#3 - Oncology - April 3, 2011

1. News & Events: Next Generation Sequencing
2. News Summary

Increasingly Big Pharma/Biotech are relying on biomarkers, molecular segmentation, and targeted agents to enhance clinical development/de-risk drug development efforts as evidenced by the following news releases:

Daiichi Sankyo’s acquisition of Plexxikon

Daiichi Sankyo announced it will pay $805 million upfront and up to $130 million in near-term milestones for Plexxikon, an oncology developer with promising clinical data in melanoma. In August of 2010, researchers announced that nearly all melanoma patients enrolled in a clinical trial of PLX4032 responded to treatment (PLX4032 is an oral drug that targets the oncogene BRAF mutation present in half of melanoma cancers and about eight percent of all solid tumors). Interim data from a Phase 3 controlled study of PLX4032 in previously untreated metastatic melanoma patients with the BRAF mutation met both co-primary endpoints. Patients treated with PLX4032 had improved overall survival (OS) and improved progression-free survival (PFS) compared to patients treated with decarbazine, the current standard of care. 81 percent of patients had tumor shrinkage of at least 30 percent.

Roche/Curis – Hedgehog Pathway

Roche Holding AG reported positive results from a Phase 2 study of investigational Hedgehog Pathway Inhibitor vismodegib (RG3616/GDC-0449) for the treatment of advanced basal cell carcinoma (aBCC). According to the results, the compound met its primary endpoint of overall response rate in terms of shrinking tumors in study participants. Safety data were also positive, as shown in earlier studies.

Hedgehog, a key regulator of cell growth and differentiation during development, controls epithelial and mesenchymal interactions in many tissues during embryogenesis. Mutations cause constitutive hedgehog pathway signaling, which in basal-cell carcinomas can mediate unrestrained proliferation of basal cells of the skin. For this reason, blocking the hedgehog pathway may be useful in treating patients with basal-cell carcinoma.

Next Generation Sequencing

The days of drug development wherein researchers go after a relatively vaguely defined form of cancer based on its organ of origin, give it to all patients in a clinical trial with the related form of cancer, and hope that 25-30 percent will respond to therapy is coming to an end. Drug development is in a revolutionary state of change where patients who are most likely to respond to a given treatment based on their molecular signatures are rationally selected for inclusion in clinical trials. By sequencing tumor cell vs. normal cell DNA and isolating the variations/SNPs amongst other information/data, investigators give the “right drug to the right patient” statistically increasing response rates and delivering on the promise of “personalized” medicine.

These developments have not escaped Big Pharma/Biotech who are willing to pay enormous premiums to acquire/license personalized medical treatments like Plexxikon’s PLX4032.  Other ongoing personalized studies include those for Triple Negative Breast Cancer (TGen) and Pfizer’s c-Met and ALK inhibitor (5% of NSCLC patients have ALK mutations); both designed to target a clearly defined genetic population of cancer patients.

One of the most promising areas of personalized drug development capitalizing is the area of Epigenetics. Epigenetics refers to the regulation of genes with mechanisms other than changes to the underlying DNA sequence and such processes are widely believed to play a central role in the development and progression of almost all cancers (drive tumor progression). Such Epigenetic processes are controlled by DNA methylation and histone modifications.

A leader in Epigenics is a biotechnology company, Epizyme, whose vision is to enroll patients with a certain pathological form of cancer and take blood or biopsy samples that will enable researchers to divide patients into separate groups, one for those who have an overeactive form of the given epigenetic enzyme, the other for those who don’t. By looking at how Epigenetic profiles of patients differ, Epizyme hopes to generate a higher percentage of responders which should be highly predictive of what happens when the drug enters much larger clinical trials (help to drive better prognostic decisions).

One of the largest impediments to reaching the full potential of personalized medicine is the lack of payer reimbursement for sequencing patient genomes. In select cases, foundations have stepped-up to fill the gap left from the lack of public/private reimbursement.

Clinical & Regulatory:

Mersana Therapeutics, Inc. announced the initiation of a Phase 1b extension study with its lead cancer product, XMT-1001, a novel DNA topoisomerase I inhibitor based on the company's Fleximer(R) polymer conjugate platform, in second-line gastric cancer and second-/third-line non-small cell lung cancer. The study will be carried out in 10 clinical centers in the US. The Phase 1b follows the successful completion of a 74-patient Phase 1 clinical trial, which demonstrated high and prolonged plasma levels of XMT-1001 active release products and a safety profile free of the toxicities normally associated with topoisomerase 1 inhibitors, such as hemorrhagic cystitis and diarrhea. Additionally, XMT-1001 showed promising evidence of clinical activity, including tumor shrinkage and prolonged stable disease, in a heavily pre-treated patient population.

Oncolytics Biotech Inc. announced that it has completed patient enrollment in its U.S. Phase 2 clinical trial (REO 015) using intravenous administration of REOLYSIN in combination with paclitaxel and carboplatin in patients with advanced head and neck cancers. This trial was a 14-patient, single arm, open-label, dose-targeted, non-randomized trial of REOLYSIN given intravenously in combination with a standard dosage of paclitaxel and carboplatin. This study was performed in part to confirm the results of UK Phase II study, which enrolled a slightly different patient population, and to support ongoing Phase III study in platinum resistant head and neck cancers.

Manhattan Scientifics, Inc. announced that The Gray Sheet has written about an initial clinical trial that has enrolled its first 35 patients to measure leukemia cells using a nanotechnology-based magnetic imaging method developed by Senior Scientific, which has licensed the technology to Manhattan Scientifics, Inc. A first-in-man clinical trial to measure very small levels of residual leukemia cells using a unique nanotechnology-based magnetic imaging method has enrolled its first 35 patients. The technology, in development by Senior Scientific and nanomedicine-focused investment firm Manhattan Scientifics, is still years from reaching the market, but the firms say they are in active partnering discussions with several large drug, device and imaging companies. The trial, which will enroll 60 patients in all, is expected to be completed within two years. In leukemia, the focus is on monitoring the effect of chemotherapy by detecting residual disease. The technique also has applications in gauging therapy response in a range of other cancers.

To discuss the progress made within each of Access' programs, including an update on commercial launch activities and schedule for MuGard, the company's oral mucositis supportive care product, its Cobalamin CobOral and CobaCyte programs, as well as the advancement of both its Thiarabine Phase 1/2a trial in hematological malignancies at M.D. Anderson Cancer Center, and ProLindac phase 2 combination trial in recurrent ovarian cancer.

Roche Holding AG has reported positive results from a Phase II study of investigational Hedgehog Pathway Inhibitor vismodegib (RG3616/GDC-0449) for the treatment of advanced basal cell carcinoma (aBCC), a severe and debilitating form of skin cancer. According to the results, the compound met its primary endpoint of overall response rate in terms of shrinking tumours in study participants. Safety data were also positive, as shown in earlier studies. Roche has said full results of the study will be presented at an upcoming scientific meeting.

Bristol-Myers Squibb Company announced that a clinical trial, known as study 024 - of its investigational compound ipilimumab has met the primary endpoint of improving overall survival in previously-untreated patients with metastatic melanoma. Study 024 was designed to assess overall survival in unresectable stage III or stage IV melanoma patients who have not received prior therapy. The study compares ipilimumab 10mg/kg in combination with chemotherapy vs. chemotherapy alone. An abstract of the 024 data will be submitted to the American Society of Clinical Oncology for potential presentation at the Annual Meeting in June of this year. A regulatory filing for ipilimumab, based on a study known as 020, is currently under review by the U.S. Food and Drug Administration and other health authorities worldwide. The filings are based on study 020, which assessed overall survival in previously-treated unresectable stage III or stage IV melanoma patients. Study 020 compared ipilimumab 3 mg/kg + gp100 vaccine vs. gp100 vaccine alone and ipilimumab along vs. gp100 vaccine alone. The PDUFA date for the U.S. filing is March 26, 2011.

Cell Therapeutics, Inc. announced that it has initiated its randomized pivotal trial of pixantrone for the treatment of relapsed/refractory diffuse large B-cell lymphoma ("DLBCL"). The clinical trial is now open to patient enrollment. The trial, referred to as the PIX-R or PIX 306 trial, will compare a combination of pixantrone plus rituximab to a combination of gemcitabine plus rituximab in patients with relapsed or refractory DLBCL who have received one to three prior lines of therapy. The PIX-R trial utilizes progression free survival ("PFS") and overall survival as co-primary endpoints of the study. The PIX-R trial is targeting to enroll approximately 350 patients over 18 months and will include patients who have failed at least one line of previous therapy and patients who are not candidates for myeloablative chemotherapy and stem cell transplant. The PIX-R trial may serve as either a post-marketing commitment trial or as a follow-on pivotal trial depending on the outcome of a formal appeal that CTI submitted to the Food & Drug Administration's Office of New Drugs in the FDA's Center for Drug Evaluation and Research in December 2010 regarding its 2010 decision about CTI's new drug application (the "NDA") for pixantrone. The NDA for pixantrone was based on the results of the PIX 301 trial, a randomized trial comparing pixantrone as monotherapy to a choice of standard single-agent chemotherapy in relapsed/refractory aggressive non-Hodgkin's lymphoma ("NHL") patients. CTI expects a decision regarding its appeal in the second quarter of 2011. The PIX-R trial is designed to be a randomized, multicenter study comparing pixantrone plus rituximab to gemcitabine plus rituximab in patients with relapsed or refractory DLBCL or DLBCL transformed from follicular lymphoma who have received one to three prior lines of therapy, including CHOP-R or an equivalent regimen. The patients to be enrolled in the PIX-R trial cannot be eligible for high-dose (myeloablative) chemotherapy and stem cell transplant, but patients who relapse after such a procedure are eligible. The co-primary endpoints for the PIX-R trial are PFS and OS with secondary endpoints including overall response rate ("ORR") (ORR equals complete responses plus partial responses), complete response rate and safety. CTI is targeting to enroll 350 patients over 18 months in the PIX-R trial.

Curis Inc. announced a positive outcome from a pivotal phase II clinical trial conducted by Roche and Genentech, Curis' collaborator and a wholly owned member of the Roche Group, of GDC-0449, a first-in-class hedgehog pathway inhibitor, in patients with advanced basal cell carcinoma (BCC). Genentech informed Curis that the study met its primary endpoint of achieving a target overall response rate, showing that GDC-0449 shrank advanced BCC tumors in a pre-defined percentage of people in the study. A preliminary safety assessment showed the most common adverse events were consistent with previous experience with vismodegib. A detailed safety assessment is ongoing. Roche has indicated that it anticipates making at least one regulatory submission in 2011 to seek approval to commercialize GDC-0449. Genentech plans to submit the data from the clinical trial for presentation at a future medical meeting. Roche also informed Curis that GDC-0449 (also known as RG3616) now has a generic name approved by the World Health Organization, vismodegib (pronounced vis-mo-DE-jib). ERIVANCE BCC is an international, single-arm, multi-center, two-cohort, open-label phase II study that enrolled 104 patients with advanced BCC, including metastatic and/or locally advanced BCC, defined as patients whose lesions are not appropriate for surgery, or for whom surgery would result in substantial deformity. Study participants received 150 mg vismodegib once daily until disease progression. The primary endpoint of the study was overall response rate (tumor shrinkage) as assessed by independent reviewers. Secondary endpoints of the study included overall response rate as assessed by study investigators, duration of response, progression-free survival, overall survival and the safety profile. A preliminary safety assessment showed the most common adverse events were muscle spasms, hair loss, altered taste sensation, weight loss, fatigue, nausea, decreased appetite and diarrhea. Serious adverse events were observed, including fatal events. The deaths are being further evaluated, but do not appear to be related to vismodegib. Genentech is also evaluating vismodegib in a phase II trial in people with operable forms of BCC, which opened in October 2010. Additionally, vismodegib is being evaluated by third-party investigators in a number of other cancers and in people with BCC who have Gorlin syndrome.

Sanofi-Aventis announced it has received marketing authorization from the European Commission for JEVTANA® (cabazitaxel) in combination with prednisone/prednisolone for the treatment of patients with metastatic hormone-refractory prostate cancer (mHRPC) previously treated with a docetaxel-containing regimen. JEVTANA is the first approved agent to significantly extend overall survival in mHRPC patients whose disease has progressed during or after treatment containing docetaxel (15.1 months median overall survival vs 12.7 months in the mitoxantrone arm; HR=0.70 (95% CI: 0.59-0.83); P<0.0001). The approval from the European Commission followed a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA). The decision is based on the results from the Phase III TROPIC clinical study involving 755 patients with mHRPC previously treated with a docetaxel-containing treatment regimen. The European Commission decision is applicable to the 27 Member States of the European Union (EU) as well as Iceland, Lichtenstein and Norway. JEVTANA was previously approved in the US, Israel, Curaçao and Brazil.

Corporate Finance:

Antisoma PLC has announced that it has ended its offer period, as it has no takeover bid under consideration at the moment, nor does it expect one. The company had announced on February 8 that it plans to seek a deal to boost shareholders value, said today that its board was looking for the best ways to invest cash resources to benefit shareholders. It added that it was still reviewing options to exploit its basic intellectual property, but will no longer invest in biopharmaceutical programs.

Advanced Life Sciences Holdings, Inc. reported consolidated earnings results for the fourth quarter and full year ended December 31, 2010. For the quarter, the company reported loss from operations of $3,298,208 compared to $1,165,975 for the same period last year. Net loss attributable to Advanced Life Sciences Holdings, Inc. was $3,305,881, or $0.01 per basic and diluted share compared to $1,452,954, or $0.02 per basic and diluted share for the same period last year. The increase in the net loss for the quarter is primarily due to a non-cash impairment charge which was partially offset by reduced salary and benefit costs and other operating expenses associated with the development of the company’s lead antibiotic, Restanza. Cash used in operating activities during the quarter was approximately $1.0 million.

For the year, the company reported loss from operations of $8,628,642 compared to $7,991,939 for the same period last year. Net loss attributable to Advanced Life Sciences Holdings, Inc. was $9,321,994, or $0.06 per basic and diluted share on total revenue of $752,853 compared to $9,163,232, or $0.16 per basic and diluted share on total revenue of $2,793,191 for the same period last year. Cash used in operating activities for the full year was approximately $6.4 million.

Mergers & Acquisitions:

Tesaro, Inc. sigened a license agreement to acquire Anaplastic Lymphoma Kinase program of Amgen Inc. (NasdaqGS: AMGN) on March 22, 2011.

News & Events:

Takeda Pharmaceutical Co. Ltd. established a wholly owned holding company named Takeda (China) Holdings Ltd. in Shanghai on March 21, 2011 that will oversee Takeda's overall business in China. This new company will be responsible for the feasibility study of the strategies for future business expansion in China and its implementation, and will have functions such as administration, and development, control cash/investment management including those necessary for the increase of the sales force mentioned above, acceleration of development of new products, and improving and renovating the manufacturing facilities of Tianjin Takeda.

Strategy & Strategic Alliances:

Sanofi-Aventis announced a research collaboration with Columbia University Medical Center for the development of innovative diabetes medicines. This three-year research collaboration, with the laboratory of Dr. Gerard Karsenty, will investigate the role of the osteoblast-secreted peptide, osteocalcin, in diabetes management.

Cancer Genetics, Inc. (CGI) and Aptiv Solutions have formed a strategic partnership focused on delivering comprehensive solutions to biopharmaceutical and medical device firms conducting clinical trials for oncology therapeutics. Together, CGI and Aptiv Solutions will provide biopharmaceutical firms with a better understanding of modes of action of a variety of therapeutics and the role for biomarkers in the oncology drug development process. Early insight in complex diseases and complicated patients garnered by using genomic technologies and other methodologies will drive informed decisions and successful development of targeted therapies, personalized medicine and other new therapeutics. The collaboration will provide customers with the products and services necessary to bring oncology therapeutics to their patients faster and at a reduced cost.

Seattle Genetics Inc. has entered into a collaboration agreement with Abbott under which Abbott will pay an upfront fee of $8 million for rights to utilize Seattle Genetics' antibody-drug conjugate, or ADC, technology with antibodies to a single oncology target. Abbott is responsible for research, product development, manufacturing and commercialization of any ADC products under the collaboration. Pending achievement of certain development, regulatory and commercial milestones, Seattle Genetics is eligible to receive from Abbott up to approximately $200 million in milestone payments, as well as royalties on worldwide net sales of any resulting ADC products. Seattle Genetics also will receive annual maintenance fees and research support payments for assistance provided to Abbott under the collaboration. Seattle Genetics has 11 active ADC collaborations. There are currently 11 ADCs in clinical development across both internal and collaborator pipelines using Seattle Genetics' technology.

Eli Lilly and Co. announced that it will continue its venture capital investment in China's biopharmaceutical industry. The move will to strengthen its research and development (R&D) strength and expand its presence in China.

Ariad Pharmaceuticals Inc. announced that it has elected to exercise its option with Merck & Co. Inc. to co-promote ridaforolimus, an investigational mTOR inhibitor in the sarcoma indication upon its potential approval in the United States in 2012. Based on the terms of the license agreement that Ariad and Merck entered into in May 2010 for the development, manufacture and commercialization of ridaforolimus in oncology, Ariad has the option to co-promote ridaforolimus with up to 20% of the sales effort for the product in all indications in the U.S., and Merck will compensate Ariad for its sales efforts.

Tesaro Inc. announced the signing of an agreement with Amgen Inc. granting TESARO exclusive worldwide rights for the development, manufacture, commercialization and distribution of small molecule inhibitors of Anaplastic Lymphoma Kinase (ALK). TESARO plans to develop one or more compounds for oncology indications, including the treatment of patients with non-small cell lung cancer (NSCLC) whose tumors are ALK-positive. The agreement includes an upfront payment and potential future payments and royalties associated with the achievement of certain development and commercial milestones. Abnormal ALK fusion proteins are thought to be a key driver of certain types of cancers, including a sub-population of NSCLC as demonstrated in recent clinical trials of an ALK inhibitor. Sub-populations of other cancers including lymphoma and neuroblastoma are also associated with abnormal expression of ALK proteins. ALK is generally not expressed in normal adult tissue and therefore represents a promising molecular target for the development of a cancer therapeutic. Amgen's oral, small molecule ALK inhibitors are highly potent and selective, and possess desirable pharmaceutical properties.

Dako Denmark A/S and the Epitomics, Inc., announced that they have entered into a collaboration which will allow the companies to unite competencies to provide the Anatomic Pathology market with state-of-the-art antibodies. Dako's expertise within the field of human cancer diagnostics, including development of new diagnostic antibodies relevant in identifying, differentiating and characterizing tumors, and Epitomics' exclusive intellectual property rights and expertise within development and production of rabbit monoclonal antibodies are the key ingredients to future development of routine diagnostics, prognostics and predictive immunohistochemical assays, also known as companion diagnostics or PharmacoDiagnostics (PharmDxTM). Besides the development and launch of new state-of-the-art monoclonal antibodies the strategic alliance between Dako and Epitomics also includes a technology transfer from Epitomic's to Dako's facilities.