Thursday, May 15, 2008

BMS Gets Kai’s Heart Attack Compound Beating

Anyone who says there’s no such thing as a second chance hasn’t spent much time in biotech. Sure, plenty of compounds partnered for huge bio-bucks still end up in a laboratory morgue--or something akin to an assisted living facility--with development halted or rights returned to the original maker. But now and again, a compound is pulled out of V-tach, and put into rehab for a second shot at life.

The latest is Kai Pharmaceuticals’ delta protein kinase C inhibitor, KAI-9803, a potential first-in-class treatment for heart attack. Bristol-Myers Squibb announced plans to acquire rights to the drug this week.

Under the deal, BMS will pay Kai $25 million upfront, fund all future development including an upcoming $40 million Phase IIb trial, and pay up to $192 million in development and regulatory milestones. Additionally, BMS will purchase $10 million of KAI stock at the time of an initial public offering and pay royalties based on net sales.

This is the second time Kai has received a cash infusion courtesy of KAI-9803. The company originally partnered the drug in 2005 with the Japanese pharma Sankyo for $20 million upfront and up to $300 million in development and commercialization milestones. Following Sankyo’s merger with Daiichi, the combined Japanese entity returned rights to Kai in 2007 as part of a pipeline review.

Development deals dissolve all the time for any number of reasons. Chief among them: mergers, shifts in strategy, and pruning following pipeline rationalization. But the simplest and most obvious reason of all is that the drug simply failed to live up to its promise. Like maple syrup stuck to the kitchen table, questions about a compounds efficacy are a taint that’s not easily wiped clean.

Both BMS and Kai say no negative stigma clings to KAI-9803, however. That’s because after reacquiring the rights from Sankyo, Kai changed the drug’s formulation—from an intracoronary injection to intravenous delivery--and conducted two additional Phase I clinical trials.

As Kai CEO Steven James says: “It was a very different program when we partnered it with BMS.”

For BMS, KAI-9803 builds on the company’s cardiovascular heritage with the blood thinner Plavix. Unlike Plavix, which is used primarily as a chronic medication to reduce heart attacks and strokes, KAI-9803 is better suited for use in acute settings to reduce the size of a heart attack and improve clinical outcomes during treatment of myocardial infarction. It also has fast track status from FDA.

Sure, BMS has been talking up oncology and specialty drugs as it aims to become a “next generation biopharma,” but management has still maintained that cardiovascular and metabolic diseases remain core.

Now if you’re wondering how often compounds become successfully marketed drugs the second go around under new ownership, the answer is ... sometimes.

Consider Lilly’s erectile dysfunction drug Cialis, developed in a joint partnership with Icos. Cialis generated sales of $1.22 billion last year with growth of 25 percent. Pretty successful, but its future wasn’t always so bright.

Tadalafil emerged out of a collaboration with GlaxoSmithKline that dates back to 1991, when the two companies were studying PDE modulators for CV and anti-inflammatory diseases. The deal broke off in 1997 after Glaxo acquired Burroughs Wellcome. Icos reacquired rights to the compound, then in Phase I for CV disease, and repartnered it with Lilly in 1998. Cialis was approved for erectile dysfunction five years later.

The jury is still out on Antisoma’s potentially first-in-class vascular disrupting agent ASA404 (previously AS1404). Antisoma’s new partner Novartis recently initiated a 1,200-patient Phase III trial evaluating ASA404 as combination treatment for non-small cell lung cancer after Roche passed on its option for the drug in 2006.

But don’t forget Fabre-Kramer Pharmaceuticals’ serotonin receptor agonist gepirone ER, which was deemed “not approvable” by FDA for the third time last year for major depressive disorder. GSK inked a development and commercialization deal for the drug in February 2007, prior to the receipt of the letter, after an earlier deal with Organon fell through.

GPC Biotech’s failed next-generation oral platinum chemotherapy satraplatin has also faced an arduous road to development. It is currently partnered with Pharmion in Europe, but its history goes like this: GPC acquired satraplatin from Spectrum Pharmaceuticals in 2002, which licensed it from Johnson Matthey PLC in 2001, which had previously licensed it to BMS, which took it through Phase I and II before handing it back to Johnson Matthey in 2001. Phew.

Don’t count satraplatin out. With a past that convoluted, there’s sure to be another partner willing to brush it off and polish it up. Just don’t all jump in line at once. – Jessica Merrill

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