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Critical stage for biotechs
A number of Maryland's biotechnology companies will have prospective new drugs in their final round of clinical testing this year, a key stage for some in their efforts to fully evolve from research organizations into market-driven businesses.
Companies that either have drugs in late-stage trials - or are planning to start them this year - include MedImmune Inc., Guilford Pharmaceuticals Inc., Advancis Pharmaceuticals Corp., United Therapeutics Corp. and Nabi Biopharmaceuticals Corp.
Late-stage testing, or Phase 3 clinical trials, is the last successful round required by the Food and Drug Administration before a company can request FDA approval to market a new drug to the public. This final round of tests assesses how well the drug works.
The stakes are high for all five firms, even for Gaithersburg-based MedImmune, probably the most advanced of Maryland's roughly 320 biotechnology companies, which is working on its second generation of drug products.
But the stakes may be highest for Advancis, staggered last fall when pharmaceutical giant GlaxoSmithKline ended a licensing deal that might have brought the Germantown company about $100 million over the long haul. Its future could be in the balance because Advancis' long-term plan is to mate its time-release technology with a series of drugs, one at a time.
Having either or both of its clinical trials fail "would be a setback," said Robert Bannon, director of investor relations for Advancis. "While we feel very confident [the technology will work], we also know these [tests] are very significant - there's no doubt about [how important the trials are to] the value of this company and its Pulsys technology."
To arrive at this point of Phase 3 trials, companies invest years and millions of dollars moving potential drugs through earlier phases designed to test safety, determine dosage and get a reading on effectiveness.
Many drugs never make it to the final stage, for various reasons: The drug may have had serious - even dangerous - side effects, or failed to work. In some cases, the company developing it ran out of money, shifted its focus, or was trumped by a rival who got to market first.
Of the five companies conducting late-stage trials this year, MedImmune should be the busiest, testing as many as three candidates: CAIV-T, the successor to its disappointing FluMist nasal spray flu vaccine; Numax, a next-generation version of its primary product, Synagis, a treatment for infant respiratory viruses; and Vitaxin, an anti-cancer treatment.
"2005 is an important year for the company [in view of] the considerable number of clinical trials," said Jamie Lacey, a MedImmune spokeswoman.
MedImmune started several Phase 3 trials for Numax last year. The company hopes to have the test results sometime in 2006, which, if successful, would enable the company to file its application for approval in 2007.
Numax is intended to replace Synagis, which accounts for annual sales of about $1 billion. In its most recent four quarters, MedImmune had total revenue of about $1.1 billion.
The company's CAIV-T nasal flu vaccine is the focus of several late-stage tests. MedImmune could file for FDA approval this year, and still is focusing on 2007 for CAIV-T's introduction, the company has said. The new version would offer several advantages over MedImmune's FluMist. For one, it can be stored in a refrigerator, while FluMist must be frozen.
The company is also testing CAIV-T on children ages 6 months to 59 months - a critical target market for which FluMist is not approved. That FluMist cannot be used on children under 5 or adults over 49 made it of only limited value during this season's flu vaccine shortages.
Vitaxin, a new anti-cancer drug, underwent a Phase 2 trial last year. MedImmune is continuing to evaluate the data collected and could be moving to the next step - a Phase 3 trial - during 2005, Lacey said.
Boca Raton, Fla.-based Nabi, which has research facilities in Rockville, said it is working on a Phase III trial for its StaphVax vaccine. It is designed to protect patients with advanced kidney problems from Staphylococcus aureus infections. In a prior test, the vaccine was found to be effective for 10 months - not the full year as the study required.
Still, because the vaccine had been shown to work, the company launched a new study, this time using the 10-month boundary: If the tests confirm the prior findings, the vaccine could be approved for U.S. use. By receiving a "booster" shot before the vaccine lost its effectiveness, patients would be able to extend the protection of StaphVAX, Nabi said.
Nabi is initially focusing on staph infections in patients with severe kidney disease, but sees a broader market, since staph infections are on the rise worldwide, said Mark A. Soufleris, director of investor relations. If all goes well, the company could file for its first FDA approval late this year, he said.
Silver Spring-based United Therapeutics, which saw its first drug approved in November, is enrolling patients for Phase 3 trials of its OvaRex ovarian cancer-treatment drug.
While MedImmune and Nabi have been profitable companies in the past, and United Therapeutics has been profitable for the past two consecutive quarters, Advancis and Guilford have never posted an annual profit.
Advancis has launched two separate Phase 3 trials - one focusing on adults, and the other on children - involving its new method of delivering the ubiquitous antibiotic amoxicillin. The company's Pulsys technology is designed to deliver the antibiotic in powerful, well-defined bursts maximizing the drug's effectiveness and enabling adults and children to take lower doses.
"These clinical trials are very important for Advancis," said Gregory R. Wade, a senior research analyst who covers the Maryland company for Pacific Growth Equity LLC.
Guilford, a 10-year-old company, has two products on the market: its internally developed Gliadel wafer for certain types of brain cancer and Aggrastat, an injectable treatment for heart-attack patients that it purchased from Merck & Co.
But, like Advancis, Guilford has never turned an annual profit, though it has been around for more than a decade. That has raised the stakes for Guilford's Aquavan anesthesia candidate. The drug is in three sets of late-stage trials for use as a sedative in diagnostic and surgical procedures - a colonoscopy, for instance - that require the patient to be anesthetized for short periods, said William F. Spengler, Guilford's chief financial officer. Another test will start - and all four will finish - this year, the company said.
Because Aquavan is said to have fewer side effects and wear off more quickly than products in use, some analysts have said it could become a $200 million- a-year drug for Guilford if it's approved and brought to market.
Propofol, one of two anesthetic agents Aquavan will challenge in the marketplace, has estimated annual sales of more than $750 million. Midazolam, the other drug used for procedural sedation, has annual sales of more than $300 million, Guilford said.
The company's goal is to introduce Aquavan for sale in early 2007.
The challenge ahead is one reason that Guilford has brought in a new top management team with expertise in bringing drugs to market.
Inside Guilford, "the hope is that there is a rather large market opportunity awaiting us," said Spengler, the financial officer. "For Guilford, this is really a core program, making it [extremely] important as we enter 2005."
Although a substantial number of Maryland's life sciences firms have yet to deliver their first commercially approved product - let alone any sales or profits - the fact that so many firms have reached the last set of testing is promising for the state economy, said Bill Gust, a local venture capitalist.
"This is not at all trivial," said Gust, managing general partner for Anthem Capital Management, a Baltimore-based venture firm with headquarters in Locust Point. "When you consider how long it takes to get through drug discovery, and then Phase 1 and Phase 2 trials, just to get to get into Phase 3, the reality is that the seeds for this [emergence] were planted six, eight or even 10 years ago."