Novartis bets $750 million on small molecule immunotherapy

Novartis launched a $750 million collaboration with Aduro Biotech to develop STING agonists, adding new firepower to its portfolio of cancer immunotherapies that includes CAR-T program and checkpoint inhibitors targeting PD1, LAG3, and TIM3.

The STING receptor is generally expressed at high levels in immune cells. Once activated, the STING receptor initiates broad immune responses, inducing the expression of interferons and chemokines.

STING receptor can be activated by a series of unique nucleic acids called cyclic dinucleotides (CDNs)[1], naturally produced by bacteria and immune cells. Aduro has developed CDN derivatives that are significantly more potent than natural CDNs.

Aduro’s lead product candidate targeting STING is ADU-S100. The company plans to initiate a Phase I trial in the second half of 2015. In the preclinical study, intratumoral injection of ADU-S100 had superior anti-tumor activity as compared to HBSS (placebo control) and TLR ligands (positive control).

Here are two photographs of melanoma model lung metastases. Numerous lung metastases (black nodules) are visible in the control group (HBSS), while only a few metastases are visible in the ADU-S100 group.

ADU-S100

Source: Form S-1.

Novartis is the second Big Pharma to form a partnership with Aduro. In 2014, Johnson & Johnson licensed prostate cancer vaccine ADU-741 and lung cancer vaccine ADU-214 for $365 million and $817 million, respectively.

Furthermore, the FDA has granted Breakthrough Therapy Designation for Aduro’s pancreatic cancer vaccine CRS-207. FierceBiotech listed the company as one of 2014’s Fierce 15 biotechnology companies. The company has filed for a $86 million IPO.

[1] Nature. 2011, 478(7370), 515-518.

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Gelesis raises $22 million to develop hydrogel capsule that staves off hunger

Gelesis raised $22 million in equity financing to develop its weight loss capsule. Gelesis was founded by PureTech Ventures in 2006. Prior to this funding, the company had raised $42 million through five rounds.

Gelesis’ lead product candidate, Gelesis100, contains hydrogel which can rapidly absorb water and swell to 100 times their size in the stomach. After several hours, enzymes in the large intestine will break down those particles, enabling the polymer to release the absorbed water. The drug is designed to make obese patients feel more full after meals.

In June 2014, Gelesis presented results of a 12-week trial (FLOW study) at ICE/ENDO2014. In the intention-to-treat population, the efficacy was very modest, and it didn’t look like a game changer. The mean body weight changes from baseline to the end of treatment were -6.1%, -4.5%, and -4.1%, with Gelesis100 2.25 g, Gelesis100 3.75 g, and placebo, respectively. There was no difference between the high-dose group and the placebo.

In the trial, patients were required to drink 500 ml of water before lunch and dinner and were counseled to reduce their diet by 600 kcal/day below their daily requirements. Dropout rates were 5%, 24%, and 21%, with Gelesis100 2.25 g, Gelesis100 3.75 g, and placebo, respectively. In my opinion, lower dropout rate may explain the observed higher weight loss in the 2.25 g group.

Gelesis’ analysis revealed that the greatest weight loss occurred in prediabetic patients treated with Gelesis100 2.25 g. They lost an average of 10.9% of their body weight in three months. However, there were only 9 prediabetic patients in the 2.25 g group. Again, there was no difference between the high-dose group and the placebo.

In January 2015, Gelesis initiated a 6-month trial (GLOW study) to assess the effect of Gelesis100 in 168 obese patients including prediabetics and type 2 diabetics. The GLOW results are expected in 2016H1.

Amyloid is not the primary culprit for Alzheimer’s disease

Mayo Clinic’s study[1], published Tuesday in the journal Brain, reaffirmed that amyloid is not the proximate causal pathology for Alzheimer’s disease, but tau is the primary culprit. This paper revived the debate debate over whether the pharmaceutical industry is focusing on the right target in developing Alzheimer’s drugs.

We have focused on amyloid over the last several decades. Big Pharmas such as Johnson & Johnson, Pfizer, Eli Lilly, Roche and Biogen have poured billions of dollars into developing anti-amyloid drugs. Although Biogen recently announced their early success of aducanumab, Johnson & Johnson, Pfizer, Roche, and Eli Lilly have failed in Phasr III trials. There is good reason to be skeptical of anti-amyloid drugs.

Researchers at Mayo Clinic examined 3,618 brains in its brain bank, of which 1,375 brains were Alzheimer’s confirmed. The findings suggested that tau may be a bigger culprit in cognitive decline.

Singapore-based TauRx Pharmaceuticals is testing LMTX, a tau aggregation inhibitor, in several Phase III trials. In January 2015, Johnson & Johnson partners with Swiss-based AC Immune on tau vaccine in a $509 million deal. In March 2015, AbbVie entered into an license agreement with C2N Diagnostics to develop anti-tau antibodies. In April 2014, Bristol-Myers Squibb acquired iPierian and its anti-tau antibody IPN007 for $725 million.

[1] Brain. 2015, doi: 10.1093/brain/awv050.

Semma Therapeutics raises $44 million to develop diabetes stem cell therapy

Semma Therapeutics raised $44 million of Series A funding led by MPM Capital, Fidelity Biosciences, ARCH Venture Partners, and Medtronic. The company is developing stem cell therapy for the treatment of type 1 diabetes. Furthermore, the company has entered into an undisclosed agreement with Novartis.

The scientific founder of Semma is Douglas Melton, a father of two children with type 1 diabetes and a member of the National Academy of Sciences. Douglas Melton has thrown himself into this field for 15 years, and has done what any father would want to do. In 2001 when George Bush cut federal funding of embryonic stem cell research, he used private donations to support other researchers.

In 2008, Melton identified a combination of three transcription factors that reprograms adult exocrine pancreatic cells into insulin secreting cells[1]. In 2013, Melton reported the discovery of betatrophin, a hormone that controls pancreatic β cell proliferation[2]. In 2014, Melton reported a step-by-step procedure which generates pancreatic β cells from human pluripotent stem cells (hPSC) in a dish[3].

Semma intends to transplant these stem cell-derived β cells (SC-β) into patients to mimic natural pancreatic β cells. SC-β cells showed good comparability to β cells within islets and responded to increased glucose by secreting increased insulin.

There is at least one other company, ViaCyte, which is developing diabetes stem cell therapy as well. In August 2014, JDRF and ViaCyte initiated the first ever clinical trial (NCT02239354) of a stem cell therapy for the treatment of type 1 diabetes. ViaCyte’s product candidate, VC-01, consists of pancreatic progenitor cells, called PEC-01 cells, which are derived from human embryonic stem cells. When implanted under the skin, the PEC-01 cells are specifically designed to differentiate into β cells.

Mitchell Finer, chief scientific officer of BlueBird Bio, will join Semma as a director. From 2008 to 2010, Finer served as chief development officer of Novocell (now ViaCyte).

[1] Nature. 2008, 455(7213), 627-632.
[2] Cell. 2013, 153(4), 747-758.
[3] Cell. 2014, 159(2), 428-439.

My mistake in MEI Pharma

MEI Pharma (NASDAQ:MEIP) cratered 70% on failed Phase II trial of pracinostat plus azacitidine in myelodysplastic syndrome. The combination of pracinostat and azacitidine showed no difference in the rate of complete remission compared to azacitidine alone.

I have made a big mistake in this stock. I missed the findings from the Intergroup S1117 study presented at the ASH2014 Annual Meeting. The combination of vorinostat and azacitidine showed no advantage over azacitidine.

Pracinostat and vorinostat are HDAC inhibitors based on hydroxamic acid. The overall response rate was similar for patients treated with azacitidine monotherapy (36%) or azacitidine plus vorinostat (22%).

Aeglea Biotherapeutics raises $44 million to develop arginine deprivation therapy

Aeglea Biotherapeutics raised $44 million in Series B financing led by Lilly Ventures and Novartis Venture Fund. The company, founded in 2013, is developing engineered enzymes that degrade specific amino acids in the bloodstream.

Aeglea’s lead drug candidate, AEB1102, is an engineered version of arginase. The company uses AEB1102 as an enzyme replacement to treat hyperargininemia that results from a mutation in the arginase gene.

Aeglea has greater ambition. They believe the drug has potential in cancer. The rationale is that normal cells can make their own supply of arginine in a three-step biosynthesis, while tumor cells must obtain arginine from the bloodstream.

Arginine deprivation therapy is not a new idea. Arginine can be degraded by three enzymes: arginase, arginine decarboxylase, and arginine deiminase. Taiwan-based Polaris Group is testing its pegylated arginine deiminase, ADI-PEG 20, in liver cancer in a Phase III trial.

To be honest, I have no confidence in arginine deprivation therapy. In the Phase II trials of ADI-PEG 20 in liver cancer and melanoma, no objective responses were seen[1,2].

The efficacy of arginine deprivation therapy depends on the degree of arginine-dependency of cancer cells. Aeglea needs a companion diagnostic to identify patients whose tumor cells are dependent on exogenous arginine. AEB1102 will enter Phase I trials in solid tumors in 2015H2.

[1] Br J Cancer. 2010, 103(7), 954-960.
[2] Invest New Drugs. 2013, 31(2), 425-434.

Concerns on UCB/Immunomedics’ Phase III lupus trials

UCB and Immunomedics (NASDAQ: IMMU) expect top-line data from two Phase III trials (EMBODY 1 and EMBODY 2) of epratuzumab in 2015H1. Immunomedics’ fate hangs on the EMBODY trials, but the Phase IIb results that supported the EMBODY trials were not really all that good.

In May 2006, Immunomedics licensed epratuzumab to UCB for the treatment of non-cancer indications. Under the Amendment Agreement in December 2011, Immunomedics is entitled to receive up to $425 million in milestone payments and royalties ranging from 15-25% of net sales.

Epratuzumab is a humanized monoclonal antibody targets CD22, an antigen found on the surface of B cells. UCB is currently testing epratuzumab in systemic lupus erythematosus (SLE), an autoimmune disease affecting about one in 1,000 people.

GlaxoSmithKline’s anti-BAFF monoclonal antibody belimumab is the first new SLE drug in 50 years. The drug is only marginally effective and generated sales of £173 million in 2014. There is ample room for epratuzumab to take share.

In the Phase IIb trial (EMBLEM), SLE patients treated with 600 mg weekly of epratuzumab reported a 45.9% response rate compared with a 21.1% response rate for patients treated with placebo. The data[1] look pretty good, but there is no correlation between dose and response.

Placebo 100 mg

Q2W

400 mg

Q2W

600 mg

weekly

1200 mg

Q2W

1800 mg

Q2W

n 38 39 37 35 37 39
Responders 21.1% 30.8% 26.3% 45.9% 40.5% 23.7%
Serious AEs 7.9% 5.1% 5.4% 8.6% 10.8% 5.1%
Discontinuations 5.3% 15.4% 15.8% 21.6% 8.1% 7.9%

Analyst Avik Roy of Monness Crespi Hardt suggested:

Typically, an active drug generates more responses as the dose goes up. In trials where the response goes down as the dose goes up, the positive signal is usually the product of statistical noise, rather than of a true biological effect.

UCB and Immunomedics’ scientists just said that the mechanisms responsible for the low response rate seen with the highest tested dose require further investigation. In December 2010, UCB launched the EMBODY trials to assess the efficacy and safety of 600 mg weekly and 1200 mg Q2W regimens.

A second concern is that 21.6% of patients in the 600 mg weekly group discontinued the study compared to 5.3% from placebo. Dropouts may increase the risk of overall trial failure.

[1] Ann Rheum Dis. 2014, 73(1), 183-190.