NYC’s Coronado Biosciences Plans Two Drug Trials, Wall Street Debut, and Boston Move

7/21/11Follow @arleneweintraub

It’s not too often that a biotech company marches into the FDA and asks permission to run human tests of a remedy derived from parasitic worms. But the agency will likely be entertaining just such a request sometime in the next couple of months, when Coronado Biosciences files an Investigational New Drug (IND) application for CNDO-201, a brew that contains 2,500 eggs from a parasite found in pigs. The company—which is moving from New York to Boston in August—plans to test the therapy in patients suffering from Crohn’s disease, an autoimmune condition that strikes the intestinal tract.

Coronado has been around since 2006, but it wasn’t until recently that it came out of stealth mode—in a rather dramatic fashion. On July 6, the company revealed that it raised $25.8 million in a funding round led by National Securities Corporation. The financing came close on the heels of a $21.6 million private round last November. And earlier this week, Coronado filed a Form 10 with the SEC so it could become a public company by registering all its private shares as common stock. That will make financing Coronado easier going forward, says CEO Bobby Sandage. “We don’t intend to partner our products, so we will need to raise more money,” he says.

Management’s deliberate decision not to seek out Big Pharma partners to bankroll its clinical trials may seem bold at a time when cash-strapped biotechs need all the help they can get. But Sandage and his team of seven are confident that their two experimental treatments—CNDO-201 and an anti-cancer molecule called CNDO-109—are so promising that they can afford to handle the research themselves, so they can ultimately hold onto all the profits. “They have such broad applications for huge unmet medical needs,” Sandage says, adding that Coronado keeps costs down by outsourcing R&D.

Coronado started its life as an oncology company with three experimental molecules. Late last year, after investors started overhauling the management team, the company ditched two of the drugs so it could focus on the most promising molecule, CNDO-109, which Coronado is developing to treat acute myeloid leukemia (AML). CNDO-109 is a compound that activates so-called Natural Killer (NK) cells, which then go on to destroy cancer cells.

Then the management team went looking for a complimentary drug to add to the pipeline. In 2011, Coronado acquired San Diego-based Asphelia Pharmaceuticals, which was developing the parasite treatment.

While the two drugs may seem quite different, they’re similar in that they take an immunotherapeutic approach to combating disease. By harnessing NK cells, CNDO-109 follows a well-known technique for fighting cancer. But drugs generally used to activate NK cells are toxic. So Coronado is developing a way to remove NK cells from family members of AML patients, activate the cells in a test tube, and then infuse them back into the patient. In a trial with seven patients at University College London Business, which developed the molecule, remission times were lengthened and patients suffered few side effects, Sandage says. Coronado plans to file an IND early next year to study the drug in AML. The treatment has also shown early promise in breast, ovarian, and prostate cancer, as well as in multiple myeloma, he says.

The parasite treatment, CNDO-201, offers a different approach to modulating the immune system. The treatment was inspired by the “hygiene hypothesis”—an observation made by some academics that the incidence of autoimmune diseases such as Crohn’s has increased along with the cleanliness of society. Some experts believe that the lack of exposure to parasites may actually pre-dispose humans to inflammatory diseases. That’s because parasites similar to the pig worm that Coronado is studying actually regulate cell mechanisms that prevent excessive T-cell activation—one of the major causes of autoimmune disorders.

The idea is to give patients a dosage of eggs from the pig parasite every two weeks or so. “Because humans aren’t the right host, the worms can’t colonize,” Sandage explains. “The eggs stay there a couple of weeks and then dissolve.” But with regular dosing, the eggs seem to spark a positive immune response: In small trials in inflammatory bowel disease, upwards of 70 percent of patients achieved total remissions. If the FDA accepts Coronado’s IND, the company will start a trial in Crohn’s early next year, Sandage says.

Coronado is just the type of biotech startup that New York legislators would love to keep in the city, since life sciences is one of the industries that Mayor Michael Bloomberg has tapped as a major source of growth going forward. But Sandage says moving to Boston was a matter of logistics. Coronado’s chairman, Glenn Cooper, is based there, as is scientific co-founder Joel Weinstock, who did the original work on CNDO-201 and is now chief of the division of gastroenterology/hepatology at Tufts New England Medical Center.

Sandage and Cooper worked together for many years at Indevus, a Lexington, MA-based company that was bought by Endo Pharmaceuticals (NASDAQ: ENDP) in 2009. Sandage had moved to St. Louis to run Covidien’s oncology division when Cooper approached him to run Coronado. Sandage says he plans to commute to Boston for a while before he decides whether to move back. In the meantime, the company is preparing to move to office space that it leased in Burlington.

Despite the commuting requirement, Sandage says he didn’t need much convincing to join Coronado. “The projects are just so fascinating,” he says. “NKs are considered by oncologists to be the holy grail. You’re activating your own innate immune system to attack cancer cells. You can’t get more fundamental than that.”

As for those worms, Sandage says, “There are a hundred autoimmune diseases, and we can have our pick as to which ones we pursue. You don’t get many chances like this in a career. It was a pretty easy sell.”

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