When heavyweight scientists meet snake-oil salesmen…

Yesterday, Flex Pharma (NASDAQ: FLKX) announced the pricing of its IPO of 5,400,000 shares of common stock at $16.00 per share. Both Derek Lowe and Adam Feuerstein have their suspicions about the company.

Flex is developing treatments for muscle cramps. Very good. Approximately 4 million U.S. adults over the age of 65 suffer from nocturnal leg cramps. Maybe the disease is not killing people, but it’s pretty inconvenient. There’s no treatment so far.

Flex’s scientific advisory board comprises four scientists of National Academy of Sciences including Roderick MacKinnon, Bruce Bean, David Julius, and Christopher Walsh. MacKinnon won the Nobel Prize in Chemistry in 2003 for his work on ion channels, and so his anti-cramping crusade seemed a natural extension of that work.

Flex was founded by Christoph Westphal in May 2014 and raised $40 million in September 2014. Several heavyweights including John Sculley (former Apple CEO), John Maraganore (Alnylam CEO), Michelle Dipp (OvaScience CEO), and Roger Tung (Concert CEO) stepped into the board of Flex.

Suspicions were roused on the therapy itself. It is a mixture of ginger extract, cinnamon extract, and capsicum, which are seasonings commonly added into Chinese food. Furthermore, the company intends to sidestep rigorous clinical trials by going the dietary supplement route.

Adam Feuerstein called Cristoph Westphal the biotech industry’s Arctic ice-cube salesman who has a knack for convincing unsuspecting investors and pharma companies to buy his food-as-medicine concoctions.

I just wonder what Flex is doing. Making drug or making money? Flex said “if the results of proof-of-concept studies are favorable, we intend to pursue the development of a drug product candidate.” Maybe we should wait more.

Sofosbuvir inventor becomes the premier HBV drug developer

Two weeks ago, Tekmira Pharmaceuticals (NASDAQ: TKMR) and OnCore Biopharma announced a merger agreement, creating the premier HBV drug developer. According to the press release on January 21, the new Tekmira has dosed the first subject in a Phase I clinical trial of TKM-HBV. Several biotech companies (e.g., GILD/GBIM, ARWR, ALNY, ISIS) are developing HBV drugs. Tekmira has two advantages over other companies:

1. Respected management team

OnCore Biopharman was founded by former executives of Pharmasset which successfully developed blockbuster hepatitis C drug sofosbuvir and was acquired by Gilead Sciences (NASDAQ: GILD) for $11 billion. Michael Sofia, the inventor of sofosbuvir, will step into the role of Chief Scientific Officer. Investors may expect the same Sovaldi-like success in hepatitis B.

2. Combination therapy

Although several nucleoside analogues and interferon-α have been approved for the treatment of hepatitis B, currently available therapies do not lead to cure. Tekmira’s strategy is to take a combination approach toward an hepatitis B cure. The company is building a robust portfolio of compounds with eight distinct mechanisms. Advancing multiple programs at the same time may increase the chances of success.

Most of Tekmira’s candidates have yet to enter the clinic, and investors should take great risk. Although the prevalence of hepatitis B exceeds that of hepatitis C globally (350 vs. 200 million), the hepatitis B market may smaller than that of hepatitis C, because the disease is now only common in East Asia and sub-Saharan Africa. In the U.S., there are only 1.4 million patients with hepatitis B.

Related Articles:

Three hot anti-HBV candidates: GS-9620, NVR-1221, ARC-520

Aspyrian raises $8.5 million to develop super antibody-drug conjugates

According to a recent SEC filing, Aspyrian Therapeutics has raised almost $8.5 million in equity financing. The company is developing an enhanced version of antibody-drug conjugates (ADCs) called near-infrared photoimmunotherapy (PIT).

Aspyrian in-licensed the PIT technology form the National Cancer Institute and human monoclonal antibodies from Sorrento Therapeutics (NASDAQ: SRNE). In addition, Goodwin Biotechnology has been selected as CMO for cGMP manufacturing of the PIT.

The PIT technology is a combination of photodynamic therapy (PDT) and ADC technology[1]. Photosensitizer (e.g., IR700) is conjugated to the monoclonal antibody with stable linkers. Cell death is induced only after antibody binding to cell-surface antigens, and after tumor localized activation of the photosensitizer with near-infrared light.

The combination of selective binding to cell-surface antigens and organ localized NIR activation has the potential to avoid the dose-limiting adverse effects of conventional toxin-loaded ADCs. Another desirable feature of PIT is that it also emits a diagnostic fluorescence indicating the cancer tissues.

Aspyrian’s PIT targeting EGFR are currently in preclinical development. Early stage clinical data are expected at the end of this year.

[1] Nat Med. 2011, 17(12), 1685-1691.

Why Novartis gives up two Phase III melanoma drugs to Array?

On January 23, 2015, Array BioPharma (NASDAQ:ARRY) acquired worldwide rights to Novartis’ encorafenib, a BRAF inhibitor currently in Phase III development for the treatment of melanoma. Array will make a minimal payment to Novartis and has no obligations to offer any milestone payments or royalties.

This deal seems absurd because Novartis gave up two Phase III products to Array for practically nothing in return. In December 2014, Array announced an agreement with Novartis to regain global rights to the Phase III MEK inhibitor binimetinib. Investors would wonder why Novartis seemed so willing to give up melanoma drugs.

  1. Redundant products

Back in April 2014, Novartis acquired GlaxoSmithKline oncology products for an initial $14.5 billion and up to $1.5 billion in development milestones. The deal gave Novartis two approved melanoma drugs, BRAF inhibitor dabrafenib and MEK inhibitor trametinib, making encorafenib and binimetinib redundant.

  1. Competitive landscape

The FDA has approved three BARF/MEK inhibitors (vemurafenib, dabrafenib and trametinib) for the treatment of metastatic melanoma with BRAF V600E or V600K mutations. Exelixis partner Genentech has filed an NDA for MEK inhibitor cobimetinib in combination with BRAF inhibitor vemurafenib. Array falls behind both Novartis and Genentech. Furthermore, immune checkpoint modulators (e.g., anti-PD1/PDL1, anti-CTLA4) complicate the treatment of melanoma.

  1. Limited market

According to the National Cancer Institute, 9,710 Americans would die from melanoma in 2014. About 50 % of melanoma harbors activating BRAF mutations (over 90 % V600E). Roche priced vemurafenib at $10,000/month reported annual sales of CHF 354 million in 2013. However the drug showed signs of weakness in 2014, with sales of CHF 230 million in the first nine months.

Cytokinetics needs an SPA for ALS drug

Amyotrophic lateral sclerosis (ALS) is a fatal neurological disease caused by progressive degeneration of motor neurons. When the motor neurons die, the ability of the brain to control muscle movement is lost. Patients in later stages of ALS may become completely paralyzed, which includes losing the ability to control their breathing.

ALS became well known worldwide since the Ice Bucket Challenge became popular in 2014. More than 12,000 people in the U.S. have ALS, for a prevalence of 3.9/100,000. Riluzole (rilutek) is the only treatment shown to improve survival, but only for 2-3 months. Sales of Riluzole peaked at around $50 million per year.

BrainStorm Cell Therapeutics (NASDAQ: BCLI) and Neuralstem (NASDAQ: CUR) are developing stem cell therapies for the treatment of ALS. Cytokinetics (NASDAQ: CYTK) and MediciNova (NASDAQ: MNOV) are testing orally bioavailable, small molecules (tirasemtiv and ibudilast) in clinical trials.

Cytokinetics’ tirasemtiv (CK-2017357) is a fast skeletal troponin activator[1] which sensitizes muscle to calcium, enabling more powerful contractions. The drug does not affect the degeneration of motor neurons. It is treating symptoms and not the cause of the disease.

On April 25, 2014, Cytokinetics announced top-line results from the Phase IIb BENEFIT-ALS trial. Tirasemtiv failed to reach the primary endpoint of ALSFRS-R. The company’s stock plummeted 65% to $4.5 on news of the failure. Recently, the stock price has rebounded to $7.5.

While the trial did not meet its primary efficacy endpoint, treatment with tirasemtiv resulted in a statistically significant improvement in Slow Vital Capacity (SVC). The rate of decline in SVC for tirasemtiv was only one-third that of control patients.

SVC Placebo (n=210) Tirasemtiv (n=178) All (n=388)
Baseline 89.7 85.7 87.8
Changes from Baseline p-value
Week 4 -3.89 -0.99 0.001
Week 8 -5.81 -2.85 0.004
Week 12 -8.66 -3.12 <0.0001

SVC is the maximum volume of air that can be exhaled slowly after slow maximum inhalation. It is an indicator of the strength of the skeletal muscles that are responsible for breathing.

However, the drug didn’t show statistically significant improvement in any secondary endpoints other than SVC. It showed no effect on sniff nasal inspiratory pressure (SNIP) and maximum voluntary ventilation (MVV), another two measures of pulmonary function.

Tirasemtiv appears to be really effective for certain patients. Here is a feedback from a patient called Susan Speranza.

As a patient suffering from ALS & a P2 participant I pray for approval. I was able to get up from a chair and roll over in bed unassisted, a HUGH improvement in my quality of life! True, not a cure but to the hundreds of thousands worldwide suffering every day, moving a little easier prolongs independence. The improvement in respiratory function alone justifies approval of Tirasemtiv since all of us die from respiratory failure. Millions of dollars and a decade of research have gone into this drug and PALS have nothing else (Rilutek extends life 2-3 months). As part of P3 trial, provide an open label arm for prior participants that benefited. It’s cruel & inhumane not to offer this drug.

Will the FDA accept SVC as the primary efficacy endpoint for regulatory approval? For most diseases, the FDA would not accept a surrogate measure like SVC as a primary endpoint. Investors expect an SPA agreement with the FDA before Phase III trial.

PS: Special Protocol Assessment (SPA) is a declaration from the FDA that an uncompleted Phase III trial’s design, clinical endpoints, and statistical analyses are acceptable for FDA approval.

Cytokinetics have communicated with the FDA regarding results from Phase IIb, however, no SPA agreement has been announced so far. Here is Cytokinetics’ statement in Form 10-Q filed on November 11, 2014.

We have begun regulatory interactions with the FDA regarding results from BENEFIT-ALS and have received initial feedback from the FDA. We believe that effects on SVC could be a Phase III clinical trial endpoint and could support registration of tirasemtiv as a potential treatment for patients with ALS. As a result, we have initiated planning for a potential Phase III clinical trial of tirasemtiv that could begin in 2015.

I don’t know whether Cytokinetics will run a Phase III trial without an SPA. Considering the urgently medical need, many key opinion leaders may advise the FDA to accept SVC as the primary endpoint. All the same, it is a huge risk must be considered.

[1] Nat Med. 2012, 18(3), 452-455.

Alcobra raised $27.9M to develop its once-failed ADHD drug

Alcobra (NASDAQ: ADHD) raised $27.9 million in a secondary offering at $4 per share last week. The stock raced from $4.00 on Janurary 8 to $6.98 on Janurary 16. This Israel-based pharmaceutical company intends to initiate a second Phase III trial for its once-failed MDX in adult attention deficit hyperactivity disorder (ADHD).

ADHD is one of the most common mental disorders that develop in children and can continue into adulthood for some. The disease affects 8-10% of school-aged children and about 4-5% of the adult population.

Several drugs (e.g., Ritalin, Adderall, Vyvanse, Concerta, Strattera, Intuniv) have been approved for the treatment of ADHD. In the U.S., roughly 70% of children and 49% of adults with ADHD are prescribed drugs. Strattera (atomoxetine) generated peak sales of $667 million in 2004. In 2007, Shire acquired New River Pharmaceuticals for their their ADHD drug Vyvanse (lisdexamfetamine) for $2.6 billion. Interestingly, the European ADHD market is much smaller than that of the U.S., with sales of roughly $135 million in 2012.

Alcobra’s MDX is an extended-release oral formulation of 5-HT2B receptor antagonist metadoxine, an old drug for the treatment of alcoholic liver disease. The company has completed a Phase IIb and a Phase III trial in adults with ADHD. Moreover, the company is testing the drug in pediatric ADHD and Fragile X syndrome in Phase II trials.

In the Phase IIb trial[1], 120 ADHD patients with a mean CAARS-INV Score of 37.1±8.1 were enrolled. The MDX group showed statistically significant decrease in CAARS Score compared with the placebo group (12.5±8.8 vs. 8.9±9.2, p=0.02).

However, topline results from the Phase III trial were somewhat disappointing. In the intent-to-treat (ITT) population, the changes in CAARS Score between the MDX group and the placebo group were not statistically different (11.7 vs. 9.6, p=0.15).

The company then performed a post hoc analysis in a modified intent-to-treat (mITT) population which excluded four patients with extreme responses in the placebo group. Alcobra’s CMO, Jonathan Rubin, explained:

We conducted the mITT analysis after observing the disproportional effect of a few extremely large placebo responses which were inconsistent with what has been reported in previous ADHD trials of MDX or other agents.

Placebo effects are so significant in the trials in ADHD. A review in 2009 suggested that ADHD drugs may produce a placebo effect not in patients, but in the persons who evaluate them[2]. If the extreme responses occurred in the MDX group, would Alcobra have excluded the so-called “not right” patients?

Alcobra announced the Phase III trial as a success, but the market did not accept the mITT analysis. The company’s stock sank 80% during October 2014. Surprisingly, the company comes back so quickly. The whole industry is on fire, I must say. Investors expect positive results with a subsequent acquisition by Big Pharma in early 2016.

Whether the second Phase III trial shows statistically significant results in ITT population remains to be seen. Anyhow, the reward/risk is not as attractive compared to before the first Phase III trial. Significant placebo effects observed in the previous trials create risks for investors.

[1] J Clin Psychiatry. 2012, 73(12), 1517-1523.

[2] J Dev Behav Pediatr. 2009, 30(2), 158-168.

Is CAR-NK superior to CAR-T?

On December 15, 2014, Patrick Soon Shiong, the richest physician in the world, acquired 19.9% of Sorrento Therapeutics’ (NASDAQ: SRNE) equity at $5.80 per share (about 41.7 million). Four days later, Sorrento and Conkwest announced an agreement to co-develop CAR-NK immunotherapy. Sorrento’s stock price reached a high of $11.38 on January 15, 2015.

CAR-T cell immunotherapy has been regarded as one of the most compelling breakthroughs in cancer treatment in recent years. Companies working on CAR-T (e.g., JUNO, KITE, BLCM, BLUE, ZIOP) are red hot at present. Sorrento/Conkwest is developing CAR-expressing NK cells rather than T cells to kill cancer cells. How about CAR-TNK compares to CAR-T?

Here is a comparison published in OncoImmunology[1]. The author, Hans Klingemann, is the inventor of the NK-92 cell line and co-founded ZelleRx in 2002, which was renamed Conkwest in 2010. CAR-NK has many several advantages over CAR-T:

(1) CAR-NK cells don’t produce IL-6 which is associated with the cytokine release syndrome. A series of patient deaths in the trials of CAR-T were linked to unusually high levels of IL-6.

(2) CAR-NK cells disappear relatively rapidly from the circulation owing to their limited lifespan. There is no concern about persisting CAR-associated side effects. Whereas Juno Therapeutics has to insert EGFRt gene into the CAR-T cells to control them.

(3) NK cells are known as serial killers which diligently moves from one target to the next one, killing on as many as 7-10 cells.

(4) The transfection efficiency of NK-92 cells is about 50%, even with non-viral methods. Avoiding viral vectors eliminates the risks of oncogene activation and insertional mutagenesis.

(5) CAR-NK cells can also be produced in large scaleunder GMP conditions. Moerover, it may be used in the setting of allogeneic transplantation.

Naturally, only about 10% of circulating lymphocytes are NK cells. The activation of NK cells is determined by the balance of inhibitory and activating receptor stimulation. MHC class I molecules in normal and cancer cells inhibit the activation of NK cells.

Natural NK cells do not express antigen specific receptors. Can CAR-NK cells equipped with an antigen specific receptor kill cancer cells as effectively as CAR-T cells? Hard to say.

Preclinical studies in leukemia, lymphoma, and multiple myeloma have been reported. For instance, treatment with anti-CS1 CAR-NK cells prolonged the survival of multiple myeloma mice from 40 days to 50 days[2].

Sorrento intends to develop anti-CD19, anti-PDL1, anti-PSMA, and anti-CD123 CAR-NK cells. It is expected to initiate Phase I trials in 2016.

[1] Oncoimmunology. 2014, 3, e28147. doi: 10.4161/onci.28147.

[2] Leukemia. 2014, 28(4), 917-927.