September 15, 2007 (Vol. 27, No. 16)

Aerovance Has Four Drugs Aimed at Respiratory and Inflammatory Diseases

When Bayer Healthcare Pharmaceuticals ( closed its West Coast operations, several drug candidates in the pipeline were showing promise for treating respiratory illnesses. Rather than stash them in a freezer or license them to an outside firm, Bayer spun off the biopharmaceutical company Aerovance ( in August 2004.

“We started out with a lot more behind us than the typical biotechnology start-up,” points out Mark Perry, Aerovance’s CEO, who served as chairman of the board in 2006. About 20 former Bayer employees as well as equipment, technology, and intellectual property moved to Aerovance, which is headquartered in Berkeley. The company also raised $32 million to jumpstart early proof-of-concept clinical trials for lead products.

Researchers at Aerovance focus on developing biologics to treat inflammatory and respiratory diseases. Since 2004, Aerovance has moved four drug candidates into clinical development and currently has a mid-stage pipeline. Aerovant™ targets asthma, and the closely related Aeroderm™ is for eczema. The remaining two—Aerolytic™ for the treatment of cystic fibrosis (CF) and Pulmolytic™ for chronic obstructive pulmonary disease (COPD)—have a different modus operandi.

Clinical Advances

Aerovant is a recombinant form of human IL-4 that potently inhibits the cytokines IL-4 and IL-13, thereby dampening the inflammation that is common in both asthma and eczema. IL-4 is an upstream cytokine that regulates IgE production, and IL-13 acts similarly to IL-4.

In a Phase IIa antigen-challenge study in 30 patients, Aerovant reportedly reduced the severity of asthmatic attacks by 72% with twice-daily use for a month. Markers of airway inflammation such as forced expiratory nitric oxide also decreased.

In the past, patients received Aerovant through a cumbersome nebulizer. Now a more patient-friendly, dry powder formulation, packaged in a standard inhaler is available. This improved formulation is undergoing tolerability testing before starting a large Phase IIb study in the first quarter of 2008.

Aeroderm also potently binds IL-4 and IL-13 receptors. Eczema patients who received the compound in a Phase IIa trial improved their clinical status from severe to moderate, while the condition of controls remained severe, according to Aerovance. Aeroderm-treated participants also had fewer and less severe flare-ups of eczema, the company adds.

The volunteers, however, required two daily injections of Aeroderm, a dosing regimen that is not suitable for long-term treatment. A new pegylated formulation of Aeroderm will allow volunteers to receive just one injection weekly in future clinical studies.

Aerolytic and Pulmolytic are based on a truncated serine protease inhibitor. Both biologics interact with the enzyme prostasin to inhibit the epithelial sodium channel. Prostasin causes about 80% of the mucus production that plugs the lungs of CF patients, leading to congestion and lethal infections.

Rather than treating lung infections with antibiotics like tobramyacin, Aerolytic blocks the underlying production of mucus. “We want to hit the disease at the top of the pathological mechanism to have a more profound effect,” says Perry. A Phase IIa trial of Aerolytic administred by nebulizer is under way in Europe, and the results are expected by October.

Similar defects in epithelial sodium channels and prostasin are involved in COPD. Pulmolytic reportedly shows potential to normalize fluid abnormalities in the lungs of COPD patients and prevent disease progression. Pulmolytic has been investigated in a Phase IIa trial in COPD patients.

Potential to Partner

Aerovance plans to license Aerovant to a corporate partner that can help to finance large-scale clinical trials and commercialize the drug. “It will take a major commercial effort to reach the market,” says Perry. “We need help running combination studies with large data sets to ensure a robust label when the product is launched.”

On the other hand, “Aerolytic is a drug that we can develop and take to market ourselves,” he adds. “The leading clinical investigators in CF therapies and CF treatment centers are well known. This makes it more practical for smaller companies to enter the CF market niche and promote their drugs.”

Aerovance has a number of other biologics inherited from Bayer. All are aimed at respiratory diseases, and some have extensive preclinical data behind them. As these molecules travel up the pipeline, “we’ll create some valuable compounds that can be out-licensed but we’ll keep the rights to compounds with smaller niche markets,” Perry explains.

In addition to the initial $32 million raised to start the company, $60 million more has been secured. Much of that will be needed to conduct Phase III trials and to cover the costs of process development and manufacturing of the biologics. “Nonetheless, we have a unique set of assets for a relatively small company that gives us lots of flexibility to grow the company down the road,” Perry remarks.

Despite a great deal of R&D efforts at many companies as well as many therapies already on the market for asthma, CF, COPD, and other respiratory illnesses, unmet medical needs still remain. “We’re excited about the potential our biologics may have to impact this disease area,” Perry says.

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