Event – Gloucester hoping to add to evolving HDAC success story

Analysis

Following an almost unanimous vote last month by an FDA advisory committee in favour of approving Gloucester Pharmaceuticals’ Istodax (romidepsin) to treat cutaneous T-cell lymphoma (CTCL), expectations are high that the regulator will give the drug a green light by its PDUFA date of November 12.

Istodax belongs to a relatively novel class of drug called histone deacetylase inhibitors (HDAC) and approval would mark only the second graduate from the class following approval for Merck & Co’s Zolinza (vorinostat) in 2006. Approval would also be a major achievement for Gloucester which was only founded six years ago and could help accelerate any ongoing partnership discussions, particularly over a deal in Europe.

Burgeoning class

Interest and development in the HDAC field has accelerated rapidly in the past decade such that the current pipeline is swelling and looking increasingly promising (Therapeutic focus - HDAC inhibitors gathering evidence of broader utility, September 11, 2009).

The initial clinical and regulatory successes for HDACs have come from treating haematological cancers - leukaemia, lymphoma and myeloma - but these are relatively niche indications. Sales of Zolinza, which is only sold in the US for advanced CTCL, are estimated at just $15m for last year, although this could grow rapidly to reach $180m by 2014, if approval is granted in follow-on indications and eventually in Europe.

However, the potential of the class could be unlocked if HDACs can prove successful in treating solid tumours and numerous mid-stage trials are ongoing in these cancers for both Zolinza and Istodax, as well as multiple other pipeline candidates.

Licensing strategy

Established in May 2003, and mainly financed by the venture capital firm Apple Tree Partners, Gloucester seeks to license clinical stage oncology candidates and develop them through to regulatory approval and commercialisation.

Gloucester licensed global rights to Istodax from Fujisawa in 2004 when the drug was in phase II. Financial terms of the deal were never disclosed but Gloucester paid an upfront fee and will have to pay development and commercialisation milestones as well as royalties, now to Astellas Pharma.

Fujisawa had been developing the drug for solid tumours, such as kidney and prostate cancers, but Gloucester soon switched the focus to haematological cancers, no doubt also encouraged by an FDA fast track designation for CTCL in October 2004.

So far Gloucester has put all its efforts behind Istodax so approval could also spark renewed efforts to license a new pipeline candidate to keep the momentum going.

Partnering options

Gloucester completed its most recent financing round, a series D in August which raised $29m, providing the necessary funds to at least start the commercialisation process for Istodax in the US.

A regulatory filing in Europe was expected this year, although it seems likely and logical that the company would prefer a European partner in place before the application is submitted.

Interestingly the series D was led by a new investor, Novo Ventures. Although this corporate venture capital outfit is designed as a financial investment arm rather than a strategic one, Novo Nordisk could be a logical partner in Europe.

Merck was forced to withdraw its European application for Zolinza in February this year after the regulator indicated the filed data was not good enough to support a favourable risk-benefit profile for the drug. As such, Istodax has a chance of becoming the first HDAC to be approved in Europe, providing significant first mover advantage.

Meanwhile the appetite for IPOs in the US seems to be increasing, especially for companies with approved drugs and therefore a lower risk profile. According to the SEC register Gloucester has never filed an S-1 form seeking a public listing.

Whilst an IPO at this stage may still be a little premature for Gloucester, having already completed four financing rounds the temptation to strike while sentiment and confidence in the sector is increasing, enabling the company to reach a new level, could be prove hard to resist.

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