Patients who arrive in the emergency room complaining of abdominal pain often have to undergo a type of endoscopy—an invasive and sometimes dangerous test— so doctors can determine if the problem is in the pancreas. Taking an MRI scan is a safer alternative, but the resulting images often aren’t sharp enough to make a proper diagnosis.
Enter Repligen (NASDAQ: RGEN). The Waltham, MA-based company is in the final stages of applying for FDA approval for synthetic human secretin (SecreFlo), a hormone-based drug that’s designed to enhance MRI images of the pancreas. The FDA has granted the product fast-track status, meaning it has vowed to hand Repligen its verdict within six months of receiving the application. Even though Repligen is pursuing other opportunities, CEO Walter Herlihy is counting on the imaging product to boost Repligen’s profile as a commercial player. “The hormone is very specific for the pancreas, and that opens up the potential for exciting applications,” Herlihy says.
Repligen initially tried developing secretin more than five years ago to treat autism, but clinical trial results were disappointing. So scientists there started looking into a different capability that they knew the hormone possessed: It stimulated the ducts in the pancreas to fill with water, which made them appear bright enough in MRI images for physicians to make a diagnosis and come up with a treatment plan for abdominal problems.
The company is applying for FDA approval in pancreatitis, an inflammatory condition, which it estimates is at least a $100 million-a-year opportunity in the U.S. and Europe. Repligen is also examining the hormone’s utility in other pancreatic diseases. The market opportunity could double if the product is approved for the diagnosis of pancreatic cancer, Herlihy says. Proper imaging “is a critical point in the treatment of this cancer,” he says. “If a surgeon can get the tumor out early, it greatly increases the chance of the patient having a good outcome.” Repligen has recently initiated a trial in pancreatic cancer, with the goal of eventually applying to the FDA for a label expansion.
For the fiscal year ending in March, Repligen broke even on sales of $27 million—more than half of which came from Opus, a technology platform the company acquired last year when it purchased BioFlash Partners, a Marlborough, MA-based company. Manufacturers of biotech drugs use Opus to simplify the purification of protein-based products they are making. The first version of Opus can only be used for small jobs, however, so Repligen is working furiously to adapt the technology for larger manufacturing challenges. The company plans to launch the second generation of Opus in about six months, Herlihy says.
Repligen is still trying to make a mark as a drug developer, as well. But its recent efforts have been disappointing. In March, investors pounded Repligen’s stock down from nearly $5 a share to $3.50 on negative Phase 2 trial results of a drug it was developing to treat bipolar disorder. A positive pivotal trial of the company’s imaging product was released around the same time, but many investors were still disappointed, Herlihy acknowledges. “If we had a safe and effective treatment for bipolar depression, that would be a blockbuster,” he says. Investors who were counting on that drug, he adds, “exited the stock at that time.” (The stock is now at $3.35.)
But Repligen is undeterred. The company has developed two drug candidates to treat spinal muscular atrophy and Friedreich’s ataxia—both rare diseases of the central nervous system. Herlihy estimates that even with modest pricing, they could each bring in revenues of $500 million. But Repligen doesn’t have the resources to complete clinical-trial programs for both of them, so the company is actively looking for Big Pharma partners that might want to strike licensing deals with Repligen. “There’s a lot of interest in orphan drugs, so we think we’re well positioned to find a partner,” he says.
Repligen’s history is one marked by re-invention. The company was founded in 1981 as a maker of industrial enzymes. But as the biotech industry began to take off, Herlihy says, “investors had a lot less enthusiasm for low-margin enzymes than they did for finding cures for cancer.” So Repligen began pulling out of the industrial market and looking for ways to get in on all the action in drug development. Herlihy—who has a PhD in chemistry from MIT—joined the company as CEO in 1996, when Repligen merged with Glycan Pharmaceuticals, which Herlihy co-founded. Glycan was working on drugs to treat inflammatory diseases.
Repligen has $62 million in cash and no debt, and Herlihy has a goal of turning the company profitable in fiscal 2012.
To get there, Herlihy has set some tall orders for Repligen to reach over the next six months: filing for FDA approval for the imaging product, launching the improved Opus, and finding at least one partner for Repligen’s rare-disease drugs. He doesn’t understate the challenge. “To be successful,” he says, “those are the three things we have to get done.”