Documents Shed Light on Cam Garner’s Stealth Venture
The mystery surrounding San Diego’s Evoke Pharma is beginning to clear. The specialty drug company co-founded by serial entrepreneur Cam Garner has been operating in stealth mode and has said little about the experimental drug it is developing for gastroparesis, a digestive disorder that affects diabetics. But a recent quarterly filing from a third party, Questcor of Hayward, Calif., contains some new information.
The SEC document reveals that Evoke acquired its experimental gastroparesis drug from Questcor. According to the filing, Questcor had been developing the drug—a metoclopromide nasal spray—with British drug maker Shire Pharmaceuticals. For unspecified reasons, Shire walked away from the project in mid-2001, after the companies completed a mid-stage trial. The drug sat gathering dust until Evoke picked it up in mid-2007.
The transaction included Questcor’s rights under certain U.S. patents and various regulatory filings. Questcor said it realized net proceeds of $448,000 from the sale, suggesting Garner’s company picked up the nasal spray for a song. Besides an upfront payment, Evoke agreed to make milestone and royalty payments to Questcor. (Questcor disclosed in an earlier SEC filing that it spent $4.6 million to develop the drug before development stalled).
Metoclopromide has been available in tablet form for decades. About 2 million Americans use the drug for diabetic gastroparesis, nausea and other digestive disorders. Gastroparesis is a condition in which the stomach and intestines do not work normally. Food moves slowly through the digestive tract, causing bloating, nausea, and heartburn. Diabetics are prone to this condition because high blood sugar levels can damage the nerve that controls the stomach and intestinal muscles.
Since the metoclopromide tablets are available, what’s the rationale for a nasal spray? Questcor, in some earlier SEC filings, argued that a nasal spray offered an easier route of administration to people with digestive problems. Also, Questcor said it saw hints that a nasal spray might take effect more quickly than a tablet.
But metoclopromide has considerable safety problems. In February, the FDA ordered manufacturers of metoclopromide to add a black-box warning—the strongest possible—to their drug labels about the risk of long-term or chronic use. Such warnings typically hurt sales.
Specifically, the FDA said using metoclopromide for more than three months carried a risk of tardive dyskinesia—involuntary and repetitive movements—such as grimacing or lip-smacking, that remain when the drug is discontinued. Although diabetic gastroparesis is a chronic condition, the FDA said long-term metoclopromide use should be avoided except in rare cases. It is hard to see how Evoke’s nasal formulation of metoclopromide can avoid a black box warning.
This isn’t the only potential wrench in Evoke’s development program. As Bruce reported in March, Evoke had planned to begin a late-stage clinical trial this year. Reading between the lines, it looked like Evoke had hoped to use nine-year-old data from Questcor’s mid-stage trial to obtain FDA sign-off on a late-stage study. If that was the plan, the FDA didn’t go for it. Evoke is currently enrolling patients in a second mid-stage trial, which almost certainly will raise the cost of Evoke’s development program.
I wanted to know more about Evoke’s plans and left voicemail messages for President Dave Gonyer, as well as Executive Vice President Matt D’Onofrio, who is listed as the company contact. But I didn’t hear back from them.
Garner is a ranking member of San Diego’s biotech community – he headed sales and marketing at the region’s first biotech, Hybritech, which was later sold to Eli Lilly – and has a knack for turning lemons into lemonade. His transformation of Dura Pharmaceuticals offers just one example. During his 10 years as CEO, Garner guided the company through regulatory setbacks and still managed to drive annual sales from about $2 million to roughly $300 million. His success attracted Irish drug maker Elan, which paid $1.8 billion in stock to acquire the company. So things may look tough for Evoke. But with Garner in its corner, it is too early to count Evoke out.