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ACT Biotech, Scooping Up Bayer’s Cast-Off, Shows Promise With Stomach Cancer Drug

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Onyx and Bayer have a close relationship through their co-marketing of sorafenib (Nexavar) for kidney and liver cancer. What he saw in early 2008 was a drug that Bayer took into Phase 1 clinical trials, and saw was safe in a small number of patients. When Bayer and Schering merged, telatinib didn’t make the cut for further investment, and so ACT Biotech’s founders in-licensed it. The company raised its first $15 million from NGN Capital to see what they could do with it in further development.

One of the first things ACT Biotech did was study the molecular way telatinib worked, to better understand why it looked so safe. Others in its class, called tyrosine kinase inhibitors, are known to be designed to hit certain biological targets specifically, but they actually block other biologic targets as well, creating what are known as “off-target” effects. What was unusual about telatinib is that it appeared to be much more selectively aimed against just two targets—the VEGF receptor and the PDGF receptor. Both of those targets are implicated in angiogenesis, the process of helping form new blood vessels that nourish tumors and help them to grow.

After seeing telatinib’s potency against those selected targets, ACT Biotech decided it might have a real drug for a couple reasons. It could go after stomach cancer partly because there wasn’t a lot of competition, and it’s a tumor type that’s fast-moving and thought to be highly dependent on angiogenesis, Fattaey says. But stomach cancer shouldn’t be the end of the story. With its reportedly mild side effect profile, telatinib should be easily combined with other chemo agents, against other cancers, because it doesn’t do much to exacerbate the toxic side effects of chemo.

A lot of work needs to be done right away before ACT Biotech can go down that road. It needs to nail down an agreement with the FDA on the pivotal trial design in stomach cancer. It also needs to decide how to pay for, and execute, such a big undertaking. The company is attempting to raise $40 million to $50 million for the trial, which could come from venture investors, a partner, or some combination of the two, Fattaey says.

Clearly, there was some time to talk at ASCO over the weekend with not just clinical investigators, but potential investors and partners hanging around the conference in Chicago. Fattaey was definitely brimming with confidence, and talking the dealmaker talk.

“For a disease like this, the market size is very large and development timeline is very short,” Fattaey says. “We are right there.”

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