Isotechnika has a powerhouse franchise in voclosporin
This may seem somewhat unusual, since voclosporin is currently being considered by regulators in North America and Europe to treat uveitis, a chronic inflammation of the eye that causes vision impairment, ocular pain and loss of vision. Approval as early as the end of this year could begin spinning revenue for Isotechnika.
And then there’s psoriasis. The company has completed late-stage testing in Canada and Europe with voclosporin and is gearing up to make a marketing submission in Canada later this year which, if approved, would lead to a European filing.
“What this tells us is that the drug actually works, is an approvable drug and has pretty significant safety benefits,” CEO and founder Dr. Foster said in an exclusive interview with BioTuesday.ca. “This takes us beyond the realm of a research and development company.”
What it also says is that Isotechnika has one lead drug with a pretty big potential, especially since voclosporin is a chemical modification of Novartis’ cyclosporine transplant drug, which did just shy of $1 billion (U.S.) in sales last year, even though it has been off-patent for years.
And to set the table for the future, Isotechnika earlier this month received funding from the National Research Council to pursue development of its non-immunosuppressive cyclosporine analogue molecules (NICAMS) as a neuroprotective agent in CNS diseases like Parkinson’s, Alzheimer’s and Lou Gehrig’s. NICAMs are not the same as voclosporin, because voclosporin is a potent immunosuppressor.
That’s all heady stuff for a company that signed a blockbuster development and marketing accord for voclosporin with multinational Roche in 2002, only to have Roche step back from further development in autoimmune diseases in 2004 and to finally back out of transplantation in 2008, returning the drug to Isotechnika.
“The same day in the summer of 2008 that Roche told us they weren’t going to continue with our drug was the same day that Roche announced it would acquire the rest of Genentech and said it planned to move in other areas such as oncology and inflammation,” he recalls.
“On the one hand, I was optimistic, because people had been telling me that we should do transplant on our own if we could somehow finance it. On the other hand, the Street has this perception that if a major partner steps away, it’s probably the worst possible news other than an outright clinical failure. And our drug has never had a clinical failure.”
Things brightened in 2006, when closely held Lux Biosciences came knocking and signed an alliance for the rights to voclosporin in ocular diseases. Lux’s successful clinical testing with uveitis patients led to marketing applications in North America and Europe under the trade name Luveniq, and Lux is now conducting clinical work to develop voclosporin as an eye drop treatment for dry eye syndrome.
The only dry eye competitor on the market now is called Restasis, which is cyclosporine in an eye drop. “It works, so our drug should also work in that indication,” Dr. Foster reasons. Early research shows voclosporin is much less irritating to the eye than Restasis drops, which did about $500 million in sales last year.
If the uveitis submissions are approved in the U.S. and Europe, Isotechnika will receive milestone payments of $7.04 million and $3.52 million, respectively, from Lux, as well as royalty payments on sales of the drug. Approval will also make the regulatory path easier in other indications with voclosporin because of the large amount of already submitted safety data.
“What I’d like to do is use some of the cash that comes in from the ocular indication later this year to offset some of the costs of a Phase 3 trial in kidney transplantation,” Dr. Foster says, pointing out that the study will probably cost in the area of $10 – $15 million per year. “We’re going to have to be somewhat creative, because there’s almost no way I’m going out to do a large equity issue at these levels. It would be so dilutive, it would be ridiculous.”
As a result, he would like to find a partner to help finance the pivotal trial in exchange for certain marketing rights in Asia, for example. “But I would like our company to hold onto the major markets of the U.S. and Europe. And we can see ourselves with a small sales force in those two regions.”
Asked whether partner Paladin Labs (TSX:PLB) could step up and cover some of the pivotal costs, Dr. Foster figures it is unlikely. “They’re hoping to be our distribution partner in certain territories. But in terms of financing us to move forward, it’s not part of Paladin’s business model.”
In mid-2009, Paladin and Isotechnika formed a partnership to commercialize voclosporin in Canada, Mexico, Central and South America, Israel and South Africa, focusing initially on psoriasis and then the much larger market opportunity in transplant indications. Paladin injected $7 million cash and commitments for R&D funding of $4.35 million in exchange for 19% of a new public company called Isotechnika Pharma Inc.
The beauty of the transplant market is that about 75% of all procedures take place at about 50 clinics in the U.S. and about 70% of those are kidney transplants, Isotechnika’s first indication. “As a niche market, you could cover those sites with around 10 sales reps, so a small company like ours could step right in and be successful,” he figures. And another advantage: those 50 clinical sites are the same ones that Isotechnika uses in its trials.
“No one is taking ownership of transplantation,” he contends. “All the big boys have taken a step back, because it’s just not big enough for them in terms of new drug development. But for us, it would be massive.”
And if he can grab a share of the pie, Dr. Foster has even bigger plans. Recognizing that transplant patients take additional antiviral and blood pressure drugs, he figures that with cash coming in from voclosporin sales and a good business development team, “we should be able to pick up a few products that we can marry with our product for a transplantation franchise.”
Calcineurin inhibitors (CNi) like cyclosporine and Astellas Pharma’s Prograf represent the cornerstone of anti-rejection therapy. Researchers have known since 1982, when cyclosporine was introduced, that failure to use a CNi will result in a very high incidence of graft failure. Both drugs had total sales of some $3 billion last year.
Dr. Foster predicts that voclosporin should be the third CNi on the market and “we believe it will take significant market share from the other two, because it works just as well as the other two, is easier to dose and has a better safety profile.”
Disclosure: No positions