esperances peptides are positively charged, providing a natural attraction. But Alila said a higher concentration of drug is needed to trigger lysis, which is where the targeting moiety comes into play. For now, Esperance is focused on targets on the surface of the cancer cell membrane, which means the drug does not have to be internalized by the cell to exert its membrane-disrupting mechanism of action. We can target anything on the surface, Alila said, although he added that the technology also potentially could be used to target an intracellular membrane such as that of the mitochondria. Additionally, unlike chemotherapy, Esperances peptides are not toxic. Alila explained that targeted chemotherapy drugs enter into a cell and release their toxins, but once the cell is destroyed, the toxins circulate through the body, causing side effects. Esperances peptides destroy the cancer cell, but the lysis process releases enzymes that then destroy the peptides, preventing offtarget activity. And while chemotherapy targets only dividing cells, Esperances compounds have been shown to kill both dividing and nondividing cells, including those that are resistant to chemotherapy. Lead product EP-100 targets luteinizing hormonereleasing hormone (LHRH) receptors, which are overexpressed in cancers of the breast, prostate, ovary, endometrium, testicles, pancreas, colon, lung, liver and cervix. In preclinical studies, the drug destroyed LHRH receptor overexpressing OVCAR-3 cells within an hour. An open-label, multi-center, dose-escalation Phase I trial in LHRH-overexpressing solid tumors started last August, and Esperance expected to determine an optimal dose by the end of 2010. The Phase Ia portion of the study will then roll into a larger Phase Ib portion, with final data expected by the end of 2011. Behind EP-100, Esperance is working on EP302, which targets the cancer-associated protein nucleolin. Preclinical data were presented at the American Association for Cancer Research annual meeting this spring, demonstrating that EP302 destroyed nucleolin-expressing cancer cells within one hour when tested in vitro in 20 human cancer cell lines. In vivo studies showed that the drug resulted in significant tumor regression and improved survival in mice with PC-3 xenografts. Esperance expects to start investigational new drug application-enabling studies in 2011. Alila said Esperance has other candidates in earlier stages of development. And for each drug candidate, the company is developing a companion diagnostic to ensure that the patients enrolled in its trials actually overexpress the target.

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Esperance was founded in 2005 when membranedisruption research at Pennington caught the eye of investors Louisiana Fund I LP, Themelios Ventures Partners LP and Research Corp. Technologies Inc. They contributed $9 million to a Series A round in 2006, but Alila said the company didnt really become operational until 2007, when he came on board. Alila set about building up Esperance, which now has nine employees and works out of the

Louisiana Emerging Technology Center incubator. He also raised $6 million in a Series A-1 round in 2008 from the firms existing investors as well as some individual investors. That money will allow Esperance to complete its ongoing Phase Ib trial with EP-100. Then we will decide whether to exit or raise additional funds, Alila said. For now though, the company remains focused on advancing through preclinical and clinical studies, he said.

BioWorlds innovations in Biotechnology 2011

27

AMPlyx iMProving hiv, cAncer drugs through better tArgeting


Once a drug gets approved, the first thing other pharmaceutical companies do is try to make their version of the drug thats better, observed Mitchell Mutz, co-founder and chief scientific officer of Amplyx Pharmaceuticals Inc. Its a strategy thats been working well for a number of firms, but Amplyx, a 2006 start-up, is hoping to put its own spin on that approach. The San Diego-based firms platform stems from the lab of Gerald Crabtree, a Stanford University professor who previously founded Cambridge, Mass.-based Ariad Pharmaceuticals Inc., along with researcher Jason Gestwicki, whos now at the University of Michigan. Their work involved the use of small molecules to improve the efficacy of existing drugs, and after initial experiments, it looked like this was going to be a really productive approach, Mutz said. The idea is to attach a small ligand to a drug to improve its targeting function specifically by binding to the FKBP protein found inside cells. As a result, the improved drug has a higher concentration inside the cell and is metabolized more slowly than the original compound. Not only does that boost the efficacy, it also aims to limit the kind of off-target toxicity that plagues other firms well into late-stage clinical development. Recently, for example, InterMune Inc., of Brisbane, Calif., had to pull the plug on the highest dose cohort for protease inhibitor ITMN191 in a Phase IIb hepatitis C trial after reports of liver toxicity. At Amplyx, toxicity is actually the first problem we address, Mutz told BioWorld. One if the firms preclinical programs is tasked with designing a safer version of paclitaxel, a commonly used chemotherapy in breast and ovarian cancers but one that carries a severe doselimiting toxicity: peripheral neuropathy. Its extreme enough so that patients cant take the drug anymore, Mutz said. Paclitaxels widespread use makes it a large potential market for any firm that can come up with a safer drug. And Amplyx isnt alone. Lake Bluff, Ill.-based NeoPharm Inc. is in midstage testing with a liposome-entrapped version of paclitaxel, and Abraxis BioScience Inc., of Los Angeles, has had success with its albumin-bound nab-paclitaxel formulation Abraxane, which pulled in revenues of $314.5 million for 2009. Both of those are designed to eliminate the need for the cremaphor component, which is toxic in itself. But Abraxane still causes peripheral neuropathy just as severe, so that problems not fixed, Mutz said. Amplyxs taxane derivative so far has shown equivalent efficacy to paclitaxel in a xenograft mouse model of breast cancer, and a rat study that used mechanical allodynia as an indicator of peripheral neuropathy showed that the companys compound was significantly less toxic compared to paclitaxel. That program is the most advanced at Amplyx and, with those proof-of-principle data in hand, the firm is positioned start seeking some additional funding.

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Were going to partners and VCs now that weve shown the platform works, said CEO Elaine Heron, who came on board in February 2009 and helped the firm bring in some angel funding in 2010. To date, work at Amplyx has been funded by about $1.55 million from Life Science Angels and Tech Coast Angels, as well as from Golden Seeds, an angel group that invests in start-up companies led by women. We hope to raise a Series B in the $10 million range, Heron said. Partnering also is an option. Amplyx already has partnered two programs: a preclinical

antibacterial compound is part of collaboration with an undisclosed midsize pharma firm, and an early stage antifungal program is in development with Duke University. In addition to the paclitaxel program, Amplyx also is working on its own in HIV. While the technology also could be applied to development-stage drugs to resolve toxicity hurdles much earlier in the process, Amplyx has decided to limit its initial work to approved drugs, mostly because we know a lot about their target and their toxicity profile, Mutz said, though he added that Amplyx might consider expanding the technologys use through additional collaborations.

BioWorlds innovations in Biotechnology 2011

29

koreAn firM kAel-geMvAx AdvAncing cAncer vAccine


KAEL-GemVax Co. Ltd., a Korean firm founded in 2008, got the go-ahead earlier this month from a data monitoring committee to continue its massive Phase III pancreatic cancer program testing GV1001 , a telomerase-based vaccine designed to induce both antibody and T-cell responses. The technology might sound familiar. Research on the program dates back nearly two decades to the Norwegian Radium Hospital and led to the 2001 creation of GemVax in its first iteration, then a spinout of industrial conglomerate Norsk Hydro ASA. After failing to secure adequate funding, the Oslo, Norway-based firm went to Danish biotech Pharmexa A/S in 2005. Pharmexa continued the cancer vaccine march until 2008, when GV1001 disappointed as a monotherapy in a Phase III pancreatic cancer trial, prompting Pharmexa to accept an acquisition offer by Affitech A/S and sell the GemVax cancer vaccine unit to Korean firm KAEL Co. Ltd. The newly merged firm is a fairly young company to boast such a late-stage program, noted Magnus Moliteus, CEO of KAELGemVaxs European and U.S. operations. An industry veteran, Moliteus said his interest in the company stems from a high regard for the research surrounding GV1001 sometimes referred to as a universal vaccine for its potential against multiple cancer indications. KAEL-GemVax is continuing the efforts in pancreatic cancer first. The firm hit the 70 percent recruitment mark in June for its 1 , 100-patient UK trial designated TELOVAC to test GV1001 in combination with gemcitabine and capecitabine in locally advanced or metastatic pancreatic cancer. Survival is the primary endpoint. The study is progressing very well, Moliteus told BioWorld, adding that patient enrollment is expected to wrap up around October 2011 . Despite the failure of Pharmexas earlier monotherapy trial, PRIMOVAX, KAEL-GemVax is banking that adding the vaccine to chemotherapy will enhance immune response. The TELOVAC trial is designed with three arms: One arm will receive concurrent doses of chemotherapy plus GV1001 , one will receive chemotherapy for eight weeks followed by GV1001 and the third arm will receive chemotherapy alone. The design of the study was put together largely during GV1001s transition between owners, but Moliteus said subsequent meetings with regulators confirmed that the study was well designed. If data are positive, they could be enough for a new drug application in the U.S., as well as a marketing authorization application in Europe, he said. KAEL-GemVax hasnt yet outlined a specific commercialization strategy for GV1001 , but Moliteus said its likely the firm will employ the approach typical for Korean firms retain rights to market on its own in Korea, which is not a small market, while looking at partnerships for other areas. They have a number of options right now, he added. For now, the firm has its hands full with clinical

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development of GV1001 . Behind pancreatic cancer, ongoing studies are testing the cancer vaccine in liver and lung cancers and in melanoma. And the company is not alone is targeting telomerase, an enzyme overexpressed in several tumor types. Menlo Park, Calif.-based Geron Corp. has been moving steadily ahead with its telomerase research. That firm has an autologous telomerase cancer vaccine in Phase II testing for acute myelogenous leukemia. KAEL-GemVax also is advancing a combination

program through a deal with Lytix Biopharma A/S, of Oslo, Norway, involving its vaccine and Lytixs LTX-315, a compound designed to interact with cell membranes to induce immunogenic cell stressing and rapid cell lysis. The Norwegian Medicines Agency recently cleared the companies to begin testing the combination regimen in patients with resected tumors. With its primary operations in Korea, where capital markets are flourishing, KAEL-GemVax has not suffered the same shortage of funding that plagued its predecessor. The firm closed an oversubscribed public offering in February, raising KRW24.9 billion (US$20.7 million).

BioWorlds innovations in Biotechnology 2011

31

del MAr PhArMA bets on glioblAstoMA sAlvAge therAPy


Founder-funded Del Mar Pharmaceuticals is developing a treatment for a group of cancer patients that doesnt typically get a lot of attention from the industry those who have failed frontline biologic therapies like Avastin (bevacizumab). The objective is glioblastoma, a rare and aggressive cancer of the brain. Founders Jeff Bacha, Dennis Brown and William J. Garner used a bioinformatics-based approach to identify a compound that had the clinical and safety characteristics they needed. Del Mar is now preparing an IND for its lead candidate VAL083. The compound has a clinical history overseas, and some older studies indicated efficacy against glioblastoma. Avastin was not yet available at the time, so those studies are not specific to a patient population that has failed Avastin. Twenty years ago, when this work was originally done, those patients obviously didnt exist because Avastin was just approved in the indication about a year ago, Bacha told BioWorld. There are few end-stage or salvage therapies available for glioblastoma. Bacha said that the competition is not as fierce as it is in some other areas because companies tend to focus on frontline therapy rather than end-stage or salvage therapy. VAL083 could potentially be administered in combination with another therapy. Bacha cites antibodies and vaccines currently in development as potential partners for the compound. Particularly in glioblastoma and some of the other cancers, these patients currently have no options other than experimental or palliative care. Bacha called VAL083 a very de-risked asset because it has been studied previously in a number of National Cancer Institute-supported studies. There are over three dozen published Phase II clinical trials utilizing the compound in a number of different indications, Bacha added. VAL083 is commercially available overseas, but was never approved nor brought forward beyond Phase II in North America, according to Bacha. Del Mar has not disclosed the identity of the compound or its overseas manufacturer, but calls VAL083 an alkylating agent. Bacha compares VAL083 to Treanda (bendamustine, Cephalon Inc.) and Omapro (omacetaxine, ChemGenex Pharmaceuticals Ltd.). Treanda was developed by Salmedix Inc. for treatment of non-Hodgkins lymphoma (NHL) that is refractory to Rituxan (rituximab, Genentech and Biogen Idec Inc.). Treanda received orphan drug status in 2005 and was given fast-track status by the FDA in 2008. Treandas sales growth reached $222. 1 million in 2009, and Del Mar predicts that its annual peak sales could be $500 million. Omapro was developed by ChemGenex for chronic myeloid leukemia (CML) that is refractory to Gleevec (imatinib, Novartis AG). Omapro received fast-track status from the FDA in 2006, and orphan drug status from the

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FDA in 2009. ChemGenex has filed a new drug application for patients who failed Gleevec and also had a mutation known as T3151. If it can match the success of Treanda or Omapro with VAL083, Del Mar estimates an annual market opportunity of more than $200 million, based on Avastin pricing and failure rates. Avastin is considered one of the most expensive of all drugs. Del Mars business plan is to commercialize VAL083 for post-biologic failure in orphan drug indications. Orphan drug status enables a much higher price point and seven years of market exclusivity. The company has identified a second indication for VAL083 and will expand its IND to include that probably toward the end of the year, Bacha said in 2010. Thus far, the founders have been able to move to the IND stage using internal resources, Bacha

said. It will soon undergo a formal institutional financing to bring in more funding and more individuals to participate in the company. Del Mar is oriented toward acquisition, but is open to going public, as well. We are certainly not afraid to test the public markets. We do have what we feel is a laterstage asset that is well de-risked that also has a streamlined development pathway in terms of the regulatory pathway that well follow and a very, very experienced team to make it happen, Bacha said. Del Mar is named after a California city that Bacha once lived in. Because it means the sea in Spanish, he also liked the resonance with the concept of reaching out or bridging the ocean, because the company will be commercializing technology developed overseas.

BioWorlds innovations in Biotechnology 2011

33

certus dePloys nAnoPArticles for tArgeted tuMor delivery


Drug toxicity limits the usefulness of many otherwise promising cancer therapies. Certus Pharmaceuticals Inc. is developing a lipid-based nanoparticle technology to deliver powerful cancer drugs directly to tumors, while sparing the overall system from toxic effects. The Berkeley, Calif.-based company is working on two drug-containing nanoparticles, TaxoSphere and EmboSphere, for solid tumor indications, based on commercially available chemotherapy agents, and expected to file its first investigational new drug application in 2010. The nanoparticles, 100 nm to 200 nm in size, accumulate selectively in the tumor and extend the time that the tumor is exposed to the drug. The nanoparticle mechanism allows the drug to easily enter the tumor, but a pressure buildup prevents it from returning to general circulation. The idea is to dramatically increase the effective dose to the tumor, while minimizing toxicity. TaxoSphere is a stable nanoparticle containing the chemotherapy drug paclitaxel. Certus founder and CSO Peter Scherrer told BioWorld that TaxoSphere shows greater than twentyfold accumulation in tumors compared to Taxol, a formulation of paclitaxel marketed by Bristol-Myers Squibb Co. According to Certus, the exposure time for TaxoSphere was more than 24 hours, compared to 1 hour for Taxol. With all these chemotherapy drugs, they only work at a certain stage of the cell cycle. Having the drug extend the drug exposure . . . really increases the efficacy tremendously, Scherrer said. He estimated that Certus is approximately one year from filing an IND for TaxoSphere. Because paclitaxel has a steep dose response curve and the tumor will be exposed to the drug for an extended period of time, Certus predicts that it will outperform competitor drugs Abraxane, Tocosol and Xyotax, which have yielded at best incremental improvements in cancer outcomes. The maximum tolerable dose that weve determined in animals is more than fivefold higher. Abraxane is a nanoparticle albumin-bound form of paclitaxel (nab-paclitaxelis), currently approved for the treatment of breast cancer that has failed chemotherapy. In a recent Phase III study, Abraxis Bioscience Inc. reported a 31 percent improvement using Abraxane in non-small-cell lung cancer (NSCLC) in Phase III trials. Abraxis also is testing Abraxane in a number of other cancers including bladder and pancreatic. Tocosol, another formulation of paclitaxel by Sonus Pharmaceuticals Inc., failed spectacularly against metastatic breast cancer in Phase III trials in 2007. And Zyotax (paclitaxel poliglumex), by Cell Therapeutics Inc., failed to show significant improvement in Phase III trials against NSCLC in 2008. Certus second drug EmboSphere bundles the commercially available chemotherapeutic doxorubicin inside its nanoparticle, along with an embolization mechanism. Preliminary clinical studies of EmboSphere carried out at the Max Delbruck Center for Molecular Medicine in collaboration with Charit Universittsmediz in Berlin showed liver tumor shrinkage and stabilization of disease for more than two years in patients

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BioWorlds innovations in Biotechnology 2011

who had previously failed therapy with naked doxorubicin. Patients also had no side effects. Scherrer called that a huge step over whats presently out there. Certus compared those results to recently approved Nexavar (sorafenib, Onyx Pharmaceuticals Inc. and Bayer AG) which improves survival from 7.9 month to 10.7 month in late-stage patients, only a little over two months difference. Those studies do not qualify as clinical studies under the FDA, but have encouraged Scherrer and his colleagues at Certus in working toward an IND, which it expects to file in 2011. Certus will develop EmboSphere for liver tumors, and TaxoSphere will have broader applications, including lung and ovarian cancer, Scherrer said. The goal for the company is development into the early clinical stages. What we are after is

to get the proof of concept in the clinic. Once thats achieved, we either try to raise additional money to continue clinical development or look for partners. Scherrer negotiated the transfer of the nanoparticle technology from the Max Delbruck Center to form a start-up in Berkely in 2008 after experiencing some difficulty in starting the company in Germany. The company currently consists of a four-person management team, with research outsourced to various CROs. Scherrer demurred to name his three other colleagues pending formal announcements of their association with Certus. Seed financing for Certus has been obtained privately, and the company is working on its first financing round. Right now we are at the point of trying to close a financing, Scherrer said.

BioWorlds innovations in Biotechnology 2011

35

gensPerA testing PlAnt-bAsed Poison to ZAP solid tuMors


After acquiring a patent portfolio based on 15 years of research with more than $15 million in research funding, San Antonio-based GenSpera Inc. has moved into Phase I testing with a cancer drug candidate that is derived from a poisonous Mediterranean plant, Thapsia garganica. The active ingredient, thapsigargin, contained in GenSperas cytotoxin has been well studied by researchers for its cell-killing ability. But GenSpera believes it is the first company to find a way to use the highly toxic properties of the plant-derived drug to specifically target tumors. Previously the National Cancer Institute demonstrated that thapsigargin was ten- to a hundredfold more potent than reference chemotherapeutic agents in killing all types of cells. But it was never developed further because there was no known way to deliver it to tumors specifically. However, the co-inventors of GenSperas technology discovered a way to keep the cytotoxin masked and inactive in the body until it reaches the tumor. John T. Isaacs, of the Johns Hopkins School of Medicine, was investigating ways to treat slowgrowing tumors, when he realized that thapsigargin could be an ideal cancer agent because it kills cells independent of their rate of division. Isaacs began collaborating with Soren Christensen, of the University of Copenhagen, one of the worlds leading researchers on thapsigargin and the first to determine its chemical structure. As their research progressed, they discovered that adding a peptide to thapsigargin masked its cell-killing effects until it reached the tumor. So GenSperas thapsigargin analogue has been hitched to a peptide that works like the pin in a grenade, explained President and CEO Craig Dionne. Once the grenade reaches the tumor cell, the peptide is removed by enzymes found only in the blood vessels that support the tumor. With the pin removed, the activated drug can penetrate the tumor and work to collapse the supporting blood vessels, essentially starving tumor cells to death. That approach, in which the tumor vasculature is destroyed, is the focus of GenSperas lead prodrug, G202, now in Phase I testing. The trial, which will evaluate tumor shrinkage (objective response), is expected be completed in the second quarter of 2011 , and efficacy data could come at the end of 2012. GenSpera, which takes it name from the word genesis and the Spanish word for hope, is seeking to create a better chemotherapeutic agent without side effects like hair loss and bone marrow suppression seen with standard chemotherapy such as taxanes. With about $4 million currently in the bank, the company estimated it has the resources to take G202 through the third quarter of 2011 . GenSpera probably would need to raise money again in the spring to fund Phase II studies, said Dionne, a co-founder of the company. While G202 is designed to work against all solid tumors, the company plans to finalize which specific cancer types to study at the end of Phase I. Dionne indicated that an orphan indication also may be considered.

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G202 targets the prostate-specific membrane antigen (PSMA), which initially was thought to be specific only to the prostate. But later discoveries showed it also was present in the vasculature of all solid tumors. PSMA is expressed at high levels in blood vessel cells found only at the tumor site. We take advantage of the enzymatic part of PSMA, Dionne said. Contrasting it with an antibody-based approach where only one antibody bearing a drug molecule binds to one PSMA, we have thousands of released drug molecules per one PSMA, he said. As a result, thapsigargin is delivered at very high concentrations in the tumor and stays there with a half-life of greater than 30 hours in animal models, Dionne said. Not only that, the drug is expected to kill the slowly proliferating cancer stem cells, as it kills independent of cell division, leading to a lower rate of tumor relapse compared to standard therapies, he explained. And patients potentially could be retreated with the drug without developing resistance to it. He pointed out that antibody-based approaches, while they can cause tumors to regress, also can lead to nondurable response. GenSperas G202 prodrug candidate is designed to be curative as a monotherapy. We have a drug that looks like its going to work on its own, Dionne said. The companys second candidate, G115, is

targeted to a different peptide, prostate-specific antigen (PSA), a marker for prostate cancer. PSA actually is a protease that is active only when being secreted from the cancer cell. At least two deals valued at nearly $1 billion have emerged in recent years centered on prostate cancer compounds. Cougar Biotechnology Inc. was acquired by Johnson & Johnson for $970 million, handing the drugmaker Cougars prostate cancer compound, abiraterone acetate. Medivation Inc. scored a potential $725 million deal with Tokyo-based Astellas Pharma Inc. GenSpera has managed to raise money for its early stage pipeline in an otherwise difficult financial climate for start-ups. Dionne said the companys model keeping spending low (its a virtual firm with two employees), meeting timelines and giving investors liquidity (the companys stock began trading in 2009 on the Over-The-Counter Bulletin Board) has helped to facilitate funding. Were pretty proud of where we are, he said. The company, incorporated in late 2003, has raised $11 million over the last 2.5 years in three to four funding rounds, all with increasing valuation in the worst market condition, Dionne said. In the last round, more than half were previous investors, he noted. As the former vice president of biological research and drug discovery at Cephalon Inc., Dionne was responsible for neurobiology and oncology, helping to build that companys cancer research program.

BioWorlds innovations in Biotechnology 2011

37

Actis biologics to rAise $380M, for MAlAysiA, indiA ventures


U.S.-based Actis Biologics Inc. (ABI) plans to raise $380 million through a mix of investor, government and other funding sources, the bulk of which will be used to expand the companys ventures in India and Malaysian, CEO and cofounder Sanjeev Saxena, told BioWorld. Founded in April 2003, Palo-Alto, Calif.-based Actis has raised $15 million to date from Indian entrepreneurs and has built a pipeline of clinical and preclinical product candidates aimed at cancer and HIV. The companys most advanced pipeline drug, Angiozyme for colorectal cancer, was acquired through a 2005 deal with Chiron Corp. (acquired by Novartis AG) and San Francisco-based Sirna Therapeutics Inc. (formerly Ribozyme Pharmaceuticals Inc., now part of Merck & Co. Inc.). Sirna had completed Phase II studies of the drug in the U.S. and Canada. Angiozyme, which is based on the companys nucleic acid-based Ribozyme platform, already has been shown to be safe and efficacious in cancer in the North American Phase I/II trials, and Phase II studies are under way in India. Eight centers have been recruited for the study in India and the company is looking for trial sites in Malaysia as well. Data from the 24-week dosing study of Angiozyme are expected in the next six to nine months. We are looking for partners for trials in Europe and the U.S. and elsewhere, Saxena said, adding that partner talks have yet to begin. Actis is planning Phase III studies of Angiozyme in combination with chemotherapy, using $5 million in committed funding from the Indian government, half of which already has been released to the company. When the anti-angiogenesis molecule was tested in U.S. and Canadian patients, only 48 patients showed high levels of the soluble VEGFR1 protein, while 150 blood samples from India showed high levels of the protein in every single sample, indicating that the biomarker may be higher in people in Asia, Saxena explained. The cost of manufacturing this drug is expected to be less than $200 and hence we should be able to make it available for less than half of what other drugs are going for in the market, he said. In addition, he said that the drug is given as a subcutaneous injection, making it possible to ultimately be marketed like an insulin drug, which a patient could potentially administer in the presence of a doctor. Actis other technologies are based on recombinant proteins, gene therapy and a vaccines platform. All of Actis technology platforms were initially were developed in its U.S. labs. Now the company is looking to increase its stake in its Indian and Malaysian arms, Actis Biologics Pvt. Ltd. (ABPL) and Actis Biologics Malaysia Sdn Bhd. All of the current scale-up work and new discoveries are being handled out of India. About $45 million worth of drug that was transferred to ABI as part of the Angiozyme acquisition will be now be transferred back to the Indian venture, ABPL, to expand facilities there, Saxena said.

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ABPL has 18,000 square feet of research and development laboratories in Marol Naka, Mumbai, on prime real estate, which will be the site of product development. A larger, pilot plant and manufacturing center will be established on 11 acres in Khapoli. Behind the Angiozyme program is a Phase I-ready orphan product based on ligand-based technology acquired from Rockville, Md.-based Cellworks Therapeutics. Actis is seeking funds from the Indian government to start that Phase I trial. It also is developing an in-licensed medial diagnostic system developed in the U.S. that is designed to detect potential sites for breast cancer with 95 percent accuracy. Actis subsidiary Telesto Diagnostics, is expected to start marketing in Malaysia and South East Asia in the next nine

to 12 months, and shortly thereafter in the U.S. The company is making plans to build various facilities at a planned 270-acre biotech park in the Malaysian state of Malacca, through its Malaysian venture formed in 2007. Some 20 biomedical companies, including medical device, drug development and diagnostics, are slated to be housed there, the first of which is expected to be Actis subsidiary Telesto Diagnostics. An undisclosed Malaysian investor has committed $300 million for the Malacca facility, the details of which were expected to be announced shortly after. That money makes up the bulk of the funds that Actis plans to raise. Actis hopes to raise another $30 million through private equity and other investors, Saxena said.

BioWorlds innovations in Biotechnology 2011

39

ensysce AiMs nAnotubes to deliver Precise therAPeutics


Fullerene carbon nanotubes are being investigated as a means to solve two important problems for many cancer therapeutics: to deliver large active agents to specific locations and to protect normal tissue from the active agent during delivery. Backed by an enormous intellectual property portfolio in carbon nanotube technology, Ensysce Biosciences Inc., hopes to corner the market using the tubeshaped molecules to deliver cancer therapeutics. Because carbon nanotubes can traverse cell membranes and carry large payloads into cells, Ensysce has a multi-pronged development platform. The chemical structure of carbon nanotubes allows them to form stable complexes with cancer-cell targeted agents that range from small interfering RNA (siRNA) to existing cancer drugs, such as Taxol and doxorubicin. In fact, the name Ensysce was chosen to signify the precise targeting of drugs inside cells, since nanotubes so easily penetrate cancer cells. Were quite different from most of the delivery companies in that theyre usually looking at relatively large-diameter nanoparticles, whereas ours are very small, CEO D. Lynn Kirkpatrick told BioWorld. Weve been able to form stable complexes with numerous active entities including siRNA. We believe our current research efforts to tailor their transport and release will ensure a therapeutic benefit while eliminating offtarget effects. Because siRNAs can silence gene messages and have potential to suppress messages that lead to cancer, the molecules have intriguing prospects as a cancer therapeutic if they can be delivered directly into cancer cells without degrading or interfering with other matter. Ensysce-sponsored animal studies conducted at M.D. Anderson Cancer Center in Houston have shown that carbon nanotubes can transport siRNA into cancer cells to produce a biological response without signs of toxicity. In June, the Houston-based company received $1 .5 million from the Texas Emerging Technology Fund (ETF) to move its technology into preclinical studies. We are optimizing our first product and hope to have it [ready for an investigational new drug application] in 12 to 18 months, Kirkpatrick said. Privately held Ensysce was spun off in 2008 by Unidym Inc., a majority-owned subsidiary of Pasadena, Calif.-based Arrowhead Research Corp., to focus specifically on the therapeutic applications. Unidym, which develops nonclinical products that incorporate carbon nanotubes, licensed its nanotech patent portfolio to Ensysce for that field of use and holds an equity position in the company. The companys technology stems from the research of the late Richard Smalley, the 1996 Nobel Laureate for chemistry from Rice University in Houston. Unidym acquired the rights to Smalleys work in carbon nanotechnology through a merger with Smalleys firm Carbon Nanotechnologies, Inc. (CNI) in April 2007. CNI had been developing carbon nanotubes tube-shaped molecules comprised of intricately arranged carbon atoms for more than 10 years and owned 54 U.S. patents

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and several patent applications for the technology. After the spinoff, CNIs co-founder, Robert Gower, continued to chair the new company. He recruited Kirkpatrick, co-founder of ProlX Pharmaceuticals and a former professor of chemistry and biochemistry at the University of Regina, Canada, to join Ensysce as CEO in January 2009. The company now has four employees and sponsors collaborative research in carbon nanotube technology at Stanford and Rice Universities as well as M.D. Anderson. For example, Ensysce is supporting a research program at Rice that uses two alpha-emitting materials astatine and actinium complexed inside ultra-short carbon nanotubes to offer another potential delivery vehicle for cancer therapy. Holes in the walls of the ultra-short carbon nanotubes allow the alpha-emitters to enter, where they are captured and retained. Subsequent emission from the radioactive material penetrates only a two- to three-cell diameter, ensuring localization of the agents. Although Ensysce is focusing on developing its own product stream, the academic research

collaborations may also lead to enhancements of existing technologies. We have the opportunity both to partner with companies that require the delivery technologies and to take products into trials ourselves, to develop our own pipeline, Kirkpatrick said. Presently, the companys IP portfolio includes exclusive and nonexclusive licenses from several universities and research institutions for more than 80 issued patents, plus additional pendingpatent applications. Ensysce holds the licensing rights to technology developed as part of its funded research programs and, as part of its broad license agreement with Unidym, the rights to any IP required for the use of carbon nanotubes in therapeutic applications that is developed, licensed or acquired by Unidym within the next few years. The ETF funding is expected to take the company through 201 1 with a highly aggressive development timeline, Kirkpatrick said. In the meantime, shes discussing downstream funding opportunities with potential partners and examining other financing mechanisms.

BioWorlds innovations in Biotechnology 2011

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concordiA PhArMAceuticAls first off the line in rAs rAce


When serial entrepreneur Reginald Hardy formed Concordia Pharmaceuticals Inc. in 2003, it was to answer the question, Can we use our relationships to build a pharmaceutical company? Seven years later, the answer is clear: affirmative. Having recently licensed its first-in-class Phase II cancer drug, salirasib, to Japans Ono Pharmaceutical Co Ltd., the Ft. Lauderdale, Fla.based company continues to do business on a virtual basis, building value on its relationships, headed by a four-man team with more than 100 years of combined experience in the pharmaceutical industry. The management team, comprised of Hardy, Marc Watson, Victor Bauer and Hubert Huckel, quickly identified a ras inhibitor discovered by Yoel Kloog at Tel Aviv University, and made arrangements to develop the compound as a cancer drug. The focus of Concordia has always been to move salirasib into Phase II studies, as quickly and efficiently as possible, and find a partner, Hardy told BioWorld. The ras family of genes were the first identified oncogenes, so named because it was first found in rat sarcoma in the 1960s. However, efforts to develop cancer therapeutics by targeting ras protein have not been very successful thus far. Salirasib is the very first ras inhibitor to be developed for cancer therapy. The U.S. Adopted Names Councils (USAN) created a new name stem, rasib for Concordia in 2006 to reflect that fact. In 2009, Concordia reported encouraging interim data from Phase I and II trials of patients with advanced pancreatic cancer and advanced non-small-cell lung cancer (NSCLC). Salirasib improved one-year survival in patients with advanced pancreatic cancer, and in a separate Phase II study in NSCLC, 38 percent of the treatment-naive salirasib group had stable disease following treatment. In August, salirasib completed Phase I trials for pancreatic cancer at Johns Hopkins University and Phase II trials for NSCLC at Memorial SloanKettering Cancer Center. On Sept. 1 , Ono signed an agreement with Concordia to develop and commercialize salirasib in Japan for all indications. That was a planned development in Concordias overall business strategy. Concordia sought a Japanese partner because even though the population is smaller, Japan has about the same number of pancreatic cancer cases around 28,000 per year as the U.S. We saw Japan as a very good opportunity for us. Ono is an ideal partner for us because of their experience in the oncology market and the development of first-in-class products, Hardy noted. Through the deal, salirasib becomes part of Onos growing pipeline of cancer drugs. In 2010, Ono licensed regional development and commercialization rights to a Phase IIb multiple myeloma drug, carfilzomib, from Onyx Pharmaceuticals Inc. Concordia will receive an up-front payment from

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Ono, with additional milestone payments possible in the future based on clinical and regulatory progress. Concordia will also receive royalties on the sale of salirasib in Japan. The financial details were not released; Hardy said that Concordia has been funded privately from the start. Right now were not looking for any additional financing. . . . Were talking with companies interested in acquiring global rights outside of Japan for salirasib, he noted. In spite of the fact that pancreatic cancer is a notoriously aggressive cancer, often discovered in its advanced stages, few treatments have been found. Gemcitabine, marketed as Gemzar by Eli Lilly and Co., is the front-line therapy with annual sales of more than $500 million per year.

Median survival for patients with pancreatic cancer on gemcitabine is 6.2 months, with 19 percent survival at one year. We see this drug as being used in combination with gemcitabine or other therapies in the treatment of pancreatic cancer, Hardy said. Regarding future business and exit strategies, Concordias plans are as simple and laser-focused as its start-up strategy. The exit is pretty well defined, he added. The company will seek additional regional partners like Ono, as well as an additional global partner to shepherd salirasib through Phase III trials and registration studies. Whats next after Concordia for serial entrepreneur Hardy? Well start something else.

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43

centrose seeks funds for loW-tox edc PhAse i triAls


Centrose LLC is hoping to find success with antibody-drug conjugates, an area where Pfizer Inc. encountered disaster in 2010 with its Mylotarg cancer therapy. Founded in 2006, Madison, Wis.-based Centrose is looking to raise money to begin Phase I testing of its extracellular drug conjugate, EDC-One, aimed at cancer. Centrose believes its approach could result in potentially lower toxicity than seen with Mylotarg and other ADCs in development. EDC-One is similar to an antibody-drug conjugate, but works outside of cells rather than inside, which is why the company describes its cancer candidate as an extracellular drug conjugate. I dont believe anything is out there right now that comes as close to this in terms of specificity, James Prudent, chief scientific officer, told BioWorld. Centrose only recently has provided details of how EDC-One is designed to work, and how it might address the limitations the company sees with current antibody-drug conjugates (ADCs) in development. ADCs, composed of an antibody and a drug connected by a linker, bind with markers on cancer cells. But once they find their spot, the entire ADC gets internalized into the cell, where the antibody and linker get degraded by proteins, releasing and activating the drug. The drug then kills the cell. The ADC approach generally requires the use of a toxic drug hitched to the antibody, and the drug gets activated only when released from the antibody. Releasing the toxic drug in this way can cause it to come in contact with healthy surrounding tissue, which was the main reason why Mylotarg ultimately failed, Prudent explained. Centroses EDC system seeks to get around such problems by making antibody-drug conjugates that arrive at the diseased cell fully active in the linked state without degradation. EDC-One is designed to be active on disease cells, sparing the healthy ones, and can work repeatedly, rather than being degraded internally in the cell. Company data have demonstrated that only upon binding to both targets does the EDC kill the cell. Under the EDC platform, targeted drugs could be developed for multiple indications beyond the cancer model, according to Centrose. Mylotarg, a product that originated with Wyeth (acquired by Pfizer Inc.) was the only U.S.approved antibody-drug conjugate, before it was removed from the market in 2010 at the request of the FDA. The drug had received accelerated approval in May 2000 to treat elderly patients with acute myeloid leukemia. But it failed to show clinical benefit in postmarketing studies and raised new safety concerns. There were increased rates of death and veno-occlusive disease, a potentially fatal liver condition, seen in study patients treated with Mylotarg, a combination of the antibody gemtuzumab and the chemotherapy ozogamicin (a calicheamicin analogue). Out front in clinical development today is Genentech Inc. (part of the Roche Group), with its Phase III Herceptin Tumor-Activated Prodrug

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(TAP), which consists of ImmunoGen Inc.s DM1 cancer-cell killing agent attached to Genentechs trastuzumab, known as Herceptin. Interim Phase II data recently presented at the European Society for Medical Oncology (ESMO) annual meeting showed that Genentechs Herceptin TAP (T-DM1) resulted in an objective response rate of 47.8 percent in first-line HER2+ metastatic breast cancer, compared to 41 .4 percent for patients treated with Herceptin plus chemotherapy. Additionally, the incidence of serious side effects with T-DM1 was approximately half of that reported with the Herceptin plus chemotherapy arm. Also in the hunt is Seattle Genetics Inc., which recently reported positive data from a pivotal trial of brentuximab vedotin (SGN-35). Bothell, Wash.-based ImmunoGens most advanced unpartnered TAP compound, lorvotuzumab mertansine (IMGN901), is still in early stage trials for Merkel cell carcinoma (MCC), small-cell lung cancer (SCLC), ovarian cancer and multiple myeloma. The company presented positive data at ESMO showing a

clinical benefit in 38 percent of MCC patients, including one complete response, one partial response that evolved to a complete response, and three patients with stable disease. Additionally, three of 26 SCLC patients had stable disease and another achieved an unconfirmed partial response. Seattle Genetics also reported positive SGN-35 data in anaplastic large cell lymphoma. ImmunoGens technology has attracted multiple partners, bringing in some $285 million for the company over the past decade. Centrose has a number of angel investors who want in for another round, Prudent said. And as for whether the company will seek partnerships down the road, he said, We are pretty much keeping our options open at this point. The company derives its name from the center of sugars as in sucrose, glucose, fructose. Centrose uses its Carboconnect technology as a way to attach drugs to proteins via modified sugars.

BioWorlds innovations in Biotechnology 2011

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APogee Poised to enter clinic; sk inhibitor AiMed At cAncer


Following two recent accomplishments the FDAs acceptance of its investigational new drug application for lead drug ABC294640 and orphan drug status awarded in pancreatic cancer Apogee Biotechnology Corp. has emerged from stealth mode and is looking to start clinical testing in 2011 with its sphingosine kinase inhibitor. Its an exciting time for us because weve got a lot of preclinical data and now its time to find out if it will work in humans, said President and CEO Charles D. Smith, who founded Apogee in 2001 as a spinout of Penn State University. While perhaps not a newco in the strictest sense of the word, the firm spent its early years establishing the sphingolipid technology. Then it continued flying under the radar. We were focused on the science and then we were hyperfocused on the IND package, Smith told BioWorld. Apogee submitted the IND early in 2010. In September, the FDA gave the go-ahead for a Phase I trial of ABC294640 that will test the drug in two stages: a dose-escalation portion expected to enroll patients with any type of advanced solid tumors and an expansion portion that will involve pancreatic cancer patients. The study was slated to start in January and should take an estimated 12 months to 18 months to complete. In addition to the usual safety parameters, Apogee also is hoping the trial will yield pharmacodynamic data, specifically measuring levels of sphingosine-1 phosphate as a biomarker. S1K is produced by the sphingosine kinase, an oncogene expressed in a variety of tumors, and helps cancer cells avoid apoptosis. In fact, while screening the sphingosine kinase target at Penn State, Smith discovered its critical link between cancer cell proliferation and cancer cell apoptosis. In other words, he said, its sitting at the switch of life and death for the tumor cells. S1K also has implications in other disease processes such as inflammation. Cytokines such as TNF- required signaling through that same pathway. Plus, cancer is believed to have an inflammatory component as well. So its really a multitarget [approach], Smith said. Inhibiting S1K goes after not just the signaling pathway but the other processes that support tumor growth. Based on promising preclinical data, Apogee envisions ABC294640 as part of combination therapy. Pancreatic mouse xenograft models have shown efficacy when combined with gemcitabine, the current standard of care, as well as with taxanes, which are getting more attention in the pancreatic cancer space thanks to early clinical success by Celgene Corp.s Abraxane (nabpaclitaxel). If early data pan out in cancer, Apogee plans to use those results for filing INDs in other indications. Its really a platform technology, Smith said. The broad applications could make it an attractive partnering asset, and the firm is exploring a number of options. But even if it inks a collaboration, wed like to be involved, at least through Phase II, he added.

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Apogee has taken advantage of the sphingolipid technologys broad potential to obtain funding. Since its incorporation, the company has relied almost entirely on Small Business Innovation Research grants, including a grant from the National Eye Institute to evaluate the technology in retinopathy and a grant from the National Institute of Diabetes and Digestive and Kidney Diseases in inflammatory bowel disease. Apogee also is working with the SENS (Strategies for Engineered Negligible Senescence) Foundation in

the area of regenerative medicine. To date, the company has raised about $8 million in SBIR funding. Its also gotten some state tax credit funding from Pennsylvania and recently received $825,000 from the Qualifying Therapeutic Discovery Project Program. Apogee is headquartered at the Hershey Center for Applied Research in Hershey, Penn.

BioWorlds innovations in Biotechnology 2011

47

neW genesis for virAgens Anti-cd55 cAncer ProgrAM


Failed biotech Viragen Inc. might have called it quits in 2007, but its monoclonal antibody targeting CD55 was reborn in start-up Genesis Biopharma Inc., which licensed the CD55-related assets in 2010 and plans to move forward with testing in both solid tumors and blood cancers. Manhattan Beach, Calif.-based Genesis also formally kicked off operations in 2010 with a move not usually seen in young biotechs: It went public. Genesis completed a reverse merger with public shell Freight Management Co. in March, gaining a listing on the Over-the-Counter Bulletin Board. We thought that choosing that route seemed viable, said Robert Brooke, president and CEO, pointing to success stories in the industry, most notably Cougar Biotechnology Inc., which merged with a public shell in 2006 while advancing a Phase I-stage program and then went to Johnson & Johnson in 2009 in an acquisition deal worth just under $1 billion. Genesis is at an earlier stage than Cougar when it went public. Brooke estimated that the firm is about 18 months from filing an investigational new drug application for clinical testing of lead anti-CD55 drug VG102. But the product has shown promising data so far. A member of the membrane complement regulator protein family, the CD55 antigen is overexpressed on more than 80 percent of solid tumors and implicated in many blood cancers. Its believed to protect tumor cells from being killed by complement-dependent cytotoxicity (CDC). Genesis plans to test VG102 as a monotherapy and also in combination with other cancer therapies. Since a number of drugs on the market work via the CDC pathway, inhibiting CD55 could really unleash the potential of those other drugs, Brooke told BioWorld. It has already shown synergy with anti-CD20 antibody Rituxan (rituximab, Biogen Idec Inc. and Roche AG) when the two were tested together in lymphoma cells. Weve shown in-house a 40 percent increase in rituximabs complementdependent cytotoxicity, he added, and other studies have shown an even more dramatic response. Results published in a 2000 issue of Blood, for instance, showed Rituxans activity boosted by 280 percent with the addition of an anti-CD55 drug. Were looking at Herceptin and Avastin, too, and maybe even next-generation [compounds] such as bispecific antibodies or cytotoxic antibodies, Brooke said. CD55 also offers another advantage. Its got a pretty long history, he said. The parent antibody was used as an imaging agent, and has been used safely in about 300 patients for local tumors in cases of colorectal, breast, lung, gastric, pancreatic, osteosarcoma and liver cancers. Additional work is ahead, but Genesis is looking to stay virtual and lean for the moment. The firm only has three employees, and Brooke is the only one who is full time. To date, the company has raised about $1 .35 million, and partnering is almost certainly in its

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future, hopefully, sooner rather than later. Because of the anti-CD55s broad potential in solid tumors and synergy with [CD20-targeting antibodies], we believe it has early partnership potential, Brooke said, maybe even as early as IND or Phase I. While most of the firms resources are focused on its lead program, Genesis also has set up its ADP (Advanced Development Program) effort, where

we try to convert science into pragmatic drug development, he said. Genesis ADP is focused on working with academic partners to screen approved drugs for creating cocktail therapies that can be submitted under the cheaper 505(b)(2) regulatory pathway. Its collaborators to date include Wake Forest University, which is working on natural cancer resistance and the SENS Foundation, on a program focused on regenerative medicine.

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49

JAntibody heAts uP Antibody And vAccine fields With hsP70


Jantibody Therapeutics LLC is tapping into the immunostimulatory properties of heat-shock protein 70 (HSP70) to boost the efficacy of antibodies and vaccines. Heat-shock proteins support cell survival and are up-regulated in times of stress. HSP90, the most well-known of the bunch, is overexpressed in cancer cells, making it the target of oncology efforts by Synta Pharmaceuticals Inc., Curis Inc., Debiopharm Group, Astex Therapeutics Ltd., Infinity Pharmaceuticals Inc., Bristol-Myers Squibb Co. and others. But while HSP90 contributes to cancer, Jantibody believes HSP70 may be able to help fight it. The molecule triggers Toll-like receptors and innate immune responses, and it helps direct antigens through the major histocompatibility complex to trigger further immune reactions. Utilizing HSP70 from the Mycobacterium tuberculosis bacterium rather than from humans provides an even stronger immune reaction. After conducting early HSP70 research at Massachusetts General Hospital, scientist Jeffrey Gelfand founded Jantibody to further advance two lead programs. The first involves fusing recombinant HSP70 to an antibody targeting mesothelin, which is overexpressed in ovarian, colon, breast, lung and other cancers. The single chain variable fragment of the antibody binds the target, while the HSP70 triggers immune responses to boost its effectiveness. The second program is what Jantibody calls a self-assembling vaccine. In this construct, HSP70 is bound to the protein avidin, creating a stable vaccine base that can be prepared in advance and stored for future use. Once the vaccines target is identified, the target antigen is labeled with biotin, a B-complex vitamin with a high affinity for avidin, and the antigen-biotin piece is added to the HSP70-avidin piece to create the final product. Gelfand noted that the vaccine platform provides a lot of flexibility and versatility. The ability to prep the base of the vaccine in advance and add the antigen on short notice could address some of the manufacturing issues that have plagued personalized cancer vaccines. But beyond cancer, the government is interested in using the technology to quickly develop vaccines against emerging pandemic threats, like severe acute respiratory syndrome or H1N1 swine flu. Additionally, since avidin is a tetramer, researchers could add up to four different antigens to create a vaccine against multiple threats. Jantibody initially is testing both the antibody and vaccine programs against ovarian cancer. The disease claimed the life of Gelfands wife, Janice, who served as Jantibodys inspiration both in name and in spirit. Thus far, preclinical studies for both programs have shown statistically significant tumor suppression in mice. Gelfand predicted that the programs are 18 months to 24 months from the filing of investigational new drug applications. Since its founding in early 2008, Jantibody has been operating as a wholly-owned subsidiary of Boston-based technology commercialization firm Boston Biocom LLC. The firm licenses

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early stage technologies out of academic labs and provides the management, scientists, facilities and funding to advance the projects to IND filing, at which point the goal is to either out-license or seek independent funding. Gelfand serves as chief scientific officer both for Jantibody and for Boston Biocom. Former venture investor Frank Dinucci serves as president and CEO for both entities, while Alexey Eliseev provides scientific and business

development support for both. Boston Biocom is backed by grant funding and a $10 million investment from Pfizer Inc., which has an option to negotiate for the right to license any resulting technologies but cannot block the portfolio companies from negotiating with other parties if a mutually beneficial agreement cant be reached. Dinucci said Boston Biocom is interested in establishing similar funding relationships with other biotech and pharma backers.

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51

APexigen exPloits unique rAbbit Physiology to MAke Antibodies


Newly incorporated Apexigen Inc. will develop and commercialize rabbit monoclonal antibody technology developed by Epitomics Inc. under the premise that rabbit antibodies have a number of advantages over antibodies grown in mice or with phage display technology. Rabbits use a different mechanism to generate antibodies than mice or humans. They can generate higher affinity antibodies, Apexigen President and CEO Xioadong Yang told BioWorld. He explained that like humans and mice, the rabbit uses a recombination of different variable regions to produce a monoclonal antibody. However, unlike mice and humans, rabbits use a gene conversion mechanism that results in high affinity antibodies. The Burlingame, Calif., company acquired exclusive rights to develop and commercialize humanized rabbit monoclonal antibodies along with sufficient funding and support to carry it through early preclinical development. Why rabbits? They can produce a greater diversity of antibodies, including antibodies to tricky antigens such as phosphorylated proteins or carbohydrates that are not immunogenic in mouse. However, for many years production of monoclonal antibodies in rabbits eluded scientists who would have liked to take advantage of this feature. It was not until 1995 that Katherine Knight of Loyola University in Chicago created a cell line that could produce rabbit monoclonal antibodies. This was accomplished by breeding a double transgenic rabbit that developed a myeloma-like tumor. From the tumor, she isolated a plasmacytoma cell line, 240E-1 . Fusion of 240E-1 with rabbit lymphocytes resulted in a hybridoma that could produce the coveted rabbit monoclonal antibody, or RabMAb. Knight published those results in the Proceedings of the National Academy of Sciences in 1995. Those early RabMAbs were not very stable. Burlingame, Ca.-based Epitomics refined a method based on Knights original work and developed it into a product catalog of more than 1 ,600 monoclonal rabbit antibodies, a custom antibody service, and an in vitro diagnostics platform. Apexigen will move forward with a therapeutic pipeline including programs developing RabMAbs against VEGF (vascular endothelial growth factor) and TNF-alpha. The choice of these targets is strategic, setting Apexigens RabMAbs up against some of the most sought-after targets. Avastin (bevacizumab, Genentech Inc./Roche AG) is a humanized, monoclonal IgG-1 antibody against VEGF and Enbrel (etanercept, Amgen Inc. and Wyeth Pharmaceuticals Inc.) is an anti-TNF-alpha antibody. In addition to advancing its pipeline, the company will also cultivate partnerships to produce antibodies for other biotech and pharma companies. Apexigen already has relationships with two Chinese pharma companies: Sincere Pharma Chemicals, of Yang Chen, China, and Shenyang Sunshine Pharmaceutical Co. Ltd. (3S Bio), also of Shenyang. While Apexigen is acquiring rights to develop the RabMAbs as therapeutic antibodies, along with Epitomics humanizing technology, Epitomics will

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retain rights to the RabMAbs for diagnostics, research services and reagents. Apexigen inherited its Chinese connections from Epitomics, which owns a subsidiary company located in Hangzhou, China. We have a plan . . . to license out some of the China rights of some of the product candidates to some big Chinese companies, Yang said, citing the Chinese governments interest in biotherapeutics as added incentive to partner with companies in China. The company also inherits an agreement with Amorfix Life Sciences Ltd. to develop antibodies against a variety of cancer targets. Yang expects such partnerships to provide significant financial support to the company when its seed funding from Epitomics runs out. In order to support future partnerships in developing therapeutic humanized RabMAbs, the company will undertake proof-of-concept studies, showing that the antibodies can be effective, and that Apexigen can produce them to GMP standards. The crowded field of monoclonal antibody

companies divides roughly into those that own platforms and those that license that technology from the first group. Apexigen aspires to be a provider of best-in-class antibodies by exploiting the unique rabbit physiology. There are many contenders for best-in-class title including San Diego-based BioAtla LLC and Wynnwood, Pa.-based Immunome Inc. BioAtla and San Diego, Calif.-based Femta Pharmaceuticals Inc. have a similar relationship and occupy a parallel niche to Epitomics and Apexigen. Sharing a platform technology in antibody evolution and rapid humanization of antibodies, BioAtla exists as a service company while Femta is pursuing therapeutic targets and partnerships. Meanwhile, Immunome seeks to distinguish itself by offering superior native human monoclonal antibodies. Apexigen currently runs a very lean operation with only three employees, sharing facilities and resources with parent company Epitomics.

chapter 3:

Drug Screening and Delivery

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BioWorlds innovations in Biotechnology 2011

55

senex tArgets Aging diseAses With cki PAthWAy inhibitors


Senex Biotechnology Inc., a small company with an unusually eclectic mix of therapeutic programs, is taking on some of the most dreaded diseases of aging by targeting cyclin-dependent kinase inhibitor (CKI) proteins. Albany, N.Y.-based Senex is seeking its next round of funding after a run of seven grants in three years. New funding prospects may come in the form of more grants, investments or partnering opportunities, founder and President Igor B. Roninson told BioWorld. The future depends on one thing: funding. If we had sufficient money now, we could be in clinical trials within a year and a half to two years. The concept for Senex, which means old in Latin, came from Roninsons academic research showing that expression of a cell-cycle inhibitor gene leads to changes in gene expression associated with cellular senescence. Research has shown that cellular aging causes damage that triggers a number of events including invasive growth and angiogenesis. Viruses also use the damageresponse pathway to produce viral proteins and nucleic acids. CKI proteins mediate that damage response by inhibiting the complexes formed by cyclin and cyclin-dependent kinase. CKI proteins also activate genes associated with diseases of aging. Senex has used its screening technology to develop two classes of preclinical CKI pathway inhibitors. The first class, SNX2 compounds, targets cancer, Alzheimers disease and virus production, but does not kill cells. Rather than blocking the activity of a single growth factor, those compounds are designed to inhibit multiple growth factors and also block aging cells from producing amyloid precursor protein (APP), BACE1 and tissue transglutaminase. Those proteins contribute to the formation of amyloid plaques, which are believed to cause the symptoms of Alzheimers disease. Roninson said that SNX2-class compounds may be better tolerated than conventional inhibitors of APP, BACE1 and tissue transglutaminase because they only inhibit aging related increases in production of those compounds. A second class, the SNX9 compounds, aims to target and kill cancer cells by inhibiting a specific protein kinase, sparing normal cells. According to Senex, those compounds also inhibit the production of cancer-promoting factors by tumor cells. In addition to cancer and diseases of aging, Senex also has a program targeting viruses, especially HIV. That might sound like an odd fit, but HIV and other viruses take advantage of the cell damage and senescence pathways to reproduce their genomes. For HIV, our compounds act not on a viral target, but on a cellular target which is activated by damage which in this case is produced by the virus, Roninson said. Senex claims its the only company developing therapeutics against those pathways and is pursuing patent protection for its investigational drugs and for inhibitors of its specific targets and pathways. Because of the mechanism of action of SNX2 and SNX9 compounds, they can be used to

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augment or complement other therapies, rather than replacing them. In the case of Alzheimers disease therapy, Roninson said he believes the Senex drugs will be better tolerated than competitors similar drugs because they only affect aging-related changes in APP, BACE1 and tissue transglutaminase. A number of companies, notably Merck & Co. Inc., of Whitehouse Station, N.J., Eli Lilly and Co., of Indianapolis, Takeda Pharmaceutical Co. Ltd., of Osaka, Japan, and Medivir AB, of Stockholm, Sweden, have preclinical BACE inhibitors. Comentis has completed Phase I trials of its BACE inhibitor. The primary risk factor for Alzheimers disease is aging, which is associated with accumulation of various sorts of damage and cellular stress. Our compounds reduce stress- and senescenceassociated induction of all of the Alzheimers disease markers that weve looked at, Senex CEO Lawrence Friedhoff told BioWorld. This includes the genes involved in synthesis of beta amyloid, the genes involved in the synthesis of tau, as well as the genes controlling a number of other pathways that have also been reported to be abnormal in Alzheimers disease and which

may be part of the cause of this terrible illness. Friedhoff, is a drug development expert who has helped to bring a number of drugs to market including the current leading Alzheimers therapy: New York-based Pfizer Inc.s Aricept. Technically born in 2002, Senex began operations in earnest in 2004 when it received seed funding of $700,000 from the Charitable Leadership Foundation. Since then, it has racked up seven additional grants, including small business innovation research Phase I grants from the National Institute of Aging, the National Institute of General Medical Sciences and the National Cancer Institute in 2006 through 2009. Two more grants came from the National Cancer Institute. The first was a Phase II SBIR grant, and the second award was a supplement to the first, under the American Recovery and Reinvestment Act of 2009. Additional research grants came from the Alzheimers Drug Discovery Foundation in 2007 and the Department of Defense Breast Cancer Research Program in 2008.

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57

fAbrus forges AheAd With therAPeutic Antibody PlAtforM


Fabrus LLC, whose name means Functional antibodies R Us, spent its first three years under Pfizer Inc.s wing developing a therapeutic antibody discovery platform before it was spun out into independence just eight months ago. The biotech decided there was a need to find a new way to discover antibodies. Fabrus, the first occupant of New York-based Pfizers business incubator in La Jolla, Calif., spun out in January. We decided there was a need to find a new way to discover antibodies because all of the antibodies on the market today are highaffinity antagonists, Fabrus founder and CEO Vaughn Smider told BioWorld. The prevailing methods for discovering antibodies have been hybridoma antibody production and display technology. These technologies select the highest affinity antibodies. I think in the last five years . . . its been pretty clear that the highest affinity antibody isnt always the best therapeutic. Thats one of the rationales for starting new technology, Smider said High-affinity antagonist is a pretty narrow range of function compared to small-molecule therapeutics, which can have many different functions as agonists, partial agonists, antagonists and modulators. We thought theres really no reason antibodies cant have those activities, said Smider, adding that there are large classes of targets that have been refractory to antibody discovery, such as GPCRs and ion channels. Those types of proteins typically have several transmembrane domains, and it is difficult to raise antibodies to them by traditional methods because it is not possible to obtain purified protein in the proper folded state. However, many cell-based assays are available for those proteins. Smider said the Fabrus platform allows it to make use of those technologies, avoiding the problem of purified membrane proteins. Fabrus screens antibodies the way most companies screen small molecules. It has created a library of more than 10,000 pure human functional antibody (Fab) fragments, and is screening potential targets in functional assays against the library generates hits. Smider told BioWorld that the technology is able to discover multiple antibodies against multiple targets. Weve actually got antibody hits against 12 targets in various stages of development, he said. Were a small company, so were not going to be able to develop 12. Instead, Fabrus will work to license these excess leads to other companies, while developing others internally for oncology indications. For now, Smider declined to reveal details of how the companys platform works. Fabrus founders spent the first two to three years inside the incubator developing the library and doing proof-of-concept studies. The company was ready to strike out on its own in 2010, and in January inked the documents that cut it loose from Pfizers apron strings. Fabrus moved to a new location in La Jolla to concentrate on growing the company. The first order of business is funding. Fabrus has recently

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closed on a round of bridge financing that Smider said is less than $1 million. Pending additional investments and other business developments, the bridge round could close a second time and become a proper A financing round.

Pfizer retains equity in Fabrus, but has signed over control of the company to its founders. The Pfizer Incubator opened in 2007 with 26,600 square feet of laboratory space and a budget of $12.5 million per year to divide among the five to eight companies occupying the space.

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59

cro + drug discovery helPs discoverybioMed survive


When Erik Schwiebert founded DiscoveryBioMed (DBM) in Birmingham, Ala., in 2007, he had no idea that the worst economic recession since the Great Depression was looming in the near future, but he did have a business strategy that is helping his company ride it out better than most. DiscoveryBioMed is both a contract research organization (CRO) and a drug discovery and development company, using the revenue stream from its human cell-based screening platform to nourish its programs in respiratory, metabolic, inflammatory and hyperproliferative disease. Were doing things in the services realm and the R&D realm. When [venture capitalists] look at us they dont know what theyre investing in, Schwiebert told BioWorld. So surprising was their business model, Schwiebert said, that when he gave a presentation at a bio-investor mentoring event. Right after we presented, during 45 minutes of Q&A, venture capitalists were arguing with one another about what we should be when we grow up. Birmingham Technology Fund took the plunge and invested $1 .95 million in DBM in seed and Series A financing. Greer Capital Advisors also provided mentoring to Schwiebert. DBM brought in revenues of $120,000 in its first year of operations and $365,000 in its second year. Current revenue streams include ongoing service contracts plus grant funding including three Phase I SBIR awards, one Phase II SBIR award and a Core within a Program Project grant. DBM projects its revenue at nearly $1 million for 2010, not bad for a 3-year-old biotech. Most are years away from profitability at age 3. DBM has achieved break-even status. DBMs contract research service is based on the philosophy that in vitro assays should model in vivo conditions as closely as possible, including the retention of disease and wild-type phenotypes through many cell cycles of division. The human body on a microtiter plate concept has found its niche as a validation step, or final screening step for client companies, rather than a replacement for the entire cell-based screening program. DBM has forged multiple and different partnerships with various academic institutions including Mt. Sinai School of Medicine, University of Alabama-Birmingham and Johns Hopkins School of Medicine. For its program in respiratory disease, DBM used primary and immortal human lung cells of relevance to identify targets and biomarkers of interest in CF, asthma, COPD and idiopathic pulmonary fibrosis. Out of these research programs, DBM has a Phase I cystic fibrosis drug discovery SBIR, a Phase I anti-inflammatory SBIR and a Phase I/Phase II program for its ENaC ligand discovery program for CF and kidney and hypertensive diseases. Lead candidate drugs are emerging from the CF drug discovery programs, for multiple forms of cancer, for polycystic kidney disease, and for other human diseases. Lead candidate drugs are emerging from the CF drug discovery programs, for multiple forms of cancer, for polycystic kidney disease and for other human diseases. The company also has a Phase I compound, AR060111-01 , for osteoporosis, and a Phase I/

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II compound, DK083171-03ENaC, in a ligand discovery program. An additional new grant comes from the National Institutes of Health (NIH) and the National Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS) in the form of a $234,000 Phase 1 SBIR grant to screen bone cells against multiple functional endpoints for osteoporosis within the mission of NIAMS in cooperation with partners at the University of AlabamaBirmingham and Johns Hopkins. At the same time, DBM will be serving as a cell culture and engineering core under a program project grant to Johns Hopkins School of Medicine for the study of polycystic kidney disease. Schwiebert believes that dual-purpose CRO/ discovery research companies could fill an emerging void in early discovery research.

According to Schwiebert, pharmaceutical and larger biotech companies have shifted focus to late-stage programs, at the expense of early discovery research. At the same time, small biotech companies struggle to obtain operating funds at a time when venture capitalists are holding tight to purse strings. A biotech company with its own side revenue from contract services can provide some of its own funding for early discovery research, providing an option for the future when latestage assets have moved to market. If nobody is doing early discovery right now, and if it doesnt continue going forward while later-stage assets are being focused on, once those later-stage assets get to market, theres nothing behind it, Schwiebert added.

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Acylin PhArMA exPlores blooMing AcetylAtion field


Acetylation and deacetylations initial claim to fame came from its effects on histones, structural elements that package DNA and affect transcription by making sequences more or less accessible. But other proteins besides histones can be acetylated. In fact, acetylation is being recognized as a major form of post-translational modification. A paper published in 2009 identifying several thousand acetylation sites on proteins came to the conclusion that, far from being restricted to histones, lysine acetylation contributes to regulation of almost all nuclear functions and to the control of a surprisingly large array of cytoplasmic functions as well. The acetylome is blooming, Bard Geesaman told BioWorld. Geesaman is chief technology officer of Acylin Pharmaceuticals Inc. Acylin, which was founded about two years ago, completed a Series A financing with Seattles Accelerator Corp. in November. The firm is built around the goal of developing drugs that target acetylation. The amount of funding was not disclosed, but Accelerator chairman and CEO Carl Weissman told BioWorld that it is a normal amount for Accelerator, which would be in the range of $3 million to $4.5 million. Funding came from Accelerator syndicate partners Alexandria Real Estate Equities, Amgen Ventures, ARCH Venture Partners, Inc., OVP Venture Partners, PPD Inc. and WRF Capital. For now, Acylin is laser-focused, Geesaman said. The company is pursuing the inhibition of histone acetyltransferase p300/CBP. P300/CBP is important in cancer, metabolic diseases and neurodegeneration; Acylins primary focus with p300 will be in oncology. But, Geesaman added, the platform is much broader a fact that Acylin intends to exploit in its business development. In November 2010, Acylins scientific founders described a novel way to counteract the effects of the appetite-stimulating peptide ghrelin: through targeting the histone acetyltransferase that activates it, ghrelin O-acyltransferase, or GOAT. Acylin has also licensed this technology, although the specific inhibitor used in the experiments is unlikely to go anywhere clinically, since it cannot be given orally. Philip Cole, who is senior author of the paper describing the work and professor of pharmacology at Johns Hopkins University, believes that targeting the activating enzyme might have advantages over going after ghrelin directly. Getting rid of ghrelin altogether is at least in the short term not feasible: Theres no simple way to selectively turn off the production of one protein, Cole told BioWorld, although that state of affairs may change with advances in RNAi technology. Another possibility is to antagonize ghrelin via the tried-and-true-in-other-indications strategy of receptor blockers. Cole said this strategy is still being pursued with enthusiasm, and conceded that it has potential.

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But it also has pitfalls. For one thing, receptor blockers would tend to rev up the production of ghrelin via feedback mechanisms, and so might carry the seeds of their demise within themselves. Receptor blockers would also need to cross the bloodbrain barrier, which is a challenge, though not an insurmountable one and one that GOAT inhibitors might also face. Lastly, Cole noted that targeting GOAT might have what he termed a stoichiometric advantage namely, that one enzyme molecule makes many molecules of acyl ghrelin. While receptor inhibition has to be fairly comprehensive to be successful, even less than perfect inhibition could have a sufficiently large effect to be clinically meaningful. GOAT is an enzyme that activates ghrelin by adding an acyl side chain to the peptide. In their studies, Cole and his team prevented this activation by designing an analogue of ghrelin that binds to GOAT and inhibits its activity. When the researchers treated mice on a high-fat diet with daily injections of this GOAT inhibitor for a month, the animals gained less weight

than controls. Imaging studies showed that the inhibitor-treated animals specifically had less fat mass, but not less muscle mass, than controls. The animals glucose control was also improved. Administering the inhibitor to ghrelin knockouts had no effect, suggesting that its effects are due to its actions on ghrelin. Ghrelin modulates both weight and blood sugar levels. Cole said that there is some controversy about how. While earlier research led to a general consensus that ghrelin is an appetite suppressant, more recent studies suggest that most of the effect may be on metabolism rather than appetite. In his teams study, food intake did not differ between treated animals and controls, adding to the evidence that at least some of ghrelins actions are on metabolism. Cole would not speculate on whether that is good or bad in a biological sense. Its not clear what the best mechanisms for weight loss are. But for the psychological side, he gives an argument that certainly rings true: If you ask people would you like to eat as much as you want and not gain weight, Ill bet most people would say yes.

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ligon turns MicroArrAy screening uPside doWn


Some potential protein drug targets, such as transcription factors, are difficult to study well in a high-density screening situation. Many transcription factors flop around like wet noodles with little organized structure, and are regarded as undruggable by many pharma companies. Ligon Discovery Inc., of Cambridge, Mass., is turning the target-based screening paradigm upside-down literally. Ligons small-molecule microarray screening platform anchors the drug compounds to the glass slide, and passes potential protein targets over them. Ligon researchers then simply locate the target on the array, without requiring any prior knowledge of its structure or function. It allows us to find small-molecule drugs that interact with previously intractable targets, Christian Baily, CEO and co-founder of Ligon Discovery, told BioWorld. One such intractable target is Sonic hedgehog (Shh) protein. Inhibitors of Shh have possible utility as therapeutics for medulloblastoma, basal cell carcinoma, pancreatic cancer, prostate cancer and certain developmental disorders. Inhibitors of a protein in that pathway, Smo, are in development at Genentech Inc. and Infinity Pharmaceuticals Inc. Genentechs oncology candidate GDC0449 completed Phase I trials and Infinitys IPI-926 is at the Phase I stage for solid tumors and pancreatic cancer. In research published in the January 2009 issue of Nature Chemical Biology, Harvard University scientist Stuart L. Schreiber and colleagues from Harvard, Stanford University, Massachusetts General Hospital and the Broad Institute of Harvard and MIT described the identification of a small-molecule compound, robotnikinin, which interferes with signaling by ShhN (the N-terminal cleavage product of Shh), using the small-molecule microarray method. Ligon was created as a spinout from Schreibers Harvard lab in 2009 by Patrick Kleyn, Angela Koehler and Benjamin Ebert. The new company, whose name, Ligon, is a play on the words ligand/on, received $1 million in seed financing with Cambridge, Mass.-based incTANK Ventures as lead investor. Christian Bailey, a general partner at incTANK, joined the company as a board member at that time. Bailey said that Ligon is now bringing in revenue through collaborations and may not need another financing round to continue operations. Ligons main therapeutic program focuses on hypoxia induced factor (HIF). The nearterm focus for the HIF inhibitor program is renal cell carcinoma, but HIF inhibitors have relevance to other solid tumor cancers including pancreatic and lung. HIF expression in those cancers is unusually high and correlates with poor outcome. Diabetic retinopathy is another disease that may be addressed by HIF inhibitors. Ligons preclinical pipeline also includes other programs related to transcription factors in oncology, inflammation and other indications.

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In addition to its internal R&D campaign, Ligon now has collaborations with Lycera Corp. and Bayer Schering Pharma AG. Under its agreement with Lycera, Ligon worked to identify first-in-class drug candidates for immune disorders. Lycera has active programs focusing on ATPase activity within mitochondria and inhibition of ROR-gamma, a nuclear receptor in Th17 cells. The ATPase pathway may have relevance in lupus, rheumatoid arthritis, psoriasis and graft-vs.-host disease, and upstream regulators of ROR-gamma may block production of pro-inflammatory cytokines, according to Lycera. Ligons partnership with Bayer is focused on finding first-in-class targets for undisclosed therapeutic programs at Bayer. One thing that really attracted Bayer to working with us, and

whats unique about our platform, is that it works with existing chemical libraries, Bailey noted. Many screening technologies require compounds to be synthesized on common scaffolds for tagging purposes or other chemical requirements of the technology. Our immobilization approach was specifically developed by our founder Angela Koehler in Schreibers lab to be compatible with most screening collections, Bailey continued, adding that it will work with natural products and roughly 80 percent of compounds in a typical large pharmaceutical compound library. Ligons business strategy going forward is to look for collaborations with pharma partners that have invested in biology to validate a pathway, but have not been able to attack targets in that pathway directly using traditional screening methods. Ligon said that it is pursuing external collaborations in antimicrobials and CNS disorders.

chapter 4:

Cardiovascular and Related Diseases

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verio tAking regenerAtive roAd to develoP Muscle, cArdiAc drugs


Rather than taking the typical isolationand-transfer path in the stem cell field, Verio Therapeutics Inc. is traveling an alternative route, focusing instead on developing disease-modifying drugs that stimulate the bodys existing cells to promote tissue regeneration and repair, said CEO Frank Gleeson. The Canadian company, established in 2008, identifies regulatory pathways that control the function of stem cells in tissue regeneration and then targets those pathways to stimulate regeneration in organs damaged by disease, ultimately restoring function. This might lead to pharmacologic approaches to regenerative medicine, as opposed to stem cell therapy approaches to regenerative medicine, Gleeson told BioWorld. It might be one way of accelerating the path to the clinic, and also a way of overcoming some of the obvious challenges that this whole field will have in translating tremendous potential into therapeutic modalities that get approved by regulatory authorities and make it to market, he contended. Verios programs are aimed at discovering and developing therapies that promote the growth of new skeletal muscle fibers to treat sarcopenia and other diseases, regenerate cardiomyocytes to treat severe cardiac dysfunction following heart attacks and stimulate the production of new insulin producing beta cells to treat Type I diabetes, Gleeson explained. The Ottawa, Ontario-based company also has a repurposing opportunity for an undisclosed currently marketed compound, and Verios testing has shown the drug to have a very dramatic impact in muscular dystrophy animal models. We have a very broad platform, as well as some quite exciting programs, said Gleeson, who has been the founding venture capitalist for a dozen biomedical start-ups. Privately held Verio, which has been operating with about $1 million in founder funds over the past year, is preparing to raise $8 million in a Series A financing, he noted. We would like to put that together over the next six months, Gleeson said. Whenever possible, he added, the company also would make the maximum use of nondilutive financing, such as government or health charity funding, to advance the firms technology. Verio has an exclusive license agreement with the Ottawa Health Research Institute (OHRI) to commercialize certain discoveries from the laboratories of the companys scientific founders, Michael Rudnicki and Lynn Megeney. Rudnicki, the director of the regenerative medicine program and the Sprott Centre for Stem Cell Research at OHRI, is very well known internationally in the field of skeletal muscle regeneration, particularly for his work with the noncanonical Wnt pathway and its involvement in stem cell regeneration in muscles, Gleeson noted. Megeney, a senior scientist in the regenerative medicine program at OHRI, headed the lab that was first to identify the pivotal role of caspase-3 in the differentiation of skeletal myoblasts. His

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lab also was the first in the world to identify cardiac stem cells and discovered the potential therapeutic role for cardiotrophin-1 (CT-1) in cardiac cell regeneration. Verios lead muscle cell regeneration program is focused on the noncanonical Wnt pathway, Gleeson noted. The company has identified a potential biotherapeutic protein, called Wnt7a, which Verio has shown activates the development of satellite stem cells in the body, he explained. Wnt7a is a member of the Wnt gene family, which consists of structurally related genes that encode secreted signaling proteins that have been implicated in oncogenesis and in several developmental processes, including regulation of cell fate and patterning during embryogenesis. The idea is that Wnt7a could be a biotherapeutic that actually activates ultimately the production of muscle cells, Gleeson said. Verio is investigating Wnt7a in treating sarcopenia, a muscle-wasting disorder that largely affects the elderly and is a major cause of morbidity and death in that population, he said. We think that this is a very significant area of the future, and one in which quite a number of pharmaceutical companies are now either developing programs, have established programs or are certainly thinking about establishing programs, Gleeson said. In the cardiac area, Verios scientists have demonstrated that treatment with CT-1, an Interleukin-6-related cytokine, dramatically reduces scar tissue, replaces cardiac muscle, improves contractile performance and restores

heart function following heart attack. Verios recombinant CT-1 compound, VT-101, has the potential to become a first-in-class biologic capable of restoring and repairing damaged heart muscle, Gleeson said. The company also has been investigating the use of the protein periostin to regenerate insulinproducing beta cells to treat Type I diabetes. We showed that we could double beta cell mass in the pancreas within three days with a single injection of periostin in mice, Gleeson said. This is a functional situation where we are producing beta cells that lead to islets that lead to insulin production that lead to a reduction of glucose levels, he added. The company is seeking a partner to move its periostin product, VT-201, into the clinic. While Verio is focused on using proteins or small molecules to activate endogenous stem cells, the company discovered through its investigations in muscle diseases that another firms well-known prescribed small molecule has promising results as a therapy for muscular dystrophy, Gleeson said. We have shown that in young mice, we have reversed muscular dystrophy with the use of the drug, which Gleeson said is marketed for another indication. He said Verio has filed the appropriate patent protection around the use of the compound for the application of the drug in muscular dystrophy. Obviously, we need to explore it, the business model of how we will develop it and the clinical path, Gleeson said. Its very exciting.

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More oxygen, PleAse; norMoxys tArgeting diseAse viA hyPoxiA


Its long been known that oxygen deficiency leads to many diseases, so it makes sense that increasing the release of oxygen would lead to effective treatment. But to find a molecule that can actually do it has not been easy, said Martin Tolar, president and CEO of NormOxys Inc., a company founded in 2004 by scientists Claude Nicolau and Nobel laureate Jean-Marie Lehn. Nicolau, who worked on the idea for about two decades, was inspired by the ability of migratory birds to fly so high and far. Through is research, he discovered an allosteric modulator of hemoglobin, essentially an endogenous protein change that allowed for greater release of oxygen, Tolar told BioWorld. Red blood cells, which transport oxygen, only release 25 percent of the oxygen they have bound plenty for healthy tissues but insufficient for diseased conditions. The problem with existing oxygen treatments such as hyperbaric chambers is that the increased oxygen output can spread to unwanted areas of the body, so what Nicolau and Lehn wanted to do was find a small-molecule approach that could specifically target allosteric sites on hemoglobin. They ended up creating oxyrens, or oxygen release enhancers, which are designed to actively transport into red blood cells and bind to those allosteric sites, thereby allowing twice as much oxygen to be released. And results so far have been dramatic, Tolar said, albeit only in animal models to date. NormOxys recently filed an investigational new drug application for its first oxyren, OXY111A, and well begin the first study in a month or so in healthy volunteers. The company intends to pursue cardiovascular disease and cancer as its first indications. In the cardiovascular space, the objective is pretty straightforward congestive heart failure, for instance, results in the heart muscle being unable to pump enough blood for normal oxygenation, so the oxyren would aim at getting that oxygen delivery back to normal levels. In cancer, the goal is to boost oxygen levels to actually fight the disease. Solid tumors are dependent on hypoxia, so stimulating that oxygen release through various pathways, such as the hypoxia-inducible factor, vascular endothelial growth factor or apoptotic pathways, would allow the body to clear out cancer in a natural way, Tolar said. Perhaps the most exciting discovery, he added, is that the cancer cleared in animal models has not recurred. If we can translate a fraction of that effect in humans, then well have something that can provide substantial benefit. And oxyrens can be used in combination with chemotherapy. Once we normalize the hypoxia, which normalizes the vasculature, we can use much lower doses of chemotherapy, Tolar said. Other applications for oxyrens include anemia, where they could prove just as efficacious, yet safer than erythropoiesis-stimulating agents, and

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in age-related macular degeneration. For now, though, NormOxys, having only recently emerged from stealth mode, is concentrating its efforts in the cardiovascular and cancer spaces. Over the next year, Tolar said the firm hopes to establish proof of concept. After that, well be starting business development activities, though he added that NormOxys platform already has caught some interest from big pharma.

Since inception, the company has pulled in about $15 million from Index Ventures and has been able to keep its burn rate low by operating its research in incubator space in Strasbourg, France. It has about a dozen employees, though we work with 20 to 30 people through universities, Tolar said. NormOxys recently established headquarters in Wellesley, Mass. corporate

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sWedish firM cArdoZ tAckling oft-underdiAgnosed triPle-A


Founded in 2006 to develop what CEO CarlJohan Dalsgaard calls an overlooked biology, small Swedish biotech Cardoz AB hopes to offer the first therapeutic for treating abdominal aortic aneurysms (AAA). Known as a silent disease, AAA is characterized by the weakening and dilation of the aortic wall. Its often diagnosed only by chance if patients happen to have an ultrasound or X-ray taken during physical exams; in many patients its remains undiagnosed until rupture, and, at that point, its often too late. Many patients present with rupture, Dalsgaard told BioWorld Today. About 50 percent of those make it to the hospital and, of those, about 50 percent survive the surgery. If patients are diagnosed early, they are monitored and usually end up having surgery. But Cardoz is hoping its therapeutic approach will be more palatable to patients, as well as encourage more routine testing to identify AAA. To do that, the company is targeting mast cells. They are the bodys most trigger-happy cells, Dalsgaard said. They trigger other enzymes to break down the structural proteins such as collagen in the aneurismal wall, so inhibiting that mast cell degranulation should help prevent the breakdown of those proteins. And preclinical studies have been promising, he added, with data showing that treatment appeared to prevent AAA formation in animal models. The Stockholm, Sweden-based firm, which was incubated by venture firm HealthCap , has raised about SEK130 million (US$17.1 million) to date, including a recently closed SEK100 million Series A round led by Forbion Capital Partners and included participation by Ysios Capital Partners and HealthCap. With those funds in hand, Cardoz plans to accelerate its Phase II program in AAA. A randomized, double-blind, placebo-controlled trial is set to start by the end of this year or early next year. Its a one-year trial, so Dalsgaard anticipates reporting data in about three years. At that time, Cardoz could consider striking up a big pharma partnership. Thats the ideal situation, he said, though the AAA indication is aimed at a concentrated physician group, which would allow a small biotech to consider going to market on its own. The Phase III program likely would not be as big and as elaborate as other trials in the cardiovascular space, he said. And, if Cardoz can prove that the mast cell degranulation approach works in AAA, that could pave the way for its use in larger CV indications such as atherosclerosis. Of course, part of succeeding in the AAA market will rely on educating the medical community. AAA affects men to a greater degree, with an estimated 5 percent to 7 percent over the age of 65 diagnosed. So thats about 210,000 men in the U.S., but Dalsgaard estimates that the number might actually be five times or six times that because the condition is so often underdiagnosed. Its very simple to identify via ultrasound, so having an oral therapy available would mean that routinely checking patients for signs of AAA also would translate into a more manageable and costeffective approach in terms of the overall health care environment.

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Beyond its work in AAA, Cardoz has earlier-stage programs, though the firm is not yet disclosing any details on those. Like many start-ups, its operating as a virtual company and has only a

small staff of five. In connection with the Series A financing, Sander van Deventer, of Forbion, joined Cardozs board.

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elexoPhArMs first license deAl Worth uP to $41.6M froM Merck


In its first licensing deal, Germanys ElexoPharm GmbH entered an agreement worth up to $41.65 million with Merck & Co. Inc. to develop compounds for cardiovascular diseases. Until now, we have signed some contract research agreements but no license deals, Axel Koch, managing director of ElexoPharm, told BioWorld. Based in Saarbruecken, Germany, ElexoPharm offers contract research services as well as conducts its own in-house drug development. In the future, we plan to expand in both business units, Koch said. Under the terms of the Merck deal, ElexoPharm will receive 1.5 million (US$1.85 million) up front and up to 32.3 million in milestones payments. The deal covers ElexoPharms program targeting aldosterone synthase for the potential treatment of cardiovascular disease. The company plans to use its up-front payment from Merck to finance its own research projects aimed at estrogen dependent diseases like breast cancer, he said. ElexoPharm was founded in 2005 as a spinoff from the Department of Pharmaceutical and Medicinal Chemistry of Saarland University The company obtained its aldosterone synthase inhibitors from the lab of Rolf Hartmann, who is head of that department at Saarland. With its expertise in the cardiovascular area, Merck, maker of Vytorin, Zetia and Zocor, was the best partner we could find for this project, Koch said. The specific inhibition of aldosterone synthase should be a better pharmacological approach for the treatment of congestive heart failure, hypertension and other cardiovascular diseases he said. Excessive plasma concentrations Excessive plasma concentrations of the hormone are associated with congestive heart failure and certain forms of hypertension, according to ElexoPharm. The company has proof-of-concept in vivo data with an aldosterone synthase inhibitor. But Novartis AG, of Basel, Switzerland, is ahead with its Phase II aldosterone synthase inhibitor, LC1699, having gained ownership of the program following its acquisition of Speedel AG, of Allschwil, Switzerland, in 2008. To catch up ElexoPharma wanted a big pharmaceutical partner early to move the project forward as quickly as possible, Koch said. Two aldosterone antagonists have already gained approval, for treating congestive heart failure in patients after myocardial infarction and for controlling hypertension. Inspra (eplerenone), marketed by New York-based Pfizer Inc., and spironolactone both act by blocking the mineralocorticoid receptor and preventing aldosterone from exerting its effects. ElexoPharm, which has 10 employees including freelancers, so far has managed without any venture capital funds. It has received support from a relatively small partnership with a regional funding agency, Saarlndische Wagnisfinanzierungsgesellschaft mbH. In addition, ElexoPharm has successfully acquired

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public funding for its own research projects. Besides its cardiovascular targeted compounds, ElexoPharm also is focused on hydroxysteroid dehydrogenases (HSDs) that modulate the action of steroid hormones. The company has developed nonsteroidal 17betaHSD1 inhibitors that could be used to treat estrogen dependent diseases like breast cancer and endometriosis, in which 17beta-HSD1 is strongly overexpressed.

Of the few inhibitors of 17beta-HSD1 described in the literature, most of them have a steroidal structure and the nonsteroidal compounds are not appropriate candidates for drug development as they are not selective towards 17beta-HSD2, according to ElexoPharm. Our non steroidal inhibitors are expected to have less side effects than steroidal compounds like existing aldosterone receptor blockers, Koch said.

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75

invAsc seeks PAth for ckd coMbo, neW tArgets next


Four-year-old InVasc Therapeutics Inc. is gearing up for Phase II testing with its lead drug, a lowrisk, combination treatment aimed at chronic kidney disease via a 505(b)(2) pathway, even as it prepares to advance earlier stage programs against other cardiometabolic diseases. Founded in 2006, InVasc was run virtually by professors at Emory University in Atlanta and Ohio State University until last spring when industry veteran William D. Johnston came on board as CEO with the task of transitioning the firm from academic research to a real company, Johnston said. While still operating on a mostly virtual model InVasc does conduct some of its own chemistry work in an Ohio facility the company recently pulled in its first $3.15 million round of institutional financing, its sights set on getting INV-144 into an FDA-approved Phase IIa study in CKD. INV-144 is a combination of losartan, a generic angiotensin receptor 2 antagonist widely used in hypertension, and alpha lipoic acid (ALA), a compound thats been around for about 15 years and is a regulated drug in Europe for peripheral neuropathy and kidney disorders. In the U.S. ALA is considered a nutraceutical. InVasc conducted an early trial testing ALA in combination with another hypertension drug and recorded statistically significant reductions in protein in urine compared to the hypertensive drug alone, Johnston said, indicating that ALA seems to play a role in delaying the onset of endstage renal disease. INV-144 wont offer a cure for CKD, but its aimed at slowing the pace of decline experienced by CKD patients. Once patients reach ESRD, the options are limited to transplant or dialysis. We can offer incremental improvements, he told BioWorld. We can move the bar. InVasc is in good shape to file an investigational new drug application in the last half of this year, Johnston said, focusing on the target population of hypertensive diabetics. Well be looking to see whether that can mimic the earlier trial, he added. If the Phase IIa is successful, and also confirms the optimized ratio of the combination therapy, then a Phase III trial will be up next. I think weve got a pretty direct path. Hypertensive patients with diabetes primarily are treated by nephrologists, a manageable group for a small company to hit with its own sales force. So its not unfathomable that InVasc might consider commercializing INV-144 on its own, Johnston said, though he acknowledged that the firm certainly could consider any suitable acquisition or partnership options. We could go either way, he said. Beyond INV-144, InVasc is looking to advance compounds targeting a nontraditional target for atherosclerosis. Johnston said the firm is finishing up ADME studies and, pending success, could file the first INDs in 2011 . INV-404 and INV-405 are part of the 400 Series compounds designed to activate SREBP2, a protein involved in directing the expression of LDL receptors on the surface of liver cells. In

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addition to scavenging LDL from the blood, those compounds also are believed to have antiinflammatory properties that could extend their use into other indications such as diabetes and hypertension. InVasc also has early programs targeting myocardial infarction and stroke, including a compound targeting myeloperoxidase in oxidative tissue damage. In MI and stroke, the toolbox is very limited, Johnston noted, adding that theres not a lot you can do for patients presenting with an infarct.

Prior to its first funding round, InVasc, which is headquartered just outside of Atlanta in Tucker, Ga., had raised about $1 .8 million from founders, friends and family. The new capital should allow the three-person team to add a couple more employees, though I dont see us growing much beyond 10 [people] in the next year or so, Johnston said. Earlier in 2010, InVasc picked up an additional $400,000 in grant funding, receiving two Small Business Innovations Research Phase I awards from the National Institutes of Health.

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rAdicAl therAPeutix Works to Protect Precious heArt tissue


When Roberta Gottlieb discovered through her work at the Scripps Research Institute in 2003 that the antibiotic chloramphenicol could protect the heart from tissue damage after an injury, she knew she was onto something big. It was at first kind of mysterious, why this antibiotic would protect the heart, she told BioWorld. She initially theorized that chloramphenicols ability to inhibit protein synthesis in mammalian mitochondria was the key to its surprising tissue protective effect, however it later turned out that it was inhibition of cytochrome P450 instead. According to Gottlieb, inhibition of cytochrome P450 leads to inhibition of cellular autophagy, which is what causes the tissue damage that occurs after an injury such as a myocardial infarction. Cellular autophagy is a catabolic process that helps the body clean up damaged materials. However, Gottliebs results suggested that when blood flow is returned to tissue after surgery, myocardial infarction (MI) or other cardiac event, cellular autophagy can cause damage to healthy tissue. Its been quite a long odyssey to sort that out, Gottlieb said. We started working on autophagy in 2005. We didnt connect it to a drug effect until just this last year. When an ischemic reperfusion injury occurs, mitochondria become unstable, triggering neighboring mitochondria to also become unstable, and this chain reaction creates large areas of damaged tissue, even after the triggering event, such as a clogged artery, is resolved, she explained. If you can insulate or remove first unstable mitochondria, and prevent most of chain reaction, you can avert the cell death. Examples of clinical situations in which a therapy for reperfusion injury would be useful include angioplasty, general cardiac surgery, organ transplantation and heart attack. That mechanism would constitute a first-in-class drug for heart attack. Gottlieb formed Radical Therapeutix in 2005 in partnership with La Jolla, Calif.-based Scripps colleagues Mark Yeager and Paul Wentworth. They chose the name Radical Therapeutix because of the free radical protective effect they observed in the laboratory. The company received a Phase I Small Business Innovation Research grant from the National Institutes of Health to pursue the cardioprotective effects of chloramphenicol. In a rabbit open chest model, it produced a 70 percent reduction in the size of an infarct. The study was published in the Proceedings of the National Academy of Sciences in 2003. The rabbit study was pretty dramatic, Gottlieb noted. The drug was given as pretreatment, and it was completely blinded. This was the breakthrough that convinced Gottlieb and some of her more skeptical collaborators that the concept had commercial potential. The company is now working to develop drugs for tissue reperfusion injury by screening FDAapproved drugs for their ability to modulate cellular autophagy. Those compounds include their original antibiotic, designated RX-1003, a

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second cytochrome P450 inhibitor, RX-1001 , and the current lead compound RX-1005. RX-1005 is a commercially available compound already in use clinically in the European Union, Brazil, Japan and China for a noncardiac indication. Radical is developing two formulations intravenous and intracardiac for patients undergoing cardiopulmonary bypass. The I.V. formulation is the most advanced program. Proof-of-concept studies in open-chest porcine models of myocardial infarction using RX-1005,

showed a reduction in the size of an infarct by 50 percent. Gottlieb said that Radical is close to being ready to begin clinical trials of RX-1005. The company is fundraising now for an angel round or Series A round to finance Phase I and Phase IIa trials of RX-1005. Pending successful completion of those studies, the company will attempt to seek B round funding to push through Phase II trials, at which point Gottlieb said the company will undergo a liquidity event.

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ferrokin to eliMinAte iron overloAd With 1 dose/dAy


An aging population combined with improved treatments for conditions such as sickle cell anemia and beta-thalassemia have created the perfect storm for FerroKin Biosciences Inc. The San Francisco-based biotech is developing a single compound, FBS0701 , to address the treatment of iron overload that results from transfusion therapy associated with the management of hereditary and acquired chronic anemias. Hugh Young Rienhoff Jr., the companys CEO, and Laura Eichorn, director of operations and finance, founded FerroKin in 2007. The companys name has a double meaning that relates both to ferrokinetics the movement of iron in the body and kinship the genetic component in many of its target populations. FBS0701 is designed to treat one specific indication. Patients who receive chronic transfusions to treat anemia, regardless of the cause, accumulate iron because their bodies are unable to rid themselves of the excess mineral naturally. Over time, cells of the liver, heart and other key organs become compromised. If left untreated, progressive iron overload eventually leads to major organ failure. For people who start their transfusions when theyre young, all of the morbidity and mortality is associated with iron overload, Rienhoff said. FerroKins approach to treatment is to bind iron stoichiometrically. Many drugs bind the proteins and have their effect by modulating the activity of the proteins, Rienhoff explained. This [compound] simply binds iron, which is in excess in the patient population that were treating. The once-daily iron chelator Greek for cage traps the iron and induces a complex that the body excretes. Developed in capsule form, FSB0701 removes excess iron from tissues and organs efficiently and is easy for patients to use, Rienhoff added. Individuals with myelodysplastic syndrome (MDS) a condition associated with aging represent the largest group of patients with acquired iron overload, while children with conditions such as sickle cell disease and beta-thalassemia represent the greatest proportion of patients with inherited anemias. The estimated target population is 50,000 to 100,000 U.S. patients and an equal number in Europe, according to Rienhoff, with the proportion of patients skewed toward MDS in the U.S. and beta-thalassemia in Europe. However, anemia affects an estimated 200 million individuals worldwide, suggesting the number of patients with iron overload could grow. FerroKin has completed three Phase I studies one in healthy volunteers and two in patients with transfusional iron overload and has received orphan drug status both from the FDA and the European Medicines Agency. Last month the company initiated an international Phase II study of FBS0701 . The open-label, 24-week study at nine academic sites in five countries is evaluating two dose levels of FBS0701 administered orally once daily. Patients in the study have both hereditary anemias such as sickle cell disease, beta-thalassemia and DiamondBlackfan anemia as well as acquired anemias such as MDS and other forms of bone marrow failure. We expect that study to be completed by next July, Rienhoff told BioWorld.

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FerroKins clinical platform has attracted a handful of VCs, enabling the company to complete two financing rounds. Burrill & Co., Clarus Ventures and MP Healthcare Venture Management led a $15 million series A that closed in October 2008. A $12 million Series B closed in June 2010, led by HealthCap Ventures with participation from the existing investors. The new round will take the company through the next two years and allow it to complete the Phase II trial in adults as well as the Phase I/II pediatric studies scheduled to begin next year, according to Rienhoff. In 2012, we will begin a pivotal Phase III study, which should take about two years, leading to a

new drug application in 2014, he said. Once the company has demonstrated Phase II proof of concept, we are completely open to a variety of business strategies, including a partnering deal or an internal marketing program, Rienhoff added. There has been high interest in the programs particularly since we started the Phase II studies, he said. With FerroKins work force currently numbering 65 FTEs, fortunately, the Phase III studies are within the scope of a small company and the nature of the product is such that a small sales force could effectively market this drug, he added, noting that a decision will be made next year about which direction the company will take.

chapter 5:

Neuroscience

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AfrAxis stAbiliZes synAPses in frAgile x, AutisM, AlZheiMers


Start-up Afraxis Inc. is using kinase inhibitors to repair neurons, stabilize synaptic connections and modify the course of neurological diseases like Fragile X syndrome, autism, Alzheimers disease and schizophrenia. Autism has made headlines of late thanks to The Lancets retraction of its 1998 study linking vaccines to autism. The study incited a backlash against life-saving vaccines, although study author Andrew Wakefield was financially tied to a lawyer hoping to sue vaccine makers, and the Lancet now admits he hand-selected and paid study participants. Amid all that racket, its not surprising that most folks have overlooked little Afraxis. Besides, the San Diego-based company has been operating in stealth mode since its founding in 2007 by venture capitalist Jay Lichter and Nobel Prize-winning scientist Susumu Tonegawa, of the Massachusetts Institute of Technology. Lichter approached Tonegawa after reading a scientific paper in which the researcher described a possible cure for Fragile X syndrome, a genetic mental disorder that is the most common known cause of autism. The technology involved targeting p21-activated kinase (PAK), an enzyme that regulates the cytoskeleton within the dendritic spine of neurons. Over-expression of PAK causes the dendritic spines to become misshapen and unable to form a strong synaptic connection with the axon of another neuron. However, inhibiting PAK allows the dendritic spines to mature. In July 2007, Tonegawa and others published a paper in the Proceedings of the National Academy of Sciences showing that PAK inhibition corrected dendritic spine abnormalities and behavioral abnormalities in a mouse model of Fragile X. Lichter was hooked. It was the first disease modification of a neurological disorder, he told BioWorld. He contacted Tonegawa, and the two started Afraxis to develop PAK inhibitors. Lichter said the Afraxis team has about six such compounds that have shown very good activity in mice. The biotech is now optimizing them for pharmacokinetics and blood-brain barrier penetration, with the hope of selecting a lead candidate by midyear. After that, Lichter anticipates starting a safety trial in healthy volunteers in 2011 and moving into Fragile X patients in 2012. Lichter said Afraxis also plans to test what happens after treatment with the drug has been stopped. If the synapses stay intact, it may provide a rationale for drug holidays. And Lichter expects the lead PAK inhibitor to have utility beyond Fragile X, a concept Afraxis academic collaborators are already exploring. Akira Sawa and Akiko Hayashi-Takagi at Johns Hopkins University School of Medicine published a paper in Nature Neuroscience implicating increased PAK levels and dendritic spine deformities in schizophrenia. Additionally, Dennis Selkoe of Harvard Medical School is researching a link to Alzheimers disease a particularly tough target as evidenced by last weeks failure of Medivation Inc. and Pfizer Inc.s Dimebon (latrepirdine), not to mention previous

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failures by Neurochem Inc. and Myriad Genetics Inc. Autism, too, has proven insurmountable for drug developers. Neuropharm Group plcs Prozac (fluoxetine) reformulation failed a Phase III trial. Currently Curemark LLC is in Phase III with CM-AT, which targets protein digestion disorders associated with autism, and Seaside Therapeutics LLC is in Phase I with STX107, a selective mGluR5 antagonist for Fragile X. Lichters venture firm, Avalon Ventures, has been the sole supporter of Afraxis thus far and is prepared to carry the company through its first

trial in Fragile X patients. Yet Lichter said other venture funds have already begun to show an interest, despite the start-ups early stage. As to partnering plans, we hired a VP of corporate development so that sort of tips our hand, Lichter said. Although mainly virtual, Afraxis recently hired Carmine Stengone as its vice president of corporate development. Stengone previously held positions at Phenomix Corp. and Anadys Pharmaceuticals Inc. Afraxis also hired David Campbell, another Phenomix alum, as its chief scientific officer.

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first deAl A good one for neuroP; uP to $74M for cns discoveries
Atlanta-based NeurOp Corp. snagged its first deal in a collaboration with Bristol-Myers Squibb Co. to develop small molecules for depression and other central nervous system disorders, using NeurOps platform targeted at the N-methyl-Daspartate (NMDA) receptor. Under the terms, NeurOp would get $1.5 million up front, research funding for two years, and up to $74 million in potential milestones. Founded in 2001, CNS-focused NeurOp got off the ground around 2005-2006 when it received SBIR funding and other grants. Currently, NeurOp has hundreds of compounds that are under assay collaborations, including the safety and assay collaboration with BMS, CEO Barney Koszalka told BioWorld Today. Although NeurOp has a lead molecule in the preclinical stage, the company is not in any position to declare any type of clinical candidate, Koszalka said. He added, We will have more information this summer. At that point, the company could decide whether to conduct more chemistry work or move forward with additional testing, said Koszalka, who was named NeurOp CEO earlier this month. NeurOps compounds are designed to improve the safety profile of NMDAR blockers without compromising therapeutic efficacy. We are very specific in targeting the NR2B subunit of the NMDA receptor, Kolszalka said. Competitors include Roche Holding AG, which is funding the development of Evotec AGs pipeline drug for treatment-resistant depression, EVT101, and a next-generation version of the product, in a deal valued at more than $300 million. Inlicensed from Roche in 2003, the compound, which is about to start Phase II development, is an anesthetic that is designed to inhibit the action of the NMDA receptor. Another drug in the same class, Pfizer Inc.s anesthetic ketamine (CP101,606), showed antidepressant effects with faster onset and higher response and remission rates. Its a space begging for more effective cures. Only about half of patients respond to initial therapy with currently marketed antidepressants, with remission rates of about 30 percent with the first agent and about 50 percent following use of the second agent, according to a landmark study known as the STAR-D (Sequenced Treatment Alternatives to Relieve Depression) trial. Vincent La Terza, head of corporate development at NeurOp, said in a statement that the collaboration with BMS will explore new treatment options for the millions of patients suffering from major depression who are unable to get relief from available treatments. NeurOps overall strategy is to expand its NMDA receptor platform to cover other CNS diseases beyond depression, such as neuropathic pain, ischemia, schizophrenia and Parkinsons disease. The company has offices and laboratory facilities in EmTech Bio, a life sciences incubator located on the campus of Emory University in Atlanta, where two of its founders are based. The basic research performed by NeurOps

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three scientific founders Raymond Dingledine and Stephen Traynelis of the Emory University pharmacology department, and James McNamara, chairman of the neurobiology department at the Duke University Medical Center provided the

underpinning for companys technology. Their discoveries inspired concepts and designs for improved, safer drugs to treat neuropathic pain, ischemia and neurodegenerative disease, according to NeurOp.

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stArt-uP Agenebio AiMs to treAt Mci by inhibiting neurAl Activity


It sounds almost counterintuitive: the idea of treating memory loss associated with mild cognitive impairment (MCI) by inhibiting neural activity in a specific region of the brain. After all, MCI is considered a precursor to Alzheimers disease about 15 percent of patients suffering amnestic MCI convert to AD every year and poor memory in AD is associated with significant neuronal loss. So amnestic MCI patients should have decreased activity in their hippocampal regions, right? Not so, according to researchers at Johns Hopkins University, who found that those patients actually showed increased activity, or hyperactivity, in functional magnetic resonance imaging studies. The higher the activity, the greater the memory loss, said Tim Parshall, CEO of AgeneBio Inc., an Indianapolis-based start-up founded a little more than a year ago based on work by founder and Johns Hopkins scientist Michela Gallagher. AgeneBio is working on a proof-of-concept study to find therapies that can reduce those neuronal activity levels, similar to the way statins work to bring cholesterol levels down, Parshall said. Were looking to normalize that activity. Currently, there are no treatments available specifically for amnestic MCI. Many companies working in the MCI and Alzheimers space, such as Vancouver, British Columbia-based Allon Therapeutics Inc., are targeting the familiarsounding amyloid beta plaques and tau tangles that have been identified as hallmarks of the diseases. We dont dispute that [work], Parshall told BioWorld. But AgeneBios approach aims to target the dysfunctional nerve cells that lead to poor memory. And the advantage of going after MCI is that those patients, unlike AD subjects, still have plenty of tissue intact to make it a treatable target. Whats also unique about the firms approach is that it is using functional MRIs in the proof-ofconcept trial and will match those data against actual behavioral outcomes. Its like having a stress test for your heart, Parshall said. In this case, we can see how the brain is functioning. We find that one of the most appealing parts of the program. The companys initial plan is to test its approach using already-approved compounds for central nervous system disorders. If the proof of concept works, that will really drive the time to market, he said, adding that the company could move the platform to filing via a505(b)(2) application in the next four to five years. Beyond that, AgeneBio has a novel set of chemistry Parshall said, though the firm is not disclosing details on that platform just yet. Once it has established proof of concept, the company likely will seek partners for further development. And finding a partner might not be that difficult, given big pharmas hunger for drugs targeting the tough AD space. New York-based Pfizer Inc., for example, shelled out a whopping $225 million up front for rights to San Franciscobased Medivation Inc.s Dimebon, a drug in latestage testing in Alzheimers and Huntingtons disease.

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Dimebon missed all its goals in Phase III trial reported earlier this year. Other recent AD deals include New Brunswick, N.J.-based Johnson & Johnson making a $1 billion-plus investment for Alzheimers programs such as Phase III-stage bapineuzumab from Elan Corp. plc, of Dublin, Ireland. And even early stage AD programs have netted promising partnerships, with Vitae Pharmaceuticals Inc., of Fort Washington, Pa., signing a potential $242 million deal with German pharma firm Boehringer Ingelheim GmbH shortly after concluding animal studies with its beta-secretase inhibitors. Like many of its fellow start-ups, AgeneBio operates primarily as a virtual company with four employees. Parshall, along with Robert

Postlethwait, vice president of business development, and J. David Leander, senior scientific advisor, are veterans of the Indianapolis pharma community, having all worked previously at big pharma firm Eli Lilly and Co. There are a number of folks with neuroscience backgrounds still located here, Parshall said of the Indiana capital. So we have access to expertise, while complementing that with global outsourcing. To date, AgeneBio has raised undisclosed seed funding and recently added $300,000 from BioCrossroads, the states life sciences seed fund. Well raise a Series A, hopefully, next year, Parshall said.

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sinAPis PhArMA sees neW use for Meth in stroke, brAin inJury
Sinapis Pharma Inc. believes that it has a found a way to provide neuroprotection to stroke patients and those with traumatic brain injury using an unlikely benefactor an intravenous, low dose form of the neurotoxic drug methamphetamine. Its an unlikely combo. Numerous stroke trials involving other neuroprotective agents have failed. And the scientific literature is filled with examples of the negative effects of methamphetamine stemming from abuse. Yet, a discovery in the University of Montana laboratory of David Poulsen showed that intravenous methamphetamine had activity in a rat model of stroke even when administered six to 12 hours after a stroke. Poulsens discovery turned out to be the most robust preclinical stroke data yet. Previous pipeline stroke compounds had only shown activity for three to four hours at the preclinical stage, and they failed to work for longer periods when tested in the clinic. To confirm the companys findings, Sinapis reproduced the stroke data in the laboratory of Michael Chopp at Henry Ford Hospital, one of the leading academic experts in stroke animal models. While methamphetamine abuse is known to cause arterial injury, stroke and brain hemorrhage and even death in humans, Sinapis compound has been shown to have a neuroprotective effect in an animal model for up to 12 hours. We would be the only ones to go to clinic with 12-hour data, Sinapis CEO Don Picker said of the companys neuroprotective stroke trial. Founded in 2009, Sinapis licensed Poulsens stroke and brain injury treatment technology from the University of Montana. Poulsen serves as the companys chief scientific officer. Currently, only one drug, tissue-plasminogen activator, or tPA, is FDA-approved to treat stroke patients, but that drug only works within the first three hours of when symptoms begin, such as tingling fingers and numbness in a foot. Most patients are not aware they are having a stroke when they experience such symptoms and usually do not go to the hospital until many hours later after the onset. As a result, only a very small percentage of stroke patients actually receive tPA. Traumatic brain injury has no approved therapy. A 2008 retrospective study published in the Journal of Trauma, Injury, Infection and Critical Care looked at substance abuse and mortality in patients with traumatic brain injury and unexpectedly found that there were possible neuroprotective properties of methamphetamine. The article also noted that there were few studies on the impact of methamphetamine use after traumatic brain injury and called for further study. One of the authors from that study is set to join Sinapis scientific advisory board. Sinapis believes its intravenous form of methamphetamine could potentially work in other areas such as heart transplants, anoxic birth injury and to prevent brain injury associated with cardiac bypass procedures. Methamphetamine currently is marketed in pill form for weight loss and attention deficit

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disorder with hyperactivity, sold by Ovation Pharmaceuticals Inc. (acquired by H. Lundbeck AS). Chattem Chemicals of Chattanooga, Tenn., has been contracted as the companys commercial supplier of the drug compound. Jacksonville, Fla.-based Sinapis has identified and has patents pending for a new use and route of administration for its intravenous methamphetamine. At lower doses, the compound inhibits cell death, as well as upregulates anti-inflammatory cytokines and promotes neuroprotection, primarily through the action of dopamine, according to Sinapis. To the companys knowledge, those multiple pathway effects have never been documented in the scientific literature in prior studies of the drug. Sinapis used its angel funding to file the investigational new drug application for a Phase I methamphetamine trial in healthy volunteers, and it is using a bridge financing to complete that trial. The first study patient is expected to be treated in June, Picker said. The company would need additional funding to conduct a proof of principle trial. Picker indicated that Sinapis hitting statistical significance in the Phase I trial would enable it to seek an adaptive, Phase II/III trial design, with 200-300 patients

and endpoints agreed upon with the FDA. The company is considering applying for grant funding from the Army to develop the compound for traumatic brain injury, though Sinapis also is seeking venture funds. But due to the many failures in the area of stroke, venture funds might be tougher to come by. The decision on which area to focus resources stroke or traumatic brain injury might be guided by whats more fundable said Picker, who has held numerous CEO and COO positions in the biotech industry. Sinapis is seeking to raise $10 million for the proof-of-principle trial. The company operates as a virtual firm, with top experts in the area of stroke and neurological conditions. Its co-founders are Howard Chandler, a neurosurgeon who provided the initial funding for the company, and Peter Von Doersten. Picker was part of a team at Johnson Matthey, a specialty chemical firms, whose work led to the development of carboplatin, currently one of the worlds leading cancer drugs with annual sales of more than $500 million annually.

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eMberA coMPound tAkes neW Addiction treAtMent tAck


Addictive behaviors from tobacco use to eating disorders are among the most difficult to treat and the least likely to result in permanent recovery. Thats precisely why Embera NeuroTherapeutics Inc. is excited about prospects for its EMB001 . Rather than seeking to block the effects of an addictive substance or substitute a safer compound, the firms drug combination suppresses the craving that drives addiction. We take a very different approach to addiction, Robert B. Linke, the companys president and CEO, told BioWorld. Rather than seeking to block the effects of an addictive substance or substitute a safer compound routes taken by existing products the venturebacked firm is developing a drug combination to suppress the craving that drives addiction. The combination of two off-patent, FDA-approved drugs the benzodiazepine oxazepam and the cortisol synthesis inhibitor metyrapone targets specific brain functions associated with craving and relapse. Shreveport, La.-based Embera has exclusively licensed its technology from Louisiana State University Health Sciences Center (LSUHSC-S), where it was developed in the lab of Nicholas Goeders, a professor and the head of the department of pharmacology, toxicology and neuroscience. Goeders, who also serves as Emberas chief scientific officer, has spent more than 25 years studying the role of physiologic responses to chronic stress in addiction. The companys EMB-001 targets two components of addiction to break the neural pathways in the brain related to craving. The compound prevents overactivation of the stress response system while inhibiting circuits that are prone to hyperexcitability. In essence, EMB-001 takes the foot off the accelerator the corticotropinreleasing factor (CRF) while boosting the brake of the gamma-aminobutyric acid (GABA) system. The companys goal is to develop a drug regimen that can be paired with psychosocial care to induce abstinence and prevent or reduce relapse. Embera whose name and floral logo are derived from a flower used for medicinal purposes by Panamas indigenous Embera Indians was launched in 2005 by two Louisiana-based seedstage VCs: Louisiana Ventures and Louisiana Fund I. Linke declined to disclose the amount of funding Embera has received to date, but acknowledged the VCs continue to provide most of the companys capital. The National Institute on Drug Abuse (NIDA) awarded a $3.9 million grant to LSUHSC-S, as Emberas partner, to support the next stages of development for EMB-001 to treat cocaine dependence and advance the compound into clinical testing. In animal studies, EMB-001 effectively treated cocaine addiction even at doses of each drug that had been found ineffective as monotherapy. In 2009, Embera also demonstrated preliminary clinical proof of concept for the compound in a six-week, randomized, double-blind, placebocontrolled pilot study in cocaine-dependent human subjects. Treatment with EMB-100 led to significant reductions in cocaine craving at several time points during the study and was well tolerated over the treatment period.

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The NIDA grant will advance the cocaine treatment program through Phase I studies while supporting Emberas lead clinical development program for smoking cessation a market that represents a $3.5 billion global opportunity. Earlier this year, Embera completed animal studies in nicotine dependence that demonstrated EMB-001 to be more effective than Chantix Pfizer Inc.s $833 million smoking cessation product. The grant weve received with LSU will fund all of the preclinical work required to file an [investigational new drug application] for cocaine dependence and to execute a Phase I study, Linke said. That same work will also enable our clinical program in smoking cessation, so were moving both programs forward. Over the next 12 to 18 months, Linke plans to begin animal studies of EMB-001 in alcohol dependence and obesity the next two indications in the companys pipeline and progress quickly to human studies. In 2009, the Substance Abuse and Mental Health Services Administration classified an estimated 22.5 million Americans 13 and older nearly 9 percent of the U.S. population as substance abusers. More than 15 million were solely dependent on alcohol, and another 3 million abused both alcohol and illicit drugs. Obesity, which affects more than one-third of the U.S. population, is another promising application, since food cravings arise from the

same dysregulated brain systems that affect smokers and drug abusers. Our goal is to take these drugs into Phase II clinical development, then seek partners to help us with commercialization, Linke said. We think the best use of our resources is to develop as many indications of this drug as possible and look for partners that have existing infrastructure to help us do late-stage development. To that end, Embera has retained Exponential Pharma Ventures LLC to assist in establishing a clinical development partnership for its cocaine dependence program. The pharmaceutical partner would receive an option to license and commercialize the product after clinical proof of concept. In addition, Embera is actively raising a round of capital, led by its current investors, to fund the remaining clinical development, Linke noted. For the time being, Embera is operating virtually and outsourcing most of its development work. Linke is the only full-time employee in the companys five-person management team. We have experienced consultants in research and development, regulatory and business development who can take the company through our preclinical studies, he said. The structure has allowed Embera to use capital efficiently, but as we move forward, well be looking to bring on additional full-time resources, Linke added.

chapter 6:

Stem Cells and Regenerative Medicine

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cAlling All steM cells; JuventAs boosts sdf-1 for cArdiAc rePAir
Cleveland Clinic spinoff Juventas Therapeutics Inc. is adding a new twist to regenerative medicine. Traditional cell-based approaches to repair tissues and organs rely on the extraction of a patients stem cells before growing them in a lab and re-delivering them to the damaged site, a method that has demonstrated early success but is commercially complex, said Rahul Aras, president and founding CEO of Cleveland-based Juventas. Rather than trying to deliver the actual stem cells, the 2007 start-up is exploiting stromal cellderived factor-1 (SDF-1), a naturally occurring chemokine that is overexpressed in response to tissue injuries such as heart attacks. SDF-1 is responsible for recruiting circulating stem cells to repair the damage, essentially acting as a beacon to attract cells to the site of injury, Aras told BioWorld. The problem is that the signals that drive the repair are short-lived, he added. Cardiologist and Juventas founding scientist Mark Penn discovered that prolonging SDF1 expression for a longer period of time could result in significant tissue repair. The companys lead program, JVS-100, which encodes SDF-1, has shown promising data in animal models to date. In heart failure pig models, for instance, the drug demonstrated statistically significant improvements in key indications of cardiac function. And SDF-1s benefit goes beyond just recruiting cells, Aras said. It also sends out signals to prevent cells at the damaged site from dying. So theres a dual purpose. Juventas recently started enrolling patients in its first Phase I study. A total of 16 subjects with heart failure will be involved in the open-label, dose-escalation trial and will receive JVS-100, administered via endoventricular catheter delivery. Preclinical testing has shown were able to provide a very localized signal, Aras said. The company will look at safety, as well as key efficacy endpoints, including echocardiogram, the 60-minute walk test and quality of life, basically all the standard cardiovascular endpoints, he said. Data are expected early next year. Given SDF-1s ability to attract stem cells, its potential goes far beyond cardiac repair. Juventas already has earlier programs in peripheral vascular disease, in which SDF-1 would be delivered via direct needle injection, and for wound repair, in which the stem cell-recruiting factor would be administered topically. If successful, Juventas product would offer an off-the-shelf regenerative therapy, giving it a significant advantage over the stem cell approach. Aras said. It would be available in a vial, using standard manufacturing processes. And, while stem cells are limited to certain clinics, ours is distributable to any hospital. Like most small biotechs, Juventas plans to seek a partner after reaching proof of concept. The firm currently has four full-time employees though Aras said it probably will grow to accommodate expanding clinical programs.

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Juventas, whose name comes from the Roman goddess of youth, has raised about $10 million to date in venture capital and grant money, including a $6.9 million investment round in late 2008 led by Triathlon Medical Ventures with participating from Early Stage Partners, Fletcher Spaght Ventures, Reservoir Venture Partners,

Blue Chip Venture Co., JumpStart Inc. and North Coast Angel Fund. Grant money has come from Ohios Third Frontier fund, specifically from the programs Cardiovascular Innovation Center and Center for Stem Cell & Regenerative Medicine.

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bioPrinting Press: orgAnovos technology to build neW tissues


A movie theater isnt the only place to find 3D technology these days. The idea of using 3D printing in tissue engineering applications to grow new blood vessels, tissue even organs is gaining ground in the regenerative medicine space. And 2007 start-up Organovo recently became the first firm to boast a production model 3D bioprinter, the brainchild of scientific founder Gabor Forgacs, professor of biophysics at the University of Missouri. Forgacs had spent years studying the biophysics of embryonic development in chickens, determining, for example, how a clump of cells become a wing, said Organovo co-founder and CEO Keith Murphy. He grew to understand the processes at the cellular level and learned how cells behave and how tissues are created. With those data in hand, Forgacs and a team of regenerative medicine specialists backed by a $5 million grant from the National Science Foundation developed the NovoGen technology around which Organovo was founded. The first task at hand was to build the actual bioprinter to commercial scale. Organovo partnered with Melbourne, Australia-based firm Invetech, which delivered the first bioprinter early this year, with additional printers coming later this year to fuel Organovos collaboration efforts. Unlike inkjet printing approaches, in which cells are sprayed in layers, the NovoGen technology works via a cellular aggregate fusion method, Murphy said. Cells are carefully placed and become fused together, much like individual pieces of wax that melt to form single structures. Its also sort of a breakthrough from traditional tissue engineering models because it avoids the use of a scaffold, he added. Instead, cells are placed in a desired shape held by a gel for which the cells have zero affinity. The bioprinter can take autologous cells and create a piece of tissue, along with the signaling factor that differentiates it into the type of tissue needed, such as an artery. And the technology is robust, Murphy said, with potential use with almost any cell type. So does that mean Organovos technology eventually could create on-demand replacement organs for patients in need of transplants? Thats a long-term possibility, he told BioWorld, though the companys short-term goals are a bit more modest. Were looking at simple tissues, such as creating blood vessels for cardiovascular indications and peripheral nerve grafts that can be used by surgeons to restore function lost due to injury or to procedures like tumor resection. The ability to create new blood vessels could also lend itself to future work on larger, thicker pieces of tissues. When building large tissues and organs, the trick is keeping them alive after they are bioprinted, Murphy said, so the ability to generate branched blood vessels to provide cells with necessary nutrients prior to transplant would make growing replacement organs more feasible. Organovos programs still are in early stage. Murphy said the firm aims to finish up animal testing over the next couple of years and then

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move into the clinic. The company is interested in securing venturelevel funding Organovos work to date has been funded primarily by a $1.5 million angel round and is open to potential partnerships, hoping to bank on big pharmas growing interest in regenerative medicine. Both Pfizer Inc. and Johnson & Johnson have their own regenerative medicine units, while Novartis AG and GlaxoSmithKline plc have jumped on early stage stem cell programs through recent collaborations. And, earlier this month, small biotech CureDM LLC, of Wilmington, Del., scored a potential $335 million deal with SanofiAventis for its preclinical candidate, Pancreate, a neogenesis agent aimed at treating diabetes. Organovos initial indications also offer the firm a possibility of some government funding, since blood vessel and nerve damage are common combat injuries, Murphy added. But the companys other focus will be to leverage

the technology itself, leasing out bioprinters to universities and research institutions to expand the tissue engineering capabilities in other applications. That way, Organovo can turn to academia for the early work, without having to shoulder the cost. It also retains the right to partner any programs once theyve advanced to a certain point. The goal is to leverage the potential of the technology more broadly than we could do on our own, Murphy said. For now, Organovo is staffed by 15 employees about half of them full-time. The most recent addition to the executive team is Marie Csete, executive vice president of R&D. She previously served as chief scientific officer at the California Institute for Regenerative Medicine and her experience ranges from stem cells to organ transplants. So shes positioned to take us to the next level, Murphy said, to help us reach outside and partner with the right groups.

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gArnet seeking AdditionAl funds to AdvAnce leAd cell therAPy


Garnet Biotherapeutics Inc., a regenerative medicine company based in Malvern, Pa., is in the process of raising additional funds to complete a Phase II study of its lead cell therapy candidate (GBT009) in patients who have undergone breast reconstruction surgery. The venture-backed company hopes to complete the Phase II wound healing study as well as follow-up observations in mid-2011. That study is evaluating the ability of GBT009 to improve healing at the incision site. In breast reconstruction surgery, the incision may go from hip-to-hip below the belly button, creating a flap. In the main Phase II study, one side of the incision is injected with GBT009 while the other side of the patients incision would be injected with placebo. Currently, adhesive strips can be applied to an incision to help the edges fuse together. Surgical techniques also can be performed to revise the incision area. But other than that, there arent many options for incisional wound healing, said Gerri Henwood, Garnet director and CEO. The FDA-approved anti-scarring drug Juvista by UK-based Renovo Group plc is injected locally around the incision at the time of the surgery to improve scarring. But Henwood said that product has had mixed results. If Garnets capital raise is successful, Henwood said that the company could fund the main Phase II study as well as the smaller pilot studies, plus a proof-of-concept study with a bioactive device. The device would be designed to be implanted in an area of the body that needs assistance with healing. A regulatory filing for the device could be submitted by the middle of next year if the extra funds are raised, Henwood said. But the company would need another round of funding to file a biologics license application for GBT009, which Garnet hopes will take place by the end of 2010 or the start of 2013. Henwood noted that the company ultimately would like to be able to commercialize its products, but with a broad portfolio, she said that Garnet also would be open to partnering discussions. The company is hoping to meet with firms at the upcoming BIO International Convention in Chicago next week. Garnet raised $10.4 million in private financing last year. The round was led by SCP Vitalife Partners and also included Safeguard Scientifics Inc. and Alliance Technology Ventures. Garnet believes its regenerative medicine therapy could be used not only in wound healing, but autoimmune diseases and a variety of ischemic diseases such as acute myocardial infarction and stroke. The company also believes its therapy candidates may have veterinary applications, Henwood said. The company was founded by the late Hubert J.P. Schoemaker, who is perhaps best known for his co-founding of Centocor Inc., which was purchased by Johnson & Johnson for $5.2 billion. While stem cells can be influence by the area in which they are placed and become other stem cell types, raising the possibility that stem cells placed in soft tissue, for example, could start to make bone. But Garnet believes it can overcome

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that problem partly by virtue of its manufacturing process of mesenchymal stem cells. We wind up with cells that cant become other [unwanted] cell types, Henwood said. As the cells are replicated, they maintain their same genetic fingerprint. Henwood indicated that the predictability of Garnets cells could address one of the regulatory challenges for stem cell therapies. Another key manufacturing challenge for stem cell therapies has been the sheer expense of making them. Garnets process can produce the cells at an impressively low cost of goods, Henwood said. The companys process requires less feeding of the cells and less manpower, she said. Other regenerative therapies under development include a range of approaches aimed at wound and tissue repair. For example, Osiris Therapeutics Inc., of Columbia, Md. is developing stem cell products for pediatric graft vs. host disease and heart attack patients. Rockville, Md.-based

RegeneRx Biopharmaceuticals Inc. is developing Thymosin beta 4-based drug candidates in dermal, ophthalmic and cardiovascular tissue repair. GliaMed Inc. is developing compounds called regenerative immunophilin ligands, or RILs that have been shown to regenerate skin and other tissue in animal models. Its wound healing compound (GM1485) is being studied as a topical treatment in three patient populations: orthopedic surgery, plastic surgery, and burns. Cleveland Clinic spinoff Juventas Therapeutics Inc. has a lead program JVS-100, which boosts stromal cell-derived factor-1 (SDF-1), to promote cardiac repair. The company recently started enrolling patients in its first Phase I study of JVS100, administered via endoventricular catheter delivery. In its earlier programs in peripheral vascular disease, SDF-1 would be delivered via direct needle injection, and for wound repair, the stem cell-recruiting factor would be administered topically.

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MultiPlAtforM tAigA scores nih funding for hsc technologies


At first glance, Taiga Biotechnologies Inc.s four platform technologies might seem to be all over the map. Among the 2006 start-ups efforts is developing fully human monoclonal antibodies against difficult-to-target self proteins, working on a vaccine adjuvant aimed at boosting treatments for infectious disease and cancer and creating a universal donor blood stem cell line designed for clinical applications. It might seem disjointed, but the biology is actually quite uniform, said Yosef Refaeli, an assistant professor at the University of Colorado Denver School of Medicine who co-founded the company with Brian Turner and now serves as chairman of the scientific advisory board for the firm, which is headquartered in the Fitzsimons Bioscience Park in Aurora, Colo. Underlying all of its platforms is Taigas flagship technology for expanding and purifying undifferentiated hematopoietic stem cells (HSCs) in the lab. We figured out a combination of different genes that regulate growth and survival, Refaeli told BioWorld. By transducing HSCs with those specific genes and then expanding them in culture, Taiga is able to create fully functional stem cells that are self-renewing. Best of all, that expansion is unlimited. Now we can grow large amounts of stem cells without genetic modification, he added. The firms lead program involves using the HSC technology to generate fully human monoclonal antibodies, specifically antibodies capable of going up against targets that previously have been hard to hit with antibody drugs due the immune systems resistance to generate antibodies against self targets. Taigas scientists found that by overexpressing a growth gene in the antibody-producing B cells in mice that are derived from its stem cell lines, those B cells can overcome immune dominance. So we can put our special stem cells into mice, then modify those growth genes to get autoantibodies, said Turner, who serves as president and chief scientific officer. The companys approach also might allow it to avoid the lengthy process usually required to engineer a mouse antibody into a humanized antibody. Though still in the early stage, Taiga has set its sights on creating antibodies for cancer, autoimmune and inflammatory diseases. Meanwhile, its options remain open in terms of developing its own pipeline, partnering or out-licensing. Itll probably be a mix of all the above, Refaeli said. Partnering could be a possibility for a second program focusing on vaccine adjuvants. One way we use to grow stem cells also makes for a very powerful adjuvant, Turner said. Taigas work has shown that such adjuvants can be added to boost vaccines for flu and HIV, and even for cancer vaccines, in which the biggest obstacle is the target itself, Turner noted. Weve been able to vaccinate mice with melanoma and leukemia, he said. We can give them back a

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little piece of the cancer and then the immune system will attack. The companys HSC technology also has applications in bone marrow transplants and for red blood cell transfusions, another issue of supply and demand, Turner added. Weve found a way use stem cells to make red blood cells in a dish and then found a way to scale up those cells. Taigas still working to determine a clear path forward with the cell technologies, but its moving ahead with the antibody and adjuvant programs, largely with the help of funding from the National Institutes of Health. Aside from about $800,000 in seed funding, the

rest of the firms cash has come from the NIH about $2.2 million all told. Those grants include a Phase I Small Business Innovation Research award to develop antibodies against influenza, Phase I and Phase II SBIR grants to develop a universal donor blood stem cell line to treat AIDS and a Phase I SBIR grant to support work on an HIV vaccine adjuvant. Additional funding will be needed as the company grows beyond its three full-time employees, but thats a challenge Taigas founders are ready for. After all, Turner and Refaeli said the firms name, which refers to a subarctic region, kind of represents a biotech start-up. There are harsh conditions, and youve got to be tough to survive.

chapter 7:

Genetics and Genomics

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blockMir technology gets seed funding, coMes out of steAlth


Mirrx Therapeutics A/S raised seed financing to continue development of its Blockmir antisense drug technology, which is designed to de-repress gene expression by blocking microRNA (miRNA) binding sites on messenger RNA (mRNA) molecules. Three Danish investors participated in the round, including: Seed Capital, of Lyngby; Inventure Capital A/S, of Aarhus; and Vecata A/S, of Vejle. The amount involved was not disclosed. It will allow us to get in vivo proof of concept, Thorleif Moller, founder and chief scientific officer of Lyngby-based Mirrx told BioWorld. Moller devised the Blockmir concept while working at an IP consulting firm. He originally set up a company to develop the technology with a working title of Stealth Biotech ApS. The new entity was established for administrative purposes. I own Stealth, and Stealth owns my shares in Mirrx, Moller said. The company now has enough funding for two years, during which it aims to validate the technology before embarking on preclinical and clinical drug development. We have funding to look into compounds that may be used to go into clinical trials, Moller said. It will also perform in vitro work to further delineate the optimal design of Blockmirs. We want to create several layers of IP, Moller said. The Blockmir concept is not limited to a specific oligonucleotide chemistry. The basic idea is to deliver single-stranded oligonucleotides that sterically hinder inhibitory miRNA molecules from binding to mRNA. There is no requirement for any particular chemistry, although some chemistries may be better than others, Moller said. They do need some common features, however. They should be designed to be pretty artificial, because otherwise they could be degraded or could recruit other enzymes, he said. Apart from their miRNA site specificity, Blockmirs should be biologically inert and unable to interact with the RNA -induced silencing complex (RISC), for example, or with RNase H. The main advantage of the Blockmir approach is its specificity. Other species of antisense molecules, because of their enzyme recruitment activities, can lead to off-target effects. Mirrx has already gathered data on the exclusivity of the Blockmir:mRNA binding. We wanted to be sure about that. Were pretty certain that holds through, Moller said. Increasing length could help to increase affinity, but shorter molecules would probably help delivery. Blockmirs will, however, face the same challenges as other oligonucleotide-based drugs. Of course we have a delivery problem, Moller said. Thats one reason why the firm will target liver-related disease - specifically hepatitis C infection initially, because of the livers receptivity toward oligonucleotide drugs. However, the approach will be broadly applicable in many areas. We only know a very small fraction of miRNA-mRNA interactions, Moller said. Based on the total number of human genes estimated to be subject to microRNA based regulation, approximately every third human gene may be targeted by a blockmir, according to the company.

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MoleculAr teMPlAtes develoPs drugs viA toxin-bAsed Method


Move over, antibodies. Toxin-based molecules could become the next generation of targeted biologics, at least if Molecular Templates Inc. has its way. The Georgetown, Texas-based firm, which boasts screening libraries of ETBs, or engineered toxin bodies, will put its technology to the test in its first deal, an oncology discovery and translation research agreement with ImClone Systems, a unit of Eli Lilly and Co. If the firms successfully create ETBs against a target chosen by ImClone, Molecular Templates could earn up-front fees, milestones and royalties. More importantly, success would be able to show how toxin-based drugs stack up against antibodies. ImClone, which developed blockbuster cancer drug Erbitux (cetuximab) clearly understands antibodies very well, said Eric E. Poma, president and CEO of Molecular Templates. So this will be a good test case to see if toxins can do what we think they can. The idea of using bacterial toxin scaffolds is not new, Poma said. The literature goes back 20 or 30 years. Toxins offer potential advantages over both antibodies and small molecules because of their ability to gain cell entry through targets that might not normally internalize into the cells and their ability to enzymatically trigger apoptosis. But the limited ability to screen for targets meant that most firms working in the biologics arena opted for an antibody approach instead. With the earlier toxin platforms, you could only go after targets you knew, he told BioWorld. You couldnt do widespread screening. Molecular Templates set out to build screenable libraries, similar to existing antibody libraries, and now has created billions and billions of molecules, each with a different affinity, Poma said. Instead of screening for binding ability, however, the companys screening platform looks at cell-killing ability. One of the biggest advantages of etiology-based screening is that the company doesnt have to know the target beforehand. Its lead program, MTI-SAM3, which targets an undisclosed receptor present on certain melanoma cells, was found by screening without a target, he added. The companys technology has been around for about a decade. In fact, the first iteration of Molecular Templates was formed in 2000 by researchers at the University of Toronto and the Ontario Cancer Institute, Poma said. He joined the firm in 2008, and a year later, it underwent a restructuring and relocation after securing $2.5 million in Series A funding from Sante Ventures. The platform uses a modified Shiga-like toxin, a ribosome-inhibiting agent, so its use could go beyond the obvious oncology targets. Poma said the company might also look at viral and autoimmune diseases as well. The goal now is to look at other possible partnerships. Well probably put in place one or two more collaborations, he said, and then focus efforts on building out the companys pipeline. Over the next year or so, Molecular Templates hopes to develop a number of new leads, and then

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advance to the clinic in the next two or three years. Unlike many start-ups, Molecular Templates has

opted to forgo the virtual model. The company has a 5,000-square-foot R&D facility and 12 fulltime employees, with all research conducted inhouse.

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sirnAoMics tAkes MultitArget APProAch to gene silencing


Flush with new grant funding, Sirnaomics Inc., in partnership with its overseas subsidiary, Sirnaomics China Co. Ltd., of Suzhou, China, is moving forward with development of multitarget RNA interference therapies for 1 1 different preclinical programs including wound healing, influenza and glioblastoma. Gaithersburg, Md.based Sirnaomics is separating itself from the rest of the RNAi pack by taking a multitarget approach to gene silencing. One siRNA to silence one gene doesnt always result in a viable therapeutic, Sirnaomics Vice President of Discovery Research David Evans told BioWorld. Multitarget therapeutics have been appearing in many pharmaceutical and biotech pipelines due to the influence of systems biology and past failures of single-target therapeutics in complex diseases like cancer. Taking that premise into the field of gene silencing, Sirnaomics believes it can produce a more effective RNAi therapy by targeting multiple genes simultaneously. We took the approach that multiple siRNAs, targeting either multiple regions along the same gene to improve efficacy or preferably multiple genes in a signaling cascade can actually improve the outcome for a therapeutic, Evans said. The companys lead program is in scarless wound healing. It started with the observation that wounds to a fetus, such as in prenatal surgery, heal without scarring because certain genes are down-regulated. The hypothesis, then, was that silencing those genes in an adult would allow the healing of wounds without scars. Sirnaomics scientists identified two genes, TGF1 and Cox-2 that have been associated with the phenomenon in the literature and developed siRNAs against those targets. For a delivery method, they borrowed the histidine lysine polymer (HK polymer) nanoparticle system from James Mixson, of the University of Maryland. Histidine and lysine are natural carriers of nucleic acids, and the branched polymer developed by Mixson buffers the RNA and assists in its release within the cells. In the area of antivirals, Sirnaomics has an investigational gene silencing therapy for influenza that may inhibit replication of H5N1 avian flu as well as HIN1 seasonal flu. It is focusing on silencing multiple conserved regions of the viral genome in order to thwart the viruss noted ability to mutate and become resistant. For example, last flu season saw a tremendous increase in Tamifluresistant strains, according to Evans. Currently available countermeasures for avian and seasonal flu virus include flu vaccine and antivirals such as Tamiflu (oseltamivir) and Relenza (zanamivir). Sirnaomics reported that its gene silencing cocktail rescued 60 percent of avian flu-exposed mice, compared to just 40 percent for Relenza. Sirnaomics has little serious competition in producing siRNA-based influenza therapies. A deal between Alnylam Pharmaceuticals and Novartis International AG in 2006 to develop a gene-silencing therapy against influenza, and

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seeded by a $250,000 grant from the Defense Advance Research Projects Agency, was initially predicted to be in clinical trials by 2007. That program remains preclinical, according to Alnylams website, and the program was reported stalled in 2007 due to lack of efficacy. Marina Biotech, of Bothell, Washington, formerly MDRNA, Inc., reported positive in vivo results with an RNAi-based therapeutic in 2008, but no further news has come out of that program and it no longer appears in the companys official pipeline. If Sirnaomics is right, multitarget RNAi therapeutics may allow it to crack a nut that so far has resisted efforts by larger companies. Sirnaomics is involved in numerous collaborations with academic institutions in the U.S. and Asia, including the University of Tennessee, the University of Pittsburgh, Johns Hopkins University, Duke University and Hong Kong University. Sirnaomics also has ties with Silence Therapeutics plc, via the former Intradigm Corp., at which Sirnaomics President and CEO Patrick

Lu served as vice president from 2001 to 2006. Subsidiary operations in China have allowed Sirnaomics to take advantage of VC networks and local government incentives in the Suzhou Industrial Park Biobay area, outside of Shanghai. The company employs 10 people in Maryland and 15 in Suzhou. It also has operations in Guangzho, capital of Chinas Guangdong province, which the company hopes to expand. There are multiple pharmaceutical companies very much interested in our programs, and we believe theyre going to have another push for development in China of our siRNA therapeutics program, said George Ji, vice president of corporate development for Sirnaomics. The company is operating on just over $500,000 in small business innovation research grants from the National Institute of Allergy and Infection Diseases and the National Cancer Institute. Going forward, Sirnaomics will seek additional grant and partnership opportunities to fund its discovery and development programs.

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integrAted diAgnostics tAkes ProteoMic APProAch


After recently securing a $10 million second tranche of its $30 million Series A financing, Seattle-based Integrated Diagnostics is now moving toward clinical verification of its bloodbased tests for diagnosing lung cancer and Alzheimers disease (AD). Founded in October 2009, Integrated Diagnostics is running its lung cancer and AD projects concurrently, and next summer hopes to begin clinical verification of the lung cancer test. However, the Alzheimers clinical work is expected to run longer due to the complexity of that disease. Integrated Diagnostics believes it has sufficient funds to get at least one of the two proposed indications through the clinical verification process, which involves a retrospective study of existing blood specimens of several hundred people. The company in-licensed data on specific proteins with a demonstrated association with a particular organ or disease. That association is based on preclinical studies with human tissue samples. CEO Albert Luderer said that while many companies are looking for gene signatures to detect disease, few are using a proteomicbased approach like Integrated Diagnostics. Thats because, he said, few labs have the technical capability and intellectual property to use proteomic techniques to develop large-scale diagnostics. The technology behind Integrated Diagnostics products allows it to analyze proteins that appear in the earliest stages, potentially providing an early warning system to prevent or treat disease. Earlier diagnosis of AD would be a breakthrough for a disease that can start taking hold more than a decade before any symptoms arise. In AD, some experimental neuroimaging tests are being developed to confirm a diagnosis. Psychological tests, while they have great variability in results, also are available to help diagnose the disease. According to a study published in 2010 in the online version of the journal Archives of Neurology, an analysis of cerebral spinal fluid can indicate the presence of tau and beta amyloid, proteins that are widely believed to be hallmarks of Alzheimers. All those types of tests can help physicians make a more clean diagnosis of AD, Luderer said. But he indicated that the companys blood-based test could be a relatively inexpensive way to rule out patients who are low- or high-risk for AD. The companys blood-based test for non-smallcell lung cancer would be used to help physicians determine whether a patient may need a biopsy after receiving a CT scan of the chest. In many cases, patients often require a second CT scan to make the call on a biopsy, which can be a difficult and risky procedure. The additional CT scan typically comes after a period of watchful waiting, and during that time malignant tumors could begin to grow and spread. As a spinout from the Institute for Systems Biology, Integrated Diagnostics was founded largely based on the protein blood markers

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research of Lee Hood, president of the nonprofit research institute. Hood, one of the four founders of Integrated Diagnostics, also co-founded several other biotechs, including Thousand Oaks, Calif.based Amgen Inc. and Applied Biosystems LLC, of Foster City, Calif. (now part of Life Technologies Corp.). While at California Institute of Technology, where he began his professional career, Hood and his colleagues pioneered the DNA gene sequencer and other instruments. The DNA sequencer played a key role in the mapping of the human genome during the 1990s. In 2000, Hood co-founded the Seattle-based Institute for Systems Biology (ISB), which is focused on personalized medicine. In 2009, Integrated Diagnostics became the first commercial enterprise to arise from a partnership between the institute and the University of Luxembourg. The nation of Luxembourgh created a venture arm, BioTechCube Luxembourg, which is an investor in the diagnostics firm along with InterWest Partners and the Wellcome Trust.

The $30 million Series A round in September 2009 was led by venture capital firm InterWest. Last month, the personalized diagnostics firm triggered a $10 million second tranche of its Series A financing, funds that will be used to advance the development, validation and commercialization of its blood-based proteomic diagnostics programs. Integrated Diagnostics products would be classifed as in vitro diagnostic multivariate index assays, or IVDMIAs, a subset of lab-developed tests that are the subject of draft guidance recently released by the FDA. In the new draft guidance, IVDMIAs are defined as a device, which would make them subject to FDA clearance or approval. Luderer said the assumption is that the FDA will issue a final rule on IVDMIAs, and the company aims to meet or exceed any new requirement. He said he hopes to meet with FDA officials soon to seek their counsel and guidance early in the program. Luderer previously was president and CEO of BioTrove, a venture-backed molecular biological tools company that was acquired by Life Technologies Corp. in December 2009.

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113

AlternAtive to surgery for refrActory ePilePsy?


Asklepios Biopharmaceutical Inc. received $200,000 in grant funding from the Epilepsy Therapy Project (ETP) and the Epilepsy Foundation to advance its preclinical gene therapy for medically refractory epilepsy. The treatment could eventually offer an alternative to surgical brain resection, and the company expects the funding to support the program through an investigational new drug application filing. With the new grant, the Middleburg, Va.-based company continues its strategy of pursuing nondilutive funding from disease foundations, which it used to fund its clinical program in Duchennes muscular dystrophy. We very much like the fact that they have shown efficacy, low toxicity and good tolerability for the galanin molecule gene transfer, and have experience with the adenovirus vector that makes this all possible, ETP President Joyce Kramer told BioWorld. The grant disbursal is contingent upon Asklepios receiving a phase II Small Business Innovation Research grant to complete the funding required for preclinical research. It has applied to the NIH via the National Institute of Neurologic Disorders and Stroke for that grant. The company received a phase I SBIR grant in 2008 and successfully completed its milestones, according to Scott W. J. McPhee, Asklepios director of research and development. The gene therapy is being developed for patients with mesial temporal lobe epilepsy (MTLE). Out of 2.5 million people with epilepsy in the U.S., between 250,000 and 375,000 have MTLE that is resistant to the currently available drug therapies. For those people, surgical resection of the brain tissue that is causing the seizures is the only alternative treatment. Asklepios has completed proof-of-concept testing, and its next steps will be to model delivery in patients in preparation for clinical trials. In order to do this, the company has assembled a team of neurosurgeons, neurologists and epileptologists to work together to develop the best plan for delivering the therapy to the brain. All of the patients in the trial will have failed three anticonvulsants and will be candidates for resective surgery. Because these patients have already been mapped for surgery, well have a clear idea of where the epileptic tissue is and where its positioned . . . so well be targeting those sites, McPhee explained. The goal is to insert a gene that will produce galanin at the tissue site that would normally be resected during surgery. Although it would be an early Phase I trial, if the patients show a therapeutic response, it could spare them the brain surgery. And, according to McPhee, because the therapy is a one-time treatment with a permanent effect, there is an additional opportunity to collect long-term efficacy data. Some patients with MTLE are not candidates for surgery because the tissue causing the seizures is involved in language functions of the brain. McPhee hopes that if the gene therapy treatment is successful it can provide an alternative for those patients, as well.

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The galanin gene will be delivered by Asklepios gene delivery platform, a recombinant adenoassociated virus (rAAV)-based system called Biological Nano Particles (BNP). The BNPs are made out of pieces of different adeno-associated viruses and parvoviruses, engineered to target transducing muscle tissue and to evade the immune system. Back in 2004, Asklepios was the first commercial biotech company to receive major grant funding from a nonprofit disease foundation, the Muscular Dystrophy Association. Since then, disease foundation funding has become more common as an alternative to angel or VC financing. Weve kept going while some of the biotech

zombies have gone under, McPhee said. We keep a nondilutive approach. With the longer time frames involved in moving these technologies forward, its less well suited to the VC, early exit strategies. To date, Asklepios has had just one equity investor, a parent of a child with Duchennes muscular dystrophy, who contributed $1 .5 million in series A financing in 2006 to boost the companys DMD therapy, biostrophin, now in clinical trials. Asklepios has supplemented its portfolio of grants with licensing deals with partners including Merck & Co., Medtronic Inc., GlaxoSmithKline plc, Bayer Healthcare AG, and a number of smaller deals for its BNP technology.

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115

tivorsAn reAdy to rAise funds for biglycAn dMd cAndidAte


Tivorsan Pharmaceuticals, a recent spinout of Brown University, is seeking to raise additional funds to take its biglycan molecule for Duchennes muscular dystrophy (DMD) through preclinical development and prepare to enter the clinic. Under an exclusive licensing agreement with Brown, the university transferred the related intellectual property around biglycan to Tivorsan. The therapeutic candidate has been tested in mice and has demonstrated improvement in muscle cells. DMD, a genetic disease that typically strikes boys, is caused by a mutation in the dystrophin gene that causes muscle cells to die. But Tivorsan has found a way to recruit a related protein, utrophin, to make up for the loss of the dystrophin gene in Duchenne boys. In boys with DMD, utrophin helps their muscles to develop when they are young. But as they mature, the expression of utrophin decreases and the disease progresses. Biglycan, a recombinant version of a naturally occurring protein, is designed to activate utrophin, which normally only is expressed during fetal and neonatal life and gets down-regulated after that. The general concept of activating a protein dormant in the body, presents a really interesting therapeutic target, Joel Braunstein, one of the Tivorsan founders and acting CEO, told BioWorld. Biglycan, he said, works to recruit utrophin to take over the role of dystrophin in adults. While there are no approved therapies for the underlying disease, steroids have been used with limited effect in patients with DMD, an ultimately fatal disease. With biglycan, The hope is that we would improve the quality of their life . . . that they could perhaps stay out of wheelchairs longer and be able to move better and maintain their independence, said Justin Fallon, a professor of neuroscience at Brown, who has led the research and serves as chairman of Tivorsans scientific advisory board. Once in the clinic, the company hopes to be able to show that biglycan can extend the function of muscle. The company is now working to show that it can manufacture biglycan in large enough quantities. Once it has scaled up production, then it can begin demonstrating the safety of the material in preclinical toxicology studies. So far, Fallons lab has received funding from government and private organizations for the development of biglycan. A four-year, milestonedriven cooperative agreement award from the National Institutes of Health has helped to fund development of the technology behind biglycan. In addition, patient advocacy groups Charleys Fund, the Nash Avery Foundation and Parent Project Muscular Dystrophy have provided considerable support to Fallons lab to develop the DMD therapeutic. Currently, Tivorsan is in the process of raising capital from private investor sources, Braunstein said. The expectation is to have both institutional financial support and angel investors. Biglycan has demonstrated efficacy in a commonly accepted mouse model, MDX, that is genetically identical to humans. In experiments, the molecule was delivered systemically and was readily

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manufactured. The muscle cells in the mouse model also showed as good as 50 percent less damage after contraction. At the microscopic level, biglycan-treated muscle cells had lower inflammation and muscle fibers showed decreased degeneration. One of the main approaches to developing a treatment for DMD is to fix the mutated dystrophin gene. For example, in gene therapy a viral vector is introduced to produce a functional (albeit truncated) copy of the gene. Antisense oligonucleotides are designed to splice out or skip over the mutated parts of the gene, an approach that may only work in a subset of patients. Similarly, small-molecule drugs have been developed to read through premature stop codons. Several companies, such as Bothell, Wash.-based AVI BioPharma Inc., are developing RNA-based therapies for DMD that attempt to repair or replace defective dystrophin. However, those approaches, which include exon-skipping therapy, may be appropriate only for a subset of patients with specific mutations in the dystrophin gene. In March, PTC Therapeutics Inc. and partner Genzyme Corp. reported disappointing preliminary efficacy data from a pivotal Phase IIb study of ataluren in DMD, using a six-minute walk test as an endpoint. Ataluren, which is designed

to overcome the dystrophin mutation and restore protein function, was aimed at a smaller subset of DMD patients, as is the case with most RNAbased therapies targeting the disease. Yet another approach uses stem cells with normal dystrophin to replace the diseased muscle. And protein-based therapeutics are being tested to increase muscle mass in DMD patients. As part of a $498 million deal, Acceleron Pharma Inc. and partner Shire plc are developing a Phase II molecule (ACE-031) that targets the activin receptor type IIB (ActRIIB) pathway, which plays a critical role in regulating the growth of skeletal muscle. Tivorsans approach, on the other hand, is to compensate for the loss of dystrophin by upregulating the gene expression. In the same way, Novato, Calif.-based BioMarin Pharmaceutical Inc.s BMN-195 was designed as a utrophin regulator for DMD. However, the BioMarin DMD candidate was discontinued in August due to inadequate plasma concentrations in a Phase I study. There are plenty of data to support the idea of utrophin up-regulation as a potential therapeutic target for DMD. However, biglycan as a molecule and its mechanism of action are considered unique in that it closely follows the expression of utrophin. The molecule is designed to express utrophin at the cell membrane where dystrophin normally would need to act.

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bMt tAkes shorter APProAch to develoP rnAi-bAsed drugs


South Korean start-up BioMolecular Therapeutics Inc. became the latest firm to start playing in the RNAi sandbox and its brought its own toys. As far as I know, were the only Asia-based company with freedom to operate in the RNAi space, said Dong-ki Lee, an associate professor of chemistry at Sungkyunkwan University in Suwon, Korea, and inventor of BMTs technology. RNAi has been heavily touted as one the more promising drug development approaches the silencing of genes to treat disease but trying to move into the space without infringing on intellectual property held by a handful of RNAi heavyweights such as Alnylam Pharmaceuticals Inc. and Silence Therapeutics plc is tricky business. Most companies working on siRNA compounds aim to improve the molecules via chemical modifications but without touching the backbone structure, Dong-ki Lee to BioWorld. Were able to change that backbone structure in way so that the IP does not infringe the Tuschl patent, he added, referring to the patent series relating to siRNAs. Specifically, BMT reduced the number of base pairs. The Tuschl patents call for duplex regions with 19 base pairs. It was suggested that that length was critical for optimal gene silencing, Dong-ki Lee said. But we reduced [the base pairs] to 16 and then to 15 and were able to achieve comparable silencing, he said. The shortened siRNAs called asymmetric shorter-duplex siRNA, or asiRNA also could have a leg up over traditional siRNAs in diseases in which treatment can be hampered by innate immune stimulation such as age-related macular degeneration. A duplex of 19 base pairs or longer can trigger an innate immune receptor, namely Toll-like receptor 3, a discovery made by BMT advisor Jayakrishna Ambati, an ophthalmologist and professor at the University of Kentucky Medical School, and apparently born out in two AMD studies. In the past two years, Opko Health Inc. cut short a Phase III AMD trial of siRNA bevasiranib after a data monitoring committee determined the study was unlikely to meet its primary endpoint, and Allergan Inc. dropped work on AGN211745 in AMD after disappointing Phase II data. BMT found that the shorter duplexes do not trigger TLR3. The firm is going after AMD as its first indication, hoping to file an investigational new drug application in late 2011 or early 2012. Beyond that, asiRNAs could have applications in both infectious diseases, including herpes-simplex virus, and cancer. Dong-ki Lee said a locally delivered asiRNA for vaginal HSV could be next in line for the small biotech. The larger cancer indication likely will need a partner. Weve been acquiring data on the activity on [asiRNAs] in cancer but we have no internal programs, he said, but added that we do have a midsize pharmaceutical company interested in the technology.

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To date, BMT has operated on money from its founders, but the firm, which recently was selected as venture company by the Korean government and picked up some government funding, was planning a Series A financing, with plans to seek funding globally, including from U.S. venture capitalists. Thats one of the reasons we recruited Johannes Freuhauf, a biotech veteran with experience in RNAi and an office in Boston to help the company develop in the U.S., Dong-ki Lee said.

The firm also plans to seek funding in Korea, but that might be challenging. In Korea, theres a lot of money around waiting to invest in biotech, he said, but most is going toward the less risky biosimilars business. My opinion is that theyre afraid of investing in novel technologies. In the coming months, BMT plans to work on strengthening its IP portfolio and scouting out possible early collaborations and licensing deals.

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gene therAPy firM renovA creAted froM collAterAl vein


Biotech veteran Jack Reich thought he had retired in 2002 after selling his cardiovascular gene therapy firm Collateral Therapeutics Inc. to Schering AG in a $140 million stock-for-stock deal, but further developments in the field brought him back to the executive fold, heading up 2008 start-up Renova Therapeutics Inc. It was over lunch a couple of years ago that Reich met with his Collateral co-founders, Craig Andrews and Kirk Hammond, and learned that Hammond had continued working on a cardiovascular gene therapy project held over from the teams Collateral days, using the AC6 gene to treat congestive heart failure. The animal results were spectacular, Reich said. That work was being funded primarily by grants from the National Institutes of Health, but Andrews and Hammond sought to start a new company to further develop and commercialize the therapy. And they needed a CEO. I couldnt say no, Reich told BioWorld. I believe the therapy will work. And his opinion certainly carries some weight. Reich, who co-founded gene therapy firm Viagene Inc. (bought out by Chiron Corp. in 1995) before helping to establish Collateral, has been working in gene therapy for a while. So he knows first hand that one of the biggest hurdles in the space has been delivery. You have to be able to deliver [the gene therapy] to the organ in a high enough titer, he said. Thats what has held the field back. But San Diego-based Renova gets to benefit from work previously conducted at Collateral, which included gene therapy candidate Generx. That product reached Phase IIb/III studies before Schering determined that the protocol would not provide sufficient efficacy. Yet it was tested in roughly 400 patients, and we have learned much about safety, Reich said. Renovas program is using the same vector and is relying on delivery via a coronary catheter, so its similar to the method used in angiography a catheter threaded through the thigh up to the coronary artery. Were using the catheter to inject the gene therapy, Reich said. So theres no surgery, no needles. Were confident thats the right approach, he said. The NIH seems to agree. The agency, which has provided about $23 million for the project to date, is funding the firms Phase II dose-response study of AC6 gene therapy in CHF patients. Data from that study are expected sometime in 2012, Reich said, and investigators are hoping to see improvements in cardiovascular indices, ejection fraction and treadmill time among other endpoints. The AC6 gene was identified during Hammonds animal work. He discovered that the one abnormality in CHF patients was the downregulation of that gene. We reasoned that if we can restore AC6 to normal levels using gene therapy, we could restore the hearts ability to pump, Reich said. Published animal data to date have shown that

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mice with CHF have a life span about half that of normal mice. Treatment with AC6 gene therapy could return that life span to normal, he noted. Similar data were seen in pigs. Ejection fracture is down-regulated severely in pigs with CHF, but with the gene therapy, that rose by about twothirds, Reich added. Pending successful Phase II data, Renova likely will move into Phase III testing. For that, the firm could look to partnerships to help fund and run those large trials. With the executive team in place, including Hammond, who serves as lead scientist in the AC6 study, and Andrews, who serves as chief operating officer, we have the knowledge, but to create the infrastructure needed for late-stage work would be a large task for a small biotech, Reich said.

Well find a partnership that can augment what we do best. Besides the NIH, Renovas funding has come from a handful of angel investors. It also recently won about $250,000 from the qualifying therapeutic discovery tax credit funding. But Reich said he has no plans to seek venture capital. His last company, Collateral, also opted against VC funding. It was supported, instead, by megainstitutions before going public. Id rather see the people who work at the company reap the benefits of a stock sale, he said. Renova is in the process of hiring additional staff, but Reich added that the core group already is in place. Because weve worked together so long and have succeeded in the past, we have an advantage, a good chance to succeed, he said.

chapter 8:

Immune System and Infectious Diseases

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123

vbl turns sights on inflAMMAtory MArket With novel PhosPholiPids


Seeking to capture a share of the anti-inflammatory market, Israeli biotech VBL Therapeutics has pioneered a family of oral oxidized phospholipid analogues, called Lecinoxoids, as potential treatments for psoriasis, rheumatoid arthritis, multiple sclerosis, inflammatory bowel disease and atherosclerosis. The venture-backed firm is in Phase II testing of its lead Lecinoxoid product VB-201, a firstin-class, orally-administered immune response modifier, as a treatment for psoriasis.VB-201 is believed to act by inhibiting the production of the proinflammatory cytokines interleukin-12/23p40 by dendritic cells and macrophages. As a once-daily oral drug, said VBL co-founder and CEO Dror Harats, VB-201 has the potential to be both simpler and safer than Centocor Ortho Biotech Inc.s recently approved injectable psoriasis drug Stelara (ustekinumab), a fully human monoclonal antibody, which targets the p40 subunit of the cytokines IL-12 and IL-23. VBLs Lecinoxoids technology has sparked enormous interest with big pharma and big biotech, Harats told BioWorld. The moment they learn about our platform technology both in the anti-inflammation and the Lecinoxoid family, which is completely novel, it brings a lot of interest, he said by phone from Tel Aviv, Israel, the companys headquarters. Harats would not speculate about any potential partnerships, stating only that interest and talks are ongoing. He noted VBL has successfully completed four Phase I trials of VB-201 involving 120 patients with inflammatory diseases under a U.S. investigational new drug application, with results demonstrating that the compound was well tolerated, with a favorable safety profile. We knew that we had in our hands a very potent family of compounds, and we wanted to make it right, so we wanted to know the exact formulation, the dose that we needed to give, and how we need to give it, Harats explained. VBLs double-blind, randomized dose-ranging, placebo-controlled Phase II efficacy and safety study, which was initiated in January 2010, is evaluating VB-201 as a treatment of psoriasis, Harats said. The study will enroll about 180 patients with moderate to severe psoriasis. Patients in the trial, which is being conducted in the U.S., Germany and Israel, will receive VB-201 or placebo once-daily for 12 weeks. The primary endpoint is at least 75 percent improvement in the Psoriasis Area and Severity Index at week 12, or PASI 75. Based on the encouraging preclinical results, which showed that VB-201 had a robust antiatherosclerosis effect, VBL is conducting a subgroup study as part of its Phase II psoriasis trial to evaluate the effect of VB-201 on atherosclerosis, Harats said. Atherosclerotic cardiovascular disease has recently been recognized as a major cause of morbidity and death in psoriasis patients, he noted. Patients with these chronic inflammatory diseases, such as psoriasis, rheumatoid arthritis and other chronic inflammation, actually dont die

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from the disease itself, but they have a premature and more severe cardiovascular event, and that is because this inflammatory process is actually promoting inflammation in their arteries, Harats said. The atherosclerosis subgroup portion of the Phase II psoriasis trial will be conducted at in the U.S. at Mount Sinai Medical Center in New York and Massachusetts General Hospital in Boston, he said. Patients in the subgroup trial will undergo PET-CT scans of chest and neck vessels to measure the level of inflammation within atherosclerotic plaques, which is known to trigger vessel occlusion. In addition to eyeing the $3 billion biologics psoriasis market, VBL also is planning to test VB201 in rheumatoid arthritis, inflammatory bowel disease, multiple sclerosis and other inflammatory diseases, Harats said. The company also plans to launch a multicenter Phase II trial of VB-201 in rheumatoid arthritis, involving about 200 patients, Harats said. That

study, however, will be conducted in Europe and Israel, because it aims to study VB-201 first in patients who have not yet been exposed to other biologics to treat their rheumatoid arthritis. In the U.S., Harats noted, biologics are common therapies for the disease. VBLs pipeline also includes an antiangiogenic and vascular disruptive agent for cancer, VB-111, which was expected to enter Phase II trials in solid tumors in 2010, he said. Harats said his firm has sufficient funds to conduct its planned inflammatory disease and cancer Phase II studies, which he noted is uncommon for the current tough financial times. We have successfully raised a total of $76 million from venture financing and have an additional $8 million coming from [Israeli] government R&D grants, he said, noting the firms key investors KeffiGroup, Aurum Ventures and Pitango Venture Capital. We are absolutely well financed, Harats said.

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JdP, With neW ceo on boArd, goes for Pc, Allergy MArkets
JDP Therapeutics Inc., a start-up biotech that is focused on drugs for hospital use, has appointed a CEO as the company looks to begin formal clinical studies of a potential treatment for severe allergies from food or medications, for example. Founded in 2008, the Lansdale, Pa.-based company has used angel funds to take its programs through preclinical formulation and to do patent work, and is now entering the clinical phase. JDP hopes to start Phase I testing of its two compounds for allergies, JDP 205 and JDP AI in the in the first quarter of 2010, based on anticipated venture funds. Behind the allergy program, JDP has a preclinical drug candidate for high blood pressure that also utilizes a proven ingredient, which the company declined to disclose. The company hopes to de-risk its programs by reformulating undisclosed existing medication, newly appointed CEO Joshua M. Tarnoff told BioWorld. He said that the company is preparing for an eventual regulatory filing under FDAs 505(b) (2) approval pathway, which would allow the company to use much of the safety data from an existing parent compound. Under the 505(b) (2) route, Tarnoff estimated that the companys allergy relief product candidate could potentially get to market in roughly four years, if all goes well in the clinic. We recognize that investors want to get to market quickly, Tarnoff said. He described the allergy compound as a safer, newer generation injectable antihistamine for use in the hospital setting for acute care. JDP is prepared to take its allergy product through the approval process, but the company does not intend to do the marketing and commercialization. Instead, it hopes to attract a mid-size pharmaceutical partner with a hospital focus. He said the company has deliberately elected to stay out of the primary care market and instead focus on what it sees as the underserved hospital market. While the primary care market can often require 200-500 sales representatives in given target area, the allergy relief product that JDP is developing could be handled by less than 30 reps in a highly targeted marketplace, Tarnoff explained. So it would not be a big stretch to put in a sales force [of that size], he said. Jie Du , founder and chief scientific officer at JDP, said the unique formulation and special delivery of the antihistamine compound is designed to have a quicker onset without the common side effects associated with older antihistamines. JDPs injectable compound is targeted at the second-line treatment of severe allergies, such as swelling and itchiness. First-line treatment with epinephrine often is used to open the airways. Tarnoff has held corporate development and commercially based positions across a range of therapeutic areas in both the hospital and primary care settings. He served as CEO of Houston Pharma Inc. and its subsidiary Potomac Pharma

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Inc. and chief commercial officer at ViroPharma Inc. In addition, he led a $1.5 billion U.S. business unit at AstraZeneca plcs diversified products group. Raymond Tobey, vice president of medical affairs, completes staff of three at JDP.

Currently a medical consultant serving the pharmaceutical industry, Tobey started in the industry with Merck & Co., where he headed the Phase I-III clinical team for respiratory diseases. His most recent industry position was vice president of research and development at Dermik Labs.

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dAring tb different; eArly stAge AArden Working on PtP drugs


Given the success of tyrosine kinase inhibitors such as Gleevec (imatinib) and Tarceva (erlotinib), why arent there any drugs targeting the counterparts of those enzymes known as protein tyrosine phosphatases (PTPs)? Thats a question Francis Burrows, co-founder and chief scientific officer at 2008 start-up Aarden Pharmaceuticals Inc., asked. I thought it was odd that such a huge amount of effort had gone into those drugs while there didnt seem to be any against PTPs, he said. The answer was twofold. First, there seemed to be a common misconception that PTPs were the brake pedal to tyrosine kinases accelerator. While thats true in many cases, a better understanding has led to the discovery of more than 100 PTPs, with roles in cancer, autoimmune disease and tuberculosis, he said. But the bigger hurdle has been trying to develop drug-like molecules against PTP. One molecule, targeting PTP1B for Type II diabetes and obesity, demonstrated some promising efficacy in a mouse model. Big pharma got interested but they couldnt get those molecules to work in cells Burrows told BioWorld. The reason? With traditional drug discovery techniques you end up with a negatively charged molecule, which, while potent, could not cross the cell membrane. But just as Burrows was looking into PTPs, scientist Zhong-Yin Zhang at Indiana University, who had been working on PTPs for about 20 years, had a breakthrough. He created a technology that could produce a chemically modified PTP able to cross the cell membrane. We thought [that technology] was ideal for a start-up, and since then weve been working to move forward with our lead program in TB, Burrows said. A neglected disease might not seem like the obvious choice for an early stage firm. After all, the TB space is not that big only about $400 million per year. But its an area that has value in emerging markets, where big pharma is looking to see much of its future growth. Aarden also needed to choose a target that would provide the quickest way to demonstrate proof of concept, said Gary Noonan, the companys president and CEO. So, starting with TB can help demonstrate our platform and could be a way to create partnerships with big pharma or regional countries. It fits well with the companys name, which comes from a Dutch word that carries several meanings, all of which are encompassed in Aardens slogan: Connecting drug discovery to worldwide disease. The company has developed a proof-of-principle compound, which it will take into animal models. At the same time, its working on secondgeneration compounds, with the aim of moving into clinical trials in the next one or two years. To date, Indianapolis-based Aarden has relied on local financing, including a recent $500,000 grant from the Indiana Economic Development Corp.s 21st Century Research and Technology Fund.

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Its a challenging environment for start-ups, Noonan said. We have to come up with creative ways to finance. Hopefully, Aarden will be able to advance its technology using local support, getting us to the point where weve crossed that valley of death to get to institutional investors for a Series A round, he added.

That means the company plans to stay small. Cofounder and board member Chris LeMasters said Noonan and Burrows made up Aardens full-time staff, working Zhang at the university and with a handful of consultants. We may add employees as we advance, LeMasters said. But our goal is to stay as lean and virtual as we can.

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loW-Profile MArcAdiA Moving diAbetes cAndidAte forWArd


Marcadia Biotech Inc. has kept a low profile since its founding in 2006 but has stayed quite busy, raising funds, entering a peptides collaboration with Merck & Co. and now taking its unpartnered diabetes drug candidate, MAR701, into human clinical trials. Money from the 2008 Merck deal plus a $15 million Series A venture financing round in 2007 have helped to keep the company on firm financial footing. With its current funds, the Carmel, Indiana-based company hopes to independently take MAR701 through Phase II, or perhaps even further, CEO Fritz French, told BioWorld. Beyond Phase II, Marcadia likely would consider a partnership, merger or acquisition, French said, since diabetes and obesity drugs require such a great deal of capital to develop. He said the company could have data from its Phase I dose escalation safety trial in late 2010 or early 2011, the first of several planned Phase I studies. Marcadia believes it may be the first company worldwide to develop a peptide that is a dual agonist of two peptide hormones, glucagonlike peptide-1 (GLP-1) and gastric inhibitory peptide (GIP). The company plans to initially develop the compound as a treatment for Type II diabetes with once-weekly dosing. The Phase I trial will evaluate MAR701 in healthy volunteers at escalating dose levels. Newer oral drugs for diabetes, like Mercks dipeptidyl-peptidase-4 (DPP-4) inhibitor, work by slowing the breakdown of the two incretin hormones, GLP-1 and GIP, to help control blood glucose. Januvia was the first DPP-4 inhibitor to reach the market, gaining approval in 2006. Bristol-Myers Squibb Co.s Onglyza (saxagliptin) also has been FDA-approved. And Novartis AGs Galvus, also a DPP-4 inhibitor, is approved in Europe. Osaka, Japan-based Takeda Pharmaceutical Co. Ltd. is seeking FDA approval for alogliptin. Injectable GLP-1 agonists like Victoza and Byetta quickly breakdown GLP in the gut in response to food intake, French explained. He said that MAR701 has the potential for greater efficacy in glucose and weight loss and less toxicity. Under their 2008 collaboration, Merck and Marcadia agreed to jointly discover, develop and commercialize treatment targeting the glucagon and related receptors for the treatment of diabetes and obesity. Merck agreed to pay Marcadia an initial upfront fee as well as payments for exclusivity and ongoing collaborative research. Specific financial terms were not disclosed. Marcadia also will be eligible to receive future milestone and royalty payments associated with research, development and commercialization of certain drug candidates. Merck has obtained a worldwide exclusive license to certain Marcadia development candidates and intellectual property. Marcadia will also have the right to exercise options for profit and cost sharing and co-promotion in the United States. Additional terms of the agreement were not disclosed.

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131

viroxis gAining A foothold As it tries to bArk uP the right tree


ViroXis Inc., a San Antonio start-up company, apparently is barking up the right tree: it has has a lead drug candidate which already has completed Phase II testing based on the East Indian sandalwood tree. Founded in 2006, the company is developing botanically derived pharmaceuticals, most of them in a class known as terpenoids. Its lead drug candidate, the albuterpenoids, is is being developed as a topical agent for problematic human papilloma virus (HPV) infections of the skin, or common warts. ViroXis CEO and co-founder Ian Clements said the company already has three patents issued for the anti-viral properties of sandalwood oil on the skin, and others filed for a variety of medicinal properties, including anti-cancer activity. Indian sandalwood oil, a food additive recognized by the FDA, has a number of established uses, including as a perfume and a flavoring agent. The oil also has been used for medicinal purposes for thousands of years for a variety of skin disorders, as well as to treat diseases such as sexually transmitted diseases and bladder infections. Co-founder Paul Castella noted that most drugs available today are botanical in origin, such as the oncology drug Taxol (paclitaxel), which is derived from the yew tree, and aspirin, which originally came from the bark of willow trees. The founders hope that the newly established FDA botanical guidlelines, as well as the extensive prior human experience with sandalwood oil, help streamline the approval process for its drug candidates. ViroXis is the first company to be housed at the New Venture Incubator facility at the University of Texas at San Antonio (UTSA), and the location allows ViroXis access to a variety of funding options and other resources. For example, the San Antonio-based Targeted Technology Fund provided seed capital, and the company also has applied for additional funding through the Texas State Emerging Technology Fund as well as to the Cancer Prevention and Research Institute of Texas. The universitys new venture incubator will support companies that are commercializing its intellectual property or sponsoring research in the universitys labs that can lead to new IP for the university. The facility will fit into the broader technology commercialization environment of San Antonio as an early-phase source of new ventures, according to the university. DPT Laboratories, a global contract formulation and manufacturing company, also is located in San Antonio, and has a partnership with ViroXis to assist with the development of topical formulations of its product candidates. ViroXis lead drug candidate is focused on the prescription treatment of HPV infections of the skin in children. The company is planning to file an investigational new drug (IND) application in the next quarter to move into a late stage clinical study. The firm also has teamed up with the UTSA Professor Jim Chambers in the Department of Biology to look at the unique activities in the antiinfective and anti- inflammatory areas of its other terpenoid drug candidates. The companys portfolio of drug candidates is

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in various stages of development. Its anticancer work is preclinical while its lead candidate for HPV treatment has undergone a Phase IIb study under an investigator-sponsored IND application. Pending discussion with the FDA and IND approval, ViroXis hoped to move into Phase III in 2010. If it pursues an over-the-counter use for one of its candidates, the plan is to get it on the market in 12-18 months while the HPV candidate could potentially come to market in 2014, Castella said. If the HPV candidate advances to Phase III, ViroXis hopes to attract additional venture funding and possibly a partnership with a pharmaceutical company, Clements said. He said drug companies are becoming more interested in botanicals partly because they have the potential to get to market quicker than synthetic new chemical entities. Under the 2004 FDA guidelines for development of botanical drugs, complex, but well-defined plant extracts that have had prior human use can be taken into clinical trials and, if found to be safe and effective, may be marketed as mixtures, rather than going through the arduous process of identifying and purifying a single active drug ingredient. In issuing these guidelines, the FDA has recognized that the medicinal properties of such complex botanical mixtures may be due to the combined activity of more than one component in the mixture. Veregen ointment, a green tea extract concentrated for use on the skin, was the first botanical product approved under the FDAs botanical products guidelines. The drug, made by Germanys MediGene AG, is approved to treat genital warts, which are also caused by the HPV. It is available in the U.S. through MediGene partner Nycomed US Inc. LEO Pharma, of Ballerup, Denmark, is another

example of a drug company developing a botanically derived medical product for skin disorders. The company has a Phase III candidate, PEP005 gel (ingenol mebutate) for actinic (solar) keratosis or pre-cancerous lesions. LEO Pharma, which acquired Peplin Inc. in September 2009, expects to file for regulatory approval of the gel in the U.S. and Europe in 2011. Despite a number of over the counter remedies, there is no prescription treatment for skin warts approved in the US. Existing products work through destroying the wart rather than treating the viral infection that produces the wart. Other treatments for skin warts include freezing and surgical removal, but major problems include the associated pain and scarring and the high recurrence rate among treated patients. Although botanical-based products can take a streamlined regulatory path, they may have additional sourcing challenges compared to conventional, chemical-based drugs. Most sandalwood trees are harvested from native forests, rather than cultivated, which has led to issues of product traceability, quality and sustainability. To solve this problem, ViroXis has formed a strategic partnership with an Australian company, TFS Corp. Ltd., that can provide highly refined and well-characterized East Indian sandalwood oil that is in compliance with ISO specifications established for the oil in 2002. Sandalwood, which grows naturally in India, is not cultivated for use in drug products but TFS had the foresight 20 years ago to grow Indian sandalwood trees on ecologically sustainable plantations in Western Australia under optimum conditions to produce commercial grade oil suitable for use in a drug product, Castella said.

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133

inhibikAse tAking on bActeriA, viruses With single APProAch


The latter half of 2008 might not have been the ideal time to found a new biotech, acknowledged Milton Werner, CEO of Atlanta-based startup Inhibikase Therapeutics, which picked up its first $50,000 in seed money the same day Lehman Brothers filed for bankruptcy and sent other investment banks into a panic. We took a chance, Werner told BioWorld, relying on the companys host-factor targeted approach aimed at treating both bacterial and viral infections via a single mechanism to attract a little attention. If were right, itll be a really novel approach, he added. As a professor at the Rockefeller University in New York and at the National Institutes of Health before that Werner became interested in translational medicine and, in 2008, decided to break out on his own, looking for a technology or platform that was transformative. And he found it in the lab of Daniel Kalman at Emory University, with additional patents licensed from Duke University. The host-factor targeted line of attack differs from most existing antibacterial and antiviral treatments, such as Tamiflu (oseltamivir, Gilead Sciences Inc. and Roche AG), which uses a pathogen-specific approach. Instead of being directed to a particular pathogen, Inhibikases compounds go after the pathways that both bacteria and viruses use to reproduce, a mechanism that might prove immune to common resistance problems. We have knowledge of 22 different bacteria and pathogens, Werner said. From there, the firm began looking at existing drugs known to work via that underlying mechanism for repurposing. At the same time, its developing its own novel compounds, but the established safety and targets of repurposed drugs will get us to the clinic and to the endgame much more quickly. Inhibikase planned on filing its first investigational new drug applications in late 2010 or early 2011, initially targeting flu and polomavirus. Flu seemed a no-brainer given the 2009 H1N1 pandemic and the fact than any company working in that space got a nice boost on the headlines alone. But Werner said its the resistance to existing treatments, rather than the fear of pandemic that drove Inhibikases decision. And it doesnt hurt that flu also represents a large market, about 100 million people. Tamiflu sells for about $60 a dose, so if I can get 10 million people worth of market share, Ive built a really good company, he said. Inhibikase intends to get the flu program through clinical validation before finding a partner, or possibly even selling the entire unit to big pharma for a substantial royalty share, he said. For the polomavirus indication, the company will be looking at an orphan indication, specifically progressive multifocal leukoencephalopathy, an often-fatal brain infection caused by activation of the JC virus. Typically occurring in patients who are immune-suppressed, PML has caused headaches for companies with marketed immune suppression therapies such as multiple sclerosis drug Tysabri (natalizumab) from Cambridge, Mass.-based Biogen Idec Inc. and Dublin, Ireland-based Elan Corp. plc.

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Werner said Inhibikase has identified a drug with a precise mechanism of action to treat PML. If successful in the clinic, there are at least eight major pharma companies in the autoimmune space, he added. We think that will bring partners and cash, hopefully early on in development since funding for early studies is often hard to come by. Initial trials will test the compound in treating PML, but ideally, we see it as a prophylactic for people taking drugs for diseases such as MS or lupus, or for those who are immunocompromised due to HIV/AIDS. We dont think its feasible to do [prophylactic studies] initially, Werner said. Thats a next step. In the long term, Inhibikase could also look at other viruses, such as rotavirus and respiratory syncytial virus. The host-factor targeted approach also might prove useful particularly for people suffering multiple infections because of its potential to treat primary viral infection and secondary bacterial infection. We dont know if it works in humans yet,

Werner said. But if it does, it would have a huge impact on the developed and developing world. On top of that, there are possible applications in the biodefense area. Since inception, Inhibikase has raised $855,652 and expects to spend only have that money getting to the IND phase, in large part because the firm has no salaried employees, relying instead on people volunteering time and expertise. When capital becomes available, the company hopes to take those folks on full time. Thats a strategy thats not for everyones stomach, Werner conceded, though the firm so far has gotten an enormous amount of work done. Locating in the southeast also was a strategic move. While Hartsfield-Jackson international airport makes traveling easy, it was the proximity to the Centers for Disease Control and Prevention that convinced Werner to set up shop in Atlanta. The real gem here is the CDC, he said. Weve been able to talk to people in real time. Its an untapped resource for our industry.

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$39.6M series A inflAMes cAtAbAsis effort in diAbetes


Catabasis Pharmaceuticals Inc. pulled down $39.6 million in a Series A financing that puts the firm on its way to developing drugs that target inflammation in diabetes by working with salsalate a prodrug of salicylate as well as omega-3 fatty acids, as amplified through a platform called SMART-linker. Led by SV Life Sciences, Clarus Ventures, and MedImmune Ventures, the round also included Advanced Technology Ventures, and should take the company through Phase IIa trials with its lead program (still at the preclinical stage) or another three or four years, estimated CEO Jill C. Milne, who founded the company with Michael Jirousek, chief financial officer, in 2008. Both previously worked at Cambridge, Mass.based Sirtris Pharmaceuticals Inc., acquired the same year by GlaxoSmithKline plc, of London, for $720 million. Catabasis, also of Cambridge, takes its name from a word that means decline of disease. The firm planned to increase its number of fulltime employees to about 12 by the end 2010 and could double that number by the end of 2011. Milne said Catabasis has been staying below the radar while its technology develops, and Jirousek noted that the first patents on the firms intellectual property have just begun to appear. The SMART-linker acronym is based on Catabasis aim of making drugs that are safely metabolized and rightly targeted, Milne said. Its a chemical conjugation of omega-3 with salsalate to safely amplify the well-characterized properties of both, she added. Theres going to be more to come, she told BioWorld. We have the intention of publishing a scientific paper over the course of the next year. Jirousek said the approach, which deploys a natural bond that takes place in the human body, has shown pretty remarkable efficacy in six animal models. Catabasis planned to soon file an investigational new drug application, and enter Phase I trials by the end of 2011. Clinical studies of the non-steroidal antiinflammatory drug salsalate, sold generically for rheumatoid arthritis, have found that the compound could be useful in Type II diabetes, Catabasis first-sought indication. In a threemonth trial led by Joslin Diabetes Center researchers, those who took salsalate showed significantly improved blood glucose levels. Steven Shoelson, from Harvard Medical School and Joslin, led that trial, and also was one of Catabasis founders. Results from the study were published online in the Annals of Internal Medicine. Diabetes is a crowded space, in a sense, but this is a totally new approach, Milne said. Nothing on the market for diabetes now is directed at inflammation, and Catabasis candidate has the potential to be disease modifying and really get at the root cause of diabetes and insulin resistance, she said. This is an exciting time to be in diabetes research, as others are taking heed of the role of inflammation, too not only in that disease but in conditions that often go along with diabetes, such as heart trouble, especially given the role of omega-3s against atherosclerosis and lipid disorders. Catabasis will start partner shopping for the lead

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program sometime in Phase II, Milne said. We havent worked out the details of how best to do it. Jirousek told BioWorld that the platform is such that the firm could partner a lead asset that well

have in the clinic next year, or partner an earlier program [in a deal] that might look much more collaborative. The flexible conjugate approach offers chances for multiple new medications and a plethora of business development opportunities, he said.

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137

iMMunoMe hArnessing iMMune systeMs nAturAl curAtive Ability


When serial life science entrepreneur Tim Pelura was looking for his next biotech opportunity, he sought a company with a game-changing technology, but most importantly, one with a platform that could generate numerous capitalefficient assets. I wanted to make sure that going into this tough financing environment that there was a way that I could bring in money besides going to the financial markets, he told BioWorld. Pelura found what he was looking for in Wynnewood, Pa.-based Immunome Inc., which is pursuing the discovery and development of treatments for life-threatening infectious diseases using its native human monoclonal antibody (N-huMAB) platform. N-huMAbs, which are human antibodies that exist in the conformations created by the natural protective activity of the human immune system, may be the most effective and safest type of antibodies for therapeutics, Pelura said. Our philosophy is that if you want to cure a disease, you should start with the immune system of a person who has already done it, he said. Our approach is rather than trying to find an antibody in a mouse that might protect a human being, lets go to a human being who we know is protected and isolate their antibodies to be used for therapeutics for individuals who cant generate antibodies to protect them. While the traditional approach of developing antibodies from mice, yeast, bacteria and other nonhuman systems has been demonstrated to be useful, those humanized antibodies come with a certain level of risk relative to protecting humans, Pelura said, whereas N-huMABs are in the exact structures created by nature and possess the natural safety and protective power of the human immune system. Immunomes method, which optimizes a hybridoma method that exclusively produces affinity-matured IgG N-huMAbs, begins with small blood samples obtained from volunteer donors who are immune to pathogens of interest. Pelura noted that Immunome specifically targets samples from health care workers, such as physicians and nurses in intensive care units. They are working in this environment every day and through exposure, they are becoming immune, he said. B cells from those donors are converted to stable hybridoma cells that express full-length N-huMAbs that are specific for those pathogens. While there are about half dozen companies that have N-huMAB platforms, what differentiates Immunome from the other firms, and where we think we have a real edge is that the biotech does not bias the selection of antibodies that we get from human beings, Pelura said. Our technology gives us a very stable cell line, which ensures that we are not losing any important antibodies that human beings make in response to a disease, he explained. Any kind of technology platform, you want to make sure that it is stable so that you are not losing something valuable. In our screening, we have no bias. We see everything that the human being makes; all the antibodies

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made in response to a certain bug. By nature of their screening process, some of Immunomes competitors are only able to see a small window of what the human immunome actually makes, Pelura added. The combination of our exceptional stability of our cell lines and our lack of bias enables us to see the full repertoire of what a healthy human being makes in response to disease. I think that is the best position to be in if you really want to have the very best therapeutic. Immunome licensed worldwide rights to its technology from MIT and Thomas Jefferson University, where the companys founder, Scott Dessain, generated the intellectual property. Dessain formed Immunome in 2006, but Pelura noted that there wasnt much happening until [2009], when the company began its fundraising. Pelura came on board in September. Since then, weve been raising money and moving the strategy forward, he said. Immunome just completed a financing round, led by Pennsylvania greenhouse investment fund BioAdvance Inc., with additional investment from a group of angel investors. Although the firm has yet to disclose the amount of its recent financing, Pelura said that the new funds, along with the almost $1 million in seed money from private investors the company had in hand, would be enough for us to generate our first development candidate. Immunome anticipates raising a Series A by next spring, he added.

Private investor Michael Widlitz, a former specialty markets vice president of medical affairs for New York-based Pfizer Inc., said he was attracted to Immunome because of its unique platform. It is unique because it harnesses the power of the natural human immunological system, as well as the evolution of that system, he told BioWorld. And because it uses the natural human immune system, the opportunities for finding antibodies to treat diseases are endless, said Widlitz, who brought together a group of former Pfizer executives to explore this company as potential investors. Immunomes strategy is to out-license its antibodies at the preclinical stage, but hold on to the platform, Pelura said. The company, however, plans to take its primary candidate, which is targeting Clostridium difficile, into the clinic itself, he added. Immunome is a company that will have in a few years a deep clinical program in C. diff., and will have several licensing deals under our belt for preclinical candidates, Pelura said. By targeting acute diseases, in which patients are dosed once or in short duration, with endpoint outcomes that are known in weeks and not months or years, and a regulatory pathway that is known equates to a very capital-efficient strategy that enables us to do quite a lot on less money, he said. It is the way companies have to think nowadays, because there just is not the amount of money out there that one needs to do some of these chronic programs.

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139

retrovirox building AntivirAl cAndidAtes for others to groW


RetroVirox Inc. is seeking to raise funds to support the companys hepatitis C virus (HCV) and other antiviral programs, including one aimed at Dengue virus. But the San Diego-based firm, which began operating in May 2009, wants to advance its antiviral programs only so far, through the investigational new drug (IND) application process or Phase I. We dont plan to be a clinical stage company, Juan Lama, president, CEO and director of RetroVirox, told BioWorld. Instead, he said the company is focused on the early stages of discovery and preclinical development of lead compounds. RetroVirox could go in a few different directions based on that model. It could work to identify new compounds that could lead to first-in-class antivirals and out-license those compounds, approach potential partners to continue clinical development, or possibly put all of its assets up for sale, Lama indicated. The company is interested in partnerships, venture capital and also non-dilutive opportunities such as small business innovation research (SBIR) funding, he said. Founded by a group of scientists and entrepreneurs in the fields of virology and drug discovery, the companys expertise is in utilizing cell-based assays to discover new small-molecule compounds with antiviral activity. To do this, RetroVirox has developed proprietary assays to identify compounds that block viral entry by targeting host factors rather than viral proteins. RetroVirox employs four to six scientists with expertise in virology, assay development, highthroughout screening and medicinal chemistry. The company offers its services to other biotech companies, providing antiviral assays and screening of libraries for antiviral compounds. In that regard, RetroVirox would work similar to a contract research organization, providing assays in the virology area and identifying potential new compounds to offset its research and development expenses. Still, the companys major focus is on advancing its own discovery programs, explained Lama, who has governed the firm since its inception. The companys platform technology has achieved proof-of-concept in the area of HIV, and based on that technology, RetroVirox is developing proprietary assays to create a platform to discover drugs against other major human viruses, including HCV. The technology potentially could be used to inhibit viral entry for almost any virus containing a lipid membrane, Lama said. Ideally, RetroVirox would like to advance its HCV and HIV programs first, to an IND or Phase I. We are actually working in both [programs] at the same time, although given the burden of HCV infection we intend to put more effort in the HCV program, Lama said. In the U.S. alone, more than 3 million are infected with HCV. So far, RetroVirox has received a little over $1.1 million in financing, with much of that coming from three National Institutes of Health Small Business Innovation Research (SBIR) awards, and

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the remaining from early stage investors. The current SBIR Phase I funds would last for the next 18 months. A Phase II SBIR grant could cover another two to three-year period, Lama said. Under the grants awarded in the last 12 months RetroVirox received $872,000 to fund development of novel HIV entry drugs that could potentially overcome limitations of current therapies. The company received its last award in May to finance the discovery of anti-HIV drugs that block removal of the virus receptor, the CD4 protein. RetroVirox believes that the mode of action used in its antiviral programs has never been targeted before and holds some key advantages over other antivirals. The company takes aim at human

proteins that are needed by the virus to become infectious and enter other cells. While conventional viral entry inhibitors block binding between the viral envelope and receptor proteins, RetroViroxs approach targets intracellular intracellular proteins, which may not bind directly to viral factors. The company believes that those intracellular host factors could display higher barriers to the emergence of resistant virus, one of the major hurdles in antiviral therapy. Unlike other entry inhibitors such as the FDAapproved CCR5 blocker maraviroc (Pfizer Inc.s Selzentry), which act on one of the HIV receptors, RetroVirox molecules are efficient at blocking entry of all HIV strains, regardless of the coreceptor used by the virus, Lama said.

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141

strox in croWded rAce to develoP Antibody for S. AureuS


Strox Biopharmaceuticals is working to develop an antibody-based antibacterial aimed at Staphylococcus aureus infections that could overcome what it sees as a key hurdle facing similar pipeline vaccines and antibodies. The company believes it may have an edge by using antibodies that can effectively target the capsular polysaccharide antigens on the outer surface of S. aureus, without being neutralized by a key protein, Protein A. Protein A is a well-known research tool used to purify antibodies. But Strox Bio sees Protein A as a virulence mechanism that can bind to as well as neutralize antibodies. And I dont believe any other anti-Staph antibodies out there take that into consideration, CEO Stanley Kim told BioWorld. In some cases, companies that tried and failed with an antibody or vaccine aimed at S. aureus had products that were subject to the cloaking effect of jelly-like polysaccharides, according to Strox. The mucus-like layers of polysaccharides form a bacterial capsule. Those capsules are expressed on the outer surface of S. aureus and prevent the antibody from hitting target antigens located on the cell wall, under the capsule. As a result, the antibodies arent able to see their jelly-coated target, Kim reasoned. I think that could very well explain the failures, he said. The antibody couldnt really see that antigen very well because it was covered with jelly. Stroxs product, however, is designed to address both the problem of cloaking by polysaccharides capsules and neutralization by Protein A. Saurestat, a polyclonal antibody purified from human plasma, directly targets the outside surface of the bacteria (the polysaccharide capsule) and also avoids Protein A neutralization, according to Strox. The company already has obtained three U.S. patents that broadly cover its technology, and has two pending patent applications, one of which is specifically directed to Saurestat. Currently, no antibody-based products are approved for treating or preventing S. aureus infection. A number of published studies have shown that polyclonal immunoglobulin M (IgM) plays a critical role in controlling bacterial infections. Kenta Biotech Ltd. has presented positive Phase IIa results of its lead drug candidate, panobacumab (KBPA101), a fully human IgM monoclonal antibody, showing it is safe and well tolerated in patients with hospital-acquired pneumonia caused by Pseudomonas aeruginosa. Founded in 2008, Wellington, Fla.-based Strox is developing its polyclonal IgM antibody for hospitalacquired S. aureus infections, including those caused by methicillin-resistant S. aureus or MRSA. Antibiotics are the standard treatment for S. aureus infection. However, the bug is becoming increasingly resistant to conventional treatment with antibiotics. For example, MRSA has the ability to resist beta-lactam antibiotics such as penicillin and cephalosporins, and the MRSA infections rates continue on the rise. Due to methicillin-resistance, other antibiotics including vancomycin, daptomycin and linezolid have been developed. Those antibiotics are used as a last resort and all of them can have serious side effects and other limitations. As antibiotics are becoming

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less effective to address staph infection, Strox Bio believes new approaches are needed to prevent and treat such infections. The company intends to seek fast-track designation from the FDA for Saurestat based on the significant unmet medical need. According to Strox, the current worldwide cost of staph infections exceeds $50 billion. In 2008, U.S. sales of Cubicin, an injectable antibiotic used to treat MRSA, were $414.7 million. Zyvox (linezolid) for hospital-acquired S. aureus infection, had sales of $1.115 billion for 2008. Several companies are in the race to develop an antibody-based product or vaccine for S. aureus. And many of them are subject to either the cloaking or neutralization effect of Protein A, or both, according to Strox. Swiss drugmaker Novartis AG decided not pursue further development of Aurograb as potential add-on therapy to antibiotics for use treating staphylococcal infections, after Phase data showed a lack of efficacy. to a in II

aeruginosa. To enhance the efficacy, Nabi developed and added a new and patented surface polysaccharide component, 336. S. aureus Type 336, which accounts for the roughly 20 percent of S. aureus infections that do not form a polysaccharide capsule in the human bloodstream. The 336 conjugate was evaluated in a Phase I/II human trial and shown to be safe and generates antibodies in humans that are specific and mediate protection against 336 positive strains of S. aureus, according to Nabi. Biosynexus pagibaximab, a humanized IgG monoclonal antibody (mAb), was partnered with GlaxoSmithKline but was returned to Biosynexus. That antibody has completed IIa, showing promising results in preventing staphylococcal infections in very low birth weight infants. A large Phase IIb/III study has been initiated. A Phase II/III proof-of-concept trial of Intercell AGs investigational S. aureus vaccine (V710), licensed to Merck & Co. Inc., is currently recruiting, with the first critical interim analysis (surpassing futility) expected in 2011. Alopexx and partner Sanofi-Aventis are developing a Phase I mAb for S. aureus (F598). And preclinical studies of Elusyss ETI-211, which is partnered with Pfizer Inc., are nearing completion. So far, Strox has conducted very preliminary in vitro experiments and the next step will be to raise money or enter a partnership to accelerate development of its product, said Kim, an immunologist and a registered patent attorney. Once it has secured adequate financing, the company plans to hire additional management and scientific personnel. Although some research and development will be outsourced, Strox intends to move the bulk of its operations to its own dedicated laboratory. Ideally, Strox would like to begin clinical trials for Saurestat in 2010-1 1 and complete the studies in 2012-13.

Inhibitex Inc.s Veronate polyclonal antibody (IgG) failed in Phase III trials. However, Inhibitexs Aurexis humanized monoclonal IgG has completed a Phase IIa study in 60 patients with complicated S. aureus bacteremia. Nabi Biopharmaceuticals Staphvax vaccine failed to meet its endpoint in its last Phase III trial, although its reformulated vaccine called PentaStaph (Staphylococcal polysaccharide conjugate and toxoid vaccine) was purchased by GlaxoSmithKline Biologicals SA and is in Phase I. Nabis previous investigational polysaccharide conjugate vaccine, StaphVAX, contained the two main capsular types, 5 and 8, found in the outer coating of more than 80 percent of S. aureus bacteria. The capsular polysaccharide molecules are linked, or conjugated, to a nontoxic, carrier protein derived from the bacteria Pseudomonas

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143

Western stAtes goes eAst to AdvAnce iMMune ModulAtors


Just as its name implies, Western States Biopharmaceuticals Inc. was formed in early 2009 with discovery and development work centered in Colorado and Southern California. But the firm recently turned its eyes east Far East, that is as it sought funding to advance its compounds aimed at modulating the adaptive immune system. WSBI had managed to secure some seed capital and grant money early on, said Michael J. Reilly, co-founder, president and CEO. But, as a company born in the midst of a recession, with VCs focusing on their own portfolios, the Aurora, Colo.-based firm found itself looking elsewhere for much-needed capital. People told us all the money was in China and that we should look there, Reilly told BioWorld. So we did, and that led us down an interesting path. The firm has been building a presence in China. Co-founder and chief scientific officer Carl Edwards moved to a Beijing lab, which is staffed with about 12 people, and now WSBI is in further collaboration discussions with institutions in and around Beijing, Reilly said. WSBI went to China for the equity source also attracted to the countrys well-known reputation for lower drug development costs but were finding that the level of talent there is amazing, he said. Theres a lot to be leveraged in China. Between six regular employees and a number of contractors, WSBI has more than 20 people spread among its three facilities all working on the T-cell cytokine inducing surface molecule (TCISM) technology licensed from the University of Colorado, where co-founder Edwards has served as an associate professor in the dermatology department. Edwards and Reilly previously worked together on Amgen Inc.s anti-TNF-alpha franchise prior to the 2002 Immunex Corp. acquisition that brought blockbuster Enbrel (etanercept). After Amgen, Edwards returned to academia at the university, where he discovered a new way of treating autoimmune diseases and, perhaps also, inflammatory diseases, Reilly said. One of the problems with a number of programs is that they block individual cytokines, such as TNF-alpha, he said. While drugs such as Enbrel, Remicade (infliximab, Centocor Inc.) and Humira (adalimumab, Abbott) are efficacious, they also produce several negative effects such as high infection risk due to immune suppression. It was thought a cocktail approach might be better, blocking two cytokines at once, Reilly added, and in those cases, the efficacy creeped up, but so did the safety signals. And as long as we keep using those downstream cytokines, were going to see those safety signals. WSBIs TCISM approach aims to mobilize the adaptive part of the immune system, specifically autoreactive T cells, to attack the disease, while leaving the innate immune system to continue fighting off pathogens. Blocking those T cells upstream results in the blocking of downstream cytokines, so compounds can target all usual suspects TNF-alpha, IL-1 and IFN-gamma but only those produced by the autoreactive T cells, Reilly said. The companys lead candidates currently consist of murine antibodies, including WSBI-711, which

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is heading into midstage preclinical testing. Reilly estimated the firm is 18 months to two years away from the clinic. But WSBIs relationship with the University of Colorado gives it access to clinical tissues for diseases such as psoriasis and rheumatoid arthritis, which he said is important given the spotty history of animal model data in autoimmune diseases. Its a tough space also a crowded one, especially in RA so you need very definitive early studies in order to convince yourself you have something special, Reilly said.

So far, early data have been promising. WSBI has tested its compounds against other therapies, even going so far as to dump in additional bacteria to make sure the innate immune system wasnt impaired by the therapy. Its drug was able to allow the body to respond to the bacteria while still addressing the disease, he said. Testing to date has focused on psoriasis and RA in predictive models, but Reilly said the company could look at other diseases, as well. After all, he noted, theres no lack of targets in autoimmune disease.

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145

exceliMMune AiMs PolyclonAl Antibodies At bActeriAl diseAse


After operating quietly since its formation four years ago, Excelimmune Inc. emerged earlier this month with some promising preclinical data at the Interscience Conference on Antimicrobial Agents and Chemotherapy meeting in Boston highlighting the advantages of its early stage polyclonal antibody approach to bacterial infections. Studies using a mouse model of Staphylococcus aureus infection aimed at comparing a polyclonal cocktail of five antibodies to untreated controls showed 100 percent survival in treated animals, CEO Quinton Zondervan told BioWorld, adding that those results were seen even at S. aureus doses that were 100 percent lethal in the control group. Excelimmune anticipates advancing a preclinical candidate soon, he said. The Woburn, Mass.-based company was founded in 2006 by Vincent Coljee and Zondervan, who met at college about 20 years ago when Coljee was studying chemistry and Zondervan was working in computer science. Our careers diverged for about 15 years, Zondervan said, as he went on to work as a software engineer for firms such as Clickmarks and IBM, while Coljee moved into the biotech space, joining then-start-up Symphogen A/S in 2000 and developing its mammalian expression platform. During his time at the Danish firm, Coljee also helped create human polyclonal antibodies against tetanus, influenza and vaccinia. After leaving Symphogen a few years later Coljee was still full of ideas, Zondervan said. And I had reached the point in my career where I wanted to do something different. So the two teamed up to start Excelimmune, closing an undisclosed Series A round with sole investor Greenheart LLC in May 2007, and moving forward with a platform to develop fully human recombinant polyclonal antibodies. The idea of using antibodies to treat bacterial infections is hardly a new one and firms such as Progenics Pharmaceuticals Inc., which also presented strong preclinical data at ICAAC, have demonstrated the effectiveness of the monoclonal antibody approach. But monoclonal antibodies face the same resistance hurdles as traditional antibiotics, Zondervan said, because they are only attacking one target. Polyclonal antibodies can attack bacteria via multiple targets at once, he said. And Excelimmunes antibodies are cloned from naturally occurring human antibodies, so the approach is really more akin to the bodys own immune system. Another plus: since polyclonal treatment consists of multiple antibodies against the same pathogen, each individual antibody can be delivered at lower concentrations, reducing the chance of immunogenicity compared to monoclonal antibodies. It helps if you can present the immune system with diversity, Zondervan said, adding that earlier work confirmed lower immunogenicity with its polyclonal cocktail. Other firms also are working on the polyclonal approach for infectious diseases, including Symphogen, as well as recent start-up Strox

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Biopharmaceuticals, which is working on a polyclonal IgM antibody for hospital-acquired S. aureus infections. Excelimmune has opted to go after staph, included the dreaded methicillin-resistant S. aureus, as its initial indication, though the firm also has received a Small Business Innovation Research grant from the National Institutes of Health to develop therapies against Clostridium difficile infection.

The company, staffed by 17 people, hasnt disclosed its total funding to date, though, according to an SEC filing, it recently raised about $4.5 million in new financing. Going forward, Zondervan said Excelimmune will focus on developing its own pipeline while expanding the applications of its polyclonal antibody platform through collaborations.

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147

forMer AMgen execs fusing Antibodies, ifn At iMMungene


ImmunGene Inc. is looking to drop the bomb on cancer; a smart, targeted cytokine bomb, that is. Thats how President and CEO Sanjay Khare described the technology. Khare, formerly scientific director at biotech stalwart Amgen Inc., founded Thousand Oaks, Calif.-based ImmunGene in 2007 based on the idea of harnessing the power of the bodys own immune system. We could simply take advantage of what we already know about the activity of chemokines and cytokines, he told BioWorld. The firms approach involves fusing a monoclonal antibody with a cytokine, initially interferon, for local delivery to the tumor. Called a CmAb, the molecule can be aimed directly where we want it to go, Khare said. Its similar to antibody-drug conjugate technology, which links an antibody to a cytotoxic agent. But the addition of the cytokine means that ours can do more [than ADCs] since cytokines are associated with several functions, he said. CmAbs also are genetically engineered molecules, which could make them simpler and cheaper to produce. Theres no multistep manufacturing process, Khare added. Another benefit is that the cytokine can be dosed at a very low level and still be efficacious. ImmunGenes researchers, for example, have been able to limit interferon exposure to one-one hundredth of the usual dose. By fusing it with an antibody that binds only to tumor cells, that interferon dose is sufficient to initiate cell death. ImmunGenes lead cmAb candidate, IGN002, is a third-generation antibody-fusion drug designed to target CD20-postitive tumors, initially going after non-Hodgkins lymphoma not treatable by Rituxan (rituximab, Genentech Inc./Roche AG and Biogen Idec Inc.) The companys hardly alone in that space. A number of biotechs are working on nextgeneration drugs, but I suspect those nextgeneration Rituxan compounds wont solve the problem of Rituxan resistance because theyre using the same mechanism, Khare said. Ours is a different mechanism. Toxicology studies are ongoing in nonhuman primates, but the firm has wrapped up remaining preclinical testing and has determined that IGN002 can be manufactured, which Khare called two major hurdles. ImmunGene is looking to be in the clinic sometime in 2011, hopefully with a partner. Were already working with one, he said, though it was too early to disclose a name. But, he added, things are looking good. The companys second program is IGN001 , a next-generation HER2-IFN antibody fusion drug that has shown promising efficacy over the naked antibody in in vivo testing. A third program is targeting multiple myeloma, and Khare said ImmunGene is interested in in-licensing additional compounds. Ideally, the firm would like to partner at least the first two programs, picking up some big pharma muscle as well as some nondilutive funding that can feed other programs, he said.

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To date, ImmunGenes funding has come from its founders and angel investors. If it succeeds in closing a promising partnership, the firm might be able to hold off going to venture capitalists for a couple more years, giving it time to further advance its programs. Khare said the company also plans to license its technology similar to licensing deals done by ADC firms such as Seattle Genetics Inc. which could bring in further milestones and royalties. Were hoping to close the first one [of those] by

the end of [2010], he said. ImmunGene currently has two full-time employees, including another Amgen alumnus, Raj Sachdev, who serves as chief operating officer. The rest of the firms work is rounded out by contractors and consultants, among those Mike Gresser, chief scientific consultant, and Linda Pullan, consultant chief business officer, both of whom also previously held positions at Amgen.

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149

MAbvAx Pursues tWo-Pronged APProAch to iMMunotherAPies


As its name implies, MabVax Therapeutics Inc. is simultaneously pursuing development of monoclonal antibodies and polyvalent vaccines, both targeting various forms of cancer. Although the San Diego-based company was founded in 2006 after licensing technology from Memorial Sloan-Kettering Cancer Center (MSKCC), things really began moving in June 2008 with the help of a $2 million tranche from a Series A financing, said CEO David Hansen. While MabVaxs initial venture capital partner experienced a setback, leaving it unable to deliver on the balance of the intended $8 million Series A financing something certainly other biotechs can sympathize with these days the tenacious small immunotherapeutics company nonetheless was able to raise a second Series A round of $4 million, which it closed in August 2009, Hansen told BioWorld. MabVax also has received government grants of more than $1.6 million, said Hansen, a former executive at Avanir Pharmaceuticals Inc. and Xenerex Biosciences. In December 2008, the firm won $400,000 from the National Cancer Institute under the Small Business Technology Transfer (STTR) program to support a pilot trial of a tetravalent conjugate vaccine against small-cell lung cancer and to generate human monoclonal antibodies from immunized patients. MabVax in August also scored a two-year, $1.1 million STTR follow-on Phase II grant from the NCI to support continued development of the companys project focused on the characterization of human antibodies to sialyl-Lewis A, a carbohydrate antigen widely expressed on tumors of the gastrointestinal tract, such as colon and pancreatic cancers, and also breast cancer cells. Human antibodies discovered during the initial phase of MabVaxs project were selected for high affinity and specificity for binding to the target antigen on cancer cells, with two antibody candidates demonstrating excellent activity in assays measuring in vitro tumor cell killing, according to the firm. The goal of the second phase of MabVaxs project is to scale up antibody production for further characterization and in vivo testing in relevant cancer models. The project is designed to select a lead candidate and to move it toward meeting the FDAs requirements for production of clinical material for human safety testing. Also in August, MabVax received $150,000 in initial Small Business Innovation Research (SBIR) funding from the NCI under the agencys streamlined noncompeting award procedures, with the potential to receive up to $1.5 million more in follow-on funding under the agencys fast-track procedures, following the NCIs normal reporting and review procedures. The initial $150,000 SBIR grant is devoted to supporting the manufacture and testing of MabVaxs trivalent sarcoma vaccine in a randomized, multicenter, double-blind Phase II trial, which seeks to enroll 134 patients with metastatic sarcoma. The vaccine is being developed to specifically target and kill residual circulating cancer cells and micrometastases, which are thought to cause recurrent cancer.

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This is an effort to vaccinate patients against essentially three carbohydrate antigens that are overexpressed on most sarcoma tumor cells, Hansen explained, noting that the vaccine is given in the adjuvant setting. The patient is treated with the best available therapy today and rendered NED no evidence of disease, he said. About 50 percent of patients will recur, and the more times they recur, the poorer their prognoses, Hansen said. So the objective is to vaccinate the patients in the NED setting and try to raise the bodys immune system in an attempt to eliminate residual tumor cells and micrometastases, he said. MabVax has licensed a variety of vaccines from MSKCC, of which its sarcoma vaccine is the most advanced, Hansen said. The company is hoping to follow along in 2011 with a Phase II program in SCLC in the adjuvant setting, he added. Although MabVax has licensed a vaccine for ovarian cancer from MSKCC, a Phase II trial in that disease is being funded by the NCI and managed by the Gynecologic Oncology Group, Hansen noted. If after that Phase II trial any evidence is accumulated that suggests the ovarian cancer vaccine is worth continued development, then that program will be rolled over to MabVax and it is our responsibility, he said. Under the partnership, MSKCC is responsible for the early development work, including the Phase I trials for the monovalent and polyvalent vaccines. At the end of that stage, we sit down and determine if it is worthwhile to continue developing, and if it is, then that program is shifted over to MabVax, and it is our responsibility to bring it forward to the patient, Hansen explained.

That early work at Sloan-Kettering is overseen by Philip Livingston, head of the tumor vaccinology laboratory at MSKCC and MabVaxs chief science officer, and Govind Ragupathi, an associate attending immunologist at MSKCC and MabVaxs vice president of vaccine technology. MabVaxs immunotherapy approach is very different from that used by Dendreon Corp. for its prostate cancer product Provenge (sipuleucel-T), Hansen noted. We are essentially activating the antibody side of the system, and Provenge is activating the cell side, he said. But he emphasized that no one can claim one is better than the other. We just dont know enough at this point in time, Hansen said. If enough high-quality antibodies can be generated in response to a cancer vaccine, then they can be beneficial and eradicate cancer, noted Wolfgang Scholz, vice president of antibody discovery at MabVax. The company is taking two approaches in its development programs, with the first being the antibody response to the vaccine in the trial so we get direct evidence, he explained. But we also actually are generating human monoclonal antibodies from patients that have responded in those vaccine trials and have responded with very good antibodies, and we are rescuing them, and then regenerating them in our laboratories to use down the road in a therapeutic, Scholz said. We are attempting to find the best antibody against a certain target and then essentially explore that antibody and bring it forward into the development process, Hansen said.

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MAxygen technology breeds vAccine efforts At AltrAvAx


AltraVax Inc. celebrated the one-year anniversary of its founding in December 2010, but the firm is hardly the typical early stage start-up. Its aim to develop next-generation vaccines is backed by MolecularBreeding, the DNA shuffling technology developed more than a decade ago at Maxygen Inc. for use in protein therapeutics and vaccines programs. But Maxygens efforts in vaccines had not really evolved into a specific product pipeline, and co-founder Robert Whalen, formerly the director of infectious diseases at Maxygen, saw untapped potential in that space. He recognized that Maxygens technology would make a great standalone vaccines company, said CEO Leonard P. Ruiz, who joined Whalen and cofounder Michael Chambers in 2009 to establish AltraVax and license rights to the MolecularBreeding platform for vaccines. Though not quite a traditional spinout, AltraVax did take with it Maxygens small vaccine team and the Fargo, N.D.-based firm retains a lab near Maxygens Sunnyvale, Calif. facility. AltraVax also acquired Maxygens existing grants related to the vaccine work. All of that allowed us to start with a solid portfolio, Ruiz told BioWorld. In its first year, the firm has added about $2 million more in funding, including two Small Business Innovations Research grants totaling $1.2 million in October, as well as about $200,000 under the Qualifying Therapeutic Discovery Project program. AltraVax will seek additional funding and employees when it gets into clinical testing, hopefully in 2011. The companys use of the MolecularBreeding technology is targeted to creating improved vaccine candidates. Ruiz described the platform as a method of shuffling genetic components in a very structured way, to take genes and produce better antigens for higher immune response. AltraVaxs lead product, initially developed at Maxygen, is in early testing as a therapeutic vaccine for chronic hepatitis B, a condition affecting about 1.4 million people in the U.S. The cost to the health care system for those patients exceeds $1 billion, so we see a significant opportunity, Ruiz said. So far, results from animal studies have been strong. The company hopes to finish up preclinical testing and were looking at Phase I [in 2011], he added. Other pipeline programs include an improved influenza vaccine and a vaccine to prevent HIV, and the company could choose to pursue a number of other indications. The Maxygen technology is a very useful tool in the whole vaccine process, Ruiz said. It really opens the door to any infectious disease we want to target. As a small company, theres no way AltraVax can take on all those opportunities alone, so partnering likely will be a big part of its strategy. And, since vaccine trials usually generate information well beyond safety in Phase I antibody and T-cell responses, for starters those potential partnering deals could come fairly early in the development process. Wed definitely like to partner as we move forward, Ruiz said. But we also may be able to generate some Phase I and Phase II data and then raise capital for our own Phase III trials. Were keeping both of those options open.

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chapter 9:

Inflammatory Diseases

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155

look out, roche! fAst-folloWer feMtA is chAsing ActeMrAs tAil


Barely a week after Genentech Inc./Roche AG received FDA approval for Actemra (tocilizumab), the first interleukin-6 (IL-6) targeted monoclonal antibody for rheumatoid arthritis, the competition started closing in. Of course, closing in is relative in the biotech world. Actemra should have a few good years before its closest competitor, Alder Biopharmaceuticals Inc.s anti-IL-6 antibody ALD518, reaches the market. But start-up Femta Pharmaceuticals Inc., aiming to begin clinical trials in 2010 with its own anti-IL-6 antibody, believes theres plenty of value to be had for companies that are second, third or even fourth to market if the target is strong enough and the market is big enough. Femta was cofounded in early 2008 by Latterell Venture Partners and Jay Short, whos perhaps best known as the founder and former CEO of bio-prospecting firm Diversa Corp. (now Verenium Corp.). Short later founded BioAtla LLC, which boasts a platform technology for rapid humanization of antibodies with improved affinity, specificity, stability and other characteristics. Yet BioAtla is a service provider, not a drug developer. So Femta was founded to leverage BioAtlas technology by discovering and advancing best-in-class humanized antibodies with femtomolar affinity against five specific targets. The first target on the list was IL-6, a major pro-inflammatory cytokine that plays a role in rheumatoid arthritis, Crohns disease, lupus, Castlemans disease, myeloma and various other conditions. Although Actemra is now FDA-approved for rheumatoid arthritis and anti-IL-6 competition from Alder and others is in the clinic, Femta believes its lead candidate, FM101, may offer advantages such as less frequent dosing and subcutaneous rather than intravenous administration. Peter Emtage, Femtas chief scientific officer, also noted that Femta can modulate the target a little longer, and a little better, with less drug, which could potentially lead to safety and/or efficacy benefits. But while Femta is hoping FM101 will be a bio-better rather than a me-too drug, Emtage noted there is room in the market for several rheumatoid arthritis drugs with the same mechanism of action. That fact has been proven by the blockbuster success of anti-tumor necrosis factor-alpha antibodies like Enbrel (etanercept, Amgen Inc. and Wyeth Pharmaceuticals Inc.), Remicade (infliximab, Centocor Inc.) and Humira (adalimumab, Abbott). And the anti-TNF-alpha drugs dont work in 40 percent to 50 percent of RA patients, Emtage noted. Femta planned to start a Phase I trial of FM101 in treatment-resistant RA patients in 2010. Beyond FM101 and the anti-IL-6 program, Femta is in preclinical with FM-202, which targets IL-12 and IL-23, and FM-302, which targets a unique subunit of IL-23. FM-202 would be a fast-follower to Johnson & Johnsons psoriasis drug Stelara (ustekinumab), but it binds a different epitope and thus should avoid patent problems, Emtage said. The drug may also be applicable in rheumatoid arthritis, multiple sclerosis, inflammatory bowel disease, and other

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conditions. FM-302 is initially positioned for inflammatory bowel disease. The two remaining targets for which Femta has exclusive rights to BioAltas technology have not been disclosed. Stephen Keane, Femta president and chief operating officer, said each target is validated and was selected after a rigorous analysis of its scientific merit, market potential, competitive landscape and intellectual property. San Diego-based Femta has $4 million in Series A funding from Latterell Venture Partners and $3.5 million in committed services from BioAtla. That funding will carry the start-up through the end of 2010. Keane noted that Femta is truly virtual he and Emtage are the only employees, while Lonza Group Ltd. handles manufacturing services.

We dont cut any corners; we just contract everything out, Keane explained. Femta is currently seeking $5 million to $10 million in Series B funding. Latterell has already committed to the round, and Keane hopes to have a few new investors on board within six months. And in the interim, Femta is in active discussions with potential partners, Keane said. Just a few months ago, Alders ALD518, in Phase II, snared a $1 billion deal with Bristol-Myers Squibb Co., which indicates the appetite for fast-follower biologics. These are known, validated targets. If youre second or third or even fourth to market, theres a huge opportunity, Keane said. If youre a large pharma or biotech that doesnt have monoclonal antibody strengths, this will fill your pipeline.

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157

With fibrosis MAking heAdlines, ProMedior closes $12M series c


Promedior Inc. announced in March 2010 that its immune-targeted approach to treating fibrotic disease attracted $12 million in Series C financing. Fibrotic diseases, particularly idiopathic pulmonary fibrosis, made headlines in March 2010 thanks to the FDA advisory committee panel on InterMune Inc.s Esbriet (pirfenidone). The drug met its primary endpoint of improving lung function in only one of two Phase III IPF trials and demonstrated a questionable impact on survival, but the committee voted 9 to 3 in favor of approval anyway, largely because of the need to provide patients facing an IPF death sentence with a smidgen of hope. There are no drugs approved for IPF, in which progressive scarring of the lungs causes suffocation, generally within three to five years. The week before the Esbriet panel, Actelion Ltd.s Tracleer (bosentan) an endothelin receptor antagonist approved for pulmonary arterial hypertension failed a Phase III IPF trial. And that failure may not bode well for Actelions macitentan, another endothelin receptor antagonist in Phase II for IPF, or for Gilead Sciences Inc.s ambrisentan, an endothelin receptor antagonist in Phase III. Dominick Colangelo, president and CEO of Promedior, noted that many IPF programs to date have been too narrow, focusing on a single cytokine or pathway, and the natural redundancy built into most biological systems allows the disease to find a work-around. Other approaches are broadly immunosuppressive and result in dose-limiting toxicities. Promediors proposed alternative hinges on serum amyloid P (SAP), an endogenous protein that binds to both damaged tissues and monocytes. Colangelo explained that monocytes are naturally attracted to damaged tissue, and they can cause fibrosis by differentiating into pro-fibrotic macrophages. SAP, however, causes the monocytes to differentiate into macrophages that help resolve fibrosis rather than contributing to it. PRM-151, Promediors recombinant form of human SAP, has demonstrated preclinical efficacy in models of IPF, as well as ophthalmic, kidney, heart, and liver fibrotic and inflammatory diseases. A Phase I single-ascending-dose trial recently was completed and, while data have yet to be released, Colangelo said he would deem it as successful. The next step will be Phase Ib and/or Phase II studies in ophthalmic, lung and liver fibrotic diseases. Promedior is still prioritizing the indications, but Colangelo said trials would begin in 2010. The Series C funding is expected to last through 2011 and support the completion of multiple trials. Colangelo emphasized that because the biology of fibrosis is the same in all tissues, Promedior believes it has a very broad and powerful platform in hand. Pulmonary indications beyond IPF include scleroderma lung disease, moderate-to-severe asthma and chronic obstructive pulmonary disease. Renal indications could include transplant and diabetic nephropathy, lupus nephritis and focal segmental glomerulosclerosis, while ophthalmic uses could include surgical fibrosis, dry eye, agerelated macular degeneration, diabetic retinopathy and glaucoma. Its almost like an oncology compound, Colangelo said, referring to how cancer drugs are

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often applicable in multiple tumor types. Promedior is actively discussing its platform and lead compound with prospective partners, but for now, the Malvern, Pa.-based biotech is well-funded. Forbion Capital Partners led the $12 million

Series C round, with participation from existing investors Morgenthaler Ventures, HealthCare Ventures, Polaris Venture Partners, and Easton Capital. Promedior, founded in 2006 as a spinout from Trellis Bioscience Inc., previously raised $14 million in Series A funding and $15 million in Series B funding.

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159

sWedens biochroMix PhArMA tAckles Ads AMyloid cAscAde


BioChromix Pharma AB, a Stockholm-based firm that is developing therapeutics for Alzheimers disease (AD), has discovered what it believes is a new chemical class of compounds designed to effectively cross the blood-brain barrier (BBB) and that appear active throughout a large window of the disease pathology. Jointly founded in 2009 by Karolinska Development AB and the diagnostics firm BioChromix AB, BioChromix Pharma is targeting beta amyloid aggregates, toxins in the brain that are believed to play a key role in how Alzheimers disease develops. BioChromix Pharma has not disclosed very many details about its early stage research with respect to its discovery of a new mechanism of action aimed at Alzheimers. That mechanism of action has been preliminarily established, with further investigations ongoing. What is known at this point is that the compounds have shown a significant reduction in toxic soluble aggregates and plaques in the brain, as demonstrated in an in vivo model. In addition, the mechanism has been demonstrated as a method for in vivo imaging of the soluble aggregates of beta amyloid in mice with Alzheimers disease. Early experiments indicated that the compounds may have the ability to work all the way through the beta amyloid aggregation cascade, from the smallest oligomer to larger aggregates and plaques, BioChromix Pharmas CEO Peter Asberg explained. Other drugs that have been tried and failed in the area of Alzheimers may have been too narrow in their target or didnt effectively penetrate the BBB, Asberg told BioWorld, when asked about the challenges faced by some later-stage AD drugs. Typically, antibodies, protein therapeutics and other large molecules do not easily cross the BBB due to their size, and some small-molecule drugs do not cross the BBB at all. It is unclear whether BioChromixs compounds are purely small molecules or some modified form of a biologic; the company has been mum on that question. But its lead compounds are designed to penetrate the BBB very effectively and quickly reach effective concentrations in the brain. The companys development program, which receives funding from Karolinska Development, is slated to continue through proof of concept (Phase IIa trials) for the treatment of Alzheimers and for other proteopathic diseases like Parkinsons disease, for example, in which proteins can become toxic and lose normal function. If all goes well in Phase II, BioChromix Pharma would seek to partner or license the program, Asberg said. Even amid some lackluster results in the Alzheimers area Medivation Inc.s Dimebon, Myriad Genetics Flurizan, Elan Corp. plcs bapineuzumab and Alzhemed by Neurochem Inc. (renamed Bellus Health) big pharma has not shied away from the amyloid blocking approach, such as Johnson & Johnsons bet on Elan Corp.s bapineuzumab, despite negative Phase II results in 2008. Currently, BioChromix is finalizing its preclinical phase and selecting compounds for lead optimization. We have a few more studies before

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initiating the regulatory package and filing an investigational new drug application, he said. No drugs have been approved to actually stop or delay the onset of Alzheimers disease. But numerous companies are working to develop therapies to fight the underlying disease. And many of those development programs are hinging on the theory that beta amyloid is at the center of the pathogenesis of Alzheimers. Although the theory has its skeptics, it is generally accepted that toxic beta amyloid affects the ability of neurons in the brain to function properly, leading to cognitive and other disruptions typically associated with Alzheimers disease. Bolstering that theory, the Alzheimers Disease Neuroimaging Initiative presented research in April 2009 at the American Academy of Neurology meeting showing a strong correlation between beta amyloid levels and cognitive decline. Another prime suspect believed to be responsible for the death and damage to nerve cells is the formation of neurofibrillary tangles in the brain. Companies are using various strategies to reduce the production and aggregation of beta amyloid, or to increase its clearance in order to alleviate its deleterious effects on the brain. Another widely held view in the scientific community is that a unit of proteins known as oligomers are responsible for blocking memory loss in the early stages of the disease. Currently available cognitive-enhancing drugs Eisai Co. and Pfizer Inc.s market leader Aricept and two other drugs in the same class, Novartis AGs Exelon and J&Js Razadyne work to ease the symptoms of Alzheimers disease. But those drugs, known as cholinesterase inhibitors, stop

working after several months and have some unpleasant side effects, such as nausea, vomiting and diarrhea. Another approved therapy in Alzheimers disease, memantine, sold as Namenda by Forest Pharmaceuticals Inc., is intended for more severe Alzheimers and also is aimed at improving symptoms. But a new crop of products in the pipeline including Elans amyloid-targeted bapineuzumab, a monoclonal antibody are being developed to slow the disease. Last year, Janssen Alzheimer Immunotherapy, a J&J affiliate, acquired substantially all of Elans assets related to the Alzheimers immunotherapy program, which Elan had shared with Wyeth. The Alzheimers immunotherapy program is continuing with Pfizer Inc., which acquired Wyeth in 2009. Although a great deal of industry and academic research has focused on beta amyloid as key to fighting Alzheimers, there are several other targets that are seen as holding promise in treating the disease. The Tau protein, in the form of neurofibrillary tangles, is considered to be a major hallmark of Alzheimers. Other potential drug targets for Alzheimers disease include heat shock protein-90, a tau-related target. Yet another target is ApoE, shorthand for apolipoprotein E, a major risk factor gene for Alzheimers. In addition, companies like EPIX Pharmaceuticals Inc. and Sanofi Aventis SA are focused on the alpha-secretase pathway in Alzheimers disease. That pathway is responsible for preventing the production of amyloid beta and stimulating the neuroprotective protein, sAPPalpha, that keeps neurons alive and healthy.

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161

genentech colleAgues reunite to bring eye drug to MArket


Launched in 2006 with a $37 million Series A financing by venture capital firms Alta Partners and Clarus Ventures, SARcode Corp. had been working quietly to bring to market a class of small-molecule lymphocyte function-associated antigen-1 (LFA-1) antagonists as a nonsteroidal anti-inflammatory topical agent to treat unmet medical needs in ophthalmology, dermatology and other inflammatory diseases. In September, the Brisbane, Calif.-based biotech became a bigger blip on the radar screen when Quinton Oswald joined as CEO. Oswald became the third member of SARcodes management team who had played a significant role in the commercial launch of Lucentis (ranibizumab) by South San Francisco-based Genentech Inc. He joined Charles Semba, SARcodes chief medical officer, who was the clinical development team leader for Genentechs ophthalmology program, and Valerie Smith, SARcodes senior director of clinical operations, who was clinical program manager for Lucentis. Reuniting the Lucentis team was certainly no accident. SARcode co-founders Tom Gadek, who remains on the companys board of directors, and John Burnier also were Genentech scientists. In fact, Gadek and Burnier were members of the research team studying LFA inhibition at Genentech in the late 1990s, Oswald recalled during an interview with BioWorld. The program failed because it was an oral program, and they were trying to create smallmolecule versions of a large molecule that Genentech had in its pipeline, Oswald said. But the founders felt that these drugs, used topically and intravitreally, could potentially have some opportunity going forward. In 2006, Gadek and Burnier purchased LFA-1 inhibitor technology from Sunesis Pharmaceuticals Inc., of South San Francisco, for $2.6 million to launch SARcode. At the time, the weakness of the drug became the strength underpinning the companys platform a highly potent small molecule with local bioavailability that is cleared rapidly by the bodys circulation, Oswald explained. SARcode a name that refers to the structureactivity relationship, a term used by chemists to describe the relation between the chemical structure of a molecule and its biologic activity is staking its future on the success of its lead product candidate, SAR 1 1 18. In May, the company reported results of a 230-patient Phase II proof-of-concept study evaluating topical SAR 1 1 18 ophthalmic solution in the treatment of aqueous deficient dry eye (keratoconjunctivitis sicca). The results demonstrated improvements in both signs and symptoms of dry eye at 12 weeks compared to placebo, according to the company. SAR 1 1 18 was well tolerated, and no serious ocular adverse events were reported. SARcodes corporate philosophy has been to move SAR 1 1 18 toward proof of principle and

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meaningful endpoints in a relatively short timeline, Oswald said. Dry eye requires a 12- to 24-week study period, so this was thought to be the most efficient therapeutic area to study from a drug development perspective, he added. The problem is that dry eye also is notoriously complicated to treat, according to Oswald, who was lured to SARcode by the companys smallmolecule program, which breaks the chronic cycle of ocular surface inflammation. A major contributing factor in the development of dry eye is T-cell mediated inflammation and cytokine production in diseased ocular surface tissues that leads to disabling eye discomfort and reduced tear quality, he explained. SAR 1 1 18 inhibits the interaction of LFA-1 with its cognate ligand, intercellular adhesion molecule-1 (ICAM-1) a protein that is normally expressed in low levels on the surface of epithelial and endothelial cells, but is highly expressed in inflamed tissue. The blockade of LFA-1 binding to ICAM-1 is the key to treat not only dry eye but also diabetic macular degeneration, atopic dermatitis and many other diseases, Oswald said. We have a well-defined biologic pathway that could be effective for future unmet needs. Although the symptoms of dry eye are addressed by a whole raft of artificial tear products, Oswald said, Restasis (cyclosporin emulsion 0.05 percent) is the only therapy approved in the U.S. to treat the condition, which represents a $1 .3 billion market in the U.S.

Clinical studies of Restasis suggested the onset of action is nearly twice as long 24 weeks as SAR 1 1 18, according to Oswald. Unlike SAR 1 1 18, Restasis also accounts for up to a 17 percent rate of ocular burning at the same dosage, he added. A dermatologic formulation of SAR 1 1 18 also is in development as a treatment for atopic dermatitis and psoriasis to provide a potentially safer alternative to long-term topical steroids or calcineurin inhibitors. The opportunity for SAR 1 1 18 in diabetic macular edema the leading cause of blindness in working-age adults in the U.S. could be even larger, given the severity of the disease and the growing incidence of diabetes in the U.S. and abroad. The year 2011 could bring a new, catchier name for the company and, Oswald hopes, initiation of a Phase III study of SAR 1 1 18 in dry eye, named OPUS-1 . A successful outcome would pave the way for follow-on safety and efficacy studies and an anticipated new drug application filing for SAR 1 1 18 ophthalmic solution in 2014. Down the road, the company has eight compounds in its large library of drugs that are potential candidates for commercialization, he added. However, SARcode has no intention of changing its capital-efficient structure. With only six employees, the company outsources preclinical development and other functions at the point of need, according to Oswald. And although Alta and Clarus remain active members of SARcodes board, at the same time, were thinking about how we continue to move toward our Phase III program with a potential Series B financing, which also could occur early in 2011 , he said.

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163

resolve therAPeutics tArgets uPstreAM interferon-AlfA PAthWAy


Lupus took the spotlight twice in November 2010, first when Resolve Therapeutics LLC entered this active area of drug development and licensed compounds and technology targeting the interferon-alfa pathway from the University of Washington School of Medicine in Seattle. A week later an FDA panel recommended approval for Benlysta (belimumab), Human Genome Sciences Inc.s (HGSI, Rockville, Md.) and GlaxoSmithKline plcs (GSK, London) B cell target inhibitor, which could be the first new drug approved for lupus in over two decades. With 16 compounds in development for this chronic inflammatory autoimmune disease, Resolve is taking a different approach than other companies by targeting neither B cells nor interferon-alpha, IFN-alpha, but rather the upstream IFN-alpha pathway. Resolves lead compound, RSLV-125, is an antibody-like fusion protein that is designed to stop the chronic activation of the interferon pathway upstream in the inflammatory cascade without blocking IFN-alpha itself, a molecule that helps the body respond to infection, CEO and co-founder Jim Posada told BioWorld. For this reason, Resolve is betting that its drug will have greater specificity and fewer side effects than other drugs in the pipeline. Genentech Inc., of South San Francisco, and MedImmune Inc., of Gaithersburg, Md., are developing IFN-targeting monoclonal antibodies, while other companies are targeting other immune molecules such as the B-cell antigen, CD-20. If successful, a new molecule will be welcome by patients, which number about 5 million worldwide, including 1 .5 million in the U.S. The disease is currently treated with antiinflammatories, corticosteroids, immunosuppressives and anti-malarial drugs, none of which are approved for lupus or treat the diseases underlying pathology. Resolve is resolved to change that. Started as a virtual company a few months ago to commercialize discoveries of University of Washington rheumatologists and co-founders Keith Elkon, and Jeffrey Ledbetter, Resolves sole focus is on lupus, with RSLV-125. Its approach begins from the premise, long studied and championed by Elkon, that lupus patients have a decreased ability to clear apoptotic cellular debris, which is comprised primarily of nucleic acid/protein complexes. These complexes are modified in circulation in ways that the immune system senses as foreign, triggering host defense pathways, including the IFN-alpha pathway. Our hypothesis, supported by our in vivo preclinical data, is that RSLV-125 will eliminate the immune complexes at a proximal step in the cascade of events in this pathway, preventing it from becoming pathologically activated in the first place, and will decrease IFN-alpha production in patients over time, Posada told BioWorld. Resolve is using the interferon signature, a biomarker of 20 genes (activated by chronic IFN

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production) that has been validated in recent clinical trials to demonstrate that RSLV-125 inhibits chronic IFN activation in patients. Posada has created a streamlined, recession-proof business plan to bring RSLV-125 through Phase IIa trials in three years, and then partner for late-stage trials with a large pharma, rather than conducting costly Phase III trials and waiting for a bigger payout. The company will have a low headcount, which includes 10 Seattle-based consultants, and will use university labs for R&D rather than spending on infrastructure. Posada, who identified the technology and is assembling the team, was formerly with Eli Lilly and Co. and, more recently, with GlycoFi Inc., a Dartmouth College spinoff, until Merck & Co. Inc., of Whitehouse Station, N.J., acquired it for $400 million in 2006. Since then he has headed a life sciences consulting firm. A 25-year protein design veteran, Resolves co-founder is the inventor of BMS Orencia (abatacept) for RA. He also was a founder of Trubion Pharmaceuticals Inc., of Seattle, which focused on protein therapeutics for autoimmune and inflammatory diseases before its acquisition by Emergent BioSolutions Inc., of Rockville,

Md., in August for $135 million. Posada is raising $7 million in seed financing which he expects to be completed by mid-January, and plans to raise $12 million altogether to take the company through Phase IIa trials. Resolve also has two related, preclinically validated back-up fusion protein molecules in addition to RSLV-125, which possess different mechanisms of action, and could be used for lupus nephritis, a complication of lupus, Posada said. All three molecules will be part of a completed preclinical partnering package, along with Phase I and IIa results. RSLV-125 will begin a pilot IFN signature study in early 2011 in 100 patients examining patientto-patient variability of the IFN signature to help Phase IIa trial design. Posada anticipates filing an investigational new drug application for the Phase I in the second quarter of 2012, and completing a safety study by the third quarter of 2012. The Phase IIa proof-of-concept, placebocontrolled, double-blind study should begin in early 2013 and take 12 to 15 months to complete.

chapter 10:

Dermatologics

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167

$12M series A Moves Ablexis toWArd better Mouse PlAtforM


Transgenic mouse platforms have proven to be the work horse for successful human therapeutic antibodies since their first implementation in the late 1990s, said Larry Green, one of the early pioneers of the technology. But recent changes in the landscape of providers in the transgenic mouse space, which have included the 2006 acquisition of Abgenix Inc. and its XenoMouse technology by Thousand Oaks, Calif.based Amgen Inc. and the 2009 acquisition of Medarex Inc. and its HuMAb-Mouse technology by New York-based Bristol-Meyers Squibb Co., have dramatically diminished to access platforms for therapeutic antibody discovery, Green told BioWorld. So there is a need for robust platforms for discovery of human therapeutic antibodies, he said, adding that his newly formed company, Ablexis LLC, intends to fulfill that need. The San Francisco-based biotech, which was created in December 2009 based on technology from Hiroaki Shizuya the creator of the bacterial artificial chromosome technology has completed a $12 million Series A financing led by Third Rock Ventures, with additional investment from Pfizer Venture Investments, said Green, who is Ablexis CEO. The firm is pursuing development of a nextgeneration transgenic mouse platform, known as the AlivaMab Mouse, which Green said is aimed at providing the foundation for efficient discovery and development of the next wave of human therapeutic antibodies. Our mission is to genetically engineer mice to serve as efficient platforms for the discovery of highest-grade therapeutic human antibodies, and then through creative partnering strategies, license those mice to developers of antibody drugs, Green said. We are getting very significant interest from pharma companies, and we expect to begin very rapidly executing on our business strategy. As the co-inventor of the XenoMouse technology and a scientific founder of Abgenix which was spun out from Cell Genesys Inc. in 1996 Green said he brings knowledge to the new company of the strengths and the weaknesses of the firstgeneration transgenic mouse platforms. I bring experience in not only creating the platforms, but also in utilizing them, he insisted. Green led or contributed to at least 60 therapeutic antibody discovery projects that resulted in lead candidates in clinical trials, preclinical development or research for Abgenixs or its partners pipelines. In 2008, Green joined Aliva Biopharmaceuticals, a startup established by Shizuya in 2001, which has been folded into Ablexis. Shizuya, a member of the professional staff of the division of biology at the California Institute of Technology and Ablexis resident adviser, had earlier co-founded a company called Tellus Genetics, which was acquired in 2000 by Redwood City, Calif.-based Maxygen Corp., Green noted. In pursuing funds for Ablexis, he said his firm did not have to look far, considering the background of Third Rock Ventures, whose founding partners, Mark Levin and Robert Tepper, are co-founders

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of Cell Genesys, where Green started his career in 1992, and Abgenix. This is a group of individuals who know the antibody space and are interested in developing far-reaching technologies that serve as the basis for engines for drug discovery, Green said. So when we initiated discussions with Third Rock Ventures, it was a very productive discussion, he said. Third Rock and Pfizer Ventures, Green added, have been a great team that is helping the company. He noted that Ablexis board members also include Third Rocks Cary Pfeffer and Lou Tartaglia, who he said are contributing significantly to the companys strategic plans, both from the business side and the technical side. For competitive reasons, Green said he could not disclose details about what differentiates Ablexis AlivaMab Mouse technology from Amgens

XenoMouse or BMS HuMAb, for which he said there have been large waves of candidate drugs in clinical development that have come from these platforms. But, Green said, we felt there were several opportunities to improve upon the platform to provide a more efficient and robust transgenic animal platform for the discovery of human therapeutic antibodies. He emphasized that Ablexis business model is not currently based on the discovery of therapeutic products, but on providing a very large unmet commercial need for robust and efficient human therapeutic antibody discovery platforms. Experienced antibody drug developers are seeking transgenic mouse platforms, because of their tried and true nature, their efficiencies, their ease of use, and the direct discovery of very high-potency drug candidates, and multiple candidates to provide backup for later stages of development, Green said.

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vicePt AiMs to get red out, Adds $10M for rosAceA triAls
Founded in August 2009 to develop products for skin disorders, Vicept Therapeutics Inc. recently added $10 million in Series A funding to push into Phase II with its lead program designed specifically to address erythema associated with rosacea. Were going to be jumping into Phase II studies in the second half of [2010], said President and CEO Neal Walker, a dermatologist who co-founded the Malvern, Pa.-based specialty pharma firm around an alpha-adrenergic receptor technology for use in developing topical skin treatments. Vicept has raised a total of $16 million in the Series A round, led by investors Vivo Ventures, Sofinnova Ventures and Fidelity Biosciences. Those funds should get the firm through the end of Phase II with V-101 in rosacea and allow it to advance a second product aimed at various forms of bruising and purpura. While there are existing treatments available for rosacea, most are not effective against erythema, the facial redness. V-101 works by binding with the adrenergic receptor present on blood vessels and clamping down on them, Walker said. Its the dilated vessels that cause the redness. Roughly 16 million to 17 million people in the U.S. suffer from rosacea, and about 80 percent of those experience the redness, so its a rather large market opportunity, Walker told BioWorld. The main pharmaceutical ingredient in V-101 is not new. Vicepts technology is based on a group of molecules that have been used for years since the late 1960s actually, in ocular and nasal indications, he said. Drugs such as Afrin (pseudoephedrine), for instance, act on the alphaadrenergic receptors. That means Vicept has a good shot at applying for approval of V-101 under the less risky 505(b)(2) regulatory pathway, though Walker pointed out that its still a new topical dosage, so weve got a lot of work ahead of us. Funds from the latest round are expected to get V-101 through Phase II testing. After that, the company will consider its options. When starting a company, I think you have to plan to take [a drug] all the way through on your own, Walker said, though partnering is certainly on the table. Earlier in the pipeline, Vicept has a topical program designed to reduce actinic purpura, bruising associated with accumulated sun damage that typically affects the elderly, as well as bruising from injectable procedures. A lot of people dont realize how life-altering dermatologic conditions such as rosacea can be, Walker said. And the companys mission is reflected clearly in its name, a reference to two Latin words: vita, meaning life, and receptus meaning to take back. Its about giving people their lives back, Walker said. In connection with the financing, Albert Cha, of Vivo Ventures, Thomas Beck, of Fidelity Biosciences, and Arnad Mehra, of Sofinnova Ventures, are joining Vicepts board. Also on the board are Walker and Stephen Tullman, who serves as chairman.

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vAlocor sAys beAt it to Acne, AtoPic derMAtitis And vitiligo


Its not uncommon in a growing pharmaceutical company that a pipeline product or set of products no longer matches the overall goals and visions of the company, but are still worthwhile on their own merits. Such was the case with the dermatology program at Vancouver, BC-based QLT Inc. QLTs dermatology compounds had a bright future, but didnt fit under the companys ocular therapy umbrella. That resulted in a strategic move to spin out Vancouver, British Columbia-based Valocor Therapeutics Inc., a company dedicated to developing new treatments for areas of unmet need within the field of dermatology. QLT partnered with Novartis International AG to market its macular degeneration therapy Visudyne (verteporfin), but sales slumped after the introduction of Lucentis (ranibizumab) by Genentech Inc., a unit of the Roche Group. The company was forced to rationalize and focus on its ocular programs. The dermatology programs were worthwhile for development, but became nonstrategic and thats when we got the idea to spin this off into a new company, Valocor CEO Dan Wattier told BioWorld. Valocor took an undisclosed amount of seed financing from Growthworks Capital Ltd., the Working Opportunity Fund, to acquire licenses for several therapeutic dermatology entities from QLT. Those compounds include the clinical-stage topical photodynamic therapy lemuteporfin for acne and a portfolio of small-molecule investigational compounds for acne, atopic dermatitis and vitiligo. The name Valocor comes from the Latin words valo meaning protect, and corpus meaning body, to invoke the skins role in covering and protecting the body. The companys acne program will challenge Roche AGs Accutane (isotretinoin). Accutane, taken orally, reduces oil production by the sebaceous glands. Unfortunately, Accutane also can cause birth defects and liver toxicity, so its use is limited to moderate-to-severe cases and must not be prescribed to pregnant women. We determined that there was a significant opportunity for developing alternatives to Accutane, Wattier said. Valocor said its investigational phototherapy drug lemuteporfin has a similar activity, but is applied topically and absorbs selectively, targeting the sebaceous glands. Light therapy triggers the destruction of the gland, reducing the skins ability to produce oil. The compound has completed a Phase I drug localization study and is scheduled to proceed into a Phase II proof-of-concept trial early in 2011 . Valocor is developing another acne therapy, as well a small-molecule compound that it claims inhibits the enzyme acetyl coenzyme A carboxylase (ACC). The compound mimics 5-tetradecyloxy-2furoic acid, a natural inhibitor of ACC. Two other classes of small-molecule compounds are being developed for atopic dermatitis and vitiligo.

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Those compounds target integrin-linked kinase (ILK). Valocors early results indicated that its ILK inhibitors are as effective as calcineurin inhibitors such as Protopic (tacrolimus) by Astellas Pharma Inc. and Novartis Elidel (pimecrolimus), but without the broad immunosuppressive effect. The drugs also come with a black-box warning from the FDA regarding cancers that have developed in some children who used them. One set of ILK inhibitors had a surprise effect that Valocor is now pursuing they stimulated melanin production, resulting in darker pigmentation. The company is now pursuing that class of compounds as a possible therapy for vitiligo, an

autoimmune disorder that destroys the skins pigmentation. If we could help pigment the skin and also temper the immune response, we may have a beneficial effect in vitiligo by two mechanisms, said Wattier. For a business strategy going forward, Wattier said, Were open to a variety of strategies. Right now our plan is to move these programs to the inflection point so we have options. He added that Valocors most likely path will be to raise a few rounds of financing, using those funds to add value to the portfolio, and then go for either an IPO or big pharma partnership.

chapter 11:

Obesity

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hAlsA ZAgs While others Zig: A neW MechAnisM in obesity


Thanks to impressive preclinical data with its recombinant human Zinc-alpha2-glycoprotein (ZAG), Halsa Pharmaceuticals Inc. believes it will be able to navigate the safety and efficacy pitfalls that have derailed so many other obesity drugs. Halsa cofounder and CEO Phil Speros explained that ZAG is a naturally occurring protein that plays a role in lipolysis, or the breakdown of fat in adipose tissue. Genetically obese mice have low ZAG levels, and knock-out mice lacking ZAG gain weight quickly. Yet preclinical studies have shown that injecting ZAG into obese mice resulted in body fat loss of 20 percent to 40 percent, and weight loss as high as 17 percent, with no change in food or water intake. To put that in perspective, existing prescription options like generic phentermine, F. HoffmannLa Roche Ltd.s Xenical (orlistat) and Abbotts Meridia (sibutramine HCl monohydrate capsules C-IV) cause placebo-adjusted weight loss of just 3 percent to 5 percent. Biotech drugs in development are hoping to do better. Vivus Inc.s Qnexa (phentermine/ topiramate CR) has shown placebo-adjusted weight loss as high as 9.4 percent and excess body weight loss of 42 percent. Orexigen Therapeutics Inc.s Contrave (bupropion SR/naltrexone SR) has hit 5.2 percent and 31.7 percent on the same outcomes, while Arena Pharmaceuticals Inc.s lorcaserin came in at 3.6 percent and 31 percent and has shown impressive safety data. Halsa CEO Speros explained that ZAGs mechanism of action is unique compared to existing and experimental drugs. Xenical works in the gut to modify digestion, while most others work in the brain to modify appetite and/or metabolic rate. ZAG, however, modifies metabolic rate peripherally, working directly through the fat and muscle tissue rather than through the brain. The peripheral adipose attack also is being tried by start-up Zafgen Inc., but while Zafgen uses smallmolecule angiogenesis inhibitors, Halsa uses recombinant protein replacement therapy. While the big names in obesity took center stage at last falls Obesity Society annual meeting, Halsa presented data there as well. In a controlled preclinical study, ZAG-treated obese diabetic mice lost 3.5g, or about 4 percent of their weight compared to untreated mice, in five days. Blood glucose, triglycerides and plasma insulin levels also decreased significantly, while muscle mass increased. If you administer ZAG to an obese animal, it begins to resolve their diabetes within three days and in some studies reduces fat by 20 percent in 21 days, Speros said. And while the molecules efficacy was first observed by its overexpression in cancer patients with wasting disorders, Speros maintained that high dose studies of ZAG have shown that feedback loops produce a natural abatement of the drugs effect. As with all weight loss drugs, the efficacy gradually slows over time, he added. Halsa is currently working on preclinical safety, dosing and small animal studies of its lead ZAG candidate, and Speros estimates the drug is about 24 months from the filing of an investigational new drug application.

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Earlier in its pipeline, Halsa is working on a program that involves blocking proteolysis induction factor receptor (PFIR), interrupting the mechanism by which cancers cause muscle wasting. To date, Halsas ZAG and PFIR work has been funded without venture capital. The firm raised about $500,000 around its 2007 launch from angel and high net worth investors, and it also received $1 million from the Texas Emerging Technology Fund. Speros said Halsa is currently fundraising and aims to close a $5 million second round in mid-2010, which may or may not include VCs. Houston-based Halsa was founded based on research conducted by Michael Tisdale at

Aston University in the U.K. The university had nonexclusively out-licensed some of its intellectual property, and the Halsa team spent seven years reassembling the patent portfolio prior to launching. Halsa now hold exclusive rights to the use of ZAG in obesity and diabetes. For now, the firm is running lean, with just a few employees supplemented by advisors, consultants and contractors. Potential partners are already sniffing around Halsas programs, and Speros said the start-up is exploring its options. We dont view this as something we could or should take forward all the way on our own, he said, but the optimal stage to partner has yet to be determined.

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litherAs PhAse ii fAt reduction drug AiMs to folloW botox Model


Lithera Inc. isnt the only biotech with a genericdrug-combo product designed to bust fat. But unlike the competition, this San Diego start-up is focused not on obesity but on a combination of orphan drug and aesthetic applications similar to the development path pioneered by Allergan Inc.s Botox (onabotulinumtoxin type A). Lithera was founded in early 2007 based on research conducted by Frank Greenway, chief of the outpatient clinic at the Pennington Biomedical Research Center at Louisiana State University. Greenway had established the efficacy of adrenergic agents in localized fat reduction, but frequent administrations and slow results made the approach impractical. John Dobak, serial CEO and founder of the JAKK Group life science accelerator, learned about Greenways work and had some ideas for improving the efficacy while decreasing the dosing frequency. The result was LIPO-102, a subcutaneous formulation of the generic drugs salmeterol xinafoate and fluticasone propionate. Salmeterol, a long-acting beta2-adrenergic agonist, stimulates the natural pathway for metabolism of fat, explained Dobak. Fluticasone is a corticosteroid that upregulates the machinery that salmeterol turns on, he added. The two drugs have been combined in an inhaled formulation for the treatment of asthma, but Dobak said Lithera believes it has freedom to operate with its complex subcutaneous formulation. Several biotechs are pursing combinations of generic drugs for the treatment of obesity. Orexigen Therapeutics Inc.s Contrave combines long-acting versions of naltrexone, an opioid blocker approved for opioid and alcohol addiction, and bupropion, a dopamine stimulator approved for depression and smoking cessation. The combination is designed to affect the reward pathways associated with food addictions while increasing energy burn. Orexigen also has Empatic, which combines bupropion with zonisamide, a seizure drug intended to prevent weight gain by inhibiting energy storage and hunger. Theres also Vivus Inc.s Qnexa, which combines the generic diet drug phentermine with epilepsy drug topiramate to decrease appetite while increasing energy usage and fullness. Both Contrave and Qnexa are under FDA review for obesity. But Dobak, who serves as Litheras CEO, explained that LIPO-102 is not targeting obesity. It shrinks fat in a local area, such as the abdomen, but it doesnt cause overall weight loss. Dobak and Greenway had initially envisioned using LIPO-102 for exophthalmos, an orphan condition associated with thyroid disease in which fat accumulates around the orbit of the eye, causing the eyeball to bulge. The only treatment is surgery. Dose-ranging studies are underway in Australia, and Dobak said the initial feedback has been positive. Other potential applications for LIPO-102 could include fatty tumors known as lipomas and certain lipodystrophies associated with HIV, in which fat redistributes to form a hump on the back. Lithera is not yet pursuing these indications. What the company is pursuing, however, is what Dobak refers to as body contouring. The drug

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would be given to healthy people who, despite diet and exercise, have a bulge of fat theyd like to get rid of. Its an application where a lot of snake oil is being sold, if you will, and wed like to bring a little science, Dobak said. Phase IIa data released in March showed that the optimal dose of LIPO-102 was well-tolerated and reduced mean abdominal circumference by 3.47 cm (p=0.017) after eight weeks. Data from a second Phase IIa trial released last week showed mean abdominal circumference reductions of 1.2 cm versus 0.1 for placebo (p=0.048). The effects were sustained for six to 12 weeks. Dobak said Lithera plans to initiate Phase IIb studies soon and hopes to conduct its end-ofPhase-II meeting with the FDA by late 2011. Lithera plans to pursue a 505(b)(2) pathway for approval. While insurance providers would likely cover LIPO-102s orphan indications, the body contouring application would be an out-ofpocket expense for patients. In this way, the

business model would be similar to Botox, which is approved for medical conditions like cervical dystonia pain, eyelid spasms (blepharospasm) and eye muscle problems (strabismus) as well as for cosmetic wrinkle reduction. Botox garnered $1.3 billion in 2009. Dobak believes the opportunity for LIPO-102 as an alternative to lipsuction surgery in the body contouring market could be similarly lucrative. He explained that about 150,000 people undergo antiwrinkle surgery annually, while seven times that amount, or more than one million, opt for Botox. Since 350,000 people get liposuction annually, applying the seven-times multiple leads to a LIPO102 patient population of roughly 2.5 million. Lithera, a largely virtual operation with 10 employees, has raised $21 million in two rounds of venture capital from Domain Associates and Alta Partners. The biotech plans to raise a Series C round in the next six to 12 months. Dobak noted that while Lithera is prepared to advance its programs as far as necessary alone, it is also talking to potential partners.

chapter 12:

Eye Diseases

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Aerie sets sights on glAucoMA With PhAse ii rock inhibitor


With Phase II trials of Rho-kinase inhibitor AR-12286 underway for glaucoma, Aerie Pharmaceuticals Inc. is not exactly taking the road less traveled. But the Bridgewater, N.J.-based biotech is hoping better molecules will help it avoid potholes and surpass others in its path. Leading the glaucoma market is Pfizer Inc.s Xalatan (latanoprost), a prostaglandin agonist that boasted $1.7 billion in revenues in 2009. The drug goes generic in 2011, and other glaucoma drugs, like beta blockers and carbonic anhydrase inhibitors, are already generic. But that hasnt deterred the drug industrys interest in glaucoma. Thomas van Haarlem, Aeries president and CEO, explained that despite cheap existing drugs, there remains a need for new approaches in the glaucoma space. He estimated that 40 percent to 50 percent of patients require more than one drug, and anywhere between 15 percent and 25 percent cant tolerate prostaglandin agonists. Some companies have focused on improved prostaglandin drugs. NiCox SA just signed a $179.5 million deal with Bausch & Lomb Inc. for NCX 116, a nitric-oxide-donating prostaglandin F2a analogue that was dumped by Pfizer after turning up less-than-spectacular efficacy data in Phase II. Aerie, too, was originally focused on improved prostaglandin agonists. Van Haarlem, a former vice president of Pfizers surgical ophthalmology business, founded the biotech in 2005 based on prostaglandin agonist technology licensed from Duke University. The company quickly raised a $21 million Series A round from Alta Partners and Texas Pacific Group (TPG) Ventures and set about building glaucoma drug discovery expertise. Aeries lead program was eventually discontinued due to a less-than-ideal product profile, but the biotech had by then shifted its focus to its portfolio of more than 1,000 Rho-kinase inhibitors. Van Haarlem explained that glaucoma is like a faucet spewing water into a sink with a clogged drain. Some drugs, like carbonic anhydrase inhibitors, seek to shut off the faucet, while others, like prostaglandin agonists, seek to open a secondary drain. But Rho-kinase inhibitors seek to fix the drain thats clogged, known as the trabecular meshwork. The approach hasnt been easy to execute. Van Haarlem noted that Novartis AG had a Phase IIb program that appears to have been discontinued, while Inspire Pharmaceuticals Inc. saw mild efficacy in Phase I but ran into tolerability issues. Japanese firm Santen Pharmaceutical Co. Ltd. also has a Rho-kinase inhibitor in the clinic. Why will Aerie succeed where others have struggled? We have better molecules, van Haarlem said. In a Phase IIa trial, Aeries lead drug AR-12286 significantly lowered intraocular pressure with both once-daily and twice-daily treatment. The maximum reduction was 28 percent, which Aerie said is comparable to other glaucoma drugs. AR12286 was well-tolerated with no significant side effects. An ongoing Phase IIb trial was expected to deliver data in 2010.

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Within its Rho-kinase inhibitor pipeline, Aerie identified a series of compounds that also hit a second drug target, resulting in exceptional efficacy, tolerability and duration of effect, van Haarlem said. He declined to name the target but said an investigational new drug application for a lead candidate in the AR-13165 series will be filed in 2011. In addition to drugs, Aerie is developing a delivery system designed to address the compliance problems common with glaucoma eye drops. Long-term animal studies are underway to determine whether an insert or implant is most appropriate, but the goal either way is to provide sustained drug delivery over one to two years.

Aerie is testing the system with Xalatan but eventually plans to apply it to AR-12286, AR13165 and various combination products possibly including Xalatan. Aerie, named for the lofty nests of keen-eyed birds of prey, raised a $10 million Series A follow-on round in 2009. Van Haarlem said discussions are ongoing regarding future financing plans. And while the company is keeping all our options open regarding partnering, van Haarlem noted that glaucoma clinical trials are not exceptionally expensive and the regulatory path is well-defined. We are maintaining the option to go it alone, he added.

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Altheos rAises $20M; gets into glAucoMA rock inhibitor gAMe


Altheos Inc. jumped onto the radar and into the increasingly crowded glaucoma field on Monday with a $20 million Series A financing and a Rhokinase inhibitor licensing deal. The financing was led by Bay City Capital and included participation by Novo A/S, Canaan Partners, Life Science Angels and Atheneos Capital. It was the first money invested into South San Francisco, Calif.-based Altheos, which was founded in 2009 by Henry Hsu and Ken Kengatharan. Both cofounders previously held senior positions at CoMentis Inc., a biotech best known for inking a $760 million Alzheimers disease deal with Astellas Pharma Inc. But CoMentis also had an ophthalmology program that got Hsu and Kengatharan excited about treating front-ofthe-eye disorders like glaucoma. When the two formed Altheos, they evaluated other licensing opportunities in metabolic disease and neurology, but they kept coming back to glaucoma, and specifically to a Rho-kinase inhibitor developed by Asahi Kasei Pharma, a wholly-owned subsidiary of Tokyo-based Asahi Kasei Corp. Rho-kinase inhibitors represent a new mechanism for glaucoma, a leading cause of blindness. The disease has been likened to like a faucet spewing water into a sink with a clogged drain. Some existing drugs, like carbonic anhydrase inhibitors, seek to shut off the faucet, while others, like prostaglandin agonists, seek to open a secondary drain. But Rho-kinase inhibitors fix the drain thats clogged, known as the trabecular meshwork. There arent any Rho-kinase inhibitors approved for glaucoma yet but several are in development. Early efforts by Novartis AG and Inspire Pharmaceuticals Inc. stumbled on tolerability issues like redness, stinging and itchiness of the eyes. Asahis compound, dubbed ATS907, is an ocular administered prodrug specifically focused on widening the therapeutic index, Hsu explained. Preclinical data on ATS907 have not yet been publicized, but Hsu said his team is familiar with the data from others in the space and views ATS907 as very, very competitive. Clinical trials were slated to begin in 2011, and the Series A funding will last three or four years, carrying Altheos through Phase II trials. Hsu noted that while Altheos could have completed its Series A financing with fewer investors, the firm broadened its syndicate because there was interest in raising a second round later to fund Phase III trials and regulatory filings. The strategy of building a syndicate at the beginning that can carry a company to the finish line has been adopted by many start-ups in the wake of the recent financial crisis. Which isnt to say that Altheos would necessarily take ATS907 that far on its own. Hsu said the biotech would be open to partnering if its Phase II data are positive. Additionally, the license from Asahi included a series of back-up Rho-kinase inhibitors that Altheos could potentially outlicense for use in other indications. If Altheos succeeds where others have failed, the payoff could be significant. Pfizer Inc.s Xalatan (latanoprost), the leading prostaglandin agonist for glaucoma, boasted $1.7 billion in revenues in

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2009. Although Xalatan will go generic in 2010 and many other glaucoma drugs are already generic, the new mechanism offered by Rho-kinase inhibitors could be a value-driving differentiator particularly given that 40 percent to 50 percent of glaucoma patients require more than one drug, and many develop resistance as they cycle through the existing options. Wende Hutton, general partner with Canaan Partners, likened glaucoma treatment to the hypertension field, where there is a lot of switching between drugs and trying various combinations in search of something that works for each patient. But she noted that as multiple compounds are

combined, eye irritation can build. So if you have a drug with fewer side effects, it will be selected for first-line treatment, she explained. Altheos is not the only biotech hoping to tap into that opportunity. Japanese firm Santen Pharmaceutical Co. Ltd. has a Rho-kinase inhibitor in the clinic for glaucoma. And Aerie Pharmaceuticals Inc. is in Phase IIb glaucoma trials with of Rho-kinase inhibitor AR-12286. There is room for a couple of these drugs to open up this new class, said Hutton. While Altheos may or may not be first to market, the biotech is hoping for best-in-class performance.

chapter 13:

Foundations
Biotech Foundations is a new BioWorld Today column that recognizes biotech-related nonprofit organizations, as well as those founded by biotech industry luminaries.

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biotech vc lArry bock uses stArt-uP sPirit in science fest


Former biotech venture capitalist and entrepreneur Larry Bock knows how to turn an idea into reality. Hes had a hand in founding dozens of companies, including Athena Neurosciences Inc. (bought by Elan Corp. plc.), Vertex Pharmaceuticals Inc., Ariad Pharmaceuticals Inc., Onyx Pharmaceuticals Inc., Illumina Inc. and many others. Now Bock is applying biotech skills like fundraising and running virtual operations on a shoestring budget to the nonprofit world. On example is his USA Science & Engineering Festival, an annual celebration aimed at getting Americans excited about science. Society gets what it celebrates, Bock explained. We celebrate Brittney Spears, and we get a lot of Britney Spears wannabes. But as Bock was founding biotechs, he became concerned that it was nearly impossible to fill scientist job openings without going overseas. Americans just didnt seem to get science. Its a problem that has attracted plenty of media attention of late. Last month, the National Academy of Sciences reported that China has replaced the U.S. as the worlds top high-tech exporter and is second in biomedical research. And 2010s crop of Nobel Prize-winning scientists included three researchers working in Britain, one in Japan and two in the U.S. one of whom is a Japanese citizen and the other of whom has retired to the Philippines. Bock wanted to find a way to get Americans excited about science again, and a family vacation in Europe provided the inspiration: science festivals. So in 2009, Bock launched his own science festival in his hometown of San Diego. The month-long event attracted about 250,000 people, and the grand finale day brought in 100,000. Afterward, one of the scientists staffing a booth told Bock, For the first time, you made me look cool in front of my kids. That was the ah-ha moment, according to Bock. He realized his idea had promise, and in 2010 he expanded it nationally, with events in 50 cities leading up to a grand finale Oct. 23-24 on the National Mall in Washington. The first two weeks of the festival focused on community events: sending scientists to speak in schools, hosting teachers workshops and presenting evening lectures on topics like evolution and global warming. But the big excitement is the grand finale: 1 ,500 booths where the public can solve a CSI-style crime using DNA analysis, learn about the chemistry of Thanksgiving dinner, or play a 3-D game that goes inside the immune system. There are role models (professional cheerleaders turned scientists), edibles (DNA from Twizzlers and marshmallows), handson experiences (build molecules from LEGOs) and plenty to satisfy the inner geek (the physics of superheroes) as well as 75 performances, including an appearance by National Institutes of Health Director Francis Collins rock band. The festival is backed by engineering firms such as Lockheed Martin as well as biotechs like Life Technologies Corp., Johnson and Johnson, Amgen Inc., Celgene Corp., Illumina Inc., Agilent Technologies Inc. and others. Bock said many biotechs got their technology from universities and understand the importance of reinvigorating the system with fresh young minds.

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And for his part, Bock said many of the lessons he learned from biotech have transferred well to the nonprofit world. I could at least go up to an investor and promise theyll get a lot more out of it than they put in, he said. Bock runs the USA Science & Engineering Festival like a biotech start-up: He has a business plan, and he provides regular updates on that plan to his sponsors. He also maintains virtual operations his group has no offices and no infrastructure, and it outsources functions like logistics and public relations.

One major difference between running a nonprofit and running a biotech is employee motivation. In biotech, I could always incentivize people with equity, Bock said. While there are no stock options for the science festival, Bock still believes in paying competitive salaries to get the best people on board, reasoning that one really good employee is more effective than 10 people sharing a job for partial salaries. But Bock admits he is amazed how incentivized people are just by doing good. For more information, usasciencefestival.org. go to: www.

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cleAritys Mission: to chAnge ovAriAn cAncer outcoMes


When Laura Shawver was president of Sugen Inc., which developed Sutent (sunitinib malate) to treat kidney and stomach cancer, she never dreamed she would one day become a cancer patient. But when Shawver was diagnosed with ovarian cancer in 2006, she quickly learned that her wealth of knowledge about the molecular pathways of cancer cells was of little value in treating her own condition. Rather than benefiting from the advances of molecular profiling, Shawver discovered, women diagnosed with ovarian cancer were still being treated using protocols developed 40 years earlier. At Redwood City, Calif.-based Sugen, which was acquired in 2003 by Pfizer Inc., of New York, scientists had sought to develop optimum dosing regimens for oncology drugs by targeting pharmacodynamic markers rather than relying on the traditional dose-escalation model. We would routinely collect blood, tumor, hair, skin and other samples from patients as part of clinical trials, Shawver told BioWorld. When I was diagnosed, my first thought was, Im going to get my tumor profile. I thought that would be easy, but it wasnt. Shawver got lucky; her cancer was discovered at stage I. Still, she learned that ovarian cancers high recurrence rate subjected many women and their physicians to a treatment guessing game. Although multiple treatment options exist for refractory and recurrent ovarian cancer, the individual response rate is less than 10 percent, according to Shawver. When she complained that ovarian cancer was still treated empirically, a colleague, attorney Tracy Macuga, encouraged Shawver to apply her experience as a biotech researcher and executive to change that paradigm. Recognizing that the market for ovarian cancer which is newly diagnosed in some 21,000 women in the U.S. each year was too small to sustain a for-profit business, Macuga suggested a foundation. She proposed the name the Clearity Foundation to reflect Shawvers cancer, which was the chemo-refractory clear-cell subtype. The name struck a chord with Shawver that we were clear about treating recurrent and refractory disease and, in 2008, she launched the foundation. The Clearity Foundation is a 501(c)(3) not-forprofit that serves as a clearinghouse for women diagnosed with refractory and recurrent ovarian cancer. With the goal of helping women diagnosed with ovarian cancer to find the most appropriate treatment available at the time they need a decision, its website lists many of the clinical trials for ovarian cancer and provides a link to the complete list at the National Institutes of Health. The foundation also partners with CLIAcertified diagnostic labs to offer access to immunohistochemical analyses, gene amplification and mutational analysis of tumor samples. The foundation pays for tests to be performed if they are not covered by insurance and interfaces with a patients gynecologic oncologist, surgeon, pathologist and genetic counselor to ensure that appropriate samples for molecular profiling are obtained and results including treatment options are communicated to the treating physician. To date, the foundation has profiled the tumors of nearly 200 women. Were the only foundation in America that is

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focused on women who are diagnosed with cancer today and need help today, Shawver explained. We are not about early detection, and were not about cures for the future. Our mission is simply to help women and their physicians who are facing difficult treatment decisions. Using that mission as a platform to raise grants and other funding requires the foundation to run a lean operation. With only one full-time and three part-time employees, plus volunteers and consultants, the organization operates almost virtually. Shawver hopes to expand the staff as more physicians and patients seek out the foundations services. We want to stay up to date with the latest technologies and markers that match to drug efficacy, she explained. Today, those technologies consist of a battery of chemical markers, mutational analyses and DNA amplification tests. Tomorrow, the science might encompass circulating tumor cells or microRNA, she added. Until recently, Shawver served as CEO of San Diego-based Phenomix Corp., which ceased operations last month. As an entrepreneur-in-residence at 5AM Ventures, in Menlo Park, Calif., shes temporarily devoting additional time to Clearity. The foundations board members and officers also volunteer their time. Partners such as molecular diagnostics company Illumina Inc., of San Diego; advisory firms Blueprint Life Science Group, of San Francisco; and New York-based public relations firm Porter Novelli Life Sciences offer

in-kind services and underwrite educational and other events. To date, the foundations signature achievement has been to facilitate a system to transfer ovarian cancer samples from hospital pathology labs to specialized testing facilities, Shawver said. In April, she also presented a poster at the American Association for Cancer Researchs annual meeting in Washington, describing the dynamic range and expression of ovarian cancer markers that matched to drugs in a subset of patients in the foundations database. Long term, the Clearity Foundation hopes to improve the survival rate and quality of life for women with ovarian cancer. Shawver also wants to educate payers about the value of tumor profiling. Across all cancers, only 25 percent of patients respond to chemotherapy, so many patients get toxicity without benefit at a cost, she said. If patients and their physicians could choose from among five therapeutic options to treat recurrent cancer, why not pick one where theres some rationale to expect a response? she asked. Shawver hopes the evidence on ovarian cancer that the Clearity Foundation is gathering today will lead to an appropriate clinical trial design where the data can be tested formally. I chose to start a foundation because I couldnt find anything out there that was focused on recurrent patients, she said. I knew how frustrated I was when I was trying to get my tumor profiled. If youre Jane Doe off the street, its even more difficult to get access to the latest diagnostic tools.

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Myelin rePAir grouP Works to develoP drugs, cure Ms


Scott Johnson is a man in a hurry to discover a cure for multiple sclerosis (MS). If he succeeds, the founder and president of the Myelin Repair Foundation, of Saratoga, Calif., will have conquered the disease hes lived with since 1976. And in the process, he also will have demonstrated the speed and effectiveness of his new model for producing treatments. Johnson was diagnosed with MS during his senior year in college, becoming one of about 400,000 Americans with the disease. MS attacks the brain, spinal cord and optic nerves. It is believed to be caused by an abnormal immune reaction which initiates an attack on myelin, a fat and protein substance that insulates nerve fibers. The attack results in lesions which slow or halt nerve impulses. The severity and symptoms of MS are unpredictable; Johnson kept moving. He built a career as an entrepreneur and consultant working with a series of start-up companies. As years passed, however, his frustration over the slow pace of discovery of a cure increased along with his physical limitations a limp, a right arm that hung at his side. Channeling his frustration, he tried to find out if there was a better way. Before long, he determined that one roadblock to drug development was an academic culture that encourages scientists to keep promising discoveries hidden until they can be published. Another was the disconnect between academic scientists and those who develop drugs commercially. Johnson founded the Myelin Repair Foundation in 2002. He started by recruiting four myelin-repair specialists from Case-Western Reserve University, Northwestern University, Stanford University and the University of Chicago by paying for their research and promising to share potential profits if they shared data and ideas. Next Johnson hired a team of experienced pharmaceutical industry specialists who understood how to pick promising drug candidates and who would work with the scientists to ensure that they integrated commercial requirements into their research. We were able to bring together a network of academics to work collaboratively, but we also wanted to work with commercial entities, said Jay Tung, the foundations vice president of drug discovery and a former Elan Corp. plc executive. Our mantra is shots on goal how many targets have we identified? We see ourselves as a partner with commercial entities and see our role as derisking validated targets. Adds Johnson: We have to work with academics to steer their work to be more therapeutically relevant. We need a multidisciplinary team, but that does not happen naturally, so we need a bridge over to drug developers. I think the system has evolved to where it is because most of the research funding is coming from the government; the master has been the government, not pharma. Johnson believes that foundations like his not academic institutions or biotech companies are probably in the best position to speed up the drug discovery and development process. Academic research has gotten more removed from the biotech industry, he said. Id say that 95 percent of academics dont have an interest in working with or being involved with commercial

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companies. None of the original scientists who started with our foundation wanted to be associated with a company, but nonprofits are a lot less threatening. And by being associated with us and exposed to our partners, they lost that distrust and apprehension of working with companies. I think you need that buffer, and I think youll need it for another 10 to 20 years. Johnsons trademarked model is called the Accelerated Research Collaboration (ARC). He pointed to at least five ways it differs from traditional research and drug discovery models: First, the ARC model requires sharing discoveries without the delays associated with publishing scientific papers. Second, experiments in the ARC model fit into an overall research plan focused on identifying therapeutic targets. Third, an aggressive IP policy protects discoveries and reduces risk for commercial development. Traditionally, Johnson said, university technology transfer offices are discouraged from investing in IP protection for biological discoveries. Fourth, the ARC model promotes relationships with biotech and pharmaceutical companies to encourage evaluation and licensing for drug development and clinical trials. Fifth, the ARC model measures success in the delivery of patient treatments, not the publication of scientific papers. While the foundation cant yet take credit for delivering patient treatments, it can point to a number of significant accomplishments for an 8-year-old organization. More than 150 potential targets (proteins, genes, pathways or transcription factors) have been identified. Two dozen new

research tools with application to neurological disease research have been developed. Two U.S. patents have been issued, and 18 more patent applications published. More than 80 articles have been published in peer-reviewed scientific journals. Moreover, Johnson has raised more than $43 million from MS patients and entrepreneurs and the first clinical trial is expected in about 2014. Yet, Johnson said, he gets a mixed message from other foundations about the ARC model. Those interested in the ARC model are mostly smaller and younger organizations, he said. Legacy organizations are entrenched in doing it the way theyve always done it. Many nonprofits behave like mini-NIHs in terms of giving out grants, Tung noted. We think the real value that a nonprofit can add is by participating in every step in the value chain. Johnson believes it is only a matter of time before the new model delivers a cure for MS and demonstrates that theres a better way to discover and develop drugs. When you look at what weve done to produce 150 targets, and understand that weve only spent $28 million, you realize that a very small amount of money can have a dramatic impact, Johnson said. We cant change the way money is given out, but we can try to incent people. Small changes can have dramatic impacts, and were trying to demonstrate that. When we do, then there will be a groundswell to try to move more money in this direction.

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oneWorld heAlth seeks biotech solutions for develoPing World


The Institute for OneWorld Health (iOWH) has a novel business model: The nonprofit pharmaceutical company was founded in 2000 to pursue promising drug candidates that have been discarded by for-profit companies for lack of a viable market. The iOWH seeks to advance some of these compounds to the clinic to develop safe, effective and affordable medicines for diseases that primarily affect the worlds poorest populations illnesses such as diarrhea, visceral leishmaniasis (VL), malaria and soil-transmitted helminths. The iOWH is accomplishing its goal by soliciting donations from private foundations and governments to fund development costs; seeking university, government and biotech companies to conduct basic research; and partnering with hospitals and health agencies in the developing world to reach target populations. With several dozen employees at its San Francisco headquarters and approximately 15 in India, the institute serves as facilitator, shepherding drug leads through the development process and assembling the resources to deliver them to the developing world. When you look at global health, about 90 percent of the spending goes towards distribution, Richard Chin, iOWHs CEO, told BioWorld. Even when there are no doctors, no roads, no electricity and no pharmacies, these vaccines and drugs still need to get out to the patients in a safe and reliable way. Since R&D accounts for only 10 percent, we have to be very efficient, Chin added. We cant spend $1 billion to develop a new drug. He estimates that nonprofits can develop a drug for one-tenth the cost of big pharmas. The iOWH uses specific criteria to select its drug candidates: Chemical stability: A compound must remain stable inside its solution, cream or tablet given the tropical conditions that it will likely face in locations where its needed. Ease and cost of synthesis: The compound must show a beneficial dose-to-cost ratio for its synthesis and final manufacturing. Toxicity profile: The compound must demonstrate minimal toxicity or significantly lower toxicity when compared to current therapy. Efficacy: The compound must demonstrate improved anti-parasitic activity compared to existing therapy. Affordability: The compound must be affordable to those who need it, either directly or through government subsidy. Clinical need and global impact: The compound must meet a significant clinical need in at least one area of the developing world and must benefit individuals who do not have access to safe and effective therapy. Ethics: The compound must have been studied using globally sanctioned and approved ethical standards of research, which ensure the protection of human research subjects. Finding compounds that meet these objectives is daunting, admitted Chin, a Korean-born internist with extensive experience in drug development, including stints as president and CEO at South San Francisco-based Oxigene Inc., and senior vice president and head of global development for Elan Corporation plc, of Dublin, Ireland. Only 10 percent of global expenditures on health R&D

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are devoted to problems that primarily affect the poorest 90 percent of the worlds population, according to Chin. Even with the Bill and Melinda Gates Foundation donating some $2 billion to $3 billion annually to nonprofit health foundations for drug development, thats less than half of what the big pharmas Sanofi, Pfizer, Merck spend, Chin said. The advantage of the nonprofit structure is that were not constrained to pursuing drugs that will generate a large return, he added. That being said, we dont have access to the capital markets, and this is a very capital-intensive business. With the Seattle, Wash.-based Gates Foundation providing nearly two-thirds of its funding, the iOWH has achieved several significant milestones. The institute developed the antibiotic paromomycin intramuscular (IM) injection as a new treatment for VL, a deadly disease transmitted through the bite of an infected sand fly. Paromomycin IM injection is an off-patent aminoglycoside antibiotic that has been marketed in the U.S. as an oral formulation to treat intestinal parasites. Approximately 500,000 new cases of VL occur annually worldwide more than 90 percent of them in India, Bangladesh, Sudan, Brazil and Nepal. The largest Phase III trial ever performed for VL concluded in November 2004. The iOWH, in collaboration with the Special Programme for Research and Training in Tropical Diseases at the World Health Organization (WHO/ TDR), treated 666 VL patients in India. The following year, the institute received orphan drug designation for paromomycin IM injection to treat VL from the U.S. FDA and the European Agency for the Evaluation of Medicinal Products. Gland Pharma Ltd., of Hyderabad, India, agreed to manufacture the drug, and in 2006 the drug controller general of India approved the injection

to treat VL. In May 2007, paromomycin IM injection was included on WHOs model list of essential medicines. This fall, the iOWH expanded the paromomycin program to Nepal and Bangladesh. In 2006, the institute implemented a program to combat diarrheal disease, developing antisecretory drugs as an adjunct to oral rehydration therapy to reduce stool output and shorten the duration of diarrheal episodes. In 2008, iOWH entered a research collaboration with F. Hoffmann-La Roche AG, of Basel, Switzerland, that allowed the institute to screen more than 780,000 molecules from Roches compound library to identify a potential new drug to treat diarrheal diseases. In 2009, the iOWH successfully completed its first screening campaign and identified up to 40 new drug leads for additional study. Subsequently, the iOWH signed a collaboration agreement with Novartis AG, also of Basel, that will allow the institute to select promising drug candidates that are ready for preclinical testing. Currently, the institute is working with the Novartis Institutes for BioMedical Research to treat infectious diarrhea by inhibiting the cystic fibrosis (CF) transmembrane conductance regulator chloride channel. Because infectious diarrhea often is caused by over-activation of the CF channel, a CF channel blocker could help to reduce fluid and electrolyte loss, according to the Institute. The Gates Foundation also has given the iOWH $64 million to develop and prepare for large-scale commercialization of semisynthetic artemisinin, an ingredient in artemisinin-based combination therapies (ACTs) for malaria. The iOWH is partnering with Paris-based SanofiAventis SA with a goal of commercializing ACTs with semisynthetic artemisinin in 2012, making the institute the first commercial or nonprofit

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pharmaceutical company to develop a product from synthetic biology, according to Chin. With the inherent need for partnerships at every point along the development pipeline, nonprofits have a more diverse roster of stakeholders than for-profit enterprises, according to Chin, ranging from governments and health care delivery systems to academics and individual donors. The

iOWH has attracted great partners, both from biotech and big pharma, he said. Nevertheless, global health is something the industry cares about more and more, Chin added. Five years ago, if we had approached a big pharma company, we would have been sent to their PR department. Now, were sent to the head of R&D.

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