Calistoga Hands the Keys to Gilead, Bets It Can Make Cancer a Chronic Disease Like HIV

2/23/11Follow @xconomy

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the therapeutic benefit while avoiding the side effects of drugs that block a broader spectrum of PI3 kinase types.

Calistoga has tested this drug in patients with multiple leukemias and lymphomas, and while it hasn’t worked for all of those diseases, and it has shown some liver-related toxicity at high doses, the drug has shown a promising combination of safety and effectiveness for patients with chronic lymphocytic leukemia and indolent “slow-growing” non-Hodgkin’s lymphoma. The most recent presentation came in December at the American Society of Hematology in Orlando, FL, in which Calistoga reported that after more than 177 patients enrolled in its first major study, its drug was keeping tumors from spreading more than a year. For those who want to deep-dive into the data, check this presentation from last month at the JP Morgan Healthcare Conference, particularly the waterfall charts on pages 16 and 20.

What Calistoga didn’t have, and which Gilead does, is a lot of money to move these clinical trials forward. Calistoga’s plan for 2011 was to move first into a pivotal study that could earn FDA approval of CAL-101 for indolent non-Hodgkin’s lymphoma, while starting a pivotal study for the chronic lymphocytic leukemia population later in 2011. Instead of pinching pennies like a VC-backed startup, Gilead, Bischofberger says, will be in position to charge ahead with both pivotal clinical trials simultaneously.

“Because they were a smaller company, they didn’t have much resources,” Bischofberger says. “They were planning to first go to non-Hodgkin’s lymphoma and delay the (chronic lymphocytic leukemia) trial for a year, for purely financial reasons. We wouldn’t do that, we’ll take both indications right away into Phase III.”

Gilead also offers the possibility that Calistoga’s team won’t need to call up the moving vans if they want to stay employed. While Gallagher says no decisions have been made yet about integration, Gilead has shown interest in retaining most of the Calistoga team at its new $50 million research center along Lake Union.

Gilead first came to Seattle in 2006 through its $365 million acquisition of Corus Pharma. Gilead has made such a sizable investment locally in a group of people with expertise in lung disorders, it has an interest in consolidating many of the Calistoga employees into its new facility, Bischofberger says. The Calistoga team should be able work well with Gilead’s lung disease experts, he says, because the PI3kinase inhibitors are thought to be useful for inflammation, particularly inflammatory disorders of the lungs like asthma and chronic obstructive pulmonary disease.

Calistoga has 23 employees, and while there could be some cuts on the administrative side of the business—”you don’t need two CFOs, or two CEOs,”—Bischofberger says, Gilead hopes to retain most of the Calistoga team because it has people with necessary skills in cancer drug R&D.

“Gilead has said they are very interested in planning to retain these employees, and adding this entity to what they have already been building here in Seattle,” Gallagher says. “We saw that as an attractive opportunity for our team.”

Besides Calistoga’s lead compound, Gilead will be able to pour more resources into other compounds at an earlier stage of development, Gallagher says. Other PI3 kinase blockers designed for different diseases—like CAL-120 and CAL-129—are expected to enter clinical trials this year, Gallagher says. Another drug, CAL-263 for inflammatory diseases, will get more of a development push.

While there are a number of competitors pushing hard in the PI3 kinase field, Calistoga believes it has a three to four-year headstart on rivals in the niche of delta-isoform specific drugs. Gallagher credited three early Calistoga employees—Roger Ulrich, Mike Gallatin, and Niell Giese—with seeing the opportunity for these types of compounds before others in the industry.

As for Gallagher herself, she said she doesn’t know what her next move will be, whether it’s at Gilead or somewhere else. While it will take a few months for the dust to settle on integration work, the fact that Calistoga has just 23 employees means there ought to be fewer “headaches,” in merging the companies, than there might be if Gilead were buying a 500-person company, Bischofberger says.

Before the Gilead acquisition, Calistoga had been planning to add 15 employees in Seattle to manage the increasing amount of work it anticipates in developing its drug candidates, Gallagher says. She wouldn’t say how the hiring plan might change when Gilead starts calling the shots officially when the deal closes in the second quarter.

“We want to make sure there’s a smooth transition,” Gallagher says. “We really think it’s a strategic match.”

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