Physicians' Financial News for June 2007

%u25BA Cell Therapeutics’ Indolent NHL Agent Gets Fast Tracked

Cell Therapeutics, Inc. (CTI) received fast track designation for Pixantrone being investigated for the treatment of relapsed or refractory indolent non-Hodgkin’s lymphoma (NHL).

Pixantrone is an anthracenedione designed to reduce cumulative heart damage normally associated with the anthracycline-based anticancer agents. In designing Pixantrone, scientists removed the functional groups in the traditional anthracycline molecules that are thought to cause heart damage through the production of free-radicals. At the same time, they reportedly retained and enhanced those functional groups believed to be responsible for antitumor activity.

Pixantrone also is easier to administer than traditional anthracyclines because it is nontoxic to tissues and can be administered by a peripheral intravenous line, eliminating the need for a central line, explained Jack W. Singer, MD, chief medical officer, Cell Therapeutics, Inc.

CTI is also investigating Pixantrone in aggressive NHL. “With fast track designation already granted for pixantrone in aggressive NHL, this designation for indolent NHL is an important step in the development of this product and may help us bring this potentially life-saving drug to patients more quickly,” stated James A. Bianco, MD, President and Chief Executive Officer of CTI.

CTI has received feedback from the FDA on the design of its PIX303 trial, which will examine the time to disease progression for the combination regimen of fludarabine, pixantrone, and rituximab (FP-R) compared to the combination of fludarabine and rituximab (F-R) in the treatment of patients who have failed up to five prior treatments for relapsed or refractory NHL. The trial is expected to enroll 300 patients beginning in the second quarter with interim data by mid-2008, Dr. Singer reported.

Pixantrone is currently in a Phase III single-agent trial known as EXTEND and a Phase II combination study known as RAPID both in aggressive NHL. EXTEND is evaluating Pixantrone’s role as a salvage regimen in patients with relapsed aggressive NHL and is currently enrolling patients. “A second interim analysis of this study will be performed on approximately 100 patients and is targeted for the second half of 2007,” commented Dr. Singer.

RAPID is a first-line study of a combination therapy where Pixantrone is substituted for the anthracycline doxorubicin in the CHOP-R (cyclophosphpamide, doxorubicin, vincristine, prednisone and rituximab) regimen. “The trial, which is currently enrolling patients, will explore the potential cardiac safety benefits of pixantrone in chemotherapy naïve patients when compared directly to doxorubicin,” according to Dr. Singer. “An interim analysis is planned in the second half of 2007.”

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First Low-Molecular-Weight Heparin Approved for Extended Treatment to Reduce the Recurrence of Blood Clots in Patients with Cancer

The Food and Drug Administration sanctioned a new indication for Fragmin® (dalteparin sodium injection) for the extended treatment of symptomatic venous thromboembolism (VTE) to reduce the recurrence of VTE in patients with cancer. Fragmin is the first low-molecular-weight heparin approved in the United States for the extended treatment of recurrent VTE in cancer patients, according to Judee Shuler, Director, Corporate Planning & Communications at Eisai.

“Patients with cancer have a seven-fold greater risk of VTE than noncancer patients,” Shuler explained, “so Fragmin will address an important unmet medical need.” Eisai licensed exclusive United States rights to promote Fragmin from Pfizer Inc. in September 2005. “The agreement was aimed at strengthening Eisai’s position in oncology and critical care in the United States,” Ms. Shuler noted. “This new indication will give Eisai the opportunity to further develop relationships with oncology health care professionals and deepen our understanding of this therapeutic category, helping us prepare for the potential launch of oncology drugs in our pipeline.”

Eisai has three compounds in Phase II devel¬opment for breast, prostate, and non-small cell lung cancer and three different Phase I candidates.

Fragmin has been on the market since December 1994 when it was approved for prophylaxis of deep vein thrombosis in patients undergoing abdominal surgery, Ms. Shuler said. In 1999, the FDA allowed patients undergoing hip replacement surgery access to the medication. Latter that same year, the drug was approved for prophylaxis of ischemic complications in unstable angina and non-Q-wave MI when concurrently administered with aspirin therapy. About four years later, Fragmin was green lighted for patients with severely restricted mobility during acute illness.

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ArQule Stands to Earn $123 Million in Deal with Kyowa

ArQule, Inc. signed over the rights to its Phase I anticancer candidate to Kyowa Hakko Kogyo Co., Ltd. In a deal worth up to $123 million. Under this exclusive license agreement, Kyowa will develop and commercialize ARQ 197, a small molecule, selective inhibitor of the c-Met receptor tyrosine kinase, in Japan and parts of Asia.

“In retaining proprietary rights to ARQ 197 in the rest of the world, we preserve a broad range of longer-term strategic options for ArQule that will unlock the full value of this novel compound, including, for example, increased flexibility in pursuing additional partnering agreements and an enhanced ability to continue the further development of ARQ 197 independently should we elect to do so,” said Stephen A. Hill, President and Chief Executive of ArQule.

ArQule said that it will receive a $30 million upfront licensing fee. The company added that Kyowa could also pay up to $93 million in development payments and undisclosed sales milestones. Upon commercialization, ArQule will reportedly receive double-digit royalties on net sales.

Kyowa will back clinical development costs and commercialization of the compound in certain Asian countries, including Japan, China, South Korea, and Taiwan.

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Dendreon’s Prostate Cancer Immunotherapy Suffers Setback

Dendreon Corporation received a setback when the FDA notified it that more information was required to approve the Biologics License Application (BLA) for Provenge® (sipuleucel-T) for the treatment of asymptomatic, metastatic, androgen-independent prostate cancer. The company and the investment community in general had been very optimistic of the smooth approval of Provenge after the Advisory Committee’s very positive review of the product.

In late March, at the time of the Advisory Committee’s findings, Dendreon’s stock rose close to 150%. In the weeks that ensued up until receipt of FDA’s approvable letter on May 9, the company hit a high of $23.58. With the FDA’s notice of extra requirements, however, Dendreon’s stock plunged. On one day, the stock shed 50% of its value.

“Given our strong belief in the survival benefit and safety profile of Provenge, coupled with the positive outcome of the Advisory Committee meeting, we are disappointed that this decision will cause a delay in the availability of Provenge for patients who suffer from advanced prostate cancer,” said Mitchell H. Gold, MD, President and Chief Executive Officer. “We are committed to working closely with the FDA to resolve these questions in a timely and efficient manner to bring Provenge to patients with advanced prostate cancer who currently have few appealing treatment options.”

The FDA has requested additional clinical data in support of the efficacy claim contained in the BLA. Dendreon is seeking a clarification from the FDA. The Agency also asked for more information with respect to the chemistry, manufacturing, and controls (CMC) section of the BLA. Dendreon asserts that this can be addressed in a timely manner. During a conference call in May, Dr. Gold stated that the FDA’s concerns were not a matter of characterization of potency or maintaining sample consistency, but only a matter of making sure that certain observations made by the Agency during an inspection in February of the production plant have been addressed.

The Office of Cellular, Tissue and Gene Therapies Advisory Committee was asked if the submitted data established that Provenge is reasonably safe and whether there is substantial evidence that the product is efficacious, instead of simply whether the product is efficacious. The Committee voted 17 to 0 in favor of the safety of Provenge and 13 to 4 in favor of its efficacy.

Dendreon reported that its BLA was based primarily on a multicenter, randomized, double-blind, placebo-controlled Phase III study (D9901) in 127 men. It showed that the group of men with hormone refractory prostate cancer who received Provenge had a median survival time of 4.5 months longer than the median survival seen in the control arm. For the men who received Provenge, there reportedly was a 41% overall reduction in the risk of death. Additionally, 34% of patients receiving Provenge were alive 36 months after treatment compared to 11% of patients randomized to receive placebo, according to Dendreon.

Despite its apparent efficacy in extending the lives of patients, the FDA’s concern may be centered on the small size of this trial. The Agency may thus be waiting for the results from the company’s ongoing IMPACT study that seeks to enroll 500 patients. As of May 10, Dr. Gold noted that just over 420 patients had been enrolled.

Dr. Gold stated that IMPACT was designed under the advice of the FDA and registra¬tion will be based on the interim or final results of this investigation. Dendreon expects to have interim data next year and final information by 2010.

Gregory T. Schiffman, Senior Vice President, Chief Financial Officer, said that the company would be able to get through the interim part of the trial but cash balance would be driven down to a low level. If that were to occur, Schiffman continued, Dendreon will seek additional financing before submitting the data to the FDA.

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Amgen Anemia Portfolio at Risk

May was a tough month for Amgen’s stock. The potential of its blockbuster drugs for anemia, Epogen and Aranesp, facing competition from a Roche product in the near future was confounded by FDA scrutiny over the safety of these medications and most recently, Medicare’s decision to restrict coverage.

By the middle of May, Amgen was trading around $54, well below its 52-week high of $75.5 in late October. The company’s shares dropped almost 15% since a panel of government advisors recommended that additional warning labels be added to the company’s anemia drugs related to safety in certain cancer patients. The FDA had already asked Amgen and Johnson & Johnson in March to add label warnings about the increased risk of blood clots, heart attack and death when their anemia drugs are used at higher-than-recommended doses.

The Centers for Medicare and Medicaid Services followed suit in mid-May, proposing guidelines to stop covering those uses. The government health insurer wants to stop paying for certain uses of Aranesp. Medicare stands to save considerable amounts of money as Aranesp and its peers, Epogen and Johnson & Johnson’s Procrit, are some of the most costly drugs on the market. Medicare proposes to limit use of Aranesp to certain patients and to certain lengths of time. Medicare’s rules would also affect Procrit.

Johnson & Johnson, however, has less to lose as the company is highly diversified. For Amgen, on the other hand, Aranesp’s $4 billion worldwide sales for 2006, represents about one-third of the company’s entire revenue.

While Aranesp sales grew almost 26% over last year and Epogen’s increased by about 2%, the daunting approval of Roche’s Mircera could put a dent in Amgen’s share of the anemia market. c is seeking FDA sanction to use Mircera in patients with chronic kidney disease. On May 18, Roche received an approvable letter with only a draft label for Mircera. The company was hoping to get an okay by this summer. Roche, however, will now have to wait until fall, after the Cardiovascular and Renal Drugs Advisory Committee has issued its recommendations on the entire class of erythropoiesis-stimulating agents.

If approved, Mircera reportedly would have one major advantage over competitors: it is given in longer-lasting monthly doses compared with weekly doses for Amgen’s Aranesp and Epogen.

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Antisoma Could Gain $890 Million from Novartis Deal

In a deal worth up to $890 million, Novartis has added Antisoma plc.’s late-stage anticancer candidate to its pipeline. Clinical studies thus far suggest potential use of AS1404 in the treatment of lung, prostate, and ovarian cancers as well as other solid tumors.

“AS1404 leads the class of vascular disrupting agents (VDAs) and is the most advanced in clinical trials, soon to enter Phase III studies,” pointed out an Antisoma spokesperson. “It has a unique mode of action, distinct from other VDAs, causing apoptosis by a tubulin-independent mechanism, acting on actin via p38 MAP kinase, and causing local induction of cytokines via NF-kB.”

As per this exclusive, global licensing agreement, Antisoma will receive $75 mil¬lion immediately and $25 million when AS1404 enters a Phase III trial in lung cancer. Additionally, the company stands to earn up to $790 million in development, regulatory, and sales-related milestone payments based on successful development and marketing of AS1404 in multiple indications, launch of back-up products in multiple indications, and achievement of sales milestones.

Novartis will fund and conduct all future development of AS1404 and will also back the costs of the Phase II trials currently being completed by Antisoma. “Phase II trials in ovarian and prostate cancers are now in follow up,” the Antisoma representative remarked. “We expect to obtain survival and time to disease progression data in the coming months.”

If this drug candidate is approved and commercialized, Antisoma also will receive royalties on sales and will have the option to co-commercialize in the United States. “The Novartis deal now puts Antisoma in a position to accelerate development of our other assets,” noted Antisoma’s spokesperson. In particular, he pointed to AS1411, which is in Phase II trials for hematological and renal cancer as well as under Phase I investigation for other indications. The Novartis agreement also gives Antisoma the resources to enhance its sales and marketing operations, he continued. “Part of the Novartis deal includes potential funding of an Antisoma sales team in the United States.”

Novartis’ plans to take AS1404 into a Phase III study in squamous non-small cell lung cancer, expected to start early in 2008, and a number of supporting studies in lung and other cancers. AS1404 is the seventh compound in Novartis’ oncology pipeline that will enter phase III development by the end of 2008, according to the company. Some of the areas against which the other candidates have shown efficacy are refractory carcinoid tumors, chronic myeloid leukemia, cutaneous T-cell lymphoma, ovarian cancer, and acute myelogenous leukemia.