Building Blocks of a Biotech: CytRx Executives Talk About 3 Agents for Multiple Tumors

Steven A. Kriegsman, president and chief executive officer of CytRx

Amid growing cost pressures in the pharmaceutical industry, many small companies are playing an increasingly active role in drug development. One such company is CytRx Corporation, based in Los Angeles, California.

CytRx, which is traded on the Nasdaq, recently completed several transactions, including the sale of its molecular chaperone technology, which have the potential to generate more than $120 million for its oncology research. The company’s pipeline consists of 3 oncology drugs: INN0-206, under investigation in soft-tissue sarcomas; tamibarotene, under study in a placebo-controlled, double-blind study for non-small cell lung cancer (NSCLC) and a pivotal phase II trial in acute promyelocytic leukemia; and bafetinib, under study in a phase II proof-of-concept trial for relapsed or refractory B-cell chronic lymphocytic leukemia (B-CLL) and in clinical trials in advanced prostate cancer and brain cancer. The FDA approved orphan drug status for INNO-206 in July, which carries potential tax credits and extended patent rights.

Steven A. Kriegsman, a former certified public accountant and healthcare investor, is the president and chief executive officer of CytRx. Daniel Levitt, MD, PhD, chief medical officer, has more than 24 years’ experience managing clinical trials and drug development programs for several major pharmaceutical companies. They discuss CytRx’s research and the challenges of oncology drug development.

Daniel Levitt, MD, PhD, chief medical officer of CytRx

OncLive: How does INNO-206 work?

Levitt: The drug INNO-206 is a tumor-targeted conjugate of the commonly prescribed chemotherapy drug doxorubicin, which is used to treat a number of different types of cancer. In the INNO-206 formulation, doxorubicin is chemically linked to a second molecule that, when administered into the body, will bind very specifically to albumin, the major protein in the human circulation system.

Albumin is known to concentrate in tumors. In this situation, it acts as a carrier for INNO-206. Tumors have been shown to have a very acidic environment. They receive less oxygen and metabolize sugar to lactic acid, which leads to a higher acid content and a lower pH inside the tumor. At a lower pH, the doxorubicin is released from the albumin and from the linker, and then enters the tumor cell where it achieves a much higher concentration than if you administer just the free doxorubicin by itself.

What would be the advantages of INNO-206?

Levitt: You can administer much higher doses of the drug doxorubicin using this linker, which leads to greater activity. You get less toxicity and a lower side-effect profile. Basically, there’s a chance of actually creating a much greater destructive impact at the site of the tumor. This all leads to boosting the activity of the doxorubicin, increasing the tumor’s exposure to the drug by 300 to 400%.

Kriegsman: INNO-206 is really our first platform technology, and what makes it unique is that we have the ability to take that acid-sensitive linker and apply it to other chemotherapeutics.

The molecular structure of INNO-206, and an illustration of its mechanism of action.

Please discuss tamibarotene.

Levitt: Tamibarotene is being developed in a pivotal trial for acute promyelocytic leukemia as a third-line drug. And perhaps more excitingly, it has just entered into a placebo-controlled, double-blind phase II trial for NSCLC.

We believe that its potential to improve overall survival, progressionfree survival, and tumor response for patients with stage IV lung cancer is the real opportunity here, based on very encouraging preliminary results with a far less potent drug in the same class as tamibarotene.

We’re focused on our 140-patient phase IIB clinical trial that compares adding tamibarotene to a standard chemotherapy regimen versus a placebo added to a standard chemotherapy regimen in patients who have stage IV NSCLC, the most aggressive or late stage of this cancer. And we hope to have some of these results the latter part of next year.

Is tamibarotene the company’s most promising drug?

Levitt: I think that each of our drugs, for their specific indications, has a great deal of promise. Only the data will tell the story at the end. But, certainly, we feel tamibarotene is very promising based upon preliminary results with a drug in the same class as tamibarotene, called ATRA [alltrans retinoic acid], that is far less potent than tamibarotene. But, as I mentioned previously, we also feel that INNO-206, because of its ability to target tumors, the ability to administer much higher doses of the drug with fewer side effects, also has a great deal of promise.

Let’s talk about bafetinib.

Levitt: This is a drug that targets a number of enzymes, called kinases, that mediate cell growth, cell differentiation, etc, and are either overexpressed or mutated in a variety of different tumors. Bafetinib specifically inhibits enzymes called Lyn and Fyn kinases, which are expressed at very high levels in tumors such as B-CLL and glioblastoma multiforme.

CytRx recently reported preliminary results from its ENABLE phase II trial demonstrating that bafetinib was clinically active in patients with relapsed B-CLL who failed several other cancer treatments. Based on this indication of clinical activity and the low incidence of adverse events, additional patients enrolled in the ENABLE phase II trial will receive bafetinib as a single agent at a higher dose. The results validate CytRx’s strategy to rapidly and cost effectively conduct proof-of-concept trials in patients with advanced-stage cancers prior to moving into larger trials.

INNO-206 linker binds to albumin, which preferentially collects in the tumor.

How is CytRx generating the money to develop these drugs?

Kriegsman: Our monetization strategy to date has been very proactive in taking our legacy assets and monetizing them. We actually had a cash profit last year as a result of that strategy, even as we increased our focus on oncology development. We reported over $30 million of cash and cash equivalents at the end of March. Though we had opportunities to raise additional financing, because of our aggressive asset monetization strategy, we were able to fund our operations without diluting out stockholders. We keep a very tight handle on the overhead, and are able to manage our clinical development with 14 full-time employees.

Does CytRx plan to bring these drugs to market itself?

Kriegsman: The view of our Board of Directors to date has been: Take everything to market that you can, build a sales force and a marketing team, and sell wherever you can worldwide.

But with INNO-206, it might be hard for us to do justice to that significant of a platform without possibly leveraging the resources of a partner due to the costs involved. It’s too big for a company our size or even a company probably with an extra $100 million in cash. That’s something where in order to do parallel trials in many, many different chemos and many different indications, you need enormously deep pockets, which we don’t have and will not have for quite a while. So that’s the most likely, I think, partnerable drug.

As far as tamibarotene, if that goes well, we have the rights to Europe and North America. For that drug candidate, we would take it to market and have a sales force. I think it would depend upon how much money we had and where we stood.

Obviously, the more you partner, the less you have for yourself. But on the platform technology, it would be better to structure a favorable transaction and get cash up front to fund additional development projects.

What advantages do you feel your company has?

Kriegsman: I think it’s rare among publicly traded oncology companies and biotechs that are smaller in size that you have a management team that has had a hand in 6 oncology drugs coming to market. Dan Levitt’s been involved with 5, and Scott Geyer, our senior vice president of manufacturing, had a hand in the development and FDA approval of Nexavar.

What challenges do you see going forward?

Kriegsman: I think the challenge is always the unknown. You just don’t know what’s going to happen until the race to get a drug to market has ended, and either you’re successful and you get the FDA to approve your compound and you bring it to market or you’re not. That’s the ultimate challenge—to keep a company alive financially and obtain the fuel in the engine to drive to the finish line. It’s like in the Indianapolis 500. If your team runs out of gas on lap 499, somebody is going to be pretty upset that you couldn’t cross the finish line. In our business, the gas is the money.

Levitt: I think that’s true. You’re dealing with 2 issues, time and money. It takes time to develop a drug to the market. You’re looking at an average somewhere between 7 or 8 years for most drugs. That’s a long road, and to be able to maintain development financially is the challenge, but a challenge we are prepared to meet.

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