Greetings from Boston where spring has (almost) arrived and the Global Technology Community (GTC) Bio Diabetes Summit began yesterday. As in previous years, the conference is divided into two concurrent tracks: Diabetes Drug Discovery & Development and Diabetes Partnering & Deal-Making. The agenda for the first two days touched upon issues across a wide spectrum of diabetes research, from cell-based therapies and type 2 diabetes treatment algorithms to the bionic pancreas. Below we include our top ten highlights from the conference thus far. We’ll be back soon with highlights from the final day of the meeting, including keynote addresses from Dr. Doug Melton (Harvard Stem Cell Institute, Cambridge, MA) and Dr. Ralph DeFronzo (University of Texas Health Science Center, San Antonio, TX) – check out our preview to see what else is in store.
1. Intarcia CEO Mr. Kurt Graves (Intarcia, Boston, MA) provided an update on the phase 3 implantable exenatide mini-pump ITCA-650, including plans for an ambitious four-arm head-to-head trial as well as yesterday’s announcement of an impressive new $225 million round of funding.
2. Dr. Ed Damiano (Boston University, Boston, MA) presented positive never-before-seen results from the recently completed 11-day multicenter study for the Bionic Pancreas and updated the timeline for studies ahead. Here’s a blog entry from one of the (very articulate) patients in the trial – check this out for some vivid commentary. (One thing we just heard – someone with a 5.5 A1c went into the trial – and did better!)
3. We heard candid commentary on the downside of CVOTs for drug development during an afternoon panel on pharma-biotech partnerships.
4. We heard thoughts on the most exciting areas of development in diabetes – from brown fat to cell-based therapies to complications – from two panelists with a big-picture overview of the diabetes landscape.
5. IMS Health analyst Mr. Taskin Ahmed (IMS Health, London, UK) pointed to a reduction in M&A activity and an increase in partnerships in diabetes from 2013 to 2014.
6. Dr. Ralph DeFronzo (University of Texas Health Science Center, San Antonio, TX) questioned the assumption that metformin should always be the first-line treatment for type 2 diabetes and called out the ADA/EASD guidelines. Da … da … duhhhhh.
7. Dr. Barry Ticho (Pfizer, New York, NY) suggested a model for “looking beyond drugs into digital health.”
8. Dr. Andrea Leone-Bay (VP Scientific Research, MannKind, New York, NY) presented on the potential of inhalable oxyntomodulin as an obesity treatment, a potential direction for post-Afrezza MannKind R&D.
9. Former CDER officer Dr. Alexander Fleming (Kinexum, Harpers Ferry, WV) provided suggestions on the likely regulatory expectations for cell-based type 1 diabetes therapies, predicting that conditional approval in narrow patient populations (i.e.: disabling hypoglycemia) could occur within the next five years.
10. We heard updates on two novel type 1 diabetes therapies based on regulatory T-cells (Tregs): the controversial bacillus Calmette-Guérin (BCG) vaccine and NeoStem’s autologous Treg infusion therapy.
Top Ten Highlights
1. Intarcia CEO Mr. Kurt Graves provided an update on the phase 3 implantable exenatide mini-pump ITCA-650, including plans for an ambitious four-arm head-to-head trial as well as yesterday’s announcement of an impressive new $225 million round of funding. The “synthetic royalty” deal follows several rounds of funding over the past few years ($210 million in 2012, $200 million in early 2014, and another $171 million in late 2014 from an ex-US ITCA-650 licensing deal with Servier). Impressively, the company valuation has increased substantially – it’s now at about $1.75 billion, up from a little over $1.0 billion last year. The size and valuation is unusual for any “pre-revenue” company in our sphere – the forecast trajectory looks very steep. As we understand it, the way this deal works is that new investors purchased convertible notes that will earn them 1.5% of global ITCA-650 net sales, if and when ITCA-650 is approved, until the notes mature or are paid back in full. Uniquely, the deal has a convertible feature through which investors can convert the notes into equity during a pre-determined period of time, but only if the total company value reaches $5.5 billion during that period. The financing will support Intarcia through the regulatory approval and launch of ITCA-650 – according to Mr. Graves the company will likely double this year (in terms of employees), double again next year, and more than double in 2017 to support a launch, assuming ITCA-650 is approved. The financing will also fund an ambitious set of non-pivotal head-to-head phase 3 trials. The company is still on track to file for approval early next year, which would place a regulatory decision in early 2017.
- In particular, we were very taken by Intarcia’s plans for a two-year four-arm head-to-head outcomes study to answer the central question of which drug is the best add-on to metformin. Boy is this ambitious. The study will compare ITCA-650, an SGLT-2 inhibitor, a DPP-4 inhibitor, and a sulfonylurea, all in addition to metformin. This aligns with Intarcia’s ultimate goal to position ITCA-650 as the best second-line agent after metformin, moving the GLP-1 agonist class up from its predominantly third- or fourth-line status – notably, Mr. Graves noted that he does not view insulin as a primary competitor for ITCA-650. In addition to the basics, Mr. Graves noted that the trial will collect health resources and outcomes data, although we do not imagine it will be powered for CV outcomes to the same extent as a full CVOT (they’re doing one of these now). During Q&A, Mr. Graves spoke at length about the increasing importance of providing payers with compelling data. He argued that if Intarcia can approach payers with clinical data showing superiority vs. existing first-line drugs, weight loss, guaranteed compliance, durable control over time, and a responsible price (i.e., in his words, “not Gilead style”), it makes the decision clear for payers.
- Intarcia also plans to conduct two “switch studies” to examine patients’ reactions to switching from injectable GLP-1 agonists. Mr. Graves disclosed that these studies are expected to start in 2H15. He also expressed interest in conducting a real-world outcomes study vs. Novo Nordisk’s class-leading Victoza (liraglutide) once ITCA-650 is approved, as he believes that kind of data will have the greatest appeal for payers.
- The company’s first head-to-head phase 3 study (vs. Merck’s Januvia) is expected to report final results in September.
- The FDA-mandated CVOT for ITCA-650 finished enrollment last week, five months earlier than planned. Mr. Graves noted that the CVOT is the most frustrating to finance given that exenatide has been approved for nearly a decade – and that Byetta did not do an outcomes trial at all.
- We continue to hear payers and doctors and patients excited about the “guaranteed” (as it were) compliance that is possible with ITCA-650. It is clearly an obstacle for even the best existing drugs when 50-70% of patients “drop off” of their drugs during the first year (we don’t think it is that high for every drug, but this is what Intarcia quotes, and we have definitely noted adherence problems even with drugs that are very easy to take and have few side effects).
- We are interested to learn more about the launch strategy for ITCA-650 – although the company says not to expect “a pill-like trajectory” in uptake, we think many doctors and patients will be very interested, especially if the insertion process can be billed for like a procedure. From demonstrations we have seen, the insertion process looks remarkably easy and only takes a few minutes (the process to take one out is likely not as easy though we’ve heard it’s not that hard). We welcome alternatives for patients that make life easier for them and outcomes better – we are wondering, in fact, if cardioprotection may come sooner with this therapy due to the adherence advantage. That’s getting a bit ahead of things for sure, but we’re staying very tuned and we are very eager for ADA when phase 3 results will be announced. This will likely draw a close look once again by many manufacturers – in an interview this morning, the company shared that it has not ruled out an industry partnership for Japan – kind of amazing that all that is left for a partnership at this point is Japan! That said, Servier from our view has a heck of a lot to prove ...
2. Dr. Ed Damiano (Boston University, Boston, MA) presented never-before-seen results from the recently completed 11-day multicenter study for the Bionic Pancreas. The most recent update from the study we had seen was from Dr. Steven Russell at this year’s EASD Diabetes Technology Meeting in February. The final results in all 38 patients were encouragingly similar from that update: patients had a mean blood glucose of 141 mg/dl with a narrow standard deviation of 10 mg/dl (estimated A1c of 6.5%) on the Bionic Pancreas vs. 162 mg/dl (7.3% estimated A1c) with nearly triple the variability (SD: 29 mg/dl) on usual care. (And, “usual care” would be better in this trial than in “real life” from our view.) Time spent in hypoglycemia (<60 mg/dl) was reduced by more than two-thirds: 0.6% on the Bionic Pancreas vs. 1.9% on usual care – this latter comparison had improved slightly since the last update. Dr. Damiano emphasized that there was no statistically significant difference between the average total daily dose (TDD) of insulin that the patients received on the Bionic Pancreas (0.66 U/kg/day) and when they administered themselves on their usual care (0.63 U/kg/day), countering repeated recent criticism that their Bionic Pancreas algorithm is too aggressive. He also emphasized that this finding was consistent across all three of their outpatient studies (the 2013 Summer Camp Study, the 2014 Summer Camp Study, and the Multi-Center Study) where parity was maintained between the control and intervention groups. There wasn’t detail given on glucagon – we’re eager to hear more about this. All in all it sounds like there is a great deal of hassle that remains but excellent results.
- We were also excited to receive an update on the timeline for studies between now and regulatory filing. The pre-pivotal set-point study is now estimated to run from August-November this year, moved up from the guidance for 2015-2016 at the EASD Technology Meeting in February. Notably, an insulin-only study is now on the books for August-November 2015 – this is very smart to counter the glucagon naysayers. A human factors study and another study that will form a “bridge” to the pivotal study – bringing the integrated device together with the Xeris glucagon – is set for 2Q16-3Q16. The new guidance for the pivotal study has been adjusted slightly to 1Q17-1Q18 (back from “2016-2017”), placing FDA review of a PMA at 4Q17-2Q18 (similar to the “2017-2018 we heard at EASD in February). Of course, a lot of pieces still have to fall in place, but Dr. Damiano’s ambition and drive to bring this device to market never ceases to impress us.
3. We heard commentary on the pressure CVOTs are placing on drug development in diabetes. In response to a question on how TECOS’ neutral topline results may affect companies’ pipelines, Dr. Steven Cohen (Daiichi Sankyo, Tokyo, Japan) expressed hope that CVOTs may eventually not be required for all compounds, while J&J’s Dr. James Tobin briefly noted that he would love to see some loosening of the current policy. Dr. Alan Ezekowitz (Abide Therapeutics, San Diego, CA) noted that the FDA appears to be increasingly data-driven and that a stream of neutral data might lead the agency to modify its guidance. The CVOT discussion became more relevant following the recent FDA EMDAC meeting on the results of the SAVOR and EXAMINE CVOTs. We agree that while CVOTs can provide reassuring data, the immense cost and manpower required to conduct these trials may not be worthwhile in the larger scheme of much needed innovation in diabetes, particularly given what Big Data may ultimately be able to provide – please see our own open public hearing presentation by Mr. Manu Venkat (Close Concerns, San Francisco, CA) on this issue for more of our thoughts. Indeed, earlier in the day at GTC Day #2, Mr. Richard Caroddo (Director of Business Development at the CRO Medpace) categorically stated that he has noticed a marked recent decrease in investment in clinical trials in diabetes, although he did not go so far as to directly implicate the FDA’s 2008 CV Guidance in his remarks (we’re happy to do that).
4. Dr. James Tobin (J&J Innovation, Boston, MA) and Mr. Richard Caroddo (Medpace, Cincinnati, OH) shared their views on the most intriguing areas in diabetes research today. Dr. Tobin has a view of J&J’s diabetes strategy while Mr. Caroddo hails from a CRO that does work in diabetes, so we were interested in their big-picture perspective. Dr. Tobin’s list for type 2 diabetes included brown adipose tissue, the microbiome (Janssen has a new microbiome research initiative), and the underlying mechanisms of bariatric surgery. On the type 1 diabetes front, he highlighted J&J’s investments in cell-based therapies being developed by BetaLogics and ViaCyte. Finally, he cited complications of diabetes as a key area of focus, pointing to the CREDENCE trial of Invokana (canagliflozin) in diabetic nephropathy as an important example. With regards to pharma’s needs, he urged companies and investigators to focus on truly disruptive technology over “me too” candidates.
- Dr. Caroddo’s list also included cell-based therapies as well as new options for diabetes complications, which face a lower regulatory bar compared to glucose lowering drugs. Additionally, he highlighted increased interest in dual agonists (such as GLP-1/GIP dual agonists) as well as glucagon receptor antagonists (see our Lilly 1Q15 Report for more on this exciting new class).
5. IMS Health analyst Mr. Taskin Ahmed (IMS Health, London, UK) illustrated how M&A activity in diabetes appears to be declining while partnering activity is increasing. Interpreting these trends from IMS Health data, Mr. Ahmed suggested that diabetes may lack compelling acquisition targets and that companies are increasingly moving toward partnering to de-risk projects rather than acquiring assets. Overall healthcare industry deals reportedly decreased by 11% between 2013 and 2014 and have been declining since 2010, while the overall industry’s M&A activity has remained stable. On the other hand, partnering deal values have been on the rise compared to other areas, as partnerships have expanded into other metabolic diseases as well as into platform and drug delivery technology. In diabetes in particular, M&A appears to be declining while partnering has increased, perhaps indicating an aversion to risk at this point. In this context, panelists and attendees briefly discussed how the challenges of starting a metabolic disease company and developing a diabetes drug may be contributing to these trends. We viewed these trends as potentially linked with the points being made elsewhere in the day on the negative effect of CVOTs on innovation as well as the rising bar for new glucose-lowering agents.
6. From the audience, Dr. Ralph DeFronzo (University of Texas Health Science Center, San Antonio, TX) questioned the assumption that metformin should always be the first-line treatment for type 2 diabetes. During a panel discussion on novel therapeutic strategies for diabetes, Dr. DeFronzo placed metformin “at least fourth on the list” of type 2 diabetes drugs in terms of efficacy, suggesting that TZDs and GLP-1 agonists (as well as his signature triple therapy) are the most likely to produce durable results. He offered a harsh critique of the ADA/EASD treatment algorithm, which he characterized as more aligned with insurance companies’ economic incentives than with the science. Instead, he endorsed the AACE/ACE treatment algorithm (which, along with the ADA/EASD document, was also updated for 2015) as being “way ahead” of the ADA/EASD version. While the AACE/ACE algorithm offers a suggested hierarchy of type 2 diabetes drug classes that generally favors newer agents, we would note that it too considers metformin to be the standard first-line option and takes a somewhat dimmer view than Dr. DeFronzo of the TZDs. There is certainly some evidence that earlier, more aggressive combination therapy may be more effective than the current stepwise model; however, we do feel that metformin is unlikely to lose its status as the gold standard first-line agent in the near future given its low cost and well-established safety and efficacy profile. That said, if any drugs were to show cardioprotection or renal – protection, they would of course give metformin a run for its money.
7. Pfizer Cardiovascular and Metabolic Disorders Head Dr. Barry Ticho (Pfizer, New York, NY) noted that Pfizer is “looking beyond drugs into digital health” as the company is working to partner more on the technology side. In particular, Dr. Ticho referred to the goal of working with different companies to look at how technology can be utilized in monitoring and how to optimally use electronic health data. Moderator Mr. Richard Caroddo (Medpace, Cincinnati, OH) acknowledged this trend on a larger scale, pointing to partnerships between Medtronic and IBM as well as Google and Novartis.
8. Dr. Andrea Leone-Bay (VP Scientific Research, MannKind, New York, NY) presented on MannKind’s investigations into inhalable oxyntomodulin as an obesity treatment. Dr. Leone-Bay began by explaining how MannKind’s Technosphere platform (the technology utilized for recently launched inhaled insulin Afrezza) could be an ideal delivery system for a number of molecules due to its non-invasiveness and efficient drug absorption. Specifically, she discussed a potential application to oxyntomodulin, a satiety-signaling peptide, for obesity treatment. She presented preclinical findings demonstrating that oxyntomodulin delivered with the Technosphere technology led to significantly lower food consumption in rats compared to oxyntomodulin via IV delivery (~0.75 g vs. ~2.75 g at four hours after delivery). Dr. Leone-Bay thus stressed that while the use of an inhaled compound to control food intake is far away from any sort of product development, she believes it shows great promise. We were glad to hear that MannKind has not moved on from its R&D focus on diabetes and obesity, since the upcoming projects indicated in the company’s 4Q14 update seemed to steer away from those areas. We did hear Dr. Leone-Bay hint at efforts to develop inhalable oxyntomodulin at last year’s GTC Bio Diabetes Summit and hope that this eventually progresses to clinical trials; the high demand for Afrezza since its launch suggests that there could be a significant market potential for an inhalable obesity drug.
9. Former CDER officer Dr. Alexander Fleming (Kinexum, Harpers Ferry, WV) provided suggestions on the likely regulatory expectations for cell-based type 1 diabetes therapies. He predicted that such therapies would be targeted first to patients with disabling hypoglycemia and argued that the risks of hypoglycemia are underappreciated by both the FDA and the wider diabetes community – music to our ears! He suggested that a conditional approval in this population could be possible within the next five years (around the same time that he expects an initial artificial pancreas approval), with broader approvals to follow. In addition, it was informative to hear Dr. Fleming’s characterization of minimal, target and optimal product profiles for encapsulated cell therapy. For a minimal profile (FDA approvability results) for patients with severe hypoglycemia, these would include: one-year durability (defined as 50% with partial or complete insulin independence); a 10% treatment effect on the primary efficacy endpoint (defined as proportion of patients with A1c <6.5% and no hypoglycemia); and as an important secondary endpoint – 10% achieving partial (50% reduction in insulin dose) or complete insulin independence. The “out of Fenway Park” product profile would be 80% on the primary efficacy endpoint, and an indication for use in the broader T1D population. Dr. Fleming speculated that each of these scenarios would be associated with ~10% market penetration in the indicated populations. While we have heard plenty of hype about the potential of cell-based “cures” for type 1 diabetes and several notes of caution about the long road to approval, we have seen few explicit indications thus far about what success would realistically look like, and we hope to hear more of such assessments as these therapies progress through clinical trials.
- Dr. Gordon Weir (Joslin Diabetes Center, Boston, MA) offered a similarly pragmatic perspective on the prospects of cell replacement therapies. While he said he is “sensing a real shift” in the field after several decades of frustration, he cautioned that many unanswered questions remain, particularly regarding how to protect cells from immune attack. Much of his presentation focused on the challenges involved in designing encapsulation devices, from slow insulin release to cell inadequacy or death due to oxygen deprivation – on this front, he highlighted Beta-O2’s oxygenated macroencapsulation device as an intriguing potential solution.
- Dr. Kevin D’Amour (ViaCyte, San Diego, CA) provided an overview and update on ViaCyte’s VC-01 cell-based therapy for type 1 diabetes, which is currently being studied in the STEP ONE phase 1/2 trial. There have been no major changes or updates since our last update from the company in February at the UCSF Diabetes Public Forum. STEP ONE is still recruiting for its smaller pilot cohort phase, which is primarily designed to assess safety. If and when the study’s DSMB recommends moving to the second stage, increased enrollment across five additional sites using higher dosages will begin to better assess efficacy. Dr. D’Amour highlighted that the benefit/risk profile with VC-01 is more favorable than for existing and certain investigational cell-based therapies due to the lack of immunosuppression, raising the possibility of use in a wider range of type 1 diabetes patients.
10. We heard updates on two novel type 1 diabetes therapies based on regulatory T-cells (Tregs).
- Dr. Denise Faustman (Massachusetts General Hospital, Boston, MA) provided an update on the development of the controversial bacillus Calmette-Guérin (BCG) vaccine. A five-year randomized, placebo-controlled phase 2 trial (ClinicalTrials.gov Identifier: NCT02081326) in 120 patients with established type 1 diabetes is slated to begin in July, which is a significant delay from the expected start date of May 2014 as of last year’s Diabetes Summit. The delay appears to have resulted from difficulties with the FDA, as Dr. Faustman stated that the IND for the trial is still under review after two rounds of revisions. According to her, the primary endpoint will be improvement in A1c (which one attendee characterized as an impossibly high bar during Q&A), though the ClinicalTrials.gov listing includes stabilization of stimulated C-peptide as a co-primary endpoint. We will be very eager to see results from this trial, as Dr. Faustman’s 2012 proof-of-concept study of the therapy produced a great deal of hype in the mainstream press and some skepticism within the diabetes community.
- NeoStem Chief Medical Officer Dr. Douglas Losordo (NeoStem, New York, NY) discussed the planned design and timeline for the upcoming phase 2 trial of the company’s autologous Treg therapy. NeoStem is collaborating with several renowned academic investigators (Drs. Jeffrey Bluestone and Steven Gitelman [UCSF, San Francisco, CA] and Dr. Kevan Herold [Yale University, New Haven, CT]) on this therapy; Dr. Gitelman presented phase 1 results at last year’s ADA showing a strong safety and tolerability profile (the study was not powered to evaluate efficacy). As of last year, NeoStem developed the phase 2 trial in partnership with TrialNet, but Dr. Losordo indicated that the study would be conducted by NeoStem with the participation of some TrialNet investigators. The double-blind, placebo-controlled study will enroll adolescents with recent onset type 1 diabetes and have a primary endpoint of C-peptide preservation at 52 weeks and secondary endpoint of A1c and insulin usage. Dr. Losordo did not provide a specific estimated start date, as the company is still recruiting sites and raising funds (he estimated the total cost at ~$22.5 million) but suggested that topline interim results would be available approximately three years after trial initiation. He tentatively predicted that the therapy should lead to reduced insulin requirements compared to control – in his eyes, insulin independence in a percentage of patients would be an “absolute grand slam.”
- Oramed Chief Scientific Officer Dr. Miriam Kidron (Oramed, Jerusalem, Israel) suggested that the excess hypoglycemia seen in a phase 2 trial of oral insulin ORMD-0801 stemmed primarily from the trial protocol. Reviewing data from the phase 2a trials of ORMD-0801 in type 1 and type 2 diabetes that reported last year, Dr. Kidron suggested that the increase in hypoglycemia in the type 1 diabetes trial occurred because oral insulin was added on top of patients’ normal injected insulin regimen – she believes this would be avoidable in the real world, as patients could simply down-titrate their injected insulin doses. Despite this assurance, we still feel that hypoglycemia risk remains a major unanswered question for oral insulin, along with other challenges including inter-patient variability and low bioavailability. Dr. Kidron’s presentation did not include updates on Oramed’s ongoing glucose clamp study of ORMD-0801; the company announced the enrollment of the first patient earlier this month, but we have not yet heard details on the trial’s size or design. Our confidence in this company took a bit of a hit at last year’s GTC when we learned that a manufacturing malfunction had impacted the results of one the phase 2a trials.
-- by Melissa An, Emily Regier, Manu Venkat, and Kelly Close