Cell Therapeutics suffered an embarrassing defeat the last time it appeared in front of an FDA advisory panel and today the company made a move that will enable it to avoid another public shellacking, at least for a while.

The Seattle-based biotech company (NASDAQ: CTIC) said today it has withdrawn its application to start selling pixantrone (Pixuvri) as a new lymphoma drug in the U.S. after saying today it needed more time to prepare for a Feb. 9 meeting of the FDA’s cancer drug advisory panel. The company said it asked the FDA to allow it to present at the March meeting instead, but when the agency said no, Cell Therapeutics withdrew the application. That means the agency’s April 24 deadline to complete its review of the application has been voided, although Cell Therapeutics said today it plans to resubmit its application later in 2012.

The last time Cell Therapeutics appeared at the FDA’s Oncologic Drugs Advisory Committee (ODAC), in March 2010, the panel voted 9 to 0 against the company’s pixantrone application. The chair of the FDA panel at the time, Gail Eckhardt of the University of Colorado at Denver, said the Cell Therapeutics application was “disturbing,” partly because it only enrolled 140 of the 320 patients needed to generate a statistically valid result. The head of the FDA’s cancer drug office, Richard Pazdur, said at the time that the Cell Therapeutics application depended on “a single incomplete trial.” The initial application was turned down by the FDA in April 2010.

By withdrawing the application just before the next advisory panel, Cell Therapeutics contradicted one of its own statements from less than a month ago, when it said it believed it had addressed the concerns raised by the FDA.

“We are pleased the Office of Oncology Drug Products (OODP) chose to bring our pixantrone new drug application back to ODAC for review now that we have provided additional information and data recommended by the Office of New Drugs (OND) that we believe addresses the issues raised in the OODP Complete Response Letter of April 2010,” James Bianco, the company’s CEO, said in a Jan. 3 statement.

Shares of Cell Therapeutics fell 18 percent today to $1.09 in early trading.

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[Updated 1/26/12 8:30 am. See below.] When Avila Therapeutics’ CEO Katrine Bosley spoke with Xconomy in December, she predicted the oncology world would show “a lot of excitement” for drugs that inhibit an enzyme called Bruton’s tyrosine kinase (Btk)—and in particular for Avila’s experimental compound in that category, AVL-292. Her words were prescient: Today Summit, NJ-based Celgene (NASDAQ: CELG) announced that it is buying Avila, which is based in Bedford, MA, for $350 million, plus up to $575 million in milestone payments.

[Historical material added.] AVL-292 is part of a class of compounds Avila developed called “covalent” drugs. Covalent molecules bind tightly to disease-causing proteins, thereby shutting down their activity for a prolonged period of time. AVL-292 is also extremely targeted, meaning it blocks Btk with little effect on healthy processes in the body. That’s important—the drug industry has been interested in Btk inhibition for years, but struggled to achieve the right balance between efficacy and selectivity, Bosley told Xconomy last month. Avila’s co-founder Juswinder “Jus” Singh (pictured above), a computational chemist formerly of Biogen Idec, had the idea to develop a class of drugs that could form covalent bonds with proteins.

AVL-292 is currently in Phase 1 clinical trials for non-Hodgkin’s lymphoma, B cell chronic lympocytic leukemia, and rheumatoid arthritis. In December, Avila presented data at the American Society of Hematology (ASH) annual meeting showing that five out of six patients with chronic lymphocytic leukemia who received AVL-292 remained stable on the drug. Blood tests showed that the largest of the two doses tested inhibited Btk over the long run and was well tolerated.

Celgene has been quite active in the Boston area over the last few months. In October, it extended a partnership with Cambridge, MA-based Agios, adding $20 million to what was already a $130 million deal. And in December, Celgene participated in a $30 million funding of Cambridge, MA-based Acceleron, which is working with Celgene on two drugs to treat anemia.

In today’s announcement, Celgene said Avila’s covalent-drug platform would augment its own research efforts in developing novel drugs for complex disorders. “In particular, we see Avila’s unique approach to protein silencing as an area of great promise for our research initiatives in hematology, oncology and immune-inflammatory diseases,” said Tom Daniel, president of research and early development for Celgene, in the statement.

The deal includes a potential $195 million in milestone payments for the development and approval of AVL-292, as well as up to $380 million in potential milestone payments related to other drug candidates that emerge from Avila’s covalent-drug platform, which it calls Avilomics. In today’s announcement, Bosley lauded Celgene’s leadership in hematology and autoimmune disease. “We believe working together may accelerate the advancement of more innovative medicines from the Avilomics platform,” she said.

[Paragraphs added to provide historical background and input from Polaris Ventures.] Avila board member Amir Nashat said in an e-mail that today’s deal demonstrates the value of betting on unproven and risky new technologies. Nashat is a partner at Waltham, MA-based Polaris Venture Partners, which was an early investor in Avila. Co-founder Singh’s model, Nashat says, “had a number of skeptics. While many of the top selling drugs on the market formed covalent bonds with their targets, the irreversible interactions were serendipitously discovered after the fact. Ironically, no one in industry had thought to develop a platform for discovering covalent drugs, believing the approach to be too risky.”

Avila raised $21 million in a Series A in 2008 from Polaris, Atlas Venture, Abingworth Management, and Advent Venture Partners. The following year, it raised $30 million in a Series B led by the Novartis Option Fund. The company also had relationships with Sanofi and Clovis Oncology. Its research deals had a combined potential value of $1.5 billion, Nashat says. “Avila’s joining with Celgene is a great fit,” he says. “The combination of two great companies and their research and development teams will accelerate the advancement of more innovative medicines.”

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This was a great year for Seattle biotech if you measure success through sheer number of acquisitions. But if you prefer to measure the health of an innovation community by the number of exciting new startups it hatches, then this was most certainly a down year.

That’s the mixed bag of returns that I saw when looking back at the news of 2011 from the Seattle life sciences scene. This was the year of the acquisition for Calistoga Pharmaceuticals, Pathway Medical Technologies, Calypso Medical Technologies, SonoSite (NASDAQ: SONO), Amnis, Geospiza, and Pacific Biosciences Labs (the maker of the Clarisonic skin brush.)

While those companies got harvested, not a whole lot of new seeds got planted. The list of notable Seattle biotech startups this year includes Cardeas Pharma, Oncofactor, Blaze Bioscience, Aquedect Neuroscience and Cardiac Insight.

Who else made headlines in Seattle biotech in 2011? Seattle Genetics emerged. Dendreon crashed. Marina Biotech, Omeros, and AVI Biopharma all had years they’d like to forget. Cell Therapeutics somehow managed to stay in business. New leaders emerged at the global health nonprofits, as Alan Aderem moved in to run the Seattle Biomedical Research Institute, Stewart Parker took over at the Infectious Disease Research Institute, and Chris Elias created a vacancy at the top of PATH by leaving for a new gig at the Bill & Melinda Gates Foundation. The foundation’s head of global health, Tachi Yamada, left for a new venture capital gig, and was replaced by a former Novartis executive, Trevor Mundel.

Here’s a company-by-company rundown of the major events at Seattle biopharmaceutical and global health organizations we keep tabs on here at Xconomy. Tomorrow, I’ll follow up with the rundown of rundown of medical device, diagnostic, and others in fields like Bio-IT or Health IT.

Seattle Genetics (NASDAQ: SGEN). This was a transformative year for Seattle Genetics. The company broke through in August by winning FDA approval of its first product, a souped-up antibody for rare lymphomas. The drug validated a new target on the surface of cancer cells, CD30, and provided hard proof that Seattle Genetics’ proprietary chemistry can successfully link toxins to antibodies—a feat that has eluded scientists for 30 years. Big Pharma companies have beaten a path to Bothell to get licenses to the antibody-drug linking technology, and Seattle Genetics has exceeded Wall Street expectations in the early days of its drug rollout.

Dendreon (NASDAQ: DNDN). Dendreon was the star of local biotech in 2010, and this year it fell flat on its face. The company failed to live up to its first full year sales forecast with its immune-boosting drug for prostate cancer, and burned its shareholder base in the process. The company lost more than $3.5 billion in market valuation, and had to cut 500 jobs, largely because it sparked controversy and confusion by pricing its cancer drug too high—at $93,000 per patient. It remains to be seen this year whether Dendreon can pick up the pieces, as the disastrous screw-up of 2011 has created a gaping opportunity for emerging competitors like Johnson & Johnson’s abiraterone (Zytiga) and Medivation’s MDV-3100.

Amgen (NASDAQ: AMGN). The Thousand Oaks, CA-based biotech company, which has significant R&D in Seattle, said at the end of the year that longtime CEO Kevin Sharer … Next Page »

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Bor-Wen Wu says he had the North Star in mind in 2006 when he founded San Diego’s Polaris Group, a small holding company with a promising lead drug candidate for treating liver cancer, malignant melanoma, and other related cancers. As an explorer in science, Wu says, “I need a North Star to tell me where to go.”

Yet the path Wu has followed has been anything but a sure and constant course. In his quest to develop the drug ADI-PEG 20, Wu has formed eight companies since 2002 that are affiliated with Polaris; raised more than $60 million from individual investors in Taiwan; and battled to retain control of ADI-PEG after paying millions to acquire a predecessor company, Phoenix Pharmacologics of Lexington, KY.

Despite a sometimes-circuitous path, though, Wu has kept the Polaris Group focused on a distant goal. The FDA recently approved the company’s plans for a late-stage clinical trial of ADI-PEG 20, an enzyme also known as pegylated arginine deiminase. ADI-PEG 20 is incredibly effective in breaking down arginine, an amino acid that is critical to the growth of hepatocellular carcinoma—the primary type of liver cancer.

Among cancer drugs in Phase 3 trials, Wu boasts, “We’re not the first in class. We’re the only one in the class. There’s nothing in the rear-view mirror.”

A study published last year in the British Journal of Cancer estimates there are 500,000 new cases of hepatocellular cancer diagnosed worldwide annually, with a five-year survival rate of less than 10 percent in the United States and Europe. Polaris, which contends the liver cancer is far more prevalent in Asia, estimates that worldwide deaths from hepatocellular carcinoma is closer to 700,000 people a year, with more than 330,000, or nearly half, in China.

ADI-PEG 20 represents an especially hot area of cancer research, which has focused on finding ways to starve tumors by depriving them of key nutrients. In the case of liver cancer, Wu says a key genetic mutation that triggers hepatocellular carcinoma coincides with the specific gene that makes arginine in normal cells. The company says the correlation is more than 70 percent in the patients studied so far. As a result, most liver tumor cells are unable to manufacture their own arginine and depend on some other source of … Next Page »

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Seattle-based HemaQuest Pharmaceuticals has nailed down a full Series B round of financing worth $12 million, according to a company statement. This means HemaQuest has secured a second installment of $6 million, after grabbing the first chunk of cash in late January, which we first reported based on a regulatory filing.

The complete deal is being led by a new investor, San Francisco-based Aberdare Ventures. The financing also included HemaQuest’s crew of original backers: Palo Alto, CA-based De Novo Ventures, San Diego’s Forward Ventures, and Lilly Ventures, the startup investment arm at Indianapolis-based Eli Lilly (NYSE: LLY). Naheed Misfeldt, a partner at Aberdare, is joining the HemaQuest board in connection with the financing, the company said in a statement.

HemaQuest is led by a familiar biotech name in Seattle—Ron Berenson, a former cancer physician at the Fred Hutchinson Cancer Research Center who went on to be a co-founder of Xcyte Therapies and CellPro. Those two companies failed, but his third venture, HemaQuest, got off to an auspicious start when it raised a $20 million Series A venture round in November 2007. The company, based on research from the University of Washington, Boston University, and Colorado State University, was founded in Newton, MA. HemaQuest never issued a statement when it moved to Seattle, but it appears to have arrived here last spring, based on scanning datelines from its press release archive. (It sure looks like a Seattle company now, with a beautiful picture of the Space Needle and Mount Rainier on its website.)

What is HemaQuest doing with that $32 million it has raised in the past few years? It is developing “short-chain fatty acid” molecules for life-threatening blood disorders. The company has two experimental drugs now in the middle stage of drug development—one for sickle cell anemia, and one for patients with lymphoma that’s associated with an infection of Epstein-Barr virus. If those trials are successful, Hemaquest says it’s possible it could enter the third and final phase of clinical trials as soon as 2011.

“HemaQuest is working in areas of increasing interest to investors and the pharmaceutical industry; serious and life‐threatening orphan diseases in which patients have few therapeutic options,” Aberdare’s Misfeldt said in a statement. “They have made great progress with their first two drug candidates.”

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[Updated 11/16/09 6pm. See below] Microsoft co-founder and renowned technologist Paul Allen has been diagnosed with non-Hodgkin’s lymphoma, a form of cancer, as of early this month, according to an e-mail message sent from Allen’s sister, Jody Allen Patton, to employees of Seattle-based Vulcan and its affiliates this afternoon. The message was sent to Xconomy and other media outlets by a Vulcan spokesperson.

Doctors say Allen has diffuse large B-cell lymphoma, which is a relatively common form of lymphoma, and he has begun chemotherapy, according to the e-mail. The message pointed out that Allen “beat Hodgkin’s a little more than 25 years ago and he is optimistic he can beat this, too.” That form of cancer is different from Allen’s current diagnosis, which is classified as a non-Hodgkin’s lymphoma.

Non-Hodgkin’s lymphoma is an umbrella term for cancers in which white blood cells of the immune system start growing out of control, according to the National Cancer Institute. The disease is the fourth most commonly diagnosed cancer in the U.S. each year, following lung, bladder, and melanoma tumors, according to the American Cancer Society. About 66,000 new cases are expected to be diagnosed this year in the U.S., and about 19,500 people are expected to die from the disease. Diffuse large B-cell lymphoma is the most common subtype of non-Hodgkin’s lymphoma, accounting for 30 percent of all newly diagnosed cases, according to an expert review published by the Lymphoma Research Foundation.

Vulcan spokesman David Postman wouldn’t comment on any specific questions about the stage of Allen’s disease, how early it was detected, whether it is an aggressive or slow-growing form of lymphoma, or where he is getting treatment.

Those questions are key to determining what kind of prognosis Allen has. His form of cancer is generally considered an aggressive, fast-growing lymphoma and requires immediate treatment, according to the Lymphoma Research Foundation’s description, authored by Carol Portlock of Memorial Sloan-Kettering Cancer Center in New York, Julie Vose of the University of Nebraska Medical Center in Omaha, NE, and Bruce Cheson of Georgetown University Hospital in Washington D.C. The first sign is usually when the lymph nodes swell in the neck, armpit, or groin—other symptoms include night sweats, unexplained fevers, and weight loss, according to the summary from Portlock and colleagues.

A common treatment for the disease is a regimen of chemotherapy combined with Roche and Biogen’s targeted antibody drug rituximab (Rituxan), which kills excess B-cells of the immune system. The combination treatment can lead to a cure in a large number of patients. “Even when a cure is not possible, treatment can often keep the disease away for many years,” Portlock wrote.

“Paul is feeling OK and remains upbeat,” the Vulcan message stated. “He continues to work and he has no plans to change his role at Vulcan. His health comes first, though, and we’ll be sure that nothing intrudes on that.”

Here is the Vulcan e-mail in its entirety [added 11/16/09 6pm]:

.

To employees of Vulcan and affiliates:

I want to let you know that Paul was recently diagnosed with non-Hodgkin’s lymphoma.

He received the diagnosis early this month and has begun chemotherapy. Doctors say he has diffuse large B-cell lymphoma, a relatively common form of lymphoma.

This is tough news for Paul and the family. But for those who know Paul’s story, you know he beat Hodgkin’s a little more than 25 years ago and he is optimistic he can beat this, too.

Paul is feeling OK and remains upbeat. He continues to work and he has no plans to change his role at Vulcan. His health comes first, though, and we’ll be sure that nothing intrudes on that.

We would ask you to respect Paul’s privacy and not discuss this outside of the office.

If you have any questions, please ask your EC member.

Thank you in advance for what I know will be all your good thoughts for Paul.
Jody

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Omeros is attempting to become the first true biotech company to go public in more than a year, and the first in Washington state in two years, but it will have to overcome controversy to do it.

—Seattle-based Omeros, the biotech company with a treatment to help patients recover from knee surgery, has been listed as a contender to go public, possibly as soon as this week, according to Renaissance Capital. But the company will have to overcome an accusation by its former chief financial officer, Richard J. Klein, who has filed a lawsuit in U.S. District Court that claims he was wrongfully terminated after he blew the whistle on the company’s practice of filing false time claims on grant work performed for the National Institutes of Health. The company, in a legal response, admits it made mistakes and changed its policy after Klein’s report, but it denies many of his allegations and says the NIH accepted its self-reporting on the matter.

—Seattle Genetics has had a great run this year on the strength of its “empowered antibody” for Hodgkin’s disease, but it suffered a setback this week with another drug for lymphoma. The Bothell, WA-based company (NASDAQ: SGEN) saw its shares drop after it said a clinical trial of SGN-40, dacetuzumab, was halted early after independent data monitors said it was unlikely to succeed.

—How much do biotech workers really earn? The politicians like to throw around an average salary of about $81,000 in Washington state, but one local entrepreneur found the median salary in the Pacific Northwest was about $60,000 when he analyzed actual job openings from the past year.

—Seattle-based Theraclone Sciences struck a deal with a Japanese company that could bring in $18 million over time to generate new antibodies with broad capability to neutralize many different strains of flu virus. This is building on the Theraclone platform, which led to the creation of two new antibodies against HIV, which was featured in Science last month.

—Bothell, WA-based AVI Biopharma (NASDAQ: AVII) got some good news this week with an $11.5 million defense contract to make a novel treatment for Junin virus, in addition to its existing work against Ebola and Marburg.

—Sage Bionetworks, the Seattle-based nonprofit that aims to ignite an open source movement for biology, has secured a “major founding donation” from Quintiles, the giant contract research organization for biotech and pharmaceutical companies. Sage co-founder Stephen Friend was traveling in Europe, trying to drum up more support for the new collaborative, when the news broke.

—David Miller, the president of Seattle-based Biotech Stock Research who recently ran for the Seattle City Council, offered some great insights in a guest editorial about why biotechies need to pay attention to local issues just like they do the big national stories, like health reform and cheaper “follow-on” biotech drugs.

—Carl Weissman, the CEO of Accelerator and managing director of OVP Venture Partners, offered some advice to government officials who want to stir innovation. Instead of doing a lot of the same old stuff, they should try to recruit more superstar scientists.

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Some unexpected bad news out of Seattle Genetics is driving down its stock 14 percent this morning. The Bothell, WA-based developer of antibody drugs for cancer (NASDAQ: SGEN) said a mid-stage clinical trial of an experimental lymphoma drug was halted midway through enrollment after an independent panel of data monitors determined the experimental drug was unlikely to reach its goal of beating the control group.

The Seattle Genetics antibody drug, called dacetuzumab or SGN-40, was being studied in a trial of 224 patients with diffuse large B-cell lymphoma, in combination with rituximab (Rituxan) and standard chemotherapies. Patients in the control group got the same treatment, except a placebo instead of the Seattle Genetics drug. About two-thirds of the patients were enrolled in the randomized, blinded trial before it was closed. Seattle Genetics didn’t say anything in its statement today about the safety profile of its drug.

The trial failure is a setback for Seattle Genetics, which has been developing this drug since January 2007 in partnership with Genentech and now Roche. The new antibody is designed to hit a different target found on cells, called CD40, which is found on many types of malignant B cells and is supposed to be complementary to the standard rituximab antibody that hits another target called CD20. Rituximab, the pioneering antibody for cancer, generated $2.59 billion in U.S. sales last year as it has become a standard lymphoma treatment. Yet as good as it is, patients eventually see their disease spread, and relapse after getting rituximab. Seattle Genetics pointed out in its release that it has four other smaller clinical trials of its dacetuzumab treatment for non-Hodgkin’s lymphoma and multiple myeloma, a cancer of the bone marrow.

“We are disappointed that the interim analysis of the phase IIb clinical trial resulted in discontinuation of the study, especially given the unmet medical need for DLBCL patients,” said Clay Siegall, CEO of Seattle Genetics, in a statement. “In collaboration with Genentech, we will conduct a detailed analysis of data from the SeaGen MARINER trial.”

Seattle Genetics shares fell $1.79, or about 14 percent, at the opening bell this morning to $11.83.

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Cambridge, MA-based biotech Genzyme (NASDAQ:GENZ) reports that the firm has won European marketing approval for plerixafor (Mozobil) for injection in patients with two types of blood cancers—lymphoma and multiple myeloma—who need blood-forming stem cell transplants. The European Commission granted approval of plerixafor to be used in combination with granulocyte-colony stimulating factor (G-CSF) to boost the mobilization of stem cells in blood cancer patients, according to Genzyme. Plerixafor was cleared for sales in the U.S. last December.

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Fate Therapeutics plans to announce this morning that it has begun its first clinical trial of a drug built on its knowledge of stem cell biology. Rather than injecting certain kinds of adult stem cells to regenerate tissues, this treatment involves a conventional small-molecule drug that’s designed to spur growth of blood-forming stem cells that patients need to recover from certain kinds of leukemia and lymphomas.

Xconomy reported in March that La Jolla, CA-based Fate—which was founded by top stem cell scientists at Harvard University, The Scripps Research Institute, the University of Washington, Stanford University, and the Whitehead Institute for Biomedical Research—was destined to test its first drug in humans. But the company is now disclosing that the study will be done at the Dana-Farber Cancer Institute in Boston, and provided more details on how its treatment could better the way hematopoietic stem cells from umbilical cord blood are transplanted into some cancer patients to restore their bone marrow function.

Fate’s drug, dubbed FT-1050, is a small molecule that the company plans to use to treat blood-forming stem cells from cord blood before the cells are transplanted into humans. By activating certain genes in the stem cells, the drug is intended to boost the ability of the cells to multiply and take up residence in bone marrow, Pratik Multani, vice president of clinical development at Fate, explains. The clinical trial is testing this use of the drug in patients with blood or immune system cancers whose bone marrow function—which is vital to blood production and the immune system—has been destroyed by chemotherapy and other cancer treatments.

Fate’s treatment was initially discovered in the lab of Leonard Zon, the director of stem cell research at Children’s Hospital Boston. Zon is one of several stem cell experts who was recruited by Polaris Venture Partners and … Next Page »

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There are about 11,000 physicians in the U.S. whose job is to diagnose and treat people thought to have cancers of the blood. These specialty physicians need to sort through a dizzying number of lab tests to identify subtle differences in types and stages of leukemias, lymphomas, and myelomas. Get it exactly right, and it might cure the patient. Get it wrong, and it could be a disaster.

Most lab service companies specialize in running specific tests accurately and fast. They often get their orders one by one, and send back results that way, not in a comprehensive package for the hematologist/oncologists (known as heme-onks for short) who have to make the bottom line diagnosis. San Diego-based Genoptix (NASDAQ: GXDX) has seized upon this gap in the marketplace by bundling the tests a doctor needs to make such conclusions. Founder and CEO Tina Nova, a veteran biotech entrepreneur with experience at Hybritech, Ligand Pharmaceuticals, and Nanogen, filled me in on why her newest company has been so successful.

Something like 850,000 patients are living with blood malignancies of some kind in the U.S., and about 150,000 new cases are diagnosed each year. This typically involves a battery of expensive tests that are run by giant contract labs like Laboratory Corp of America, or Quest Diagnostics. Such tests require a small sample of a patient’s bone marrow to run analyses such as flow cytometry, which helps sort out malignant cells from healthy ones, and pathology tests, which examine cells under a microscope. More sophisticated analyses put cells in a lab dish and examine genes associated with malignancies.

Usually a combination of these tests will give the doctor an answer, like whether a patient has chronic myelogenous leukemia and is therefore a candidate for Novartis’ wonder drug imatinib (Gleevec) or whether he or she needs some other treatment altogether. Nova says Genoptix is the only company that runs all the tests in-house and puts together a report that offers a diagnosis under the direction of employees trained in hematology/oncology. As Nova put it, they speak the same language as the physician.

“No one else uses a model like ours,” Nova says. “We came to this because we learned that the diagnosis of leukemia and lymphoma was not well-served. The physicians told us that diagnosis is the biggest problem they are faced with.”

Diagnostics companies traditionally take a back seat to the more glamorous work of drug development, but Genoptix is clearly much better positioned heading into in the downturn than most traditional drug developers. Revenues were $59.3 million in 2007, which doubled to $116.2 million last year. Genoptix is profitable and expects to continue growing despite this year’s recession, with forecasted revenue this year of $170 million. Nova insists the company is just warming up, having captured just 6 percent … Next Page »

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[[Updated: March 16, 5:50 pm. Adds comments from chief medical officer Jack Singer and clarifies study results.]] Cell Therapeutics is betting its future on winning FDA approval of a drug that looks effective for non-Hodgkin’s lymphoma, but now comes word that patients on the drug in a clinical trial had a higher number of heart problems than those in a control group.

The Seattle-based biotech (NASDAQ: CTIC) disclosed that important fact today on page 7 of its annual report filed with the Securities and Exchange Commission. The finding comes from a study of 140 patients, called Extend, that randomly assigned patients to get an experimental drug, pixantrone, or another chemotherapy drug. The study found pixantrone was effective at completely shrinking tumors for 20 percent of patients, compared with 5.7 percent in a control group, according to a company statement we reported on in November. But the effectiveness apparently came with a side effect. Five of the patients in the pixantrone group had “severe cardiac events,” compared with two in the control group, the company said today in the annual report.

Cell Therapeutics acquired pixantrone for $236 million back in June 2003, when it acquired Italy-based Novuspharma. The drug is a modified version of an anthracycline, and is supposed to be designed to be less toxic to the heart than other drugs in its class. Cell Therapeutics, which has been scrambling to cut costs and raise capital in a last-ditch bid to stay in business, says its strategy is to submit the results of the pixantrone trial in the first half of this year to the FDA. If the FDA decides to give this application an expedited six-month review, Cell Therapeutics could find out before the end of 2009 whether the drug is good enough to win approval. Yet the company says even after selling off its lone marketed drug, Zevalin, and cutting 28 percent of its domestic workforce, it still doesn’t have enough operating cash to run past May.

The higher incidence of heart problems shouldn’t harm Cell Therapeutics’ application to the FDA, says company spokesman Dan Eramian. The finding from the Extend study doesn’t demonstrate that the drug caused the heart problems, which could have been caused by other things, says Jack Singer, the company’s chief medical officer.

“The numbers are too small to be statistically significant,” Eramian says, meaning the side effect could have been due to chance, rather than the drug.

Pixantrone has been studied in more than 400 patients overall, many of whom had prior treatments that are toxic to the heart, and the drug’s “safety profile is about as good as one could hope for,” says Jack Singer, Cell Therapeutics’ chief medical officer, in an interview. He says the full results of the Extend study will be presented at the American Society of Clinical Oncology’s annual meeting, scheduled for late May and early June.

The heart problem appears to be the most serious, but it wasn’t the only side effect seen in the trial with pixantrone. The study found that patients on pixantrone had a higher risk of leucopenia and neutropenia, common side effects from chemotherapy drugs in which white blood cells get depleted and can make patients vulnerable to infections. Researchers, however, found few cases of severe neutropenia, vomiting, or diarrhea, the company said. “Overall, the incidence of serious side effects was similar between pixantrone and the control arm,” the company said.

Swiss drug giant Novartis has an option to enter into an exclusive worldwide license to develop and commercialize pixantrone, although it hasn’t yet chosen to exercise that option, Cell Therapeutics says. If Novartis exercises that option, Cell Therapeutics would get $7.5 million in a license fee, as much as $104 million in registration and sales related milestones, and a royalty on worldwide sales.

If Cell Therapeutics can get that $7.5 million milestone fee, that would represent about 3.5 months of operating cash, since its monthly cash spending rate has been cut down to about $2.1 million. The company cut 34 jobs, or about 28 percent of its workforce earlier this month, bringing its total staff down to about 88 employees. Cell Therapeutics also said last month it is closing its Italian branch, eliminating 62 jobs there.

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Seattle Genetics said its SGN-35 drug candidate for Hodgkin’s disease and anaplastic large cell lymphoma has received orphan drug designation from regulators in Europe. The company (NASDAQ: SGEN) has also added the designation for anaplastic large cell lymphoma in the U.S., after previously securing that status for Hodgkin’s in the U.S. The designation is designed to encourage companies to develop treatments for rare diseases, by offering a seven-year marketing monopoly in the U.S. and 10 years in Europe if the drug is approved.

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Genzyme won FDA approval today of a new drug for patients with blood cancers. The Cambridge, MA-based biotech company (NASDAQ: GENZ) said it has gotten clearance to sell plerixafor (Mozobil) as an injectable drug for patients with a pair of deadly blood malignancies, non-Hodgkin’s lymphoma and multiple myeloma, who need transplants of blood-forming stem cells.

The product is meant to be used to aid so-called “autologous” transplants—in which patients’ own cells are collected and stored for later transplantation—by helping to coax the blood-forming stem cells from the bone marrow into the bloodstream, where they can be collected. The new drug is approved for use in conjunction with a drug called granulocyte-colony stimulating factor (G-CSF), marketed by Amgen as pegfilgrastim (Neupogen). The combination of the Genzyme and Amgen drugs is supposed to boost the speed and efficiency of stem-cell collection over the Amgen drug alone.

“Mozobil is an important advancement in the treatment of patients with certain types of cancer who require a stem cell transplant,” said John F. DiPersio, a professor at Washington University in St. Louis, in a company statement. “This product should become an integral part of the treatment regimen for transplantation.”

The approval was expected by investors, according to Thomas Shrader, an analyst with Rodman & Renshaw in New York. The new Genzyme product should generate about $75 million in sales in 2009, its first full year on the market, Shrader said. Genzyme has applied for approval of the product in Europe, and expects approval in the second half of 2009, the company said. Genzyme acquired the drug through its purchase of Vancouver, BC-based AnorMed for $580 million in 2006.

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The American Society of Hematology (ASH) is one of those scientific meetings that usually flies below the radar of the wire services and big newspapers. Still, this year’s event in San Francisco has drawn more than 21,000 physicians, scientists, and intensely interested folks from biotech companies and Wall Street. They are all scouting new treatments for diseases of the blood, like leukemias, lymphomas, myelomas, and every clotting disorder you can shake a stick at.

If you don’t think this sounds like a big deal, check out the sales of anti-clotting drug clopidrogel (Plavix): $4.7 billion worldwide for Bristol-Myers Squibb and Sanofi-Aventis in 2007, even while they faced competition from cheaper generics. Then there’s old ASH standbys like Genentech and Biogen Idec’s rituximab (Rituxan) for non-Hodgkin’s lymphoma, which eclipsed $2 billion in U.S. sales last year and keeps growing.

So, I’ve been keeping an eye on the next big thing for the blood. Here are the newsiest stories we saw cross our biotechnology desk in our three-city network of Boston, San Diego, and Seattle:

Seattle Genetics

The Bothell, WA-based biotech company (NASDAQ: SGEN) caused a stir with its “empowered” antibody drug, which has the tumor-targeting ability of an antibody loaded with a potent toxin to give it extra tumor-killing kick. The drug, SGN-35, was able to completely wipe out aggressive forms of Hodgkin’s disease and related lymphomas with minimal side effects. In a study of 44 patients who were seriously ill and relapsed after a median of three prior rounds of chemotherapy, the Seattle Genetics drug caused tumors to completely disappear or mostly go away in more than one-third of patients (38 percent).

This data is promising enough that Seattle Genetics is preparing to go straight to pivotal studies for Hodgkin’s disease and anaplastic large cell lymphoma in early 2009, which could lead this drug to be FDA approved. Seattle Genetics CEO Clay Siegall said investigators at the ASH meeting are itching to participate in the pivotal studies. “There’s a lot of buzz here,” Siegall said during a break, when he called me yesterday. “The investigators are excited. We’ve never had this much excitement in the 10.5 year history of Seattle Genetics. The doctors really want to get involved in the trial.” He adds that there’s a backlog of patients who could enroll in the next studies, and he’s hopeful that they can be recruited to sign up quickly.

Millennium: The Takeda Oncology Company

Millennium Pharmaceuticals had a breakout performance at last year’s ASH. The Cambridge, MA-based biotech company, now the cancer division of Japan-based Takeda Pharmaceuticals, showed last year that bortezomib (Velcade) could cause complete remissions for 35 percent of patients with multiple myeloma on a combination treatment with its drug, compared with 5 percent who did that well on the combination alone. This year, it showed follow-up data from the trial, called Vista, that showed that early glimpse of promise is translating into an ability to help patients live longer.

Ligand Pharmaceuticals

This San Diego-based biotech company (NASDAQ: LGND) saw some positive data reported by its partner, GlaxoSmithKline. The drug giant reported … Next Page »

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Gloucester Pharmaceuticals, a privately-held biotech company in Cambridge, MA, said today that its experimental drug romidepsin reached its goal in a Phase II clinical trial of patients with cutaneous T-cell lymphoma. Researchers at Stanford Cancer Center found 30 of 72 patients (42 percent) had their tumors completely or partially go away, according to research presented at the American Society of Hematology meeting in San Francisco. A second study sponsored by the National Cancer Institute supported the finding with a 40 percent tumor response rate. The company anticipates filing an application by year’s end with the FDA to begin marketing the product. About 1,500 people are diagnosed with cutaneous T-cell lymphoma in the U.S. each year, according to The Leukemia & Lymphoma Society.

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The longer Seattle Genetics keeps following cancer patients who took its lead drug candidate, the better the data looks. The Bothell, WA-based biotech company released some stellar (albeit preliminary and without a control group) clinical trial results today that show its “empowered antibody” is able to wipe out aggressive forms of Hodgkin’s disease with minimal side effects.

Seattle Genetics (NASDAQ: SGEN), released the findings today at the American Society of Hematology annual meeting in San Francisco. The company made waves six months ago with an earlier peek of data at the American Society of Clinical Oncology, but now Seattle Genetics has more detailed follow-up to show how patients are doing over time.

The results are truly striking. The trial monitored 44 patients with Hodgkin’s disease and other cancers of the blood that carry a signature protein target called CD-30. The patients were very sick, having relapsed after a median of three prior rounds of chemotherapies, leaving them with no FDA-approved treatment options. They enrolled in the study to get SGN-35, an engineered antibody designed to seek out cancer in the body, avoid healthy tissues, and (here’s the special part) dump an extra lethal dose of chemotherapy inside the tumor cells.

Even under these grim circumstances, researchers found that 17 of the 44 patients (38 percent) had their tumors completely disappear or mostly go away. When they looked at patients who got higher doses that are more likely to be tested in late stages, the data look even better. Of the 28 patients who got those doses, about one-third had their tumors completely disappear, while 93 percent had at least some measureable tumor shrinkage. Those numbers have improved since June, when 23 percent of patients were graded as having complete tumor eradication, and 81 percent of the evaluable patients at the time had some tumor shrinkage.

As time has gone on, the drug’s effect appears to be long-lasting, too. Researchers didn’t report on whether the drug actually helped people live longer—the gold standard of cancer drug development—but they did see that it kept their tumors from spreading for a median time of more than six months. That measurement, called progression-free survival, is a common goal of cancer studies accepted as a “surrogate” the FDA usually accepts as proof that a cancer drug is working.

“We are excited with the exceptional antitumor activity of SGN-35 and have plans to move this agent into pivotal trials in the near future,” said Clay Siegall, CEO of Seattle Genetics, in an e-mail right before he got on a plane to San Francisco to talk with researchers about the results.

Anas Younes, the director of lymphoma/myeloma at MD Anderson Cancer Center in Houston, TX, and the study’s presenting investigator, said in a statement that the data is “encouraging, and provide evidence that SGN-35 may offer an important new therapeutic option for patients in this setting.”

This study, however, had no control arm, … Next Page »

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Seattle-based Cell Therapeutics said its drug for non-Hodgkin’s lymphoma is getting a faster-than-usual regulatory review of an application that could broaden its usage. The FDA is giving a six-month review, instead of the usual 10-month examination, to ibritumomab tiuxetan (Zevalin) for newly diagnosed patients with Hodgkin’s disease. That means the agency has a deadline of April 2 to decide whether to approve marketing of the drug for the new use. The treatment is currently cleared for sale among relapsed patients, but the new application could open usage of the treatment for an additional 18,000 patients a year, the company said.

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Seattle-based Cell Therapeutics announced it has teamed up with Spectrum Pharmaceuticals of Irvine, CA, to create a 50-50 joint venture, RIT Oncology, to commercialize and develop the cancer drug Zevalin. The drug for non-Hodgkin’s lymphoma, which Xconomy has written about extensively, will be marketed in the U.S.

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Cell Therapeutics may just have one last chance to dig itself out of its hole. The Seattle-based biotech company said its experimental drug for non-Hodgkin’s lymphoma, pixantrone, was able to completely wipe out tumors for one-fifth of patients in a clinical trial, compared with about 6 percent who did that well on standard chemotherapy.

The study of 140 patients found that 14 of 70 (20 percent) of patients on pixantrone, with relapsed, aggressive forms of the disease, saw their tumors completely disappear. That compared with 4 out of 70 (5.7 percent) on the standard chemotherapy, the company said in a statement. Complete information on the drug’s side effects wasn’t reported, and full data on the trial, called Extend, will be reported at an upcoming scientific meeting. Cell Therapeutics plans to ask for a meeting with the FDA to discuss filing an application to market the product in early 2009.

The positive result for pixantrone comes at a rock bottom point for Cell Therapeutics (NASDAQ: CTIC). The company has seen its stock drop 80 percent this year, closing yesterday at 33 cents. Its sole marketed product, Zevalin, generated $2.6 million in sales in the third quarter, while it had an operating loss of more than $17 million. The company has said it is running dangerously low on cash, saying it needs more by the end of the year. Although many investors surely have written off the stock, data like this from pixantrone will be hard to ignore for pharmaceutical partners. The American Cancer Society estimates that 66,000 people will be diagnosed with non-Hodgkin’s lymphoma in 2008.

“This positive phase III study is validation of Cell Therapeutics’ capabilities in acquiring attractive drug candidates, and designing and implementing a successful phase III trial,” said James A. Bianco, the company’s CEO, in a statement.

Cell Therapeutics obtained pixantrone for $236 million back in June 2003, when it acquired Italy-based Novuspharma. The drug is a modified version of an anthracycline, designed to be less toxic to the heart than other drugs in its class. Whether it can really achieve these high rates of tumor shrinkage with milder side effects is a big question that isn’t answered in today’s release, but the shareholders, at least those who are left, will stick around to get the full picture.

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