SAN FRANCISCO
BUSINESS TIMES – JUNE
15, 2007
Chiron Refugees
Adopt 'Orphans' from Novartis
By Ron Leuty
A team of former Chiron
Corp. executives is accelerating drug development at a small,
Foster City-based company, thanks in no small part to Novartis
AG.
That's the same Novartis that bought Emeryville's Chiron
for $5.4 billion in April 2006 and swiftly sent many in the
Chiron team packing. It's also the same Swiss drug giant
that by shopping some drug development work is creating openings
for smaller pharmas.
APT Pharmaceuticals Inc. -- led by
Stephen Dilly, Chiron's former chief medical officer --
on June 5 said it entered an exclusive licensing agreement
with Novartis for worldwide rights to develop and commercialize
an inhalable form of a drug to prevent and treat lung transplant
rejection.
The
drug -- cyclosporine, known by the brand name Pulminiq --
could be used by relatively few patients. But because Chiron
and Novartis had invested years of development work already,
APT could reduce its costs by bringing the drug to market
in a relatively quick three or four years, Dilly said.
It would be the first U.S. Food and Drug Administration-approved
drug for APT, which Dilly said has no revenue.
Cyclosporine
already is used to help prevent rejection in patients who
receive heart, kidney and liver transplants. The inhalable
form for lung transplant patients, however, was stalled two
years ago by an FDA advisory panel that wanted more data
regarding effectiveness.
In the meantime, Novartis
bought Chiron, and Dilly left last April for APT, hiring
three other former Chiron executives over the past year:
Howie Raff, who was vice president of biopharmaceutical development
management; Janice Lee, Chiron's senior director of project
development. Mike Scaife, formerly senior vice president
of regulatory affairs and Richard Gill, formerly vice president
of compliance and process improvement, are consultants to
APT.
"That in many ways was key to
convincing Novartis that we were the right company to take
the drug forward," Dilly
said.
APT, which has 15 employees, has
handled clinical trials before, but Dilly said the team
from Chiron has been associated with taking 30 drugs all
the way to market. That's helpful as APT works to "repurpose" drugs developed for
one malady to handle another.
APT is paying particular attention
to drugs used to treat so-called orphan diseases, afflicting
200,000 people or less. The fewer than 2,000 lung transplants
performed each year in the United States, for example, don't
provide enough pop for larger pharmaceutical companies to
pony up $600 million or more during a drug's 10- to 12-year
development cycle.
Because of that, larger companies
such as Novartis are negotiating licensing and development
agreements for some orphan drugs. Novartis in January,
for example, licensed rights for a potential treatment
for certain types of tumors to a Massachusetts company.
"We certainly continue to talk
to Novartis," Dilly
said.
Novartis officials did not return
phone messages seeking comment for this story.
In-licensing drugs is no cheap proposition
for APT. The company raised $9 million last year through
Palo Alto-based Charter Life Sciences, Research Corporation
Technologies and Vivo Ventures, Dilly said, but over two
to three years a company of APT's size could burn through
$15 million annually.
The number of in-licensed drugs varies per category, said
Brian Atwood, a co-founder of Versant Ventures, one of the
nation's deepest venture capital investors in biotech and
medical device firms. Yet picking up a drug after human trials "de-risks" it,
he said.
Versant Ventures is not one of APT's investors.
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