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Physicians' Financial News: April 2008

OBTN, April 2008, Volume 2, Issue 4

Physicians' Financial News focuses on news-making and/or notable companies in the oncology biotechnology sector.

Sanofi-Aventis Pushing Forward Pipeline, Products, and Profits

One of the world’s top-five largest drug concerns, Sanofi-Aventis, based in Paris, France, is steadily growing even larger on the strength of the company’s:

  • Formidably sized drug portfolio
  • Bulging future product pipeline
  • Resources, extensive networking capabilities, high visibility, and economics of scale gained by the existence of its immense, efficient, ends-of-the-earth spanning organization.

Sanofi-Aventis is publicly traded and is listed on both the Paris and New York stock exchanges. (For the purpose of uniformity when discussing Sanofi-Aventis stock, this article will refer exclusively to the Sanofi-Aventis’s New York Stock Exchange listing when citing trends, price points, per-share earnings, etc.)

The company, which employs more than 100,000 people and operates in more than 100 hundred countries, was formed in 2004 when Sanofi-Synthélabo (itself formed in 1999 when Sanofi merged with Synthélabo) acquired Aventis (a company that came into existence in 1999 when Rhône-Poulenc S.A. merged with Hoechst Marion Roussel).

In early 2004, Sanofi-Synthélabo made a hostile takeover bid worth €47.8 billion for Aventis. Initially, Aventis rejected the bid because it felt that the bid offered an inferior rate of compensation based on the company’s share value. The three-month takeover battle concluded when Sanofi-Synthélabo launched a friendly bid of €54.5 billion in place of the previously rejected hostile bid. French government intervention also played an active role in the process. The French government, desiring what it called a “local solution,” put heavy pressure on Sanofi-Synthélabo to raise its bid for Aventis. This was after it became known that Novartis, a megapharma company from Basel, Switzerland, was in the running to acquire Aventis.

Organization Segmented by Therapeutic Area, Cemented by Synergy

Sanofi-Aventis is organized—based on targeted key therapeutic areas of strategic focus— into seven separate business units, including: (1) cardiovascular disease, (2) thrombosis, (3) oncology, (4) metabolic disorders, (5) central nervous system, (6) internal medicine, and (7) vaccines. These separate units, however, do not function as stand-alone entities completely disconnected from the whole of the larger company. According to a Sanofi-Aventis spokesperson, the business units are designed to buttress one another, yielding mutually beneficial overlap, and synergies and cross-pollinations of knowledge, research, and resources.

For example, when explaining the philosophy of the oncology division, Wayne Pisano, President and Chief Executive Officer, in a research and development (R&D) presentation delivered in late 2007, pointed out that a basic component of Sanofi-Aventis oncology’s R&D involves leveraging interunit synergies to bridge new therapeutic areas. Elaborating upon how this theoretical outlook is put into practice, Michel De Wilde, Senior Vice President, R&D, Sanofi Pasteur, stated, “Oncology offers the unique opportunity to leverage vaccine and small-molecule synergies within Sanofi-Aventis.”

Corporation Makes a Firm Commitment Made to Research and Development

According to a Sanofi-Aventis spokesperson, “the foundation of Sanofi-Aventis’ worldwide growth is an industry-leading R&D organization.” With roughly 17,500 scientists working in more than 28 research centers on three continents, Sanofi- Aventis coordinates its R&D on a global scale.

According to the Sanofi-Aventis global website, the company’s annual R&D budget exceeds €4.5 billion (a 2.4% increase over the previous year) and ranks among the three largest budgets of the entire pharmaceutical industry. The substantial investment has not been without returns. The company, at its most recent R&D update in late 2007, disclosed that it currently has about 50 compounds, addressing a broad spectrum of disease states, in advanced stages of development.

In all, Sanofi-Aventis can claim a portfolio of 113 products in development, 54 of which are in late-stage (phase II or III) clinical trials and 59 of which are in an early-stage (preclinical or phase I) phase of study.

Major Products

The Sanofi-Aventis portfolio of marketed products contains many blockbusters as well as nearblockbusters. The company’s arsenal of FDA-approved products is too extensive to list everything here, thus, the following Table merely represents a broad overview of the company’s major nononcology products and what they are indicated for:

Product

Indication

Actonel

(risedronate sodium tablets)

osteoporosis

Allegra

(fexofenadine HCl)

allergy

Ambien

(zolpidem tartrate

insomnia

Avapro

(irbesartan)

hypertension and

diabetes-related

kidney damage

Lantus

(insulin glargine)

diabetes

Lovenox

(enoxaparin sodium)

deep-vein

thrombosis

Plavix

(clopidogrel bisulfate)

antithrombosis

Based on Sanofi-Aventis marketshare data, four of

these products are world leaders in their respective

classes: Ambien, Lantus, Lovenox, and Plavix.

Deals and Alliances

Sanofi-Aventis’ oncology division generally follows a two-tiered track in pursuit of new product development. In addition to relying on aggressive and well-funded in-house research efforts, Sanofi- Aventis also employs an overall strategy of collaboration with numerous academic institutions and biotechnology concerns, as well as other pharmaceutical companies. A few of the major collaborators with Sanofi-Aventis oncology include:

  • Children's Hospital, Boston, MA;
  • Immunogen, Cambridge,MA;
  • Oxford BioMedica, San Diego, CA;
  • Regeneron, Tarrytown, NY.

Just a few weeks before Oncology and Biotech News went to press this month, Sanofi-Aventis announced its entry into antibody agreements with Cambridge, Massachusetts—based Dyax for the fully human monoclonal antibody DX-2240 and also for “Phage Display Technology.”

Under the terms of the two agreements, Dyax will be eligible to receive up to $500 million in license fees and milestone payments if the first five antibody candidates, including DX-2240, become commercial successes. In addition, Dyax is eligible to receive royalties from commercial sales of DX-2240 and other antibodies developed by Sanofi-Aventis.

Sanofi-Aventis will handle the ongoing development, commercialization, and consolidation of sales of DX-2240 as the exclusive licensee. Dyax will retain the codevelopment and profitsharing rights for certain other future antibody product candidates discovered by Sanofi-Aventis, while Sanofi-Aventis will lead in development and commercialization, and worldwide sales.

What Is In the Pipeline

In-house R&D progress is occurring at an impressive pace. At a late 2007 R&D presentation, company executives boasted of 17 targets in the preclinical stage, eight projects in advanced development, and 27 late-phase oncology trials currently underway or about to start (Figure).

Reflecting the company mantra of synergy between business units, the oncology and vaccine divisions are jointly contributing to a busy slate of promising drug trials that are testing potential vaccines for a range of different cancers. Preclinical research is currently being undertaken on prospective breast and lung vaccines. Phase I and II trials are underway to examine the efficacy of two different melanoma vaccine candidates. Additionally, phase II and III trials are currently in progress to assess a renal cancer vaccine as well as a colorectal cancer vaccine.

The Oncology Unit

The Sanofi-Aventis oncology unit is driven by three flagship products: (1) Eloxatin (oxaliplatin for injection), (2) Taxotere (docetaxel), and (3) Elitek (rasburicase).

%u25BA Eloxatin

Approved by the FDA in 2002, Eloxatin is a new-generation platinum salt, and is currently the only treatment indicated for both metastatic colorectal cancer and early-stage colon cancer. According to the Sanofi-Aventis international website, the development of Eloxatin in the treatment of colorectal cancer has led to the following major breakthroughs:

  • An extension in median survival rate in patients in the metastatic stage receiving Eloxatin as first-line treatment;
  • Optimized surgical excision of liver metastases after Eloxatin-based treatment, making it possible to treat more patients with initially unresectable liver metastases;
  • A 21% to 23% reduction at three years in the risk of recurrence in early stage colon cancer (stages II and III).

Recently, in fact, the FDA announced that it had accepted for filing and assigned priority review to a supplemental new drug application (SNDA) that proposes changes to the prescribing information for Eloxatin.

Sanofi-Aventis wants its SNDA to include a six-year analysis from the 2,246-person MOSAIC trial because the study demonstrated ‘significantly improved’ sixyear overall survival (OS) in patients with stage III colon cancer following surgery to remove the primary tumor, compared with the standard regimen alone. The risk of disease recurrence also improved by 22% in stage III patients in the trial. The FDA will complete its review within six months of the date of filing.

Eloxatin is in-licensed from Debiopharm, Lausanne, Switzerland, and is marketed in almost 75 countries worldwide.

%u25BA Taxotere

Originally approved in 1995, Taxotere is currently marketed in more than 100 countries in eight indications for four major manifestations of cancer-positive forms. Taxotere is indicated as monotherapy or in combination with another anticancer drug, according to the case, for the treatment of breast cancer in both the early stages (adjuvant treatment) and in the metastatic phase, as well as in the HER2/neu positive forms for which prognosis is very poor. Taxotere is also indicated for the treatment of stage IV non—small cell lung cancer, metastatic hormone-refractory prostate cancer, and metastatic gastric cancer.

Taxotere is a medication in the taxoid class. It inhibits cancer cell division by essentially “freezing” the cell’s internal skeleton, comprised of microtubules that assemble and disassemble during a cell cycle. Taxotere promotes assembly and blocks disassembly, thereby preventing cancer cells from dividing and results in their death.

According to a Sanofi-Aventis spokesperson, the clinical development of Taxotere continues, including in disease states for which Taxotere is already licensed, so as to give patients the benefit of Taxotere’s efficacy at every stage of disease.

Further evidence unveiled at the end of last year at the 31st Annual San Antonio Breast Cancer Symposium, San Antonio, Texas, for example, reaffirmed Taxotere’s effectiveness in early-stage breast cancer. Data showed that Taxotere-based chemotherapy significantly improved OS compared with standard anthracycline-based chemotherapy in a study population of patients with early-stage breast cancer.

%u25BA Elitek

Also approved in 2002, Elitek (rasburicase) was the first biotechnology product produced by the Sanofi-Synthelabo research team. Rasburicase, the active ingredient of Elitek, is an enzyme produced by genetic engineering at a dedicated Sanofi-Aventis production center. The drug is indicated for the treatment of hyperuricemia in pediatric patients with leukemia, lymphoma, and solid-tumor malignancies.

Prostate Cancer Product Candidate Hits Primary Phase II Endpoint

Privately held OncoGenex Technologies, located in Vancouver, British Columbia, Canada, unveiled positive phase-II data at the American Society of Clinical Oncology’s 2008 Genitourinary Cancers Symposium, in San Francisco on OGX-011 (custirsen), the company’s lead product candidate. OGX-011 is being developed by OncoGenex in collaboration with Isis Pharmaceuticals, Carlsbad, California.

According to the research, OGX-011 was shown to be safe and well tolerated when administered in combination with either docetaxel or mitoxantrone as second- line chemotherapy in 42 patients with hormone refractory prostate cancer. These demonstrations of safety and tolerability, according to Fred Saad, MD, primary investigator of the study and professor of surgery and urology, University of Montreal, Quebec, Canada, were the primary objectives of the clinical trial. Additionally, patients treated with second-line chemotherapy plus OGX-011 showed ongoing survival durations better than results published with chemotherapy alone.

The phase II study was designed as an open-label, randomized, multicenter study evaluating weekly administration of OGX-011 in combination with secondline chemotherapy in patients with metastatic hormone refractory prostate cancer who were previously treated with a minimum of two cycles of docetaxel-based first-line chemotherapy.

in vitro

in vivo

Patients in this study represented a poor prognostic population because of rapid disease progression after completing first-line docetaxel therapy with a median of 0.7 months in the mitoxantrone-treated group or 2.1 months in the docetaxel-retreated group. Since OGX-011 has been shown to enhance chemotherapy and reverse chemotherapy resistance in preclinical and models, the aim of this study was to assess the effect of OGX-011 in combination with either mitoxantrone or docetaxel retreatment as second-line chemotherapy.

The data, which were presented by Dr. Saad, demonstrated the attainment of the primary study objectives of safety and tolerability in all of the 42 patients assessed. In addition, encouraging clinical outcomes were observed with OGX-011 administered in combination with second-line chemotherapy. For example: A greater amount of chemotherapy than expected was safely administered to and tolerated by patients when OGX-011 was combined with second-line chemotherapy. Subjects received a median of six cycles of mitoxantrone or 7.5 cycles of docetaxel as second-line chemotherapy. These data compare favorably with published reports documenting a median of three to four cycles with second-line chemotherapy alone.

Survival was better than expected based on previously published reports. With a median follow-up of 13.3 months following second-line chemotherapy, approximately 30% of patients in both arms have not manifested disease progression and approximately 60% of patients remain alive in both arms. Median survival has not been reached in either arm. These data compare favorably with published results documenting median survivals of approximately 10 months.

New England Journal of Medicine

Reduction in pain or analgesic use was achieved in 50% or more of patients entering the study with pain: Reductions in pain or analgesic use were seen in 50% of evaluable patients treated with mitoxantrone and in 67% of evaluable patients retreated with docetaxel. These data compare favorably with the 22% to 35% of patients receiving first-line chemotherapy who reported reduction in pain in the TAX 327 study published in the on October 7, 2004.

“These data show that the combination of OGX-011 with docetaxel or mitoxantrone may improve treatment outcomes in second-line prostate cancer. The data also suggest that retreatment with docetaxel when combined with OGX-011 may reverse chemotherapy resistance in second-line docetaxel retreatment. We look forward to confirming these data in planned phase III studies,” stated Dr. Saad.

Phase III studies are planned utilizing chemotherapy plus OGX-011 as second-line therapy in patients progressing after a first-line docetaxel regimen. In addition, OGX-011 is completing evaluation in five phase II clinical studies in prostate, lung, and breast cancers.

OGX-011 is designed to block production of clusterin, a cell survival protein that is over-produced in several cancer indications and in response to many cancer treatments, including hormone ablation therapy, chemotherapy, and radiation therapy. Increased clusterin production is linked to faster rates of cancer progression, lower treatment resistance, and shorter survival duration.

Potential Leukemia Treatment Shows Positive Response in Dual-Phase Trial

Blood

According to a new study published in the February issue of , ofatumumab (formerly HuMax-CD20) has demonstrated a statistically significant (roughly 50%) antitumor response in a cohort of patients with relapsed or refractory chronic lymphocytic leukemia (CLL). The data were generated from a dual-stage phase I/II trial of the product candidate, an antiCD20 monoclonal antibody currently being co-developed by GlaxoSmithKline (GSK) and Genmab.

The study was an international, multicenter, open-label, dose-escalating phase I/II trial with the primary objective of evaluating the safety and efficacy of ofatumumab in patients with refractory or relapsed CLL. Thirty-three patients with CLL were divided into three cohorts and received four, once-weekly infusions of ofatumumab.

The primary efficacy endpoint of the study was objective tumor response over the period from screening to week 19. Fifty percent of patients in one of the cohorts experienced remission. Specifically, 12 of these patients had partial remission and one patient had a nodular partial remission. In the study, four weeks after beginning treatment, 62% of patients obtained objective response as evaluated by physical examination and peripheral blood. On average, patients achieved an average progression-free survival of 106 days and an average time-to-next- treatment of one year.

“Almost all patients with CLL experience disease progression after initial therapy, and currently there are limited therapeutic options for this group. Therefore, these early clinical data on ofatumumab are encouraging, with responses seen in half of the patients treated in the highest cohort,” said Professor Bertrand Coiffier, Head of Hematology Department, Centre Hospitalier Universitaire de Lyon, France, and lead investigator in the trial.

“CLL is a common but very serious form of leukemia. Any hope for an effective new therapy may bring promise to those affected by the disease. We are very excited by these data and the potential that ofatumumab has shown to date in treating patients with relapsed or refractory CLL,” said Paolo Paoletti, MD, Senior Vice President, Oncology Medicine Development Center, GlaxoSmithKline.

Ofatumumab is a unique investigational monoclonal antibody (MAb) that targets a distinct antibody binding site (the small loop epitope) of the CD20 molecule on the cell membrane of B cells. This is a different binding site from approved antiCD20 monoclonal antibodies and it is closer to the cell membrane. The CD20 molecule is a key target in CLL therapy because it is expressed in most cancers affecting the B cell.

Ofatumumab is being developed for the treatment of a number of serious conditions including CLL, diffuse large B-cell lymphoma, and follicular lymphoma. Ofatumumab will be studied further in ongoing clinical trials.

Avastin Approval Brightens Genentech’s Outlook

Biotech stalwart Genentech had a great deal riding on the FDA’s recently rendered decision on whether or not to give Avastin (bevacizumab)—a four-year-old Genentech drug currently approved in the United States for colorectal and some lung cancers—its official approval for treating breast cancer as well. Breast cancer is the second most common form of cancer and the second leading cancer killer among American women.

The FDA granted accelerated approval for Avastin, in combination with paclitaxel chemotherapy, to be utilized in the treatment of patients who have not received chemotherapy for their metastatic HER2-negative breast cancer. The FDA’s accelerated approval program—granted on a provisional, conditional basis pending further data—allows the FDA to approve products for cancer or other life-threatening diseases based on initial positive clinical data.

Genentech received approval for Avastin after the drug’s second trip through the FDA approval process as a breast cancer treatment candidate. In the Fall of 2006, the agency wanted an independent review of patient scans to confirm Genentech’s trials, which showed that the drug slowed the progression of breast cancer by a median 5.5 months. The FDA’s decision provided a welcome boost for Genentech; the fortunes of the South San Francisco—based biotechnology concern had been turbulent at times over the past several months.

The news means that Genentech can start promoting Avastin for this use, and the drug’s sales could rise nearly $1 billion, according to some estimates. Had the FDA come back with a negative decision, Avastin risked losing a significant share of the breast cancer market (estimated to reach $6 billion by 2012) that it had already won as an unofficial breast cancer treatment. Avastin registered 2007 sales of $2.3 billion, about 27% of Genentech’s total U.S. product sales of $8.5 billion, and the drug has already captured one-quarter of the market for metastatic breast cancer, according to Ian Clark, Executive Vice President of Commercial Operations, Genentech.

Not only has the FDA’s decision changed Genentech’s outlook and momentum, it has done so unexpectedly. Only days before the decision, the “experts” warned that the likelihood of Avastin’s approval was uncertain, and cautioned that there was a good chance that the FDA would delay its decision until later this year.

In December of 2007, a panel of outside FDA advisers voted 5 to 4 against Genentech’s application, arguing the drug’s benefits did not outweigh the dangerous and toxic side effects. At the time, many industry observers thought the panel vote would deal a fatal blow to Avastin’s potential breast cancer indication. Although the FDA is not required to follow the panel’s advice, it very often does.

Analysts have suggested that Genentech’s Avastin approval could have larger ramifications than the near-term prospects of a single company. Although it is too soon to tell, many observers predict that the FDA’s Avastin decision may signal a policy shift that will affect all companies developing cancer medicines. This is because Genentech sought approval for Avastin from the FDA based on a widely debated measure of drug effectiveness that focuses on tumor growth, not patient survival. The fact that this measure satisfied federal regulators, who overruled the recommendation of their own advisory panel, may mean that a precedent has been established for a more liberal oncology drug—approval process.

Traditionally, the FDA only approved cancer drugs that extended the lifespan of patients. However, in recent years companies have studied alternate measures of a drug’s effectiveness. One of the most controversial measures is called progression-free survival, or how long the drug halts the spread of cancer. Genentech’s studies of Avastin showed that whereas the drug halted tumor growth for more than 11 months, breast cancer patients didn’t live significantly longer than those who didn’t receive the drug.

Genentech has argued that stopping tumor growth benefits patients physically and psychologically, even if it doesn’t increase life expectancy. Before the Avastin decision, the FDA had already approved two drugs for breast cancer based on slowed disease progression: GlaxoSmithKline’s Tykerb (lapatinib) and Bristol- Myers Squibb’s Ixempra (ixabepilone); however, those drugs were approved for patients who had already failed to respond to other therapies. Avastin is now approved as a first-in- line treatment for breast cancer.

In addition to the E2100 trial (a phase III study that served as the basis for the FDA’s approval decision), Genentech has shared with the FDA a summary of the results from a second positive phase III trial (AVADO), and is expecting results from a third phase III trial (RIBBON I) in first-line metastatic breast cancer in late 2008. A full review of both the AVADO and RIBBON I data by the FDA will be required for the accelerated approval to be converted into a full approval. Genentech will also submit data to the FDA from three additional randomized trials that are either ongoing or planned.

“As an oncologist who has treated women with metastatic breast cancer, I know how important the first course of therapy can be. New treatments are needed, and this approval provides women who have not yet received chemotherapy for their metastatic breast cancer a new option to consider with their physician and families,” stated Susan Desmond- Hellmann, MD, President, Product Development, Genentech.

ADH-1 Attains Orphan Status

Adherex Technologies Inc., Durham, North Carolina, announced that its melanoma treatment product candidate ADH-1, currently undergoing testing in ongoing phase I and II trials, has obtained an orphan drug designation from the FDA.

The designation, granted for the use of ADH-1 in conjunction with melphalan for the treatment of stage IIB/C, III, and IV malignant melanoma, is administered by the FDA’s Office of Orphan Products Development. An orphan drug designation is a coveted industry prize because it provides manufacturers with a variety of potential incentives such as funding for clinical studies, study design assistance, waiver of FDA user fees, tax credits and—perhaps most importantly— up to seven years of market exclusivity upon marketing approval.

Adherex is currently conducting concurrent phase I and IIb expansion trials evaluating the synergy of systemic ADH-1 in combination with regionally-infused melphalan for the treatment of melanoma. An Adherex spokesperson announced that the Lehigh Valley Hospital in Allentown, Pennsylvania and the H. Lee Moffitt Cancer Center in Tampa, Florida are being added as additional clinical trial sites to provide further multi-institutional experience.

Commenting on the broadened institutional scope of the ongoing trials, William P. Peters, MD, CEO and Chairman, Adherex, reported that “Two additional centers, Lehigh Valley and H. Lee Moffitt, have joined our phase IIb trial which is ongoing at Duke and MD Anderson. All four participating institutions are firstclass medical centers with experienced investigators, and we are very pleased to have them involved in this development program.” The added trial sites, stated Dr. Peters, will help enable Adherex to “continue with the rapid development of this (ADH-1 and melphalan) combination.”

The phase IIb portion of the ADH-1 plus melphalan trial is anticipated to complete patient accrual by approximately mid-2008, with data to be released at an appropriate scientific venue.

Another phase I trial is also nearing completion at US Oncology, Houston, Texas, in which systemic ADH-1 is being evaluated in combination with three different systemic chemotherapies: ADH-1 plus docetaxel, ADH-1 plus carboplatin, and ADH-1 plus capecitabine. Subsequent phase II and potential randomized, prospective trials of ADH-1 in combination with chemotherapy will be planned and based upon the results of the combination studies currently ongoing.

“FDA orphan drug designation for ADH-1 is an important asset in Adherex’s development of this drug,” continued Dr. Peters, “Orphan drug designation provides multiple incentives for Adherex to continue its accelerated development of ADH-1 for this significant clinical problem. Melanoma is a disease with an extremely poor prognosis and one in which the molecular target for ADH-1, N-cadherin, is frequently and often intensively expressed. N-cadherin is also intimately involved in the invasion and metastasis of melanoma. Our experience to date combining ADH-1 and melphalan for the treatment of in-transit melanoma has been very encouraging.”

Potential Advanced Cancer Treatment Clears Key Phase I Hurdles

Clinical Cancer Research

, a peer-reviewed publication of the American Association of Cancer Research, recently published a proof-of-principle phase I study evaluating AQ4N (banoxantrone), an investigational anticancer prodrug manufactured by Novacea, South San Francisco, California, in patients with advanced solid tumors.

This translational study evaluated 32 patients with various advanced cancers (glioblastoma, N = 8; bladder, N = 9; head and neck, N = 8; breast, N = 6; and cervical, N = 1) who received a single 200 mg/m2 dose of AQ4N before elective surgery. AQ4 and AQ4N levels in 95 tissues (tumor, healthy tissue) were assessed by analytical techniques, and tissue sections were also analyzed for AQ4 fluorescence distribution and correlation with a hypoxia marker, Glut-1, by microscopy.

Activated AQ4 was detected in all tumor samples with highest levels present in glioblastoma (mean 1.2 μg/g) and head and neck (mean 0.65 μg/g) tumors; 22 of 32 patients had tumor AQ4 concentrations greater than or equal to 0.2μg/g, levels previously shown to be active in preclinical studies. In 24 of 30 tumor samples, AQ4 was detected at higher concentrations than in adjacent normal tissue (tumor to normal ratio range 1.1—63.6); distant skin samples contained very low concentrations of AQ4 (mean 0.037 μg/g).

The product candidate, AQ4N, is converted selectively to the drug’s active form, AQ4, a potent topoisomerase II inhibitor, within hypoxic, or oxygen-starved, tumor cells. Hypoxia is an important distinguishing characteristic of tumors that limits the effectiveness of radiation and chemotherapy treatments.

AQ4N is currently being evaluated in a phase 1b/2a clinical trial in patients with glioblastoma multiforme (GBM). In addition to the study cited above (which had a more general solid-tumor focus) the company has announced its completion of the three cohorts of the phase 1b/2a GBM study without any dose-limiting toxicities (DLTs), dosing patients at 200 mg/m2, 450mg/m2, and 750mg/ m2 of AQ4N once-weekly for six weeks in combination with a standard regimen of radiation therapy and temozolomide.

The company currently anticipates that the phase 2a stage of the trial will commence during the second quarter of 2008. In the phase 1b portion of the study, six patients received 200mg/m2 of AQ4N and one patient has not experienced disease progression after approximately 10 months of follow-up. At the 450 mg/m2 dose level, patients have not experienced disease progression as far out as eight months of follow-up. At the 750 mg/m2 dose level, the final cohort (seven patients) has now been fully enrolled.

“As we continue our clinical development program for AQ4N in GBM, these data clearly demonstrate that the activated form of the prodrug, AQ4, preferentially accumulates in the tumor rather than normal tissue, is present at higher levels in tumors with greater degrees of hypoxia, and appears to be localized within regions comprising hypoxic tumor cells. To our knowledge, this is the first time that the activation of a bioreductive cytotoxic agent in clinical tumor samples has been demonstrated,” said Alshad S. Lalani, PhD, Director of Translational Medicine at Novacea and coauthor of the study.

Big Pharma Stocks Offering Dwindling Shelter, Safety

Throughout the last few decades, large pharmaceutical companies have been viewed as alluringly sound investments. The popular image of the big pharma equity is akin to that of a stable, dependable workhorse. Unlike more volatile, higher-risk issues, big pharma returns may not have dazzled (although, if a given company discovered and marketed a ‘blockbuster’ drug, there is a very good chance that they might have), but very rarely did they disappoint. In most cases, investors could count on consistent, healthy returns. Although these returns may have been more humble than other sectors from quarter to quarter, over the long term, the numbers tended to even out, following a tortoise and hare trajectory, largely avoiding the dramatic boom and bust cycles experienced by many other industries.

A number of recent indications suggest, however, that the era in which investors found shelter from stormy stock market conditions, under the secure and protected umbrella of major pharmaceutical company equities, is over.

According to several market analysts, drugmakers will lag behind the broader market this year as an increasingly risk-averse FDA approves fewer new medicines. The FDA approved 19 new drugs in 2007, the fewest in 24 years. Drug-safety concerns may continue to slow approvals of new therapies. Members of Congress have called for stricter oversight of safety since Merck and Co., Whitehouse Station, New Jersey, withdrew its painkiller Vioxx in 2004 because of increased heart risks.

In addition, the industry may lose over $150 billion in revenue to generic versions of Merck’s Zocor cholesterol pill and drugs made by Novartis AG, Basel, Switzerland; GlaxoSmithKline Plc, London; and Sanofi-Aventis SA, Paris. In 2006, 63% of prescriptions were for generic drugs, compared with 56% the year before.

Adding to potential drug industry woes is increasing public-sector pressure on pricing. U.S. presidential candidates including Democratic front-runners Hillary Clinton and Barack Obama as well as John McCain, who currently is in the lead for the Republican party’s nomination, support legislation that would threaten the industry’s profits. The politicians approve of allowing the United States to negotiate drug price—discounts for Medicare, the national program for the elderly and disabled. They also propose spurring wider use of cheaper generic copies of pharmaceuticals and letting Americans buy lower-priced medicines from Europe and Canada.

A U.S. government crackdown on prices may hurt drugmakers’ profits because Medicare accounted for 34% of retail-drug sales, compared with 28% in 2005. Governments in Europe and Japan have already imposed price controls on pharmaceuticals.

Novartis, the first drugmaker to report results this year, told investors last week that it wouldn’t grow faster than its industry peers again until the fourth quarter. Sales rose at the slowest rate in five quarters, and the company will buy back 10 billion Swiss francs ($9.1 billion) in shares—the most in its 12-year history. Novartis shares dropped 12% in 2007, making the company the third-worst performer in Bloomberg’s Europe Pharmaceutical Index.

Health-care shares fell 11% last year, making the sector the fifth-worst performing in the Dow Jones 600 Stock Index, which declined less than 0.5%. The best performers were metals and mining companies, followed by chemical makers. So far this year, health stocks are off 4.2%.

According to analysts, one group of exceptions to the dismal big pharma stock market forecast may be companies that have developed or acquired significant oncology product platforms. Financial experts are suggesting that major drug concerns that place a strong emphasis on the oncology sector may be best positioned to ride out current and near-term economic upheavals.

The market strategies of companies such as Roche, for example, have been held up as a model and example of how large drug companies can best insulate themselves against market dangers in order to survive and thrive in the current environment.

Bucking sector trends, Roche’s second-half 2007 profits rose 24% as the world’s biggest maker of tumor medicines benefited from increased sales of its Rituxan blood cancer and Avastin colon cancer drugs. The products are helping Basel, Switzerland—based Roche grow faster than rivals who face competition from generic medicines. Roche’s cancer medicines sales rose 20% in 2007, bringing the company's share of the global market for cancer drugs to about 30%.

Roche is testing treatments developed with Genentech Inc. against more tumor types and for use earlier in the disease to expand sales of the medicines, which make up half of its pharmaceutical revenue. The company is also strengthening ties between units to boost sales of existing drugs.

Roche’s focus on the oncology business has allowed relatively low research and development and marketing costs, according to analysts. Also, cancer-related products tend to be associated with higher per-unit costs, yielding enhanced profitability.