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Insight & Intelligence™ : Aug 12, 2014

Developing Sophisticated Drugs for Fido and Missy

An increasing number of biotech firms are focusing on bringing “human-like” therapies to the animal world.
  • Patricia Fitzpatrick Dimond, Ph.D.

According to 2013–2014 National Pet Owners Survey statistics, Americans will spend about $58.5 billion on their companion animals. About $15.4 billion will go into the coffers of veterinarians, a figure that includes the cost of routine care and prescription medicines.

U.S. Senator Charles Schumer (D-New York) maintains that pet owners could save millions of dollars on prescriptions for their animals if they could buy the drugs at ordinary pharmacies. These therapeutics are currently dispensed by veterinarians at a profit. He says pet owners in the U.S. spend $10 billion each year on pet medications and other health-related products and is working on legislation to allow owners to get pet meds at a pharmacy or online.

One of the highest drug expenses pet owners may encounter is the cost of treating a pet with cancer. Lymphoma, one of the most common cancers among dogs, accounts for approximately 7%–24% of all dog cancers and 83% of all hematopoietic (blood cell) cancers, occurring at an annual incidence estimated at 1.5 cases per 100,000 dogs younger than one year and 84 cases per 100,000 dogs 10–11 years old.

While chemotherapy costs differ from clinic to clinic, Purdue University School of Veterinary Medicine says the standard chemotherapeutic protocol used at Purdue costs $4,000–$5,000. A number of companies including Aratana Therapeutics, Nexvet, VetDC, CanFel Therapeutics, and Fetch Pharma plan to cash in on the potential market for novel drugs to treat cancer and diseases such as arthritis in companion animals. While costs for these drugs, especially monoclonal antibodies, may turn out to be high, entrepreneurs in the emergent pet pharma industry hope that their overall development costs will amount to a fraction of what it takes to develop biologics for humans and keep costs palatable to pet owners. And biologics like antibodies could reduce use of chemotherapy and prove more efficacious than current treatments, note some experts.

Company executives say their programs can bring breakthrough human therapies to pets with serious diseases. “Aratana is about taking science from human medicine and applying it to pet therapeutics,” said founder, president, and CEO Steven St. Peter, M.D. “Because this has not been dealt with systematically in the past, the whole realm of dealing with serious pet medical needs has not been addressed.”

This June, the company announced that it is currently enrolling pet patients in two nationwide clinical trials, evaluating its AT-005 in treating canine T-cell lymphoma. The company says veterinary oncologists designed the trials to further Aratana’s and oncologists’ understanding of the antibody’s clinical value once it gains full licensure by the USDA, anticipated to be in 2015.

The studies will test the efficacy of AT-005, a canine-specific monoclonal antibody against CD52, in combination with two different chemotherapy regimens currently used to treat dogs diagnosed with intermediate- to high-grade peripheral T-cell lymphoma. The antibody is Aratana's second canine lymphoma monoclonal antibody to receive conditional approval and it represents Aratana's first internal commercial opportunity. The company's canine B-cell lymphoma therapy, AT-004, received conditional approval from the USDA in 2012 and was licensed to Novartis Animal Health for commercialization in U.S. States and Canada.

Aratana says that using combinations of mAbs with current treatments may prove to be as effective in pets as it has been for humans, and may help in reducing the use of chemotherapy in dogs. 

Focusing on Cost

But given the price of human monoclonal antibody therapy for treating lymphomas (a single course of Rituxan for non-Hodgkin’s B-cell lymphoma is around $25,000) the question of cost to pet owners, most of whom do not have pet health insurance, inevitably arises. Although he did not cite a specific cost of the canine monoconals to pet owners, Dr. St. Peter told GEN, “The USDA has regulations around manufacturing and focused on quality. You don’t need to do GMP manufacturing. We can make the monoclonals a log scale cheaper than a human monoclonal can be manufactured and that allows us to have the commercial viability.”

He also noted that the regulatory path to marketing for a pet biologic allows manufacturers to market their products upon conditional approval after trials involving in some cases a few dozen patients, although larger scale trials that may involve less than 100 patients are required prior to USDA full license.

Investors appear to believe in the power of proven human therapies as new pet medicines, having recently put serious money behind another pet-centric company, Kindred Biosciences, a Burlingame, CA-based firm that hopes to turn approved drugs for humans into therapies for animals, for a $58.1 million IPO last April.

Kindred Biosciences is working on a biological arthritis drug similar to etanercept (Enbrel) and a feline version of epoetin (a type of anti-anemia medication sold under the brand names Procrit and Epogen) to treat kidney disease in cats.

Kindred CEO Richard Chin, M.D., former head of clinical research for Genentech’s biotherapeutics unit says, “The human version is made out of human genes so you have to use dog genes to make the dog version. We have the technology to do that.”

Kindred and X-Body Biosciences announced that the two companies had formed an exclusive alliance in which X-Body will discover fully canine, feline, and equine antibodies for companion animal health, and Kindred Bio will develop and commercialize these antibodies. Kindred’s technology involves a method of linking an antibody to its gene, combined with a cell-free mammalian translational system, allowing rapid generation and screening of antibodies, as well as identification of bispecific antibodies. Its live cell selection technology can identify antibodies against membrane-bound targets, explains Dr. Chin.

Nexvet, a privately held Australian company, recently raised $31.5 million in a Series B financing from U.S. institutional investors, claiming it has a method to “peticize” antibodies, just as antibodies developed in mice are “humanized” for use in people. Nexvet believes its technology, PETisation™, ensures 100% customization of a therapy to a new species, reducing the chances of immune challenges, and ensuring a more “natural” fit between the therapy and the patient.

As Nexvet CEO Mark Heffernan describes his company, “We’ve taken the human drugs that are already on the market or in the final stage trials and used them as templates to create species-specific drugs for dogs, cats, and horses. The drugs need to be created for the species because a ‘non-self’ protein will be recognized by the body, which would then attack and destroy it.”

Nexvet’s portfolio of peticized antibodies includes NV-01 for canine pain, NV-02 for feline pain and NV-08 for canine inflammation (including atopic dermatitis). The company says that recent clinical trial results with NV-01 in a placebo-controlled study in osteoarthritic dogs showed that the antibody afforded the animals four weeks of sustained pain relief with no adverse events following a single injection.

On the big stage, Merck realized $3.4 billion in global sales last year from its animal health division, accounting for about 8% percent of the company’s total revenue. And despite having to pay out-of-pocket for veterinary care and medication, “there are still people who spend thousands and thousands of dollars,” said K.J. Varma, senior vp of R&D at Merck Animal Health, in a comment to the Newark Star Ledger.

David Krempa, associate equity analyst for Morningstar investment research, calls the animal health industry “a really attractive business to be in, more so than human pharma.”