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In conversation with Philip Toleikis

|Includes: Angiotech Pharmaceuticals Inc. (ANPI)


May 11, 2010 by leonardzehr · Leave a Comment 

As CEO of Sernova (TSX-V:SVA) for the past 13 months, Dr. Philip Toleikis is relying on his decade of experience at Angiotech Pharmaceuticals (TSX:ANP; NASDAQ:ANPI) to guide the upstart medical device company from its preclinical status to clinical development.  At Angiotech, he built and managed a successful product development team of over 20 scientists that examined the biology of the restenosis process that occurs in the bare metal coronary stent as a basis for developing the more elaborate drug-eluting stent and other products.  In the process, Angiotech turned the $500 million annual market for bare metal stents into a $4 billion colossus.  It was a simple idea, with an intelligent solution—one that could apply at Sernova as well, where the technology platforms could turn the diabetes market on its ear.  In this exclusive interview with, Dr. Toleikis discusses the revival of Sernova and the potential for its Cell Pouch System and Sertolin technologies.

Let’s begin with a brief historical sketch of Sernova.

We originally began as Pheromone Sciences, which developed a fertility monitor to measure ovulation.  After it was sold in 2004, the company began looking for new technology, eventually licensing-in Sertolin.  It’s a cellular technology which, when combined with therapeutic cells, protects them from attack by the immune system.  The previous management team met with the FDA about entering the clinic with a xenotransplant product for islets and Sertoli cells into humans.  But they weren’t able to raise the financing.

What sort of shape was Sernova in when you came on board?

After leaving Angiotech, I consulted with a number of companies in California and Canada.  During that time, I met one of the directors of Sernova, and we started talking about the technology.  What I was looking for was a company that had technology that was relatively simple for a large market indication, where you could change the current standard of care slightly and create a huge market for new product.  That was my goal.  A year ago when I arrived, Sernova was without a CEO, the company had been downsized, but the intellectual property had been maintained.

At the time, there was a prototype Cell Pouch device for animals that we scaled up for humans, and we raised $400,000 in a private placement.  Then we wrote a grant application to the National Research Council and gained access to $486,000 to implant our Cell Pouch device into diabetic pigs.  The contribution from the NRC (IRAP) was what got the company back up and running again last summer.  It let me to go out and hire key employees, and we made some changes to the management team and expanded the board.

Tell me about Sernova technology platforms?

The first is the Cell Pouch System, a device that provides a natural organ-like environment for therapeutic cells, such as insulin-producing islets for diabetics, and the second is Sertolin.  Our near-term focus is the Cell Pouch to treat insulin-dependent diabetes.  We also have the rights to commercialize products for Parkinson’s disease, spinal cord injury and haemophilia, among other diseases.

The Cell Pouch is a matchbook-sized device made of FDA-approved materials.  It’s placed under the skin in a simple procedure and develops organ-like characteristics for the natural housing, delivery and survival of therapeutic cells.  As a natural environment, it can conserve cell number and promote natural function, which may significantly increase the number of treatable patients beyond those with severe disease.

Think of Sertoli cells as protector cells for patients who have had therapeutic cell therapy, with the goal of avoiding toxic and expensive anti-rejection drugs.  In animal models, we’ve shown that the combination of these protector and therapeutic cells leads to long-term functional survival of the therapeutic cells without drug therapy.

What do you mean by cell therapy?

Essentially, it is the replacement of cells that have been lost in the body and that make specific proteins or hormones. There are two questions for cell therapy.  The first is where are you going to put the cells in the body and the second is how are you going to keep the cells alive long-term.  We answer the first question by making a Cell Pouch and putting it in the body.  It fills in with tissue and micro vessels, creating a mini-organ.  We insert islets into the pouch where they can interact with the micro-vessels, read the glucose levels and produce insulin as necessary.  We can use the Cell Pouch as a platform for other types of therapeutic cells, but we’re focusing on insulin-dependent diabetes, because it’s such a large unmet market.

What’s the clinical status of your technology?

We’re doing large animal model work right now and testing a number of configurations of our device.  Based on this study, we’ll select the best configuration and contract manufacture the device, which will be used for our formal preclinical studies.  The financing we’re looking for now will help us do the contract manufacturing of the device and the formal preclinical work that’ll help us get into the clinic.  We expect to be in the clinic by the middle of 2011 in the U.S. with the proper financing and then move into Canada and Europe as well.

[Editor’s note: The company subsequently announced plans for a $1.2 million private placement and the completion of the first closing of $405,250.]

How much money will you need?

To start with, a 15-to-20 patient study will cost a few million dollars.  And then, we’ll conduct another study in about 50 or 60 patients in a pivotal study, pending approval by regulatory authorities.  That would cost approximately $5 million to $7 million.

Tell me about the staged approach to developing your technology.

When I came into the company, the question that needed answering was what is the fastest way we can get the device tested in humans?  So, we went out and looked at the different patients that become diabetic.  One subset of patients is those with chronic pancreatitis, an inflammatory response in the pancreas that causes a significant amount of pain.  And a group of those patients are in so much pain that the pancreas has to be removed, making them insulin-dependent diabetics. So, what we hope to do is take those patients’ islets and put them into a Cell Pouch.  That’ll give us a way of testing the Cell Pouch with the patients’ own islets and no immunosuppressant drugs, and the objective will be to keep those patients from becoming insulin-dependent diabetics.  That’s the first test of the Cell Pouch.

The second application involves using donor islets from another patient in the Cell Pouch.  The big problem with islet transplantation right now is that many donor islets don’t survive when placed into the portal vein of the liver because of an inflammatory response induced by the blood. In addition, the islets are considered foreign and attacked by the immune system, and patients need to take immunosuppressant drugs afterwards.  If we can improve on islet transplantation by putting the islets in a natural environment, it will allow us to increase the number of patients that can be treated.  So, we’re looking at the pouch as a way of conserving islets.  Our preclinical studies are supporting this hypothesis.

The third application would be to reduce the use of immunosuppressant drugs or eliminate them altogether by mixing Sertoli cells with donor islets.  This will allow us to expand even further the number of patients that can be treated.

This sounds like more than just another treatment for diabetes.

The long-term goal of the therapy is to get to a point where you have a natural product that takes advantage of the body’s own behaviour.  By having islets in the Cell Pouch that release insulin according to the body’s needs, we should be able to control glucose levels, so that long-term diabetic complications disappear.  The ultimate goal would be to cure the patient of diabetes for whatever time that the islets work.  So, we’re talking curative as opposed to a treatment.

Even if you can reduce the number of insulin injections from four down to one a day, that would be considered a blockbuster product.  If you can then eliminate insulin altogether, that’s even better.

How long do islets last?

Soon after birth, once the islets mature, they essentially last your entire life.  So once we put islets into the naturally created environment of the Cell Pouch implanted into a patient, there’s no reason to believe that they wouldn’t last for a long time.

What’s your partnering strategy?

It’s a bit early for us to be licensing our technology.  Our plan is to prove the technology in the clinic to increase its value before we go into licensing talks.  However, a number of Big Pharma companies have talked to us about collaborations which can build their confidence in the product and lead to partnering discussions.  But our key milestone for 2010 is to complete preclinical work towards entering the clinic.


Philip Toleikis, Ph.D.Title:

President and CEO, Sernova Corp (SVA 0.16 ↑0.00%).


University of Vermont, B.A. Biology; University of Michigan, M.Sc., Biology; University of British Columbia, Ph.D., Medicine, Pharmacology and Therapeutics

Career Highlights:

Vice President R&D – pharmacology and drug screening, Angiotech Pharmaceuticals Inc,; President and CEO of Sernova Corp.


Disclosure: No positions