Tolerx, After a Decade and $150M, Eagerly Awaits Data from Big Diabetes Trial

3/4/10Follow @xconomy

By the end of this year, the people at Tolerx will have a good sense of what they’ve created with $150 million of investment over the past decade. If the Cambridge, MA-based company has played its cards right, it should have positive results from a pivotal clinical trial of a drug with an unorthodox approach for fighting Type 1 diabetes.

The company announced back in early January that it completed enrollment of all 240 patients in a clinical trial known as Defend-1. Those people will be followed up for 12 months to see if Tolerx’s experimental treatment is doing what it is supposed to do scientifically, and whether that adds up to a meaningful benefit for patients with diabetes. I got an update on where this all stands from Tolerx co-founder and CEO Doug Ringler.

“This is a new therapeutic paradigm. It represents opportunities and challenges,” Ringler says. “This isn’t a cure, but the data we have so far suggest it’s the closest thing to a cure we have.”

Tolerx, for those new to the story, was founded in 2000 by Hermann Waldmann of the University of Oxford and Ringler, who previously played a role in developing an antibody drug for leukemia, alemtuzumab (Campath). It has raised cash from HealthCare Ventures, Skyline Ventures, and Sprout Group, and secured support from the Juvenile Diabetes Research Foundation. Pharmaceutical giant GlaxoSmithKline signed on to co-develop Tolerx’s lead drug candidate, otelixizumab, back in October 2007, in a deal that could be worth as much as $760 million over time.

Doug Ringler

Doug Ringler

From the start, Tolerx’s idea was that it could create drugs that could treat autoimmune diseases by training the immune system to “tolerate” the healthy tissues that it attacks in such ailments, which include Type 1 (sometimes called juvenile) diabetes, rheumatoid arthritis, and psoriasis. The idea of inducing immune tolerance as a means of therapy has long intrigued researchers; Tolerx is pursuing the vision initially in people who are newly diagnosed with Type 1 diabetes. If the company is right, it could eventually offer an 8-day course of daily intravenous infusions of otelixizumab that could help preserve diabetes patients’ natural ability to produce insulin for years, reducing the amount of insulin they need to inject on a daily basis to control their blood sugar. If the drug proves its mettle in this Defend-1 trial, it could be a big step for about 30,000 patients diagnosed with Type 1 diabetes in the U.S. each year, and for a similar number in Europe.

Tolerx’s drug is designed to alter the balance between two key classes of immune system cells: the T effector cells that attack viruses and bacteria and the T regulatory cells, or “T regs” that normally keep the T-effectors in check. One theory with Type 1 diabetes is that this balance tilts too heavily toward T effectors, which wind up attacking the insulin-producing cells of the pancreas, known as beta cells. So Tolerx’s idea was to design an antibody to hit CD3, a marker on T effector cells.

The Defend-1 trial was designed to catch people who were diagnosed early enough that they still have about 30 percent of their beta cells left, which means they only need to take a little insulin to maintain blood sugar control, Ringler says. The belief was that the single 8-day course of the Tolerx drug could suppress the over-active T effector cells, and essentially give the T regs a chance to recover their normal state of balance and hold the T-effectors in check over time, Ringler says. If that could be done, it could greatly improve patients’ quality of life by reducing their dependence on insulin and preventing a whole array of painful and debilitating long-term complications that stem from diabetes, like heart attack, stroke, blindness, and limb amputations.

Measuring that sort of benefit is no easy task for anybody, much less a startup biotech company. That’s part of what makes the Defend-1 trial so interesting. While most new diabetes drugs are judged on their ability to control hemoglobin A1C, a standard marker of blood sugar control, that’s not the main goal of Defend-1. Instead, the primary goal of the study is show improvement in levels of biomarker in the blood known as C-peptide, which indicates how much insulin the body is producing. After 12 months, the goal is to show that patients on the Tolerx drug are producing more of their own insulin than patients on a placebo. Researchers will also look at secondary goals like whether patients can get by on less insulin, and how they are performing on their hemoglobin A1C scores.

Since the study design is unusual, it took some time for key research leaders, Tolerx, and the FDA to agree that C-peptide was the right measurement for a pivotal study of the Tolerx drug. Its choice was based on published studies that suggest if diabetes patients can maintain some ability to produce their own insulin, even if just for a few years, it will provide a significant long-term benefit by decreasing their risk of heart attack, stroke, blindness, and so forth.

In an ideal world, Tolerx might run a study that lasts 10 or 15 years to absolutely prove that theory, but it’s already spent a decade and $150 million getting to this point. It can’t afford to wait another 10 years, especially if it has what can be considered a reliable early indicator that those benefits will make this drug worthwhile for patients—and for insurers who want to avoid the high long-term costs of treating them.

“If you can delay symptoms for five years, that provides a huge pharmacoeconomic advantage,” Ringler says. “We don’t need to ask that question over the next five to 10 years.”

Still, Tolerx’s plan to reach the U.S. market will rely on more than just the data from Defend-1. The company is planning a second study, called Defend-2, to confirm the result. It will have a similar design, and the company hopes to begin enrolling patients this year. If the first trial produces positive results, it’s fair to assume that will speed up patient recruitment for the second study, Ringler says.

Previous trials have given Tolerx reason to be confident in the current study, Ringler says. Those trials have shown that patients on the drug produce more insulin than those in a control group for at least 18 months. Ringler also says that without breaking the blind that’s supposed to protect the Defend-1 study from biases, it can be inferred from analysis of blood samples that patients receiving the Tolerx drug are producing 100 percent to 200 percent more T regulatory cells than those on the placebo. As with any drug that suppresses a component of the immune system, I had to ask whether Tolerx’s drug appears to make patients more vulnerable to infections. “We have not seen a single case of an opportunistic infection,” Ringler says. One reason might be that the Tolerx drug leaves other major immune system components intact, he says.

It will be interesting to see how the data from Defend-1 affects Tolerx as a business. The company has considered an IPO at least twice in the past, and it may again. “I’m an opportunist,” Ringler says, when asked if he’d try again if the market turns favorable. But there’s no rush to raise capital. Tolerx has about 70 employees, but the Glaxo deal brought its cash burn rate down to the point where it now has “many years” of capital to keep the business operating, Ringler says. He’s not giving a timetable for when Defend-2 results might be available, and when Tolerx might be ready to submit an application for FDA approval of its first drug, but when I speculated it might be around 2013, he said that would be “close.”

All of those milestones are important, but none of it will matter much if the Defend-1 results turn out poorly by year end. Ringler sounds awfully confident the results will be in his favor.

“This is the most important year in the company’s history,” Ringler says. “It’s the one I’m most excited about. We have so many value-driving events to look forward to.”

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