Allozyne can’t be accused of thinking too small. The Seattle-based startup, after taking a hard look at its first clinical trial, is daring to push ahead with a frontal attack on the world’s largest maker of multiple sclerosis drugs, Weston, MA-based Biogen Idec (NASDAQ: BIIB).
The challenger’s experimental treatment, a long-lasting injection for multiple sclerosis, was safe and well-tolerated at all three doses in its first study in 40 healthy volunteers. Allozyne’s drug, importantly, stayed active in people’s bloodstreams for about 14 days at a high and medium dose, which means Allozyne has a shot at making a product that MS patients could inject themselves once a month, instead of once or twice a week as they do today. The company is releasing the results today in the hopes of wowing Big Pharma dealmakers and venture capitalists gathered in San Francisco for the JP Morgan Healthcare Conference.
There’s no cure out there for multiple sclerosis, a disease in which the immune system goes haywire, attacking nerve cells, and ultimately robbing patients of their vision, speech, and their ability to walk. More than 400,000 patients in the U.S. have this chronic disease. What drug companies know is that many people can keep symptoms at bay for years with interferon-beta products which tamp down the immune system. The interferons—marketed as Biogen Idec’s Avonex, Merck KGaA’s Rebif, and Bayer’s Betaseron—generate billions in sales. But they don’t stop the progressive march of the disease, and patients often complain about all the injections they must endure.
That has created intense interest over the years in making a longer-lasting form of interferon. Allozyne—and Biogen Idec, the market leader—have both hit upon the same idea, combining the interferon beta molecule with a polymer that’s supposed to keep it stable in the bloodstream for a longer period of time. Even though Biogen had a big head start and ought to have the first mover advantage, CEO Meenu Chhabra says she is emboldened to challenge Biogen in this market now that she has clinical trial data, and a plan to take it the rest of the way through clinical trials to the market.
“Allozyne is no longer just an Accelerator graduate with an interesting platform technology,” Chhabra says. “We’re a clinical stage company with a pipeline of products. It’s an evolution.”
OK, so what did we really learn from the first clinical trial? I have to say a healthy grain of salt here is required, because these results haven’t been presented in a peer-reviewed journal or at a scientific conference.
Chhabra walked me through the trial results last night, and what it means strategically, along with Bruce Leuchter, the director of clinical neuropsychiatry at Weill Cornell Medical College in New York, and a member of Allozyne’s clinical advisory board.
The Allozyne study found that its drug, AZ01, given via an injection just under the skin, was well-tolerated—although there were some flu-like symptoms at the highest dose tested, Chhabra says. The drug lasted about 14 days in the bloodstream, at both a 3 milligram dose, and a 10 milligram dose, although the lower dose produced a more steady, stable concentration, Chhabra says. The Allozyne study wasn’t designed to answer any important questions about effectiveness—like its impact on brain lesions, MS flares, or ability to keep patients from becoming disabled.
While the Allozyne trial didn’t directly compare its drug to the longer-lasting interferon in development from Biogen, Chhabra showed a chart with results from a similar study that Biogen presented at the American Academy of Neurology in 2009. The trial showed that the long-lasting interferon from Biogen was active in the bloodstream for about seven days. Based partly on that result, Biogen is conducting a pivotal, Phase III clinical trial designed to see whether that provides enough drug, over a long enough time, to make it so injections are taken once every two weeks or once a month.
So the Allozyne drug appears in an early study to last 14 days, about twice as long as Biogen’s seven days. It’s too early to say whether that really adds up to much of an advantage in dosing convenience.
Allozyne still has a lot of work to do before it can say it has a competitive edge. To keep pushing for a bigger advantage, the company is working on a new biotech drugmaking process in which it performs a critical protein purification step before polymers are added, instead of after. It’s likely some impurities snuck their way into the drug in its first iteration in this trial—the kind of impurities that can provoke an immune system reaction that leads to flu-like symptoms, Chhabra says.
By performing this more rigorous purification process—which is common for a drug in Phase III, Chhabra says—Allozyne hopes to reduce the flu-like symptoms and make the drug last even longer in the bloodstream. The new, reformulated AZ01 is currently being tested in another study among 40 healthy volunteers, which should generate results before the end of June, she says. If that study goes well, Allozyne intends to move ahead with an aggressive study, designed to measure the drug’s safety and effectiveness, that would compare its drug to one of the existing interferons, and enable the company to reach the market in late 2016 or early 2017.
But to hear Chhabra tell the story, AZ01 is just one piece of the puzzle. She says she has spent months in talks with Big Pharma partners who are looking to enter the MS market, and she intends to offer them not just one product, but several. Besides AZ01 as the long-lasting interferon, Allozyne is moving toward clinical trials with a so-called “bispecific” antibody called AZ17 that hits two targets on cells instead of one. And Allozyne is in the final stages of obtaining a license to an oral pill for MS that has already passed through initial clinical trials.
That takes money, obviously. Back in July, Chhabra said she had received financing “commitments” from her company’s original venture backers—MPM Capital, OVP Venture Partners, Amgen Ventures, Arch Venture Partners, and Alexandria Real Estate Equities—who pumped in $30 million in October 2007. She repeated that line, and added she expects a large strategic investor to join a round of financing worth $40 million. Some of that money will be used to obtain a license to the oral MS pill in development, she says.
Those are two very important deals to pull off for a small company like Allozyne. It’s definitely a bold set of objectives for 2011, and a big test for Chhabra to see if she can clinch those deals at the big annual gathering of dealmakers in San Francisco. “This is a very important meeting for us,” she says. By building up the portfolio, she is betting that she’s creating something a lot more valuable to acquirers, or to potential IPO investors.
“This strategy increases the value of the company, and increases the likelihood of an exit in the short term,” Chhabra says.
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