Calistoga Picks Up Buzz at ASCO, Thanks to Momentum from Rival

5/30/09Follow @xconomy

Last Wednesday night, the top dealmaker at Seattle-based Calistoga Pharmaceuticals got a tip that one of his rivals was on the verge of striking a huge deal. Cliff Stocks, the chief business officer, told CEO Carol Gallagher he was hopeful the rumor was true—that some Big Pharma company would pay a fortune for an experimental cancer drug in their class. That would generate lots of buzz for their whole field of biology on the eve of the American Society of Clinical Oncology (ASCO) meeting, an annual extravaganza for cancer drug development.

Thursday morning, Stocks’s wish came true. South San Francisco-based Exelixis announced a partnership with Paris-based Sanofi-Aventis that brought $140 million in upfront cash to the smaller company, and potential milestone payments worth more than $1 billion. For all that loot, Sanofi gets the right to co-develop a drug that blocks one of the hottest targets on cells in cancer biology, the PI3 kinase. The Exelixis drug is still in the earliest stage of clinical trials, the same phase Calistoga is in with its own compound that’s being targeted at different tumor types.

“I was sitting in the office with Carol and said, if Exelixis can close its deal before ASCO, that will make us the darling of the conference,” Stocks says. “It puts a very big spotlight on the PI3 kinase.”

Calistoga already raised its profile by a couple notches earlier this month when it raised $30 million in a second round of venture capital from Frazier Healthcare Ventures, Alta Partners, Three Arch Partners, and Amgen Ventures. The company is facing a lot of serious competitors in its category, including Novartis, Roche, and GlaxoSmithKline in the Big Pharma crowd, and Oncothyreon, Semafore Pharmaceuticals, and Intellikine in the biotech startup space. Calistoga claims to be carving out a niche within the niche, by aiming its drugs at an even more specific type of the PI3 kinase, known as the delta isoform, which it hopes will cause it to have compelling effectiveness for blood cancers, without hitting similar structures on cells that might lead to unwanted side effects. Other drugs that block more variations of PI3 kinase are thought to have greater use against solid tumors, Stocks says.

Some data to support Calistoga’s hypothesis is being presented at the ASCO meeting in Orlando, FL, today, but it’s still very preliminary. The Calistoga drug, CAL-101, showed an ability to partially shrink tumors in six of 12 patients with blood cancers like chronic lymphocytic leukemia and non-Hodgkin’s lymphoma. They got a variety of low doses in an early stage trial. This sort of dose-escalation study, in which researchers tend to start low and ratchet up doses gradually, is supposed to give companies a sense of whether the drug is safe, and isn’t really designed to show tumor shrinkage.

The first patient who enrolled in the study at Sarah Cannon Cancer Center in Nashville, TN, who got the lowest possible dose, showed tumor shrinkage. The researcher there, Ian Flinn, said in a company statement that he was “surprised and pleased” to see a tumor response at such a low dose. The drug was generally well-tolerated, and researchers didn’t reach the maximum dose patients could tolerate.

The next step will be to enroll 60 patients in the study, at a dose that’s more likely to be effective, Stocks says. The company hopes to have some results from this deeper look at the drug in time for the American Society of Hematology meeting in December, a big showcase for blood cancer drugs.

The next really big test for Calistoga will be whether it, too, can sign a big partnership. Calistoga has a full slate of meetings scheduled with prospective partners at the ASCO meeting, Stocks says, and he’d like to do a deal in late 2009 or early 2010.

When I asked if the price for CAL-101 just went up because of the precedent set by Exelixis, he said this: “It supports the benchmarking we’ve already done, and the valuation we’re run on the asset and the company.”

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