Technology Marches On, And Financings Of The Fortnight Is There!

Digital future? Sounds expensive.... and confusing! Instead, let's talk about the recent past. What stood out for us in this latest fortnight-plus – extended a bit to accommodate the Thanksgiving holiday and our expanded waistlines – were two vast sums of money for companies plying cutting-edge biomedical technologies that, despite some successes in previous permutations, are still high risk. 

We’ll start with the second, because it’s a more obvious case. The company is Juno Therapeutics, which has rounded up a few programs of cancer immunotherapy under one corporate roof. None of them use the infused-antibody paradigm of Yervoy (ipilumumab), the Bristol-Myers Squibb product approved for melanoma treatment, but the much more complicated dance of autologous cell therapy that Dendreon, with its prostate cancer treatment, showed a few years ago could make it to market. Dendreon also ran into trouble, however, because the dance – removing blood from patients, isolating T-cells, shipping them to a lab, re-engineering them, shipping them back, and re-infusing them into the patient – was more than just putting your feet on the floor in the right sequence. Juno’s backers, to the tune of $120 million and, soon, a lot more (see our blurb below), think the Seattle/New York startup has all the right moves, including improvements to the process and stunning (but small sample size) Phase I data from one of its programs. (Xconomy's Luke Timmerman got the early access and the jump on everyone this week for an excellent long-take on the company.)

The other technology-driven story is the second massive cash infusion for Moderna Therapeutics, the Flagship company that wants to inject modified messenger RNA into patients to spur them to produce their own therapeutic proteins. Moderna simmered sotto vocce within Flagship for a couple years until late 2012, when it emerged with a $40 million commitment. Still years away from clinical proof of concept, it almost immediately secured a licensing deal with AstraZeneca with a $240 million upfront that gives AZ rights to cardiovascular and metabolic programs that emerge from Moderna. 

Which brings us to the week before Thanksgiving, when Moderna added to the pile with a $110 million Series B round from Flagship and a raft of undisclosed backers. We’re a long ways from learning if Moderna’s ambitious idea works, but if it does, it will have to overcome a hurdle that has bedeviled many other companies – often extremely well-funded, too – using RNA-based therapeutics. Those oligos don’t hold up well in the body. Delivery is hard. 

When two researchers won the Nobel Prize in 2006 for their discovery of RNA interference, the biotech world seemed well on its way to developing therapeutics based on the gene-silencing technique. Two companies in particular, Sirna Therapeutics and Alnylam Pharmaceuticals, seemed poised to battle for years. Not quite. Merck & Co. bought Sirna for a cool billion dollars, and it was never heard from again. Alnylam’s rich alliances with Big Pharma came to a crashing halt at the end of last decade.

Alnylam was left to clean up the mess with a big restructuring, but it has steadily rebuilt value, and it recently scored notable Phase I data for a program based on its subcutaneous delivery technology. Its share price has rebounded and at $62.98, it’s nearly twice as high as it flew in the heady days of the ‘00s, before its pharma partners abandoned ship. 

So what to make of these new blockbuster financings? Juno is building upon the rollercoaster experience of Dendreon, even hiring Dendreon's former COO as its CEO. Its investors apparently think nothing short of a full financial blitz will make autologous cell therapy 2.0 a winning version. And Moderna has enough cash now to hand-deliver every dose to every patient on a gold-embossed platinum serving tray. And to get into patients' bodies, they might be able to use a subcutaneous approach, too. 

What will be the next frustrating biotechnology to spur a new round of hopeful spending? When the money flows, you'll certainly be able to read about it in....

Juno Therapeutics/Argos Therapeutics: Hello, cancer immunotherapy. The big Series A financing news this week – this year? – was Juno’s $120 million haul to help the company develop and commercialize not one, not two, but three autologous immunotherapy platforms from two rival research institutions. Autologous is like the high-profile Dendreon: T-cells are removed from the patient, genetically souped up in a lab to recognize and kill cancer cells, then re-infused into the patient. The top-line investors in Juno are ARCH Venture Partners and the Alaska Permanent Fund, which invests that state’s oil revenues. Which means Juno – perhaps a clever way to give Alaska and its capital city naming rights? – is cashing in on former Governor Sarah Palin’s successful campaign to raise taxes on oil companies. That tax hike is now the subject of a major political battle, by the way. But we digress. Alaska’s fund managers won’t have a Juno board seat, which means ARCH’s Robert Nelsen is the main money man to herd cats as Juno’s riches are disbursed to folks at Memorial Sloan-Kettering Cancer Center, the Fred Hutchinson Memorial Cancer Center, and Seattle Children's Research Institute. Nelsen tells us that the groups will continue to run their own cancer immunotherapy programs under Juno’s roof, and “may the best data win.” (The Sloan-Kettering folks are unveiling at ASH this weekend a study that brings the percentage of Phase I patients treated with MSKCC’s CART-19 immunotherapy who had a complete response to 88%, or 15 of 17: basically their cancer disappeared.) What’s more, Nelsen says a Series B round “larger than the Series A” is about six months away. We’ll have more on Juno in this week’s issue of "The Pink Sheet", and in the upcoming Start-Up magazine. Meanwhile, at the other end of the funding rainbow, Juno competitor Argos Therapeutics, which has been plugging away at autologous immunotherapy for more than a decade, also had funding news. It topped up its Series E round to $60 million as it continues a pivotal trial in renal cell carcinoma. The first tranche of the E round came in August and included warrants. Argos withdrew an IPO bid in 2012 and instead brought in a Series D round. Other than both working on autologous immunotherapy systems, Argos and Juno have another connection: Argos’ recent backers included Russian and South Korean pharma companies, which mean Juno’s investors can see Argos’ investors from their kitchen window.  – Alex Lash
 
Xencor: Dilution was the headline for the IPO of antibody company Xencor. It priced December 3 at one-third of the mid-point of its original range, and to compensate it doubled its shares sold, and then some. It first filed to raise $75 million by selling 5 million shares at a mid-point of $15 each; it actually raised $70 million by selling 12.7 million at $5.50. That’s despite existing investors, which include MedImmune Ventures and HealthCare Ventures, committing to buy about $20.5 million, or 29%, of the IPO. Investors are demanding deep discounts as the biotech IPO market has softened this fall, so much so that it was a bit of a surprise Xencor made it out at all. Before it got the deal done, Xencor postponed its IPO, as did at least five other biotechs leading up to Thanksgiving. The Xencor offering was originally slated for Nov. 14. The worry for investors is that bankers are now scraping the bottom of the barrel. Perhaps the typical momentum of January’s JPMorgan conference can breathe a bit of life back into IPOs – if the right companies come along. (For a detailed look at the 2013 IPO strategies of OncoMed Pharmaceuticals, bluebird bio, and Ophthotech, check out this Start-Up feature.) At least for Xencor, the immediate investor upside of a deep discount is the potential for money left on the table. In its first day of trading on Dec. 3, Xencor got a 52% bounce, to $8.64 per share. Longer term, Xencor’s fate likely hangs on lead candidate XmAb5871 to treat rheumatoid arthritis, which won’t see a significant milestone until Phase Ib/IIa data due in the second half of 2014. A Phase IIb proof-of-concept trial would follow in the first half of 2015, with partner Amgen Inc. having data in hand in 2017 to determine if it will exercise its option. – Stacy Lawrence
 

Sitari Pharmaceuticals: The joint venture that Avalon Ventures and GlaxoSmithKline announced this spring hatched its first company November 22. The two staked Sitari, which will focus on developing a drug therapy for celiac disease based on research at Stanford University, to a $10 million Series A financing. The $10 million is not a straight cash investment, Avalon Managing Director Jay Lichter told "The Pink Sheet" DAILY. Avalon provides $3 million in cash, while GSK will provide up to $7 million in both cash and in-kind services. Using intellectual property licensed from the Stanford lab of Chaitan Khosla, Sitari will attempt to address celiac, an autoimmune digestive disease caused by intolerance to gluten, by inhibiting the transglutaminase 2 (TG2) pathway. Avalon will transfer tools from the Stanford labs to Sitari’s La Jolla, Calif., location where the GSK chemical libraries will be screened for potential TG2 inhibitors. That will be the starting point of the discovery work, along with considering compounds discovered by Khosla’s team, to determine which chemical scaffold might work best along with other pharmacodynamic factors, Lichter said. The company is years away from selection of a clinical candidate, however. At the time of selection, GSK will have the option to acquire the company or let Avalon take it forward on its own, said Pearl Huang, GSK’s global head of Discovery Partnerships with Academia (DPAC) unit. Huang said $10 million likely will be the standard A round for the companies co-founded by GSK and Avalon, based on both partners’ experience of what it takes to get to candidate selection. – Joseph Haas
 
5am Ventures: The San Francisco Bay Area firm said December 3 it has closed a $250 million fund, its fourth. It’s 20% larger than the group’s third fund, which closed in 2009. Four years between fund closes isn’t bad for an early-stage investor, although as managing partner Andy Schwab told Start-Up last year, “We’re realistic that not all of our companies can be two professors and an early-stage idea.” The firm has reached exits through investments in new companies that were vehicles for mature technologies, such as the Alza pain patch that was spun out and re-jiggered by Incline Therapeutics. 5am cashed out when The Medicines Co. bought Incline in 2012. It’s also had success extending a franchise. It sold Ilypsa in 2007 for $420 million to Amgen, which wanted the startup’s phosphate binder to treat chronic kidney disease. 5am and its syndicate partners spun out of Amgen some of the extra Ilypsa assets into a new company called... Relypsa. (They’re not called 5am for nothing; you’ve got to get up early to be that clever.) Amgen eventually shelved the Ilypsa program, but Relypsa made steady progress and raised north of $150 million in venture cash. It went public this fall, six years after its spin out. Relypsa also dampened its IPO ambitions, going out at $11 a share instead of $16 to $19, and raising $80 million (with insiders buying about a quarter of the shares) instead of roughly $120 million. (Shares closed at $19.60 on Dec. 5.) The new fund keeps the same managing partner lineup of Andy Schwab, Scott Rocklage, and John Diekman.  – Alex Lash
 
Best of the Rest (Highlights of Other Financing Activity This Fortnight): Continuing its focus on drug assets, Versant Ventures will create the biotech incubator Blueline Bioscience, which will spin off start-ups to which Celgene holds an option to buy... Versant also funded the latest Inception spin-off, Inception 4, an ophthalmic company that secured a joint research and option agreement with Bayer...Visterra added $8.1M to its Series A, which now totals $34.2M, and concurrently in-licensed dengue fever IP from MIT…Despite losing GSK as its Fabry disease partner, Amicus Therapeutics was busy: the company restructured its financial and corporate structure, announced $40M in new equity and debt financing, and acquired a lead ERT for Pompe disease in its takeover of Callidus Biopharma…Horizon Pharma netted $144M in a private senior notes sale, $35M of which will fund the purchase of exclusive US rights to AstraZeneca’s pain drug Vimovo…and Gilde Healthcare closed a $200M third fund dedicated to home- and digital-health, diagnostics and medtech, and pharmaceuticals. -- Amanda Micklus

Turn Out the Lights and Go Home, the Cleveland Clinic Has Cured Cancer, Convinced LeBron to Stay

ASCO approaches, and the season of cancer vaccine hype is upon us.

Exhibit A: Cleveland Clinic Researchers Develop Prototype Vaccine To Prevent Breast Cancer. That's the headline for this press release from the Cleveland Clinic's Lerner Research Institute, announcing a Nature Medicine letter, and featuring the quote below.

"We believe that this vaccine will someday be used to prevent breast cancer in adult women in the same way that vaccines prevent polio and measles in children," said Vincent Tuohy, Ph.D., the study's principal investigator and an immunologist in Cleveland Clinic's Lerner Research Institute Department of Immunology. "If it works in humans the way it works in mice, this will be monumental. We could eliminate breast cancer."

PR folks: you know you're hypey when even the Daily Mail takes a more measured tone in its headline. As blogger/consultant/sane person Sally Church points out, the drug development road and the odds are very long indeed. "Please, show us some solid DATA first before hyping a theory all over the internets, however well intentioned," she concludes.

Of course we wish Tuohy and company well and hope the optimism is well-founded. We hope we're not being too cynical. And for Cleveland's sake, we do hope LeBron stays put.

image from flickr user mrinray used under a creative commons license

Deals of the Week Pines for the Magic Number

Numbers are good. A couple of our favorites are 3 and 0, which happens to be the win-loss record of the San Francisco Giants after their opening series. We also like 59, the number of points Butler University scored against the Duke Blue Devils in Monday's NCAA championship game. Unfortunately Duke scored 61, prompting Butler fans the world over to ask head coach Brad Stevens -- who briefly had a marketing job at Eli Lilly before he joined Butler -- if he still had Prozac or Cymbalta samples to hand out. (If Stevens is fresh out, fans can just go to the Lilly Web site.)

We're thinking somberly of other numbers this morning: 34, the years John Paul Stevens will have served on the Supreme Court after his upcoming retirement, and 4, the number of miners still missing but possibly alive in West Virginia.

Our mind wanders to numbers in the wider world because here in the little sphere of biopharma deal-making, numbers were a wee bit hard to come by this week. Only one of our four chosen deals disclosed figures we could sink our teeth into, and even then it was all biobucks. Bah humbug!

Good thing, then, the deals this week were rich with more important things in life--unmet medical need for old scourges (malaria vaccine and tuberculosis) and cutting-edge science (stem-cell manipulation). We're all antsy to get our weekend started, so it's a-one, and a-two and...



Pfizer/MicuRx/Cumencor: With its April 6 deal with two biotechs to develop novel treatments for multi-drug resistant tuberculosis (MDR-TB), Pfizer not only addresses a critical unmet need in Asia but gains even more of a foothold in a key emerging market. Outside the developed world TB is an enormous problem, resulting in 5,000 deaths a day. China is a hotspot, with more than 25% of all cases of MDR-TB. The deal with US-China hybrid MicuRx and China-based Cumencor calls for Pfizer to provide an upfront payment, preclinical research funding, and downstream milestones linked to a drug’s development and commercialization. Specifics weren't disclosed, but even if the upfront money isn’t huge, it should push molecules well into the clinic since all the development work will be performed in Shanghai. For MicuRx, the agreement validates the biotech’s proprietary antibiotic discovery platform and is the firm's first deal since its $10 million Series A led by Morningside Group in 2007. For Pfizer, the deal highlights its interest in Asia-prevalent diseases, including head and neck cancer. In February, Pfizer signed a precompetitive deal with Lilly and Merck to form the not-for-profit the Asian Cancer Research Group. This week Pfizer highlighted its R&D efforts in Asia and its desire to increase the number of Asia-based clinical trials by 10%.--Ellen Foster Licking

Sanofi-Aventis/CureDM: Sanofi is in-licensing an early-stage compound with potential to restore a diabetic's ability to produce insulin and other pancreatic hormones, the company announced April 8. It is paying up to $335 million, plus sales royalties, to CureDM, a heretofore low-profile six-year-old startup, for global development and commercial rights to the novel human peptide, Pancreate. The firms did not break down the distribution of payments. The deal marks another move by Sanofi to bolster its diabetes business and eventually lessen its reliance on sales of its leading long-acting insulin Lantus and the short-acting insulin Apidra. It comes only a week after the Big Pharma bulked up the drug delivery portion of its leading diabetes franchise by entering into a deal with another small biotech, AgaMatrix, for blood glucose monitors.--Carlene Olsen

Fate Therapeutics/Verio Therapeutics: The San Diego stem-cell firm Fate bought a Canadian startup -- two scientists and their CEO, really -- for an undisclosed amount to bolster its efforts to develop drugs that push adult stem cells into therapeutic behavior. Fate has the small-molecule FT1050 in Phase 1 as a treatment to stimulate a cancer patient's hematopoietic stem cells to replenish after a cord blood transplant. Verio's scientists, based at a research hospital in Ottawa, are investigating protein-based drugs that encourage regeneration of cardiac, pancreatic and skeletal muscle tissues. The therapies could help repair damage due to heart attack, diabetes and muscular dystrophy. Verio CEO Frank Gleeson told "The Pink Sheet" DAILY that of Verio's preclinical compounds, the cardiac program has the clearest path to reaching the clinic. Verio has pulled in $1 million in seed funding; joining Fate lets it hire a few more scientists by year's end, Gleeson said. Fate in November closed a $30 million B round and execs say the cash should last for another year and a half, even with the Verio purchase. In addition to drug development, Fate aims to create a supply of induced pluripotent stem cells that it can license as discovery tools to drug firms.--A.L.

GlaxoSmithKline/Crucell: The two firms said Apr. 6 they would join forces on a next-generation malaria vaccine by combining two existing vaccines, but they'll need outside help to pay for it. Terms weren't disclosed, but the firms will each contribute a vaccine candidate and seek third-party funding for clinical trials. If a Phase I/IIa trial is successful, they will ask for financial help from public or non-profit partners to push into later-stage trials. The deal follows a 2003 agreement GSK and Crucell signed with the Walter Reed Army Institute of Research to test their then-preclinical vaccines both as standalone and combined candidates. Data suggested a combined approach would be more effective. Malaria is the fifth deadliest infectious disease in the world, and second deadliest in Africa. The agreement is the latest in a series of R&D tie-ups by the Dutch vaccine maker, which has benefited from going against industry trends and expanding its R&D footprint. --A.L.

Photo courtesy of flickr user fringley.

Heroes, Prophets and Presidential Candidates

Add candidates Obama and McCain to the national autism discussion. And, with that, add an unsettling note for vaccines during the next four years.

Earlier this month, we wrote about praise from an unusual quarter for Congressman Henry Waxman (D-CA). An American Enterprise Institute scholar called the Democrat a “hero” in the effort to reassure the country about the safety of childhood vaccines. Waxman was praised at a book review event for a new work tracing the history and misdirected arguments from the evangelists of a perceived new epidemic of autism (“Autism’s False Prophets,” Paul Offit).

Then, as a perfect example of how politically potent the subject of autism has become, the subject was raised by both candidates in the final presidential debate on Oct. 15.

Republican candidate McCain, who has previously suggested support for those arguing that a link exists between vaccines and autism, raised the issue first in the Oct. 15 debate. McCain discussed autism in relation to his choice of Sarah Palin as a running mate.

Palin “understands special-needs families,” McCain declared. “She understands that autism is on the rise, that we’ve got to find out what’s causing it, and we have to reach out to these families, and help them, and give them the help that they need as they raise these very special needs children.” [Note: Perceptive fact-checkers quickly clarified Palin’s familial relationship to the issue: she has a nephew who has autism.]

Not to cede the issue of caring about autism to his opponent, Obama jumped in when asked for a response on Palin’s qualifications: “I think it’s very commendable the work she’s done on behalf of special needs. I agree with that.”

But Obama said that McCain’s stated plan to freeze federal spending would make it impossible to conduct further work on autism research. “I do want to just point out that autism, for example, or other special needs will require some additional funding, if we’re going to get serious in terms of research.”

McCain returned to the subject of autism forty minutes later in the debate in a section on funding for education. He said again that vice-presidential candidate Palin “knows about” special educational needs and autism “better than most.” The Republican candidate promised that “we’ll find and we’ll spend the money, research, to find the cause of autism.”

As sensitive barometers of the hot political/social issues, the candidates confirm the potency of attention to autism. Both candidates are primed to pay attention to the disease from the White House. But because of the lingering public misperception of a link between vaccines, the political statements represent a discordant note for the public health effort and for the vaccine community from the upcoming election.

The “further research” approach to autism in the third debate, however, is an improvement, from the vaccine community’s point of view, over earlier references to concern about a relationship between the condition and vaccinations.

One current legislative push, under the sponsorship, of Manhattan Democrat Carolyn Maloney would require the National Institutes of Health to conduct comparative trials of vaccinated versus unvaccinated populations “to study and resolve the question of the possible link between thimerosal in vaccines and autism.”

A definite answer from a controlled clinical trial: that sounds like the best way to put lingering questions about the safety of vaccines to rest. But it is not as easy as it sounds.

George Washington University anthropologist and international affairs professor Roy Richard Grinker has devoted close attention to the issues of prevalence and incidence rates of autism. A father of an autistic daughter, in 2007, he wrote “Unstrange Minds: Remapping the World of Autism.”

Grinker questions the fundamental assumption that there is an epidemic of autism. He maintains that the perceived change in prevalence rates in autism that is driving the public attention is not really a change in rates but stems from changes in diagnostic criteria and methods and an increase in the numbers of childhood psychologists doctors. He told an American Enterprise Institute event on autism on October 11 that comparing historic prevalence rates of autism to current rates is not comparing “apples to oranges,” it is more like comparing “apples to automobiles.”

Grinker also says that it will be very difficult, if not ethically impossible, to compare vaccinated versus unvaccinated populations. Some of the groups suggested as the unvaccinated arms are not unvaccinated.

“There is a myth out there that the Amish are unvaccinated,” Grinker says. “That is not the case: the Amish are vaccinated, probably at a rate similar to African-American communities in urban areas.” He noted that the population of unvaccinated children tends to be children with other issues (such as compromised immune systems) which will make them difficult to study.

The promise of more studies sounds good in a political campaign. Autism studies may even develop into a health priority during the next budget-strapped years. If Grinker is correct, however, the practical issues surrounding those studies will make them much harder to perform than to promise.

Good News for Cervarix?

GlaxoSmithKline sees a light at the end of the tunnel for Cervarix at FDA; but the company is not ready to break into a mad dash to reach that light.

That’s the message from the June 30 update on GSK’s filing for the bi-valent/adjuvanted human papilloma virus vaccine. On June 30, the company said it had answered specific questions posed by FDA in its “complete response” rejection of the application at the end of last year (see here).

But GSK doesn’t want FDA to make a decision on the application as it stands now. GSK wants to add final data from an 18,000-pateint Phase III study (HPV-008 or NCT00122681 by its ClinicalTrials.gov name) before seeking a FDA decision.

GSK says that 008 will be completed this year and data will be submitted in the first half of 2009. The company says to expect “up to six months” following submission of the data for FDA to review the amended application. The company had reported in the spring that the final data collection should take place in September. The trial is being conducted at 178 centers in 14 countries. GSK is using hepatitis A vaccine as the control.

The primary reason for the update is that GSK originally said it would take about six months to answer FDA, and the review of the first high-visibility product with a new adjuvant is being closely watched by the vaccine field and by Wall Street.

But there are other reasons for GSK to step forward with Cervarix info now. Some of its competitors in the vaccine world have been releasing information recently that is increasing skepticism about the GSK model for an HPV vaccine.

Novartis told analysts on June 4 that it is finding the route for an adjuvanted flu vaccine through FDA trickier than it thought (see here). Jorge Reinhardt even described his adjuvant (MF59) as not a very pharmacologically active ingredient to help assure analysts that it could eventually make it through FDA’s safety review.

Merck turned a bit a bad news for its HPV vaccine Gardasil into worse news for GSK on June 25. Merck reported a “complete response” rejection from FDA on a supplemental application for Gardasil for older patients (women 27-45). Merck rules the HPV market alone in the US while GSK is stalled. Rejecting the application, FDA said that one of the claims that it did not accept was the idea that Gardasil could protect against HPV strains beyond the four specifically included in the vaccine (6,11,16, 18).

That rejection of the “cross-protection” claim is what hurts GSK. With only two strains covered, GSK has been banking on acceptance of a cross-protection claim to make its bi-valent match up to Merck’s quadra-valent product.

The rejection for Merck is one of those subtle regulatory situations where the sponsor is hurt but probably not nearly as badly as one of the sponsor’s competitors. Merck’s bad news may well be another reason why GSK is taking a measured approach to finding the end of the tunnel.

A GSK Success

One more note from the tough slog to the new world of adjuvant products--and this one relates to a GSK success. Its pre-pandemic flu vaccine (Prepandrix) was approved in Europe earlier in the year with a proprietary adjuvant. The company has tried to maintain a mystique around the special secret ingredient during development (See here). Most competitors thought it was an adjuvant called AS03, but GSK wouldn't say a word.

The secrecy is over. GSK had to make the ingredient public in final registration documents with the European Medicines Agency, made public at the beginning of June.

Lo and behold, the secret ingredient is AS03, composed of squalene (10.68 milligrams), DL-alpha-tocopherol (11.86 milligrams) and polysorbate 80 (4.85 milligrams). Not much of a secret after all. GSK, though, defends the attempt to create mystery around the adjuvant on the way to approval in Europe as sound competitive practice.

Well, it certainly caught our attention. Maybe it built some hype with public health officials as well.

Prepandrix, and its adjuvant, are undergoing clinical trials in the US. The vaccine would be made for North America in Quebec City at a different plant from the European product. It apparently has a long way to the end of the regulatory tunnel too. Every company with a stake in the adjuvant development effort should hope that GSK is as careful at preparing an application for the product as it was at tryingto keep the ingredient secret during development.

Confused Communications

I suppose it’s tempting to try to spice up the news during slow summer months. But Northwest Biotherapeutics should have known better than to issue a press release earlier this month declaring its delight in being “the first company to reach the market with a personalized therapeutic vaccine for brain cancer.”

The release stated that Switzerland’s Institute of Public Health had issued an Authorization for Use for the product. Exciting news, it seemed. The wires and papers picked it up. Even VCs and analysts were fooled--London-based house brokers Collins Stewart issued a report that talked about “history in the making”, with this first approval for “a new class of product called personalized vaccines.” This, the analyst said, was a “high value event.”

So in flocked the investors—Northwest’s stock, listed on the OTC bulletin board in the US and on London’s AIM since June this year, more than tripled.

Trouble is, it wasn’t an approval at all. The ‘news’ was an import-export authorization for the product in Switzerland, and one with conditions attached, which the company is still fulfilling. Northwest won’t seek product approvals in the US and EU before 2009.

All of this was clarified in a release issued a week later (why not clarify it properly in the first one?) prompting the stock to fall back to where it started.

Now, we’re not saying Northwest set out to deceive or confuse—you can judge that one for yourself. But we are saying that positioning an import-export order as equivalent to “reaching the market”—which is what Northwest did—is just silly. And suggesting, as the second release did, that the media is to blame isn’t very clever either.

Yes, cancer vaccines are indeed an exciting, promising area where a handful of companies may be on the cusp of a breakthrough. (Dendreon’s Phase III Provenge, an active cellular immunotherapy treatment for prostate cancer, received an approvable letter from FDA in May 2007.)

But the sector already has to battle with the disappointment caused by over-optimistic mainstream press reports about cures for cancer and Parkinson’s disease being around the corner. It doesn’t need its own members fuelling that fire. Nor does it need another report of misleading behavior, whether in promotional activities or in corporate communications.

Northwest has come back from the edge once already—it was saved by VC fund Toucan Capital after bombing out following its December 2001 Nasdaq listing. This episode won’t reassure its new investors. It wouldn't be surprising at all if the SEC took a long look at the announcements, given the share price movements. Nor will it help anyone else in the space, either—least of all the brain cancer patients with only a handful of inadequate treatments currently available to them.

While You Were Kicking the Habit ...

Not a big weekend for our particular brand of scuttlebutt, but here are a few tidbits of alliance- and health-care-oriented news that IN VIVO Blog picked up on over the weekend and in the wee hours of Monday morning ...

• You may have heard that a small and little-discussed film called "SiCKO" was released in the US ... we haven't seen it yet but will likely comment once we have. We know of at least one big fan!


• Late on Friday, Theravance said that GSK passed on its option to acquire 50% of the biotech's shares at $54.25. The option was a big part of the companies' 2004 deal that gave GSK the opportunity to cherry pick compounds from Theravance's pipeline (while simultaneously giving Theravance's shareholders a put option well north of the firm's IPO price). We wrote extensively about Theravance's strategy here.


• Novartis wades further into vaccines this morning with a broad alliance with the Austrian biotech Intercell. For €270 million in upfront equity (€150mm) and cash/option payments Novartis is securing options to more than 10 Intercell programs, from preclinical through Phase II. Novartis now owns 16.1% of Intercell.


• Finally, England's ban on smoking in public places took effect at 6am on Sunday, and we rejoiced. Now the UK-based members of our transatlantic blogging team can enjoy an ale at the pub without stinking like we've enjoyed an ale at the pub.

What Drug Makers Can Learn from Vaccines

Drug executives worried about rising safety hurdles, demands for larger trials and politicians’ growing influence on drug regulation could do worse than learn from their counterparts in vaccines.

Massive trial sizes and squeaky-clean safety have been part of the game in vaccines for years—since these are products given to millions of healthy individuals. “We’re used to these challenges,” Didier Hoch, President of Sanofi Pasteur MSD (SPMSD) told IN VIVO Blog this week.

And they’re used to dealing with a few of the other challenges drug firms are now facing, too, including demands for sound health economic and epidemiological data to support reimbursement and the need to engage not just with doctors, but a range of other stakeholders, too, including payors, policy-makers, patients and health workers.

As drug companies stumble, they too have to make the shift, as marketing gurus call it, from "share-of-voice" to "share-of-care". Many are still struggling to supply adequate cost-effectiveness data (and may as a result resort to risk-sharing reimbursement deals like Janssen-Cilag's UK proposal for Velcade).

Vaccines companies are used to dealing with politicians and policy-makers, since vaccines typically fit into national health care strategies. "We're already political," notes Hoch. "We already have the broader, global outlook" of how a product can improve public health and save costs, and the data to support that.

Hoch can point with confidence to cervical cancer vaccine Gardasil, which parent company Merck & Co. launched in the US last year and which is on track for blockbuster status, according to analysts. Indeed, Gardasil illustrates how vaccine products, as well as practices, are closing the gap with therapeutics--in terms of innovation, and price.

Gardasil is getting to market across Europe almost as fast as a classical drug (far faster than some traditional vaccines such as Wyeth's Prevnar against pneumococcal bacteria), according to Hoch, largely because preventing cancer is relatively novel. The crop of epidemiological and health economic data, plus the 30,000 + trial size, will have helped, too.

And at €330 per person (for three doses), Gardasil knocks down the old theory that vaccines don't command premium prices. (Though it’s still cheap enough, relative to some cancer drugs, for authorities to reimburse, as they have agreed to do in all of the largest European markets, other than the UK.)

Now sure, vaccines have been hot for some years now: bioterrorism and bird flu were just some of the factors that led to a scramble of Big Pharma (and little biotech) into the field; some returning to what they’d earlier cast aside.

They will get hotter still. Scientists are figuring out how to vaccinate against a wider range of conditions--including ones that haven’t even arrived and may never will, like bird flu. As we reported a few weeks ago, Novartis just committed up to $500m for an anti-smoking vaccine from Cytos. SPMSD and others have more novel vaccines, like Zostavax for shingles and post-herpetic neuralgia, in the pipeline.

Meanwhile, FDA and other regulators are becoming increasingly sceptical of drugs that treat the symptoms of disease, and looking for products which get closer to addressing the cause, or progression, of certain illnesses. Preventing them altogether is even better. And cheaper.

Small wonder, then, that Hoch has, over the last couple of years, had a direct reporting line into Sanofi-Aventis’ outgoing big boss, Jean-Francois Dehecq. Vaccines matter (and perhaps even more now, after one-time-potential blockbuster rimonabant’s big stumble).

SPMSD sets one final example that drug firms might take note of: R&D cooperation. Sanofi Pasteur MSD was created in 1994 as a joint venture between Sanofi-Aventis and Merck. Any vaccine in either company’s pipeline passes to SPMSD after Phase II for further development, approval and marketing in Europe.

The JV was set up because vaccines require large up front investments and significant regulatory expertise, including understanding of, and links to, each European government's policy-makers and approval system.

Given the rising costs and falling productivity of R&D in regular drug firms, pooling costs and risks doesn’t seem a bad idea.

Provenge, the Pazdur effect, and looking for a silver lining

Dendreon’s "approvable" letter for its cutting-edge prostate cancer vaccine Provenge this week asks for—among other things like further manufacturing specs—more clinical data, a request that sliced over 60% from the biotech’s market cap. (For more on Provenge’s rollercoaster background, see here and here.)

But why were Dendreon shares priced so high to begin with? An FDA advisory committee shocker in March, where FDA’s advisors voted 13-4 in favor of approving the vaccine. Indeed Provenge’s prospects for a positive ruling from the FDA panel looked slim going into that meeting: two Phase III studies supporting the application missed the primary endpoint target of time to progression as well as failing to meet secondary endpoints of clinical and pain progression and treatment failure.

And that’s not a good thing when you’re trying to prove you’ve got an effective product.

What won over the committee? Two things: First, an analysis of data from a subset of patients in one of the Phase III trials demonstrated a statistically significant increase in time to progression. Second, and perhaps as importantly, the review of the therapeutic vaccine falls under the purview of the agency’s Center for Biologic Evaluation & Research—not the Center for Drug Evaluation & Research’s Office of Oncology.

Provenge therefore avoided CDER’s Oncology Drugs Advisory Committee, which is now considered to be a stricter committee to go through because of the tone set by oncology director Richard Pazdur, MD.

One scenario that did not bode well for Provenge is the involvement of Pazdur himself in the review. When cancer drug reviews were organized under a newly created Office of Oncology in 2004, biologics and chemo-preventative drugs fell under the CDER office, while vaccines remained under the CBER umbrella. But Pazdur still has a hand in cancer vaccine reviews; for example, he consulted on the approval of Merck’s human papillomavirus vaccine Gardasil and has helped evaluate GSK’s competing HPV vaccine Cervarix.

Whether Pazdur is personally involved or not, FDA officials often say that they pay just as much attention to minority opinions as those in the majority when it comes to advisory committees. And the minority "no" opinions for Provenge were particularly unwavering.

It’s tough to say where Dendreon goes from here. Recovery from an FDA rejection can be agonizingly slow (see, for example, Xoma). Dendreon can at the very least hang its hat on the positive panel review as evidence of advocacy by a key body in the regulatory process. And the market potential for cancer vaccines—analysts expect it could grow to $6 billon by 2010--could dull the market effect of a negative FDA decision as investors hold firm with an eye toward the long-term possibilities.

Sanofi-Aventis’ recent acquisition of OxfordBiomedica’s renal cancer vaccine Trovax for approximately $700 million is hard evidence of interest in the field. That sustained interest could be Dendreon’s saving grace.