Genentech’s recent deal with Bayhill Therapeutics is likely a result of the company realizing that if it wants to be a player in chronic illnesses, it needs to step outside its comfort zone of developing antibodies. Additionally, since label expansions for Avastin into the primary cancer setting look bleak, at least in the near future, Genentech will be trying to pep up its pipeline with novel approaches.
The $350 million agreement with Bayhill covers a mid-stage DNA-based, antigen-specific immunomodulatory drug candidate for type 1 diabetes. The deal also marks the company's first deal since being acquired by Roche. Until now Genentech’s technology franchise has rested firmly on partially or fully human mAbs aimed at specific immune-cell surface receptors to treat a variety of cancers.
mAbs in Autoimmune Diseases
Genentech also develops its antibodies to treat autoimmune diseases. It is currently seeking FDA approval for Rituxan® in DMARD-unresponsive rheumatoid arthritis, and for Xolair®, an anti-IgE antibody currently marketed to adults and adolescents, for pediatric asthma.
Ocrelizumab, a second generation anti-CD20 humanized mAb, is being developed with Biogen IDEC. It is currently in Phase III trials in rheumatoid arthritis and lupus nephritis. Said to be less immunogenic and cause less complement activation than Rituxan, this antibody may reduce the development of drug-neutralizing antibodies and infusion reactions.
mAbs, however, require regular IV infusions and can have serious side effects in some settings, because they compromise normal immune function. These may be acceptable therapeutics in an acute life-threatening disease setting such as cancer but can pose significant problems for use in chronic illnesses such as autoimmune diseases.
Besides this limited setting for mAbs in chronic diseases, Genentech’s mAb-based cancer franchise is seeing some setbacks. The company’s strategy of finding additional applications for marketed products recently backfired with Avastin as an adjuvant therapeutic in early-stage colorectal cancer patients failing a late-stage study.
The drug, currently approved for patients with cancers that have spread beyond the breast, colon, and lung, already has blockbuster status. So far attempts to further expand this anti-VEGF antibody’s reach has not been successful. Such potential label expansions definitely played a role in Roche’s $95 per share, or $46.8 billion, takeover of Genentech.
Following the announcement of the Avastin trial results, Roche’s stock plummeted to a 19-year low. The company had hoped that the drug, used in the adjuvant setting, would prevent tumor return and increase U.S. sales to $10 billion by 2015, according to some analysts’ projections.
Avastin now generates $4.8 billion globally in annual sales. U.S. sales of Avastin, considered the most important barometer of Genentech’s growth, rose 18% to $704 million toward the end of 2008 likely due to its increased use in treating breast cancer.
Fresh Approach: DNA-Based Antigen-Specific Drugs
Thus, while Genentech has profited handsomely in the past from the strategy of finding new uses for marketed drugs, its post-Avastin investment in Bayhill may represent a fundamental strategic change by taking a stake in a novel approach to autoimmune disease treatment. Genentech paid $25 million in cash and equity up front and agreed to pay development and sales milestones exceeding $325 million.
The terms of the exclusive, worldwide license cover development and commercialization of BHT-3021, a therapy based on Bayhill’s BHT-DNA antigen-specific immunomodulatory platform. The compound is intended to reduce or eliminate immune system attacks on insulin-producing pancreatic islet cells that result in type 1 diabetes.
“The BHT-DNA platform is based on plasmid DNA,” explains Bayhill CEO, Mark Schwartz, Ph.D. “We insert the gene for the protein that is the target of an autoimmune response, for example, proinsulin in the case of type 1 diabetes or myelin basic protein (MBP) in the case of multiple sclerosis, into a plasmid. Upon injection, the plasmid is taken up by antigen-presenting dendritic cells, which migrate to lymph nodes where they bind to the antiproinsulin T cells, thereby inactivating them and preventing them from attacking pancreatic islet cells.
“Preservation of C-peptide is what we want to see in treated patients,” Dr. Schwartz continues. “Placebo-treated patients experience a decline in C-peptide production over time as the insulin-producing cells of the pancreas are destroyed by the autoimmune response. C-protein is produced in a 50-50 ratio with insulin as proinsulin produced by pancreatic islet cells is enzymatically cleaved. The FDA accepts C-peptide as a marker of efficacy for type 1 diabetes therapeutics.”
Interim results of a Phase I/II trial testing this DNA-based, antigen-specific immunotherapy in patients with type 1 diabetes showed a preservation of C-peptide in treated patients compared to placebo and that BHT-3021 was safe and well tolerated among 42 patients who received one of four different doses of the drug over 12 weeks.
Understanding immune system mechanisms has evolved enough in the last few years to allow the development of antigen-specific, tolerance-inducing drugs. Dr. Schwartz notes that treatment of autoimmune diseases needs to be antigen specific. He characterizes the effects of general immunosuppressive agents as difficult for patients and physicians saying, “All antibody companies recognize that, in the end, antibodies and other immunosuppressants are bridges to antigen-specific approaches to treat these chronic diseases.”