Innovation Northwest Wrapup: Alder, Tekmira, Acucela, & Other Emerging Little Biotechs

3/19/10Follow @xconomy

The best reporters are always gathering string, as we like to say in the journalism trade. It means we gather lots of facts and observations in our notebooks, which might not be news at first glance, but can become part of a contextual mosaic that we can rely on later when news breaks. There wasn’t much in the way of big news at this year’s Life Science Innovation Northwest conference in Seattle, but I gathered a lot of string. Here are some of my observations.

Alder Biopharmaceuticals has kept a low profile for its first five years in business, but it has vaulted to near the top of the watch list for Seattle biotech in 2010. Mark your calendars for June 16-19, for the European League Against Rheumatism (EULAR) meeting in Rome. That’s when CEO Randy Schatzman said Alder is planning to present the long-awaited data from a 120-patient study of rheumatoid arthritis patients who were randomly assigned to get the company’s ALD518 antibody drug, or a placebo. This is the study that prompted Bristol-Myers Squibb to pay $85 million upfront, plus $1 billion worth of potential milestones, to form a partnership with Alder last November.

Alder hasn’t disclosed the data, but Schatzman has said the results appear compelling enough to give the multi-billion-dollar drugs from Amgen and Abbott Laboratories a “run for their money.”

Something like 2 million people in the U.S. suffer from rheumatoid arthritis, so this is a big market. But the Alder data could also be scientifically eye-opening. ALD518 hits a different inflammatory protein, IL-6, than the one Amgen and Abbott block, called TNF. When the full data comes out, Schatzman, a scientist by training, predicts this will change how physicians look at rheumatoid arthritis. “IL-6 is the true villain during the disease process in rheumatoid arthritis,” Schatzman said.

Incidentally, at a panel discussion at Innovation Northwest, Schatzman talked about how the Bristol deal has changed the perception of his company in Big Pharma land. “The phone started ringing,” Schatzman said. “We had already talked to everybody on the planet, but when we did the deal, it said that a Big Pharma had validated us. People said, ‘Gee, there might be something real to that. Let’s check back in.’”

Randy Schatzman

Randy Schatzman

Analyst Mark Monane, of Needham & Company in New York, said he was impressed by Alder. He was especially interested in the use of ALD518 for another use, cancer cachexia, in which cancer patients suffer from extreme fatigue caused by excess inflammation. Alder has shown some preliminary results that suggest its drug can help tamp down the inflammation and improve quality of life for cancer patients, which is measured by showing they can gain instead of lose weight.

“Cancer cachexia is a real problem,” Monane says. “We focus a lot on drugs that kill tumors, but not as much on actually helping the patient. This is something that can help the patient, and you can get an answer on that relatively quickly.”

—Vancouver, BC-based Tekmira Pharmaceuticals had some good news to share about its lipid-nanoparticle system for delivering RNA interference drugs. Delivery is the No. 1 challenge in this hot field of medical research, and Tekmira said this week that the world’s biggest drug company, Pfizer, has formed a partnership to use the technology. That means big players like Alnylam Pharmaceuticals, Roche, and now Pfizer, are beating a path to Vancouver for help in solving this vexing delivery challenge. RNAi will need to solve this problem in order to fulfill its potential to block all sorts of disease targets at the RNA level that have been inaccessible to other drugs. By the end of this year, five products using the Tekmira technology will be in clinical trials, CEO Mark Murray said.

“We’re fortunate at Tekmira to have a technology that a lot of people are interested in, and we’re the only ones who can provide it,” Murray said during a panel discussion.

Acucela CEO Ryo Kubota reminded the audience in his talk that his company has become “cash-flow positive” on the basis of a partnership with Japan-based Otsuka Pharmaceutical. That’s almost unheard of for a development-stage biotech company with no marketed products. While that makes life more comfortable in a tough fundraising climate—and is enabling Acucela to grow from a staff of 40 to 100 this year—what matters a lot more will be further clinical trial data to suggest its lead candidate, ACU-4429, has potential to become a real drug for the “dry” form of age-related macular degeneration.

—One of the things I always try to do at an investor meeting is to learn about new companies. Jennifer Hamilton of Nomura Phase4 Ventures introduced me to Vancouver, BC-based Celator Pharmaceuticals. It has some well-known VCs backing it (Domain Associates, Ventures West, and Quaker Bioventures), and some support from Frazer, PA-based Cephalon and the Leukemia & Lymphoma Society.

The idea is to develop “cocktails” of chemotherapy drugs in precise ratios, so they can minimize any overlapping side effects, while getting maximum tumor-killing kick. The lead drug candidate, CPX-351, has shown an ability to completely wipe out tumors for nine out of 45 patients with acute myeloid leukemia in an early-phase trial, which was better than what researchers expected based on historical comparisons to older trials, said David Wood, Celator’s head of finance and corporate development. Those kinds of comparisons are apples-to-oranges, but a more rigorous trial of 126 patients is expected to produce interim results before the end of June, followed by full results before the end of the year, Wood said.

—Seattle-based ZymoGenetics (NASDAQ: ZGEN) is sticking to its guns with its lone marketed product, recombinant thrombin (Recothrom) for surgical bleeding. This drug, a genetically engineered human protein that assists in clotting, was supposed to almost completely supplant a rival drug derived from cow blood. It hasn’t yet, although spokeswoman Susan Specht said it has captured 17 percent of the market as of the most recent quarter, and is on track to start generating positive cash flow for the Zymo pipeline by the end of 2010. (Specht stood in for president Stephen Zaruby, who was injured in a skiing accident.)

Most of the value at Zymo these days is derived from pegylated interferon lambda, a drug being developed with Bristol-Myers Squibb for hepatitis C. It’s supposed to eliminate the nasty flu-like side effects that plague patients taking a similar interferon drug that is part of the standard regimen for Hepatitis C. Results on the Zymo drug’s antiviral activity after four weeks, and 12 weeks of observation, are expected this year, Specht said.

HemaQuest Pharmaceuticals CEO Ron Berenson said that the Seattle company is close to nailing down the remaining $6 million out of a $12 million financing round I reported on last month. HemaQuest, a developer of treatments for blood diseases, is working on an oral pill for sickle-cell disease, and an intravenous product for lymphomas related to Epstein-Barr virus.

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