Healthcare Conference Updates: Cytori, Auxilium, Keryx, Cell Therapeutics

 |  Includes: AUXL, CTIC, CYTX, KERX
by: Mike Havrilla

Below are some updates and developments from the past week, which I spent in San Francisco for the OneMed, JP Morgan, and other healthcare conferences.

I had the opportunity to meet with the CEO (Ron Bentsur) and CFO (James Oliviero) of Keryx Biopharma (NASDAQ: KERX) on Wednesday and was impressed with the company’s focused strategy and upcoming milestones for 2010 and beyond. As outlined in my overview article last week, I have purchased shares of KERX over the past week on weakness at a slightly higher price range ($2.70-2.75) than I originally projected.

Given the company’s history of in-licensing compounds for development and robust cash position, I inquired if anything was on the horizon in this regard. However, for the near to intermediate term, Keryx plans to remain focused on utilizing its resources (cash / personnel) to get the Phase 3 trials well established before considering any new acquisitions, which is a good strategy given that Keryx is well-funded but still a small-cap drug developer that needs to remain focused.

Approximately $10-11 million is the estimated cost to fund both the short and long-term Phase 3 studies of Zerenex while perifosine has estimated funding of $12 million each to fund the Phase 3 studies for multiple myeloma (ongoing) and colorectal cancer (pending), with an estimate of $25,000-$30,000 per patient to fund the Phase 3 cancer trials. Below is a summary of additional details for upcoming catalysts and milestones for Keryx over this year and beyond that were not included in my overview article last week.

During 2010, Keryx expects to report updated data from its Phase 2 colon cancer study, conduct / update additional earlier stage Phase I/II studies, finalize late-stage trial protocol for colon cancer study, and begin additional late-stage studies for colon cancer in addition to the pending pivotal Phase 3 study of perifosine under a SPA agreement with FDA for multiple myeloma. KERX expects to provide an update on Phase 2 colon cancer survival and other data for perifosine next weekend at GI-ASCO 2010 (Jan. 22-24) as it prepares to begin a pivotal Phase 3 trial of perifosine in colon cancer patients with a Special Protocol Assessment (SPA) with the FDA possible for this indication within the next 2-3 months (i.e. mid-April 2010).

The ongoing Zerenex Phase 2 study in Japan by JT Torii is near completion and Keryx expects the Phase 3 trial to begin during 2H10, which will trigger a development milestone payment that is in the mid single-digit million dollar range. An additional $15 million milestone is possible upon regulatory approval in Japan, with approximately $55 million in remaining milestone payments based on the achievement of sales targets upon commercialization.

Zerenex represents a niche market opportunity within well understood / established class of drugs (phosphate binders) that has a key differentiation of being iron-based compared to existing treatments such as PhosLo, Fosrenol, and Renagel/Renvela. Zerenex is expected to offer an improved safety profile / patient acceptance with reduced GI / bloating side effects and approximately 50% less dosing burden (i.e. taking less pills less often) compared to existing phosphate binders.

In addition, a major secondary endpoint being evaluated is the potential ability of Zerenex to decrease the need for IV-iron and blood cell stimulators (EPO agents such as Epogen and Aranesp) since it is iron based and expected to result in long-term accumulation of the mineral. This may result in a first-line phosphate binder indication (with a goal of capturing 20-25% market share) for Zerenex and advantages that include safety (there is a pending FDA Advisory Panel to discuss safety issues of EPO drugs) and economic (dialysis bundling payment issues – Zerenx has potential to save dialysis providers money by reducing need for IV-iron or EPO agents).

On 1/13/10, Cell Therapeutics (NASDAQ: CTIC) announced an agreement to raise $30 million through the sale of preferred stock and warrants. The deal included approximately 24.7 million shares of common stock and warrants to purchase 8.6 million shares of common stock at an exercise price of $1.18 per share. Interesting to note that shares of CTIC were traded up nearly 15% during the day on heavy volume prior to news of the financing, which also comes ahead of an upcoming FDA Advisory Panel meeting to review the company’s NDA for pixantrone.

On 6/24/09, CTIC announced that it completed the submission of the New Drug Application (NDA) to the FDA for pixantrone to treat relapsed or refractory, aggressive non-Hodgkin's lymphoma (NHL). On 5/5/09, CTIC announced that pixantrone is available on a named-patient basis for use in Europe to treat patients with aggressive NHL that has either relapsed or is refractory to standard treatment options. On 9/5/09, CTIC announced that the FDA established a PDUFA action date of 4/23/10 (representing a standard, 10-month review designation) for pixantrone as a potential treatment for relapsed or refractory aggressive non-Hodgkin's lymphoma (NHL).

Auxilium Pharma (NASDAQ: AUXL) provided guidance over the past week that it expects an FDA decision soon for Xiaflex (collagenase clostridium histolyticum), which is a novel, first-in-class, orphan-designated, biological agent for the treatment of Dupuytren's contracture (this is a progressive condition that affects the connective tissue that lies beneath the skin in the palm, resulting in collagen deposits which impair normal hand function).

AUXL filed its Biologics License Application (BLA) for Xiaflex for the treatment of Dupuytren's contracture on 2/27/09 and the FDA accepted the BLA filing with a priority review (six-month) designation on 4/28/09. On 12/16/09 AUXL announced Phase 2b results for Xiaflex for Peyronie's disease (a new indication that is not part of the pending BLA) and stated that a FDA decision is still pending for Xiaflex. On 9/16/09, the FDA Panel voted 12-0 in favor of Xiaflex to treat Dupuytren's disease.

On 7/17/09, Cytori Therapeutics (NASDAQ: CYTX) announced that the FDA will regulate the company's Celution 700 System as a medical device, reviewed by the Agency’s Center for Biologics and any required clinical studies would be conducted in accordance with the Investigational Device Exemption (IDE) regulations rather than the Investigational New Drug (IND) regulations applicable to new drugs / biologics.

On 1/7/10, the FDA granted marketing clearance for the PureGraft System, which will be launched as the first and only device in the US cleared for aesthetic body contouring and allows a patient’s own fat tissue (autologous) to rapidly be prepared in about 15 minutes for re-injection and aesthetic contouring. Cytori expects to launch PureGraft in the US during 1Q10 with a formal launch at the American Society of Aesthetic Plastic Surgeons in May 2010. Marketing approval (CE Mark) is pending in Europe and expected during 1H10.

Cytori expects to receive ongoing FDA feedback in 90-day cycles to expand upon the initial marketing clearance announced last week to include specific therapeutic claims (e.g. wound healing) with the next feedback from the Agency anticipated to occur by early April. The other major looming catalysts for Cytori include pending clinical trial data from Europe for two heart trials, which are outlined in detail in my article from last year that includes promising interim results from the two studies in addition to an embedded CEO video interview and product demo for the Celution System.

Disclosure: Author holds long positions in CYTX, KERX