December 1, 2017 (Vol. 37, No. 21)

Industry Watch: Insys Continues to Reel after Founder’s Arrest

Days after the founder and majority owner of Insys Therapeutics was indicted on federal racketeering and conspiracy charges, the company continued to reel.

John N. Kapoor, Ph.D., 74, of Phoenix, was arrested October 26 on felony charges stemming from what federal prosecutors alleged was a nationwide conspiracy to profit by bribing doctors and pharmacists to prescribe the opioid agonist Subsys (fentanyl sublingual spray), indicated for patients with cancer pain.

Insys, however, is already preparing for the worst. Three days after Dr. Kapoor’s arrest (October 29), the company disclosed a $150-million “best estimate” of the minimum liability exposure it is willing to pay over five years, following talks with the U.S. Department of Justice (DOJ) that were unresolved at deadline.

“From a negotiating standpoint, we still don’t know what the DOJ’s settlement number is, though clearly it must be higher than this,” said Oppenheimer analyst Derek Archila. “We continue to remain cautious on the shares.”

And with good reason: From a high of $14.70 on May 31, Insys shares have cratered, falling 65% to $5.09 on November 1.

A day later, Insys reported deeper-than-expected red ink. The company finished the third quarter with a loss of $166.32 million and net revenue of only $30.670 million, down from $57.773 million in Q3 2016. Insys blames the loss on declining prescription volume for Subsys. The company’s marketing practices for Subsys sparked the federal investigation that led to the arrest of Dr. Kapoor and six other former executives, including ex-CEO and President Michael L. Babich.

Through his lawyer, Dr. Kapoor insisted he would fight the charges—which could, if he is convicted, send him to prison for decades.

Dr. Kapoor—a former executive chairman and CEO of Insys who resigned October 31 as chairman of drug developer Akorn—has been charged with conspiracy under the Racketeer Influenced and Corrupt Organizations (RICO) Act, and other felonies that include conspiracy to commit mail and wire fraud, and conspiracy to violate the Anti-Kickback Law.

Discovery & Development: Drug Development Teems with Microbiome Activity

Microbiome research has been on a tear lately, moving from revelation to revelation—bacterial fats accumulate in human atherosclerotic plaque, microbiome composition affects patient responses to melanoma immunotherapy, and unexpected connections keep appearing between gut bacteria and conditions as diverse as multiple sclerosis, post-traumatic stress disorder, and chronic fatigue syndrome. Although advances in microbiome research have been conspicuous, recent progress in microbiome drug development, though less dramatic, is nothing to overlook.

Kaleido Biosciences and CoreBiome have partnered to integrate genomics and informatics, and thereby enhance the study of structure-function relationships and the design of microbiome-modulating therapeutics. Symbiotix Biotherapeutics has received $5 million in financing to develop microbiome-derived therapeutics to modulate regulatory T-cell activity. And Vedanta Biosciences is advancing cancer immunotherapy candidates based on microbiome-derived live biotherapeutics that induce CD8+ T cells.

Putting such advances in context, market research firms note that the study of the human microbiome is still in its infancy. “Lack of comprehensive research, minimal awareness regarding the beneficial use of microbiome-based products, and stringent government regulations are turning out to be restraints for the market,” states Research and Markets. The firm also indicates that fecal microbiota transplant is the only commercially available microbiome-based therapy.

Nonetheless, the microbiome therapeutic pipeline has several promising candidates. According to Research and Markets, over 170 microbiome therapeutics and close to 25 microbiome diagnostics are in various stages of development. Another analyst, Transparency Market Research, estimates that the therapeutics and diagnostics markets will have growth rates of 9.2% and 8.6%, respectively, as the year 2024 approaches. By that time, the agency estimates, the worldwide market could be worth $3.2 billion.

Other parties that are bullish about the microbiome’s commercial prospects participated in the recent Microbiome Drug Development Summit. One of the presenters, Janssen R&D’s Dirk Gevers, Ph.D., characterized the emerging microbiome industry as “a nice balance between bacterial mixtures, computational platforms, single strains, diagnostic approaches, and engineered bacteria.” A post-event report emphasized that developers were willing to try nontraditional approaches, including the use of a human-first drug discovery platform for FMT, technologies for “culturing the unculturable,” and microbiome surveys focused on metabolomics.

Genomics & Proteomics: Harvard-MGH Cancer Center Gets Single-Molecule Sequencing Instrument

Understanding the molecular intricacies of cancer is the gateway to unlocking new therapeutics and treatment strategies. With that approach in mind, SeqLL announced recently that it has installed a true Single Molecule Sequencing (tSMS) Instrument at the Harvard-MGH Cancer Center to support oncology research conducted by David Ting, M.D., assistant professor of medicine at Harvard Medical School, who is a medical oncologist with a focus on gastrointestinal malignancies. Dr. Ting and his laboratory utilize RNA-sequencing and RNA in situ hybridization technologies to better understand the complex transcriptional landscape of cancers.

The laboratory has employed these technologies to identify noncoding RNA (ncRNA) sequences that are differentially expressed in cancer versus normal tissues. This work led to the identification of repeat ncRNAs that were aberrantly expressed across all major epithelial cancers and had opened the door to a new area of research that can identify novel biomarkers and therapeutic targets.

“SeqLL is extremely pleased that Dr. Ting has chosen the tSMS platform to continue his research into pancreatic cancer,” noted Elizabeth Reczek, Ph.D., CEO of SeqLL. “David is conducting groundbreaking research, and SeqLL is excited to be able to provide the level of accuracy, reproducibility and unbiased molecule counting capabilities necessary for this work.”

Accurate and reproducible RNA transcriptome analysis has traditionally been challenging for next-generation sequencing platforms due to errors associated with reverse transcription, amplification, and manipulations during library preparation. The detection of low-fold changes and identification of rare transcripts remains difficult on these platforms, particularly when using FFPE and other degraded or low-input sample types. SeqLL tSMS technology sequences individual strands of first strand cDNA or RNA directly, without amplification or library prep, providing accurate RNA sequence information that reflects the true information content of each sample without introduced bias or sample loss.

Bioprocessing: Mustang Bio Plans Manufacturing Facility in Worcester, MA

Cancer immunotherapy developer Mustang Bio has agreed to lease space within UMass Medicine Science Park in Worcester, MA, for a manufacturing facility intended to support the clinical development and commercialization of the company’s chimeric antigen receptor T-cell (CAR-T) product candidates.

Mustang Bio, a subsidiary of Fortress Biotech, will lease 27,043 square feet at the park through November 2026, subject to two additional extensions for five years each at Mustang’s option, the company stated in a regulatory filing.

In the filing, Mustang Bio disclosed that its base rent over the lease term will total approximately $3.6 million, net of $0.6 million in abatements, on a triple-net basis in which the company agrees to pay all real estate taxes, building insurance, and maintenance.

The new facility will be located within the research park’s 93,000-square-foot Four Biotech office and laboratory building, the Worcester Telegram & Gazette reported. The company said it initially expects to build cell-processing capabilities at the new facility, in order to support its two lead CAR-T product candidates, the glioblastoma multiforme treatment MB-101 and MB-102, which is being developed for both acute myeloid leukemia (AML) and blastic plasmacytoid dendritic cell neoplasm.

MB-101 targets interleukin-13 receptor subunit alpha-2 (IL13Rα2), which according to Mustang has limited expression in normal tissue but is overexpressed on the surface of greater than 50% of glioblastomas. The company’s CAR-T cells are designed to express membrane-tethered IL-13 receptor ligand with high affinity for IL13Rα2 and reduced binding to IL13Rα1 in order to reduce healthy tissue targeting.

MB-102 targets CD123, a subunit of the heterodimeric interleukin-3 receptor (IL-3R) that is widely expressed on human hematologic malignancies, including AML. Mustang says it is investigating CD123 as a target for adoptive cellular immunotherapy in AML, since high CD123 expression is associated with enhanced AML blast proliferation, increased resistance of blasts to apoptosis, and poor clinical prognosis. 

Both MB-101 and MB-102 are in ongoing Phase I trials being conducted at City of Hope National Medical Center. For both candidates, the company states on its website, “We will assess the T-cell persistence and determine the potential immunogenicity of the cells to determine a recommended Phase II dose.” Mustang Bio said it expects the new facility to be operational for clinical production in mid-2018. 

Molecular Diagnostics: Thermo Fisher Scientific Partners with Blueprint Medicines on Cancer CDx

Thermo Fisher Scientific said it will develop and commercialize its Oncomine Dx Target Test as a companion diagnostic for Blueprint Medicines’ Phase I BLU-667, with the goal of identifying RET fusions in patients with non-small cell lung cancer (NSCLC). Under the collaboration, whose value was not disclosed, Thermo Fisher will also retain rights to commercialize the test globally and will lead all required filings to seek clearance from regional regulatory agencies for the test.

Thermo Fisher said the CDx will complement efforts to drive enrollment to a Phase I clinical trial by Blueprint Medicines. The company is now recruiting patients for the study, designed to assess BLU-667 in patients with RET-driven NSCLC, thyroid cancer and other advanced solid tumors. Once validation is complete, Thermo Fisher said, it will submit a supplemental premarket approval application to the FDA to expand the clinical claims for its Oncomine Dx Target Test.

Expansion of the CDx is part of a strategic plan by Thermo Fisher to develop one multi-gene test capable of screening patients for multiple therapies simultaneously—a shift from the conventional method of running several, single-biomarker analyses in sequence to identify tumor profiles. Thermo Fisher’s collaboration with Blueprint Medicines is its second CDx development program with a drug developer. In May, Thermo Fisher agreed to develop and commercialize a next-generation sequencing (NGS) oncology companion diagnostic for Agios Pharmaceuticals’ Phase III cancer candidate ivosidenib (AG-120). The CDx will be designed to identify isocitrate dehydrogenase 1 (IDH1) mutations in patients with cholangiocarcinoma, a rare form of cancer that affects the human bile duct system.

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