Immune Pharmaceuticals (NASDAQ:IMNP) is developing bertilimumab, a first-in-class fully human monoclonal antibody that targets eotaxin-1, a potent chemoattractant and activator of eosinophils. Immune is currently testing bertilimumab in a Phase 2 clinical trial for ulcerative colitis (UC) with plans to start a Phase 2 trial for bullous pemphigoid (BP) shortly. We believe there is a meaningful opportunity for Immune to position bertilimumab as a first-line treatment for BP due to the fact there is no cure and current treatment options have multiple, deleterious side effects. Below we give an overview of bertilimumab, BP, and the clinical development plans for the treatment for BP.
Immune is developing bertilimumab, a first-in-class fully human IgG4 monoclonal antibody targeted against eotaxin-1. Bertilimumab was originally discovered by Cambridge Antibody Technology (CAT) using its fully human commercially proven phage display library. The antibody (originally called CAT-213) binds to eotaxin-1 with very high affinity (~80 pM), with clinically validated specificity and activity. Most importantly, ELISA analysis was conducted using a series of human cytokines and chemokines, including the functionally related eotaxin-2 and eotaxin-3 (Figure 1). These data indicate very high sensitivity to eotaxin-1 with a lack of any cross-reactivity to off-target chemokines or cytokines. This high degree of specificity and affinity should decrease side effects or toxicities due to cross-reactivity with other antigens.
In 2007, CAT, later acquired by AstraZeneca Corp., announced they had granted an exclusive worldwide license for the development and commercialization of CAT-213 to iCo Therapeutics (OTCQB:ICOTF). Under the terms of the agreement, iCo agreed to pay CAT an upfront fee of $400,000, and agreed to milestone payments for key clinical and regulatory achievements totaling $7.0 million. Richard Mason, CAT's SVP Business and Commercial Operations commented at the time that "Following an internal review of our development priorities, CAT decided to out-license CAT-213." There were no other indications as for why CAT decided not to pursue development of bertilimumab. iCo stated that they planned to advance CAT-213 initially for the treatment of ocular allergies including allergic conjunctivitis.
In December 2010, iCo announced that they had granted Immune Pharmaceuticals an option to an exclusive license for the development and commercialization rights to the systemic uses of iCo-008 (bertilimumab), while retaining worldwide exclusive rights to all ocular applications. The agreement came with a non-refundable $1 million option fee creditable upon conversion to an upfront payment if executed to a full licensing agreement. This option was then fully executed in June 2011 whereby iCo received $500,000 up-front with up to $32.0 million in milestone payments plus royalties on net sales. In addition, iCo received 600,000 shares of Immune with an additional 200,000 warrants priced at $0.95.
…Early clinical studies…
CAT conducted three separate clinical trials in the early 2000s to determine the pharmacokinetics, safety and effectiveness of CAT-213 in treating allergy, allergic rhinitis and conjunctivitis:
- Phase 1: The pharmacokinetics of CAT-213 was assessed in an ascending single dose, single-blind Phase 1 study. Twenty-five healthy male volunteers were administered 0.01, 0.1, 1, 5 and 10 mg kg-1 intravenously over 30 min. No serious or adverse events were reported and the half-life of CAT-213 at the highest concentration was 8.4 days.
- Phase 2: A double-blind, placebo controlled study was undertaken to assess the effect of CAT-213 on allergen-induced rhinitis through i.v. or intranasal dosage 30 minutes prior to antigen exposure. A total of 52 patients with history of seasonal allergies were entered into the study. The primary endpoint was the reduction in nasal cross-sectional area as assessed by acoustic rhinometry. The results showed that CAT-213 administered intranasally attenuated the post allergen nasal obstruction for up to six hours, however there was no demonstrated effect on either peak nasal inspiratory flow or symptoms. The infiltration and activation of cells from nasal lavage samples were collected pre-dosing and 30, 60, 120, 360 and 480 minutes after allergen challenge, and a nasal biopsy was performed six hours post challenge. The results of the lavage showed a trend for reduction in eosinophils following treatment with CAT-213, though this effect was not statistically significant. For the biopsy, submucosal mast cells and submucosal eosinophil infiltrates were significantly decreased by intravenous and intranasal CAT-213 compared with placebo.
- Phase 1/2a: An allergen challenge study was carried out using a topically applied single dose of CAT-213 in patients with allergic conjunctivitis. CAT-213 did not have any effect on symptoms as analysis showed that allergen challenge did not provoke a large enough late-phase response involving eosinophils.
The early clinical trial results using CAT-213 were not particularly encouraging from an efficacy standpoint. However, while the total number of patients tested with the drug was limited (<150), CAT-213 was safe and well tolerated with no serious side effects reported. We believe that the lack of efficacy noted for CAT-213 is likely due to no selection criteria for patients with diseases associated with increased eotaxin-1 levels and is not necessarily due to the antibody itself.
…An Overview of Bullous Pemphigoid…
A number of inflammatory diseases are mediated by eotaxin-1 and eosinophilia, including IBD, asthma, and bullous pemphigoid. BP is an autoimmune mediated, chronic, inflammatory, blistering skin disease that mostly affects older individuals. While the total number of patients with BP is difficult to ascertain, a number of epidemiological studies have been performed that show an increase in the prevalence of the disease in the last 15 years. Most large population studies have been performed in Europe, where the incidence has been shown to be anywhere from 13 to 43 cases per 1 million people (Bertram et al., 2009; Langan et al., 2008). The incidence of the disease increases significantly with age, with one study showing an incidence of 1 per 100,000 person-years for those aged 30-39 and >30 per 100,000 person-years for those aged 80-89 (Brick et al., 2014). The disease typically manifests itself through a series of flares and spontaneous remissions; and, while debilitating to all who have it, a recent study showed that BP can also be fatal in approximately 20% of cases (Brick et al., 2014). BP typically presents in one of the following forms (adapted from Medscape):
- Generalized form: This is the most common presentation of the disease. Patients have tense bullae on any part of the skin surface with a majority of the blisters found in the flexural areas of the skin (e.g., the armpits, groin, perianal region, and under the breasts). Bullae are fluid-filled sacs that appear when fluid is trapped under a thin layer of skin (Figure 2). They are similar to blisters and vesicles. A vesicle is about the size of the top of a pin and after it reaches 10 mm in diameter it is considered a blister. Once a blister becomes larger than 1 cm in diameter it is a bulla. A tense bulla means it is firm, not easily ruptured, and is indicative of a deeper, subepidermal bulla.
- Vesicular form: Less common than the generalized form whereby patients develop a group of small, tense blisters that are often on an urticarial or erythematous base (red skin with hives).
- Vegetative form: This is a very uncommon form where a patient has vegetating plaques in the intertriginous areas of the skin.
- Generalized erythedoma form: Another rare presentation that can resemble psoriasis, generalized atopic dermatitis, or other skin conditions characterized by an exfoliative erythedoma.
- Urticarial form: This is an initial presentation of persistent urticarial lesions (hives) that will turn into tense bullae.
- Nodular form: Another rare form with clinical features resembling prurigo nodularis (itchy nodules), with blisters eventually forming on normal-appearing or nodular lesional skin.
- Acral form: This is a childhood-onset BP associated with vaccination where the bullae affect the palms, soles, and face.
- Infant form: When BP affects infants the blisters generally occur on the palms, soles, and face.
Diagnosis of BP is established through a series of tests including histopathologic analysis, direct immunofluorescence, and indirect immunofluorescence. Histology of the edge of a blister usually demonstrates a subepidermal blister with inflammatory infiltrates showing a predominance of eosinophils with mast cells and basophils typically only seen early in the course of the disease. Immunofluorescence is a microscopy technique to demonstrate the location of antibodies on a microscopic sample (a tissue section in the case of BP) through the use of a fluorescent dye. Figure 3A shows a tissue section stained for the presence of immunoglobulin G (IgG). The IgG is deposited in a linear band at the dermal-epidermal junction. Figures 3B and 3C show a second tissue section of a blister from a patient with BP stained to show the eosinophil infiltrates that are a common feature of the disease.
The deposition of IgG along the dermal-epidermal layer is a result of autoantibodies directed against two hemi-desmosomal components: transmembrane collagen XVII (BP180) and plakin family protein BP230, with collagen XVII (COL17) the major autoantigen (Figure 4). Following antibody binding to the autoantigens, complement activation occurs that results in the production of a wide range of cytokines and chemokines in mast cells, including eotaxin-1. Eotaxin-1 binding to CCR3, the main chemokine receptor on eosinophils, induces eosinophil migration to the skin. The eosinophils then release large amounts of proteases resulting in the formation of tense blisters. The blisters of BP are filled with a clear fluid and are typically accompanied by intense itching. The large scale production and release of cytokines and other inflammatory compounds from eosinophils has been widely reported in both the bullae and sera of patients with BP and is often related to disease activity.
…Increases in eotaxin-1 are associated with BP…
Data from the early 2000s first showed the relationship between the levels of eotaxin-1 and eosinophilia in BP. One study found an increased level of serum eotaxin-1 in BP patients compared to patients with pemphigus vulgaris (PV), a related skin disorder, and healthy controls (Fig. 5A) (Frezzolini et al., 2002). In addition, the level of eotaxin-1 in blister fluids was found to be approximately 10-fold higher than in corresponding sera and when compared to blister fluid obtained from suction blisters from healthy volunteers (Fig. 5B). Interestingly, the authors of this study were unable to detect increased eotaxin-1 in the skin or the sera of PV patients, and they concluded "…this chemokine (eotaxin-1) may play a specific role in BP."
Results from an additional study also showed elevated levels of eotaxin-1 in blister fluid from BP patients, and the eotaxin-1 level, but not the level of IL-5, was strongly associated with tissue eosinophilia in BP (Wakugawa et al., 2000). This corroborated with another small study from that year that also showed an increase in eotaxin-1 in blister fluid and sera of BP patients compared to healthy controls (Shrikhande et al., 2000). More recently, a larger study examined the level of eotaxin-1 in BP patients and stratified the level of eotaxin-1 based on the severity of the disease and found the highest levels of eotaxin-1 were in patients suffering from severe disease (Fig. 6A, B) (Günther et al., 2011). In addition, quantification of eosinophils in lesional tissue showed they were the predominant cell type in BP skin lesions and were not found in PV skin lesions (Fig. 6C).
Due to the substantial amount of evidence supporting the role of eotaxin-1 in the pathology of BP WE CONCLUDE eotaxin-1 represents a validated therapeutic target for the treatment of BP. These data also suggest that bertilimumab could emerge as a novel treatment option for this disease.
…Current Treatment Options for BP…
There is no cure for BP, thus current treatment options are directed toward reducing the number and size of blisters and alleviating pain/discomfort for the patient. Current treatment options include oral steroids (e.g., prednisone or prednisolone), azathioprine, mycophenolate mofetil, dapsone, methotrexate, cyclosporine, cyclophosphamide, erythromycin, and plasma exchange. A number of these drugs have the potential for severe side effects such as increased susceptibility to infections, liver and kidney damage, and bone marrow suppression. This becomes a particularly important issue since the average age of patients who develop BP is approximately 65 and severe side effects can be especially problematic in this age group as they typically have multiple comorbidities.
There has been some success in using topical steroids (clobetasol propionate cream) in those patients with mild disease. These drugs may be safer than oral steroids, especially in the elderly, who are more likely to develop adverse effects with systemic treatments. However, topical steroids carry their own risks, including skin damage and infections. Additionally, if enough drug is absorbed there could be systemic side effects such as fluid retention, increased blood pressure, and adrenal gland suppression.
…Bullous Pemphigoid is an Orphan Disease…
As BP is only diagnosed in approximately 30,000 people worldwide each year, Immune will be seeking orphan drug designation for bertilimumab for the treatment of BP. The Orphan Drug Act of 1983 was designed to provide financial incentives for and to reduce the costs associated with developing drugs for rare diseases and disorders. A "rare disease or disorder" is defined by the Act as affecting fewer than 200,000 Americans at the time of designation or one for which "there is no reasonable expectation that the cost of developing and making available in the United States…will be recovered from sales in the United States." A sponsor must request that the FDA designate a drug currently under development for a "rare disease or condition" as an orphan drug, and if the FDA agrees that the drug and indication meet the criteria set forth in the Act, certain incentives become available including:
- The FDA must provide the sponsor with "written recommendations for the non-clinical and clinical investigations (based on the information available at the time of the request)… that would be necessary for approval of such drug for such disease or condition…"
- For a period of seven years post-approval, the FDA may not approve an application from a different sponsor for the "same drug" for the same disease or condition. For biological treatments, the FDA defines same drug to mean one that contains the "same principle molecular features." The 7-year exclusivity period conferred by orphan drug status is important because patent protection and Hatch-Waxman data exclusivity have limited effectiveness in excluding competitors from introducing equivalent drugs with slightly different structures. An exception is provided by any change that leads to improved safety or efficacy.
- Grants and contracts are available to defray the costs of development. For 2013-17, the amount appropriated is $30 million per year, which is a fairly modest sum but could make a significant difference for a small company such as Immune Pharmaceuticals.
- A tax credit in the amount of 50% of qualified clinical testing expenses is established by related legislation (Title 26 Part 1-28). The tax credits can be rolled forward by up to 15 years for companies that have no tax liability in the year in which expenses are occurred (e.g., pre-revenue biotech companies).
- Waiver of PDUFA fees. For 2014, these are $2.17 million for full NDAs, a huge benefit for a small biotechnology company like Immune Pharma.
Similar laws have been passed in other major markets such as Europe and Japan. In Europe, orphan drug status is not associated with tax breaks or subsidies at the European Union level, but the exclusivity period is longer at 10 years. In Japan, the exclusivity period is also 10 years, and takes special significance as the approval times are so long that many drugs are reaching the end of their patent life when finally approved.
Immune Pharmaceuticals plans to apply for orphan drug status for bertilimumab with the FDA and European Medicines Agency (NYSEMKT:EMA) in the first half of 2014. We are confident that orphan status will be granted for bertilimumab and believe that it is a prudent strategy to attempt to advance the compound as a potential first-line treatment for BP. Given the lack of efficacious treatments for BP and the novel mechanism of action of bertilimumab, we anticipate Immune to be able to justify a significant price for treatment and generate significant revenues even with the small treatable population.
…Development Plan for Bertilimumab in Treating BP…
Given the severe side effects and high mortality associated with the current BP treatments, there is a clear unmet medical need for more effective treatment options. Immune plans to initiate a Phase 2 study with bertilimumab in patients with BP in the second quarter of 2014. The study will be an open-label, proof of concept study designed to evaluate the safety, efficacy, and pharmacodynamics effect of bertilimumab in patients with newly diagnosed, moderate to extensive BP. The study will enroll 15 patients who will be treated with bertilimumab every two weeks for four weeks on top of medium dose oral steroids (30 mg) tapered down to 5 mg every week during treatment and follow-up period. The primary endpoint will be the proportion of patients who achieved a clinical response after four weeks. Secondary and exploratory endpoints include reduction in BP disease activity index score, time to control of disease activity and change in blood eosinophil count. Patient follow-up is expected to continue until day 60.
Positive results with no known safety issues will lead to a double-blind, placebo controlled Phase 3 trial. We estimate the size of this trial will be 60-80 patients. The primary endpoint of that trial would be disease control/remission as measured by a decrease in the number of blisters after three months of treatment. Secondary endpoints could include a reduction in hospitalization and morbidity, as well as lower use of corticosteroids. The trial could be completed by the middle of 2016 with a possible FDA approval in 2017.
…Market Potential for Bullous Pemphigoid…
BP is an orphan disease, and as such there are very few patients who are afflicted with the condition. We estimate that there are approximately 12,000 cases in the U.S. each year. The numbers are slightly higher in the rest of the world, with approximately 20,000 cases each year. Immune is planning on targeting those BP patients who exhibit high levels of eotaxin-1, however research appears to indicate that the majority of BP patients have elevated eotaxin-1 levels. Bertilimumab is different from currently available BP treatments in that it is a targeted treatment that targets what is believed to be the source of the disease. Based upon its unique mechanism of action, targeted effect, and with an orphan designation we believe bertilimumab would command premium pricing and thus for our model we have priced it at $50,000 per year in both the United States and the rest of the world. In addition, we model 50% of BP patients as having severe disease and of those 80% will have high eotaxin-1 levels, which represents an addressable market in the U.S. of approximately 4,800 individuals and 8,000 in the rest of the world. Based on these numbers we forecast peak sales of approximately $250 million.
Assuming that bertilimumab is granted Orphan Drug status, we believe that Immune would be able to retain all rights to the drug in the U.S. with a partnering organization taking control of the rights overseas in exchange for an upfront payment (~$20 million) and a royalty on sales (~20%). We base this upon the fact that for an orphan disease the Phase 3 trials require much fewer patients, thus keeping costs significantly lower than for a typical Phase 3 study. We forecast Orphan Drug designation will be granted later this year. We model FDA approval of bertilimumab for the treatment of BP in 2017. This is based upon a Phase 2 trial initiating in 2014, a Phase 3 trial in 2015 and filing of a BLA in 2016. We believe these catalysts and financial milestones make Immune Pharma an attractive long-term investment for biotech investors.
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