After only one month in the job Andrew Kay, the new chief executive of Algeta, was able to announce some much-needed good news. The FDA had decided an ongoing phase III trial of Alpharadin, an experimental treatment for bone metastases, would be sufficient for a US filing, and allowed the Norwegian company to start enrolling US patients.
The development sent Algeta shares, which had been steadily drifting downwards since floating in March 2007 at NKr48 ($7), soaring 64% to NKr19.50. Investors will be hoping that with a path to approval established in the US a licensing deal will now follow, particularly as cash is forecast to run out towards the end of 2009. Mr Kay told EP Vantage last week that he is confident of delivering a deal this year, describing the process of finding a partner as “coming to an end”.
The chief executive refused to be drawn on a more precise timetable, but looking at Algeta’s cash position, sooner would be better than later. The group ended September with NKr154m ($22m), down from NKr210m three months previously, a burn rate that is unlikely to slow with a global phase III trial underway.
“We’re working through our process on partners, probably coming to the end of the process. We feel confident we can deliver a partnership this year,” he said. “This is a blockbuster so it is interesting a whole range of oncology players, from biotech, specialty and big pharma.”
Breathe new life
It seems likely that Mr Kay was appointed to inject some new life into Algeta’s attempts to find a partner for Alpharadin, something that has been promised since the company floated (Vantage Exclusive - Algeta in deal talks November 22, 2007). As well as experience in getting deals done, the former Renovo commercial director was instrumental in forging a lucrative partnership with Shire over anti-scarring product Juvista; he also has a broad commercial background with sales and marketing jobs for various companies including Novartis and AstraZeneca.
Mr Kay denied that the group’s financial position was weakening his negotiating arm, and said he was determined to retain some marketing rights so a sales force can be built. However, he conceded that funds will be required this year.
“We probably want a partnership deal, then we need to look at raising some additional financing ourselves. We need to do either one or both of those this year,” he said, stressing that the company has a “loyal” set of investors.
Mr Kay’s confidence in the product stems from a very encouraging set of phase II data. Alpharadin is an alpha radiation emitting pharmaceutical, a highly targeted approach to fighting hard-to-treat bone metastases. These are common in advanced prostate cancer, the patient population being the focus of studies in the phase III trial.
The pivotal study is essentially the same as a placebo-controlled phase II trial which found that patients given Alpharadin lived on average 4.5 months longer than the placebo group, a highly significant result considering life expectancy at this stage is 12-15 months. The side effect profile was similar to placebo, which is very important for this very fragile and ill patient population.
Alpharadin targets new bone growth in and around bone metastases, and because alpha radiation only travels short distances, from 2 to 10 cells, its tumour cell killing effect is highly localised. This makes the product safe to handle and can be administered in an outpatient setting, a big advantage for a radiopharmaceutical.
If the phase II results are repeated in phase III, Alpharadin would appear to have a very good chance of reaching the market. Recruitment should be completed in the third quarter of 2010, when a safety monitoring board will have a look at the data, and final results should come in at the beginning of 2012.
Assigning a value
The only treatment option available for bone metastases in hormone refractory prostate cancer (HRPC) at the moment is Sanofi-Aventis’ Taxotere, a chemotherapy with nasty side effects. Algeta estimates that 75% of patients with HRPC who develop bone metastases cannot or will not take Taxotere, but the drug still generates sales of $650m in the indication.
Mr Kay believes if Alpharadin wins approval in HRPC, followed by breast and lung cancers, annual sales of more than $1bn are possible. Alexander Lindström, an analyst with ABG Sundal Collier, agrees, saying the prostate indication could be worth $500m-$600m alone.
“The only thing that speaks against them is that it’s a radiopharmaceutical,” he commented.
This image problem is something that Mr Kay is trying hard to challenge, and for good reason, because Alpharadin would seem to have none of the drawbacks of traditional radiation therapies. The size and shape of any licensing deal will reveal whether others share his confidence.