April 1, 2005 (Vol. 25, No. 7)

Latest Therapies Showcased at Recent Biotech Investors Conference

Biotechnology and biopharmaceutical companies were among the 230 small-cap growth companies that offered insights into their up-and-coming technologies at a conference sponsored by Roth Capital Partners (www.rothcp.com).

Roth, an investment bank involved in funding emerging companies, hosted about 2,200 institutional investors at the conference held recently in Dana Point, CA.

Anthrax and Smallpox

In November, VaxGen (Brisbane, CA) was awarded an $877.5 million contract to provide the U.S. government with 75 million doses of its new anthrax vaccine for civil defense. This is the single largest vaccine order in the country’s history and represents a strategic asset for the U.S. in the fight against bioterrorism, according to Lance Ignon, vp, corporate affairs.

VaxGen anticipates delivering 25 million doses of the vaccine to the U.S. Strategic National Stockpile in early 2006, with 50 million doses scheduled for 2007.

This is the first contract awarded under Project BioShield, legislation that was passed last July to ensure the development and delivery of biodefense products. One of the most unusual features of Project BioShield is that it allows the government to purchase products before FDA approval.

In VaxGen’s case, the goal is to ensureas soon as possiblethat the U.S. government has a vaccine that can be used in the event of an anthrax attack. VaxGen intends to license the product with the FDA in 2007.

In addition, VaxGen is working with Kaketsuken, a Japanese research institute, to introduce a safe, effective smallpox vaccine. The live, attenuated smallpox vaccine is produced in cell culture from vaccinia virus that has been modified so that it can initiate an immune response without causing serious adverse side effects. It has been licensed in Japan and forms the basis of Japan’s national vaccine stockpile.

Cancer Vaccines

In December 2004, CancerVax (Carlsbad, CA) signed a worldwide collaboration agreement with Serono (Geneva) for the development of Canvaxin, an investigational specific active immunotherapy for the treatment of melanoma. Canvaxin could be the first specific active immunotherapy to obtain marketing approval from the FDA. This type of therapy is also known as a therapeutic cancer vaccine.

Canvaxin is polyvalent. It is made up of three melanoma cell lines containing 38 antigens. This broad antigenic expression elicits a robust immune response in most melanoma patients. Canvaxin is made up of whole cells, not peptides or cell lysates, to elicit a strong, sustained immune response. Canvaxin is allogenic, so it can be given to all advanced-stage melanoma patients, unlike autologous therapeutic cancer vaccines that are only manufactured on a patient-specific basis.

Canvaxin is a surgical adjuvant therapy that is administered following surgery. Because tumors are immunosuppressive, patients have a better prognosis if the tumor is removed and they receive a therapeutic-specific active immunotherapy.

Barrier Therapeutics (Princeton, NJ) also has multiple product candidates that have been licensed from third parties in clinical development, with four of these candidates in or entering Phase III clinical trialSebazole, Zimycan, Hyphanox, and Liarozole.

Sebazole, designed to treat seborrheic dermatitis, comes in a waterless gel formulation. It is the first topical drug for seborrheic dermatitis with once-daily use for only two weeks. This common chronic disease affects 35 % of the U.S. population. Sufferers spent $220 million worldwide to treat the disease in 2003.

Barrier also seeks to develop Zimycan for Candida diaper dermatitis, one of the most common skin conditions in infants. While there are 8 million infants in the U.S. and a potential $120 million market for treating the condition, no prescription drug has been specifically approved for Candida diaper dermatitis.

Zimycan utilizes the antifungal effect of miconazole for the following benefits: low systemic exposure, no steroid side effects, and symptom relief of barrier ointment.

Barrier acquired the rights to market Solage, a topical solution used to treat solar lentigines, excessive pigmentation in Caucasians age 35 and up. Approximately 80% of these people have not seen a doctor, and the market exceeds $40 million in the U.S. and Canada alone.

Eye Diseases

Ista Pharmaceuticals (Irvine, CA) addresses serious diseases and conditions of the eye, including vitreous hemorrhage, diabetic retinopathy, glaucoma, ocular inflammation, and hyphema.

The company received FDA approval for two of its productsVitrase, a proprietary ovine hyluronidase for use as a spreading agent to increase the absorption and dispersion of other injected drugs, and Istalol, a once-a-day, beta-blocking eye drop for the treatment of glaucoma.

Ista also filed two New Drug Applications for Vitrase to treat vitreous hemorrhageof which there are 450,000 cases per year in the U.S.and Xibrom, a twice-a-day, topical, nonsteroidal, anti-inflammatory formulation to treat ocular inflammation, pain, and photophobia following cataract surgery.

Another product in development is Caprogel, a topical formulation for treating hyphema bleeding into the anterior chamber, or front of the eye, as a result of physical trauma. The $2.8 billion ophthalmic market is expected to grow to $4.5 billion by 2007, according to Lauren Silvernail, CFO and vp, corporate development.

Pain Managment and Oncology

Ligand Pharmaceuticals’ (San Diego) drug discovery and development programs are based on the company’s proprietary gene transcription technology, primarily related to intracellular receptorssensors or switches inside cells that turn genes on or offand another type of gene switch called signal transducers and activators of transcription (STAT).

“The drug candidates work by means of selective gene regulation through nuclear receptors,” explained David Robinson, Ligand’s chairman, president, and CEO.

Ligand, which has five marketed products focused on pain management and oncology, also has a deep pipeline of developmental drug candidates.

Ligand’s U.S.-marketed products include Avinza, for the relief of chronic, moderate-to-severe pain; Ontak, for the treatment of patients with persistent or recurrent cutaneous T-cell lymphoma (CTCL); Targretin capsules, for the treatment of CTCL in patients who are refractory to at least one prior systemic therapy; Targretin gel, for the topical treatment of cutaneous lesions in patients with early-stage CTCL; and Panretin gel, for the treatment of Kaposi’s sarcoma in AIDS patients.

In Europe the company has marketing authorization for Panretin and Targretin capsules.

Nasal Congestion

Matrixx Initiatives (Phoenix) produces 16 over-the-counter pharmaceutical products under the Zicam name. The U.S. experienced its lowest illness level for colds in 11 years, noted Carl Johnson, president and CEO.

Matrixx recently developed Nasal Comfort to help maintain the critical functions of the nasal cavity and its role in the respiratory process. Nasal Comfort is a preservative-free, sterile, hypertonic aqueous solution with essential salts and oils for cleaning and moisturizing the nose. It will be packaged in a pharmaceutical-grade dispenser, using a patented one-way microfiltration pump.

According to Johnson, “Nasal Comfort is for people interested in healthier breathing in general and those susceptible to nasal congestion, irritation, or dryness associated with asthma, sinusitis, and allergies. Nasal Comfort is a new alternative to help improve the functions of the nose.”

Gastrointestinal Disease

Salix Pharmaceuticals (Raleigh, NC) attempts to identify and acquire late-stage or marketed proprietary pharmaceutical products having an existing base of safety and efficacy data in humans for the treatment of gastrointestinal disease, complete any required development and regulatory submission of these products, and market them.

In 2000 the FDA approved Colazol capsules for the treatment of mildly to moderately active ulcerated colitis. Other marketed Salix products are Azasan for Crohn’s disease and ulcerative colitis, Xifaxan for the treatment of travelers’ diarrhea caused by noninvasive strains of E.coli, and several topical corticosteroids.

Urologic and Sexual Health

Auxilium (Norristown, PA), a specialty pharmaceutical company that develops and markets products for urologic and sexual health, currently markets one product and has three primary products in development.

The company’s marketed product, Testim, is a proprietary, topical, 1% testosterone gel that is designed for the treatment of hypogonadism, a disorder that affects approximately 20% of the U.S. male population over the age of 50 and a similar percentage in Europe.

Hypogonadal men exhibit lower than normal testosterone levels. The condition, which is often underdiagnosed and undertreated, has grown at more than 20% per year for each of the past three years. Currently, only 5% of hypogonadal men received testosterone replacement therapy.

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