Damage to Japanese nuclear power plants and potential risks of radiation poisoning continue to make headline news. Some biotech companies that are developing agents to treat short- and long-term radiation effects have seen their stock-trading volume increase dramatically as investors seek opportunity in the midst of the crisis.
The attention has created a unique chance for relatively unknown companies to get a share of drug development funds and become major government suppliers for emergency stockpiles of such drugs. A significant cost, however, may be derailment of company focus from core, longer-term programs as internal gears switch to government-funded projects with short-term financial rewards and relaxed regulatory requirements.
Biotech execs have seen this before. Remember that the Project Bioshield Act, passed in 2004 and kicked into gear by the Anthrax scare, was supposed to fund the development of countermeasures against chemical and biological weapons most likely to be used by terrorists. It set aside $5.6 billion for the government to purchase improved vaccines, diagnostics, and therapeutics over the ensuing years.
The program produced less than stellar results, though, and investors generally avoided biotech companies involved in biodefense. Firms failed to meet deadlines or were caught with unpredictable requirements after they had invested most of their money in biodefense-related development projects. Small companies took major stock hits, including Harbor Biosciences, formerly known as Hollis-Eden. Harbor Biosciences saw its stock collapse after the Department of Health and Human Services decided against buying Neumune, a treatment the company had spent $85 million developing for radiation.
BARDA Set Up to Streamline Activities
Legislation passed by Congress in late 2006 resulted in the Biomedical Advanced Research Development Authority (BARDA), which created new funding and new responsibilities for the government and for companies that receive funding. BARDA has invested $164 million into antiradiation drug candidates since 2008, in addition to what the NIH and the DoD have doled out for basic research in this field.
BARDA’s rules contain an antitrust exemption allowing direct dialog between companies and the government. Further, companies receiving funding must share data with the government to allow real-time decisions about the product’s potential. The new rules also allow the government to provide funding based on the achievement of milestones.
Additionally, the industry can use a truncated efficacy rule called the “animal efficacy rule.” In 2002, spurred by the September 11 terrorist attacks, the FDA announced it would allow some drugs and vaccines designed to counter biological, chemical, and nuclear terrorism to be approved without human trials since it is unethical to expose people to high levels of radiation or other lethal agents.
The agency permits approval of such drugs if it can be shown to be effective in two species of animals and safe in people at doses corresponding to those used in the animals. Developers must also have identified and validated surrogate efficacy biomarkers for use in humans that indicate protective or mitigating effects.
Stock and Government Contract Gains
About 5.6 million shares of Aeolus Pharmaceuticals changed hands in a single day after the Japanese nuclear crisis began—over 1,000 times the company’s usual trading volume. Over the past 52 weeks, Aeolus’ stock has traded between a low of $0.25 last June to a high of $1.10 per share this February. Commenting on the increased trading volume and sudden hysterical interest in his company, Aeolus CEO John McManus told GEN, “While it’s tapered off a little, we have seen our daily trading activity go from 2,000 shares to close to 200,000.”
The firm is working on a class of catalytic antioxidant compounds to reduce oxidative stress, inflammation, and subsequent tissue damage-signaling. In February Aeolus reported that BARDA had awarded it a contract for the development of AEOL 10150 as a medical countermeasure against the pulmonary subsyndrome of acute radiation syndrome (ARS). Under terms of this cost plus fixed-fee development contract, the company will receive $10.4 million in the first-year base period of performance and up to an additional $107.5 million in options, if exercised by BARDA, for a total contract value of up to $118 million.
Cleveland BioLabs (CBLI) experienced five times its recent average daily call volume as the nuclear reactor story gained momentum in March. As of April 18, the company was trading at $7.63, at the high end of a 52-week range of $2.80–$9.60. CBLI’s pipeline includes products from two types of compounds—protectans and curaxins. Protectans are being developed as drug candidates that protect normal tissues from acute stresses such as radiation, chemotherapy, and ischemias, and curaxins are being developed as anticancer agents that could act as monotherapeutics or in combination with other existing anticancer agents.
But companies are quick to point out that they don’t plan on betting the farm on government-funded antiradiation drugs and getting diverted from their fundamental development goals. McManus mentioned to GEN that “the nice thing about the BARDA contract is that about $50 million supports studies needed for our other drug-development programs, like toxicology studies.”
Despite the potential for quicker profits from government contracts, CBLI also remains absolutely dedicated to its oncology drug development programs, a company spokeswoman told GEN. Since 2007, CBLI has received commitments of up to $50 million from various federal agencies to support development of CBLB502.
Other companies developing drugs for radiation poisoning that have received significant federal funding include privately held Cellerant Therapeutics with $153 million over five years for CLT-008, Derma Sciences with $14 million over five years for DSC127, and Osiris Therapeutics with $224.7 million for Prochymal.
Targeting Toll-Like Receptors
Currently, ARS is treated with supportive measures, but products under development aim at limiting the damage caused by acute radiation syndrome resulting from exposure to a high dose of radiation over a short period of time, usually minutes. Radiation exacts its biggest toll on rapidly dividing cells, with hematopoietic stem cells and progenitor cells of the bone marrow being the most sensitive to radiation damage and nerve cells being the least sensitive.
ARS is categorized into three syndromes, which occur with increasing dose exposure, including hematopoietic or bone marrow syndrome (HP/BM), gastrointestinal syndrome (GI), and central nervous system or cardiovascular syndrome (CNS/CV). Among individuals who have been exposed to moderate to high levels of radiation, many will have received enough radiation to severely damage but not kill their bone marrow cells. While they may recover from initial injuries through supportive care, bone marrow damage will render them susceptible to severe infection for 1–2 months following the exposure.
Countermeasures under development in companies funded under federal programs range from stem cell treatments (e.g., Prochymal) to toll-like receptor agonists (e.g., CBLI’s candidates). CBLI is furthest along with its lead candidate CBLB502.
The company has thus far completed two clinical trials that demonstrated sufficient safety of the drug candidate at doses equivalent to those that produced efficacy in animals. It has also identified biomarkers that, in keeping with the “animal rule,” can act as surrogate efficacy markers in humans. Next steps include repeating the studies under GLP conditions and extending the human clinical trials from the original 150 individuals.
CBLI explains that its protectan compounds rescue mammals from lethal doses of radiation by suppressing apoptotic cell death and stimulating regeneration in critical HP and/or GI cells. The company is currently developing recombinant derivatives of microbial factors that are natural regulators of apoptosis. CBLB502 is a derivative of bacterial flagellin altered to reduce its immunogenicity while retaining its ability to activate a specific signal transduction pathway responsible for tissue protection, Andrei Gudkov, Ph.D., CBLI’s CSO and svp basic science, told GEN.
“Mobilization of natural tissue-protecting mechanisms is initiated by binding of the drug to cellular receptor toll like receptor 5 (TLR5), resulting in activation of the NF-kB pathway downstream,” he explained. “The reason we chose this approach for tissue protection from lethal stresses is because activation of NF-kB leads to blocking apoptosis, defined as the major reason for underlying cause of acute radiation syndrome.
“Apoptosis doesn’t occur in every cell and tissue but more so in two major tissues: hematopoietic tissue and certain parts of the gastrointestinal tract. If we can protect only these two tissues from radiation, exposed individuals could survive significantly higher doses of radiation since other tissues are far more resistant.”
Why bacterial protein? “We were looking for natural factors that would be involved in controlling apoptosis and were thinking about what in nature could have a natural interest in protecting our cells from apoptosis,” Dr. Gudkov noted. “These considerations brought our attention to our own microflora.
“Many components of our intestinal microflora have co-existed with our organism for millions of years and depend on the viability of their environment, which is within the cells of the gut. Our prediction was that our microflora evolved to produce anti-apoptotic factors, which if identified could be used into pharmaceutical agents.”
And, protecting the GI tract after radiation exposure, Dr. Gudkov said, is much more difficult than reconstituting damaged bone marrow. “At least you can do bone marrow transplantation in the marrow but not in the gut.”
Dr. Gudkov said that CBLB502 appears to act as both a radioprotectant and a mitigator of lethal effects; i.e., it can be given at time points after radiation exposure and produce a survival benefit. In nonhuman primates, he said, “you can give this drug to animals irradiated 48 hours prior to the drug and still see significant improvement in survival.”
As biotech companies conducting biodefense projects get more federal dollars, investor interest will increase. For example, some large institutional investors have already acquired stakes in Cleveland BioLabs.
Additionally, analysts and company executives point to another factor that will help boost investor enthusiasm: newer federal programs like BARDA have become more sophisticated in their dealings with the biotech industry. “BARDA understands it has to attract small biotechnology companies and that these companies are not Boeing, with the infrastructure to administer complex DoD contracts,” McManus pointed out. “BARDA has been flexible and helpful in bringing us up to speed.”