Valocor Therapeutics, a QLT Spinoff, Envisions Safe Anti-Acne Drug and More

5/26/10Follow @xconomy

One of Vancouver, BC’s big biotech success stories, QLT, was clobbered by Genentech a few years ago in the market for treating age-related macular degeneration, the leading cause of blindness among elderly people. But during its heyday, QLT spawned a few cool R&D projects, and now some of them are being packaged into a new spinoff, Valocor Therapeutics.

Valocor emerged from stealth mode yesterday with a technology license from QLT for dermatology drug candidates, plus an undisclosed amount of seed financing from the Working Opportunity Fund managed by GrowthWorks Capital. Valocor is led by a quartet of founders, including Julia Levy, one of the driving forces behind QLT’s light-activated verteporfin (Visudyne), a drug for macular degeneration.

The idea at Valocor is to take some of what QLT learned about light-activated drugs, and apply it to the skin. The lead program will explore whether the company can develop a light-activated lotion that destroys the glands that produce excess skin oil that clogs up pores and causes acne. If this technique can clear up pimples, without damaging the underlying skin tissue, Valocor expects it could tap into a huge potential market that’s currently underserved. Roche’s isotretinoin (Accutane) is an effective oral pill for severe acne, but has long been controversial because of its link to birth defects. If Valocor’s treatment can offer a similar effect in a safer product, it could have a viable new option for 5 million people in the U.S. who seek medical treatment for acne each year.

“There’s a huge need because of the lack of innovation in dermatology,” says Valocor CEO Dan Wattier. “Big Pharma basically walked away from dermatology 25 years ago. And these are big markets.”

Dan Wattier

Dan Wattier

The story of how Valocor set sight on those markets can be traced back about five years. QLT was riding high then on sales of Visudyne, and was looking for new applications of light-activated drugs that could be effective in localized organs, like for urology or dermatology. Then in July 2006, Genentech won FDA approval for a new treatment, ranibizumab (Lucentis), that blew away eye disease specialists and made the QLT product look obsolete. Predictably, QLT’s sales and market share plummeted, forcing it to unload some of its R&D projects and secondary products, Wattier says. (If you want to see QLT’s pain, check out these annual financial trends.)

One of those projects that got shelved during the cost-cutting effort was a drug called lemuteporfin. There were reasons to put it on the back burner. It had failed to show an advantage over placebo in a trial of patients with enlarged prostate.

But the R&D guys saw another use for it, as a light-activated acne treatment. And it made some sense from a marketing standpoint. Acne is currently treated with over-the-counter lotions for a lot of people. Dermatologists often use ultraviolet light to zap the microscopic sebaceous glands that produce too much skin oil. Sometimes they prescribe oral antibiotics to kill bacteria that congregate around the hair follicles and clogged-up pores, Wattier says. But both of those treatments are only temporary, and in the case of antibiotics, over-use can lead to bacterial resistance. Roche’s Accutane, as mentioned above, can be extremely effective, but risky.

Here’s how Valocor plans to tackle this problem. The company has developed an alcohol-based lotion that gets prepared at the doctor’s office. It’s inactive until it comes into contact with a certain wavelength of light, Wattier says. The drug gets absorbed just a couple of millimeters into the skin, where the sebaceous glands are, and the light is focused there, but not deep enough to go below the epidermal layers or into the bloodstream, Wattier says. The goal is to essentially destroy the sebaceous glands, stopping them from secreting excess oils. Since this drug doesn’t go into the blood like Accutane, it shouldn’t have the risk of causing birth defects, Wattier says.

Valocor has shown in mouse studies that this drug can be delivered specifically to the right depth in the skin. It has already run one clinical trial in healthy human volunteers, which essentially confirmed that the drug can be distributed in people’s skin like it is in mice.

So that’s encouraging enough to get a little bit of financing for an important test of effectiveness, Wattier says. A new trial, of 64 patients, ought to be up and running by early 2011, he says. It will enroll people with acne, and apply the light-activated drug to just one side of the face, so researchers can use the other side of each patient’s face as an experimental control. Patients will let the drug be absorbed in the skin for 30 minutes, and then will get different durations of light between 7 and 30 minutes. Results on whether this works should be conclusive after about 12 weeks, Wattier says.

If it works, I laughed, won’t these patients look funny with zits covering half their face and clear skin on the other side? Yes, Wattier says, they will. But the protocol will allow patients to get the drug on the other (zit-covered) part of their faces after the trial concludes and the full 12-week effectiveness data has been recorded. Assuming that trial goes well, Valocor still has a lot of work to do. It will need to do a much bigger clinical trial that randomly assigns patients to its light-activated drug, and some other control, Wattier says.

Acne isn’t as severe a disease as, say, cancer or macular degeneration, so I wondered how lucrative this opportunity might really be. Back before some of the more ominous warnings were made about Accutane, that drug generated about $800 million in worldwide sales in 1999, Wattier says.

Wattier, 42, has been following the dermatology market for a long time. He had an eight-year run at QLT in sales and marketing positions. Before QLT ran into the Genentech buzz-saw, he oversaw the planning and preparation for a 100-person U.S. sales and marketing team that launched the anti-acne product dapsone gel (Aczone), now marketed by Allergan. Earlier in his career, he worked at Centocor for a couple of years and oversaw the U.S. launch of infliximab (Remicade), which is now part of Johnson & Johnson, and is one of the world’s biggest selling drugs.

Even though some huge biotech drugs are used for dermatology conditions, like Amgen’s etanercept (Enbrel) for psoriasis, the whole field of dermatology still doesn’t have much innovation, Wattier says. This reminded me of a funny line I heard last year at Xconomy’s annual XSITE conference in Boston, where a national healthcare IT leader recalled the essential basic principles dermatologists need to follow when dealing with problem skin.

“If it’s wet, make it dry. If it’s dry, make it wet,” joked John Halamka, now the chief information officer for Harvard Medical School. And, don’t forget, “always use steroids,” he said. (He wasn’t talking about muscle-building anabolic steroids, but corticosteroids, which are blunt immune-system suppressors that can tamp down autoimmune reactions against the skin like hives or psoriasis.)

When I relayed that remark to Wattier, he laughed and didn’t disagree with it. That lack of innovation is precisely why Valocor negotiated for the rights to three other small-molecule compounds from QLT’s pipeline, still in preclinical testing, which all have novel ways of working against dermatology conditions. I didn’t have time for the chapter and verse of those drugs, but presumably if the lead acne drug pans out in clinical trials, there could be more resources to take those other programs forward.

“These are really novel. I don’t think there’s anything like this out there in the ‘derm’ space,” Wattier says. “We’re pretty excited about the prospects. I’m convinced there’s a huge need because of the lack of innovation in derm. There’s really no pipeline in derm. Our objective is to become the pipeline.”

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