San Diego’s Sangart Readying for Clinical Trials of ‘Oxygen Therapeutic’

4/10/09Follow @bvbigelow

When I reported last month that San Diego-based Sangart had raised $50 million in additional venture funding, CEO Brian O’Callaghan was eager to discuss how the biopharmaceutical has progressed in a field where others ran aground. But O’Callaghan, who is every bit as Irish as his name sounds, was unavailable at the time. So I met with him recently after touring Sangart’s impressive manufacturing facility, where the company now makes an oxygen-carrying compound from donated blood that has outlived its 45-day expiration date. But don’t call Sangart’s MP4 compound a blood substitute, even though it represents the latest effort in a decades-long scientific quest for a such a substance.

“This product has been designed to have the exact molecular size, viscosity, oxygen affinity and diffusion rate as human hemoglobin,” O’Callaghan said. “What that really means is that this product carries oxygen very well, and can transport it into oxygen-starved tissue. It can get into the micro-vasculature, opens it back up, and it releases the oxygen there.”

But Sangart does not describe its compound as a blood substitute. Rather, it is a biological product the company calls an oxygen therapeutic. MP4 is an oxygen-carrying molecule that Sangart makes by chemically modifying human hemoglobin purified from donated blood. The molecule also is pegylated (i.e. treated with polyethylene glycol) which allows the MP4 compound to reach oxygen-starved tissue before releasing its oxygen molecules.

“The entire concept of a blood substitute is incorrect,” said Dr. Howard Levy, who became Sangart’s chief scientific officer in December. Blood consists of more than red blood cells, Levy explains. It is the river that also carries immune cells, clotting factors, and nutrients throughout the body. “The ideal of having a fluid that you could just hang [in an IV bag] and have it as a substitute for blood just doesn’t exist.”

In addition to overseeing clinical trials of Sangart’s MP4 oxygen therapeutic, Levy also bears the task—along with O’Callaghan—of carrying on where Sangart’s founder, the late Robert M. Winslow, left off. Winslow, who founded Sangart in 1998 and headed the company until last year, died on Feb. 2 after battling brain cancer. He came to San Diego in 1991 as a professor of medicine at UC San Diego, after heading efforts to develop a blood substitute for the U.S. Army at the Letterman Army Institute of Research in San Francisco.

After leading development of the MP4 compound and manufacturing capabilities, including early stage clinical trials in Europe, Winslow intended to continue as chief medical officer once O’Callaghan assumed the CEO job.

“I was appointed just before he was diagnosed with his condition,” O’Callaghan told me. “Obviously, because of his diagnosis, there was a sense of urgency to the transition, but the transition already was in place. Still, it’s tragic that Dr. Winslow died before seeing his legacy complete, and MP4 is his legacy.”

So the company has come to a crossroads in more ways than one. And with Sangart’s new leadership in place, the company sought a renewed commitment from its investors.

“In this climate, raising $50 million, even from an existing investor, is a tremendous statement of confidence in us,” O’Callaghan said. The entire $50 million investment came from New York’s Leucadia National (NYSE; [[LUK]]), a diversified holding company that O’Callaghan described as a mini-Berskshire Hathaway. Leucadia has been Sangart’s single biggest investor, he said, and has provided more than 80 percent of the $160 million total that has been invested in the company since it was founded.

In recent weeks, Sangart’s leadership also has been consulting in recent weeks with its scientific advisors, who are in Europe, seeking their guidance on the most appropriate therapeutic treatments for Sangart’s MP4 compound. Based on the recommendations so far, O’Callaghan said the company must decide whether to move forward in clinical trials that use MP4 for treating trauma or sickle cell anemia. Whichever path is chosen, the CEO said Sangart intends to move forward in Europe first, because of established relationships with medical researchers in Sweden and elsewhere.

Both represent significant markets for the company. In the United States, more than 506,000 trauma incidents were reported last year, resulting in 21,813 deaths, according to the National Trauma Data Bank. Because trauma patients currently get whole blood, O’Callaghan said Sangart’s MP4 represents an alternate treatment in situations where blood is not available, or the blood supply is contaminated.

Sickle cell anemia, a genetic blood disorder that occurs in one out of every 500 African American births, affects about 70,000 people in the United States and millions worldwide. O’Callaghan said MP4 could qualify for orphan drug status in the United States because of the relatively small number of sickle cell patients.

O’Callaghan said he expects a decision about clinical trials will be made within the next two months. Sangart also plans to meet with European regulatory authorities to ensure they concur with the company’s general strategy as well as the plans it has formulated for clinical trials so far. Sangart currently has 71 employees, and has raised enough money to fund operations at least to this point next year, providing it gets the green light from regulators. “After that, O’Callaghan said, “It’s all about execution. It’s about operating as efficiently and productively as possible.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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