April 29-30, 2013; Boston, MA Full Report – Draft

Executive Highlights

Every year, the GTCbio Diabetes Summit provides a valuable forum for members of pharma and biotech to discuss the current state of drug development, early-stage research, and partnership across industry and academia. We leave grateful for the frank discourse, and this year was no exception. The two-day meeting, held at the Hyatt Regency in Boston, attracted roughly 50 attendees and featured two tracks: one on drug discovery and one on partnership and strategic deal-making. Speakers and audience members provided insight into a range of topics, from emerging challenges in drug development to the growing impetus for industry collaboration (illustrated by the recent Pfizer and Merck deal) to novel ways of identifying and evaluating new drug targets. Below, we discuss the major themes of the conference, followed by our full meeting coverage.

• Every year we look to GTCbio for frank discussion on the current state of cardiometabolic drug development. In his keynote address, Dr. Riccardo Perfetti (Vice President Global Medical Affairs, Sanofi Diabetes) emphasized the importance of comparative effectiveness data, saying that in the future, drug approvals will likely hinge on the ability to show superiority over existing standard of care. Dr. Sethu Reddy (VP US Medical Solutions, Merck) gave a very comprehensive and enlightening presentation on cardiometabolic drug development during which he listed both socio-political and pathophysiological barriers to developing new drugs (i.e., unrealistic expectations and a disproportionate focus on drugs’ harms), as well as the factors that limit our ability to prevent diabetes using pharmacotherapy (i.e., a lack of anatomical endpoints and ability to predict the risk for progressing to diabetes). Notably, Dr. Reddy remarked that the FDA had asked BMS to pursue a prediabetes indication for metformin. In a panel discussion on innovation, Dr. Reddy pointed out the interesting contradiction that “if you have a healthcare delivery system that optimizes existing therapies, it becomes more difficult for a new therapy to distinguish itself.” Several panelists during the same discussion highlighted the need for better partnerships between industry and academia to move drug development forward. Lastly, Mr. John Brooks, President and CEO of the Joslin Diabetes Center, gave an engaging discussion on Joslin and innovation, highlighting its efforts in diabetes technology connectivity and in collecting cost-effectiveness data.
• Several presentations focused on up-and-coming, disruptive therapies. President and COO of Mannkind Mr. Hakan Edstrom discussed the company’s inhaled ultra rapid-acting insulin candidate Afrezza (i.e., Technosphere insulin), highlighting that Afrezza has a more physiologic profile compared to current rapid-acting analogs. Looking forward, he expects to differentiate Afrezza from marketed insulins based its lower risk of hypoglycemia, smaller degree of associated weight gain, and greater ease-of-use. Mr. Kurt Graves also outlined the market potential of ITCA 650, which he foresees changing patient adherence for the better (thus producing better long- term outcomes). Mr. Graves remarked, interestingly, that Intarcia puts a heavy focus on collaborating with and seeking advice from payers, who are expected to drive the market in the future. Speaking for Array BioPharma, Mr. Brad Fell described the company’s GPR119 agonist ARRY-981, which Array has decided to license out (Array has shifted its focus to oncology). Speaking to potential sourcing directors, Mr. Fell noted that ARRY-981 has shown superior glucose-lowering in 28-studies in ZDF and DIO mice compared to other GPR199 agonists.
• Partnering between companies seems to be an increasingly attractive opportunity, since it offers a risk-sharing strategy for CVOTs and because combination therapies appear to be gaining momentum. Mere hours after Pfizer and Merck announced their partnership on the SGLT-2 inhibitor ertugliflozin, we heard from heads of large pharma, small biotech, and the investment community on the importance of collaboration – speakers included Dr. Mostafa Analoui (The Livingston Group, New York, NY), Dr. Tomas Landh (Novo Nordisk, Copenhagen, Denmark), and Dr. Thomas Kuhn (Poxel, Lyon, France). During this discussion, Dr. Lauren Shearman (Merck, Whitehouse Station, NJ) discussed the strategy behind Merck’s decision to partner with Pfizer, affirming that Merck recognized the gap in its portfolio without an SGLT-2inhibitor. Members of management from several companies, such as Novo Nordisk, Merck, Array,Intarcia, and Poxel took the stand during the Partnering and Deal Making track to either display assets available for licensing or to explain their companies’ asset-acquiring strategies. In all, we heard several times that large pharma is now looking for earlier-stage assets.
• GTCbio featured some notable discussion on type 1 diabetes cure research. A closing panel discussed what success means in the type 1 diabetes cure space, with the underlying message that the definition of a “cure” can evolve and mean different things to different patients. Dr. Denise Faustman (Harvard Medical School, Boston, MA) encouraged patients be more demanding of researchers. Former Close Concerns Senior Associate and lead author of Targeting a Cure for Type 1 Diabetes, Ms. Lisa Rotenstein (Harvard Medical School, Boston, MA) stated that while it important to aim for a cure, there is plenty of room for incremental improvements in the daily lives of people with type 1 diabetes. Dr. Gordon Weir (Joslin Diabetes Center, Boston, MA) gave a presentation on an important area of cure research: beta cell replacement. He stated that one of the key remaining challenges for this field is a shortage of insulin-producing cells and highlighted ViaCyte’s beta cell progenitor device, VC-01, as a possible solution. Speaking on Dr. Doug Melton’s (Harvard University, Cambridge, MA) discovery of betatrophin, Dr. Weir questioned whether the protein directly leads to beta cell replication (rather than acting through a mediator) and if it causes insulin resistance.
• Diabetes Technology was largely absent from the discussion at this year’s Diabetes Summit, with the notable exception of Dr. Ed Damiano’s (Boston University, Boston, MA) presentation on his efforts to build a bionic pancreas system. Dr. Damiano presented very encouraging results from the first five patients in his ongoing, outpatient closed-loop study. Patients showed average blood glucose readings of 128 mg/dl on days 2-3 and on days 4-5, with low incidence of blood glucose less than 60 mg/dl. He effused confidence in the system. During Q&A, he noted that technology adoption, particularly CGM, is still low. He believes that by “hit[ting] a home run the first time out” with the bionic pancreas, the huge improvement over standard of care will drive its use. Said Dr. Damiano, “It will be unconscionable for endocrinologists to not push this technology.” Dr. Damiano hopes to bring his system to market by fall 2017. More iterative systems to improve diabetes care are certainly needed in the interim and many things will need to go right for Dr. Damiano to achieve his 2017 target; still, we think it’s highly valuable for the field to have someone who is so openly ambitious. Brief technology discussion also came from Mr. John Brooks (President and CEO, Joslin Diabetes Center, Boston, MA) who discussed Joslin Diabetes Center’s projects to improve diabetes technology connectivity.
• While not a focus of this conference, we heard notable talks on type 2 diabetes pathophysiology and new disease targets. We were excited to hear Dr. Barbara Corkey discuss her hypothesis that the hypersecretion of insulin – rather than insulin resistance – plays is the driving factor in diabetes etiology (Dr. Corkey published an article in Diabetes Care on this theory, available at http://care.diabetesjournals.org/content/35/12/2432.extract). She explained that hyperinsulinemia can lead toinsulin resistance, that insulin resistance may thus be a protective response, and that researchers could potentially design drugs that decrease basal insulin secretion without altering glucose- stimulated insulin release. In a fast-paced presentation, Dr. William Bachovchin (Tufts University, Medford, MA) highlighted the role of fibroblast activation protein (FAP; a protein strongly homologous to DPP-4 that also cleaves GLP-1), noting that molecules which inhibit both FAP and DPP-4 appear to provide greater efficacy compared to DPP-4 inhibitors. He explained that while FAP-selective inhibitors only seem to improve glucose after chronic use, they could be effective as monotherapy or in combination with a DPP-4 inhibitor.

Detailed Discussion and Commentary

Keynote Presentation

THE MOST RECENT ADA/EASD GUIDELINES ARE CHANGING DEVELOPMENT STRATEGIES: A FOCUS ON COMBINATION THERAPY FOR THE TREATMENT OF DIABETES

Riccardo Perfetti, MD, PhD (Vice President Global Medical Affairs, Sanofi Diabetes, Paris, France)

Dr. Riccardo Perfetti discussed how the 2012 ADA/EASD position statement’s new focus on combination therapy is changing how companies will need to structure development programs. In particular, Dr. Perfetti emphasized that a drug’s risk/benefit profile when used alone may change when it is used in combination with another drug – it may either improve (e.g., basal insulin when used in combination with a GLP-1 agonist) or worsen (e.g., a TZD used in combination with insulin). Thus, he encouraged further study and characterization of the long-term risk/benefit profiles of combination treatments. Dr. Perfetti also stressed the need for comparative effectiveness data, saying that in the future, drug approvals will likely hinge on the ability to show effectiveness compared to the existing standard of care. Dr. Perfetti also advised that clinical guidelines are not the only guidelines that influence a drug’s success – for example, he stated that the importance of reimbursement guidelines is often underestimated; they are often very different from clinical guidelines and ultimately determine whether payers will actually pay for the drug (his point being that a drug approval can be rendered irrelevant if payers decide not to cover it).

• Dr. Perfetti highlighted critical characteristics of the 2012 position statement and outlined how it differs from the 2008 guidelines. Interestingly, he highlighted the strong emphasis on aggressive intensification (this is a point that speakers don’t often bring up – it suggests advancing from one tier of treatment to the next if the patient does not reach goal after three months of treatment initiation). Additionally, he highlighted that there are now many more choices for combination therapy, and there is now a need for comparative efficacy and effectiveness data. Another important implication for clinical development programs is that there is now the option to initiate treatment on drugs other than metformin or in combination with metformin. Presumably, metformin will remain first-line therapy in the near term, even though there are now additional options for first-line therapy outside metformin.
• Dr. Perfetti highlighted many shortcomings of clinical development data that the 2012 position statement brings to light: 1) the need for stronger comparative data to better inform how to select a second line treatment; he stated that in the future, not having comparative data in a regulatory dossier of a drug may jeopardize its regulatory or reimbursement status; 2) the need to demonstrate robust efficacy and safety in combination with other anti-diabetes therapies; and 3) the need to build combinations with complementary modes of action and better characterize mechanisms in order to identify which combinations make sense.
• Dr. Perfetti believes that the validation of combinations will be critical. He especially stressed that risk/benefit of a drug often changes when combined with another drug – one cannot simply add together the risk/benefit profile of each drug alone to characterize the risk/benefit of the combination.
  • Dr. Perfetti used his experience with Lyxumia’s (lixisenatide) clinical development program as an example of how combining two drugs can change the risk/benefit profile. In anticipation of guideline changes, the lixisenatide development program included studies of lixisenatide as monotherapy, in combination with one other OAD, in combination with two other OADs, and in combination with basal insulin. Dr. Perfetti described how GetGoal-Duo 1 followed the new position statement “100%” by randomizing patients on basal insulin to GLP-1 or placebo if they did not reach an A1c goal of 7% after three months. The risk/benefit profile of basal insulin changes when used in combination with GLP-1, he emphasized. Unlike the situation in which insulin is used on its own (e.g., intensification is associated with cardiovascular risk factors like increased body weight and hypoglycemia), when used in combination with GLP-1, the effect on weight is neutral, and there is minimal hypoglycemia.
  • As an example of how risk/benefit can change for the worse when two drugs are combined, Dr. Perfetti briefly reminded the audience that edema from TZDs is exacerbated when used in combination with insulin.
• Dr. Perfetti stated that when balancing the risk/benefit profile of drug combinations, one must take the following factors into account: mechanism of action, safety and tolerability, presence of co-morbidities, efficacy, pathogenesis of hyperglycemia, and whether the patient is lean or obese. With regard to mechanism of action – theoretically, using mechanisms that do not overlap would allow use of lower doses of each component drug. With regard to safety and tolerability, Dr. Perfetti advised the audience against undermining the importance of tolerability. Specifically, he stated that while safety allows a drug to be approved, what drives patient use is tolerability. So combinations of drugs that both cause the same side effects would not promote adherence.
• In terms of improving our state of knowledge on comparative effectiveness, Dr. Perfetti commented on the GRADE trial, which is scheduled to begin in April 2013 with a primary completion date in 2020. He stated that GRADE will likely help generate better comparative effectiveness data but since data are not expected until 2020 that medical associations and regulators would likely already have a good understanding of how these agents stack up. As a reminder, GRADE will compare the value of adding a sulfonylurea, a DPP-4 inhibitor, a GLP-1 agonist, or basal insulin to metformin. Since many more combinations may be in use by then, we are surprised that adding dual therapy isn’t being tested in GRADE.

Q: In your experience treating patients, what is your feeling about adherence? Which therapies are patients more likely to continue?

A: That is a complex question. Adherence and compliance depend on education. Patients who have a good understanding of a drug may be more willing to follow their regimen. Patients using drugs with tolerability side effects who are not fully informed will not like it, but information gives them the possibility to inform the physician, and the physician can chose alternatives. Education is a critical component to allow for adherence. Patient empowerment is critical. In the US this is part of the culture. In China, however, diabetes is treated in a hospital setting, which does not allow management in the long term. How long can you be in a hospital setting? Let’s say one week. Then you are by yourself for the next six months. Education in my view is the most critical.

Featured Presentations

THIS IS THE DAWNING OF THE AGE OF THE BIONIC ENDOCRINE PANCREAS

Edward Damiano, PhD (Boston University, Boston, MA)

Dr. Edward Damiano described his efforts to build a bionic pancreas system. (He is moving away from the term “artificial pancreas” because it says what the system is not, versus what it is.) The current system uses an iPhone 4S to run the controller, a Dexcom G4 Platinum CGM/receiver, and two Tandem t:slim pumps (one to deliver insulin and one to deliver glucagon); the system is being tested in the ongoing, outpatient Beacon Hill study. Preliminary results from the first five patients showed average blood glucose readings of 128 mg/dl on days 2-3 and on days 4-5, with low incidence of blood glucose less than 60 mg/dl. Notably, Dr. Damiano recently received the Investigational Device Exemption from the FDA to test his system in a randomized crossover study in children with type 1 diabetes at Camp Joslin (boys, n=16) and the Clara Barton Camp (girls, n=16) this summer. In addition to Beacon Hill and the camp study, he plans to conduct an adult two-week-long outpatient study (n≈50) in 1H14 and to conduct a pivotal study in 2015. Dr. Damiano expects to submit a full premarket approval application to the FDA in 2016, which would enable approval by fall 2017 so that his son (who has type 1 diabetes) can use the system when he goes to college. Dr. Damiano first presented preliminary Beacon Hill study results at the FDA-JDRF-NIH Workshop on Innovation Towards an Artificial Pancreas: see page 5 at http://www.closeconcerns.com/knowledgebase/r/7e98f344.

• The ongoing Beacon Hill outpatient closed-loop study involves five-day experiments in 20 adults with type 1 diabetes. The randomized crossover design compares five days of closed-loop therapy to five days of usual care. Patients have free run of a three-square-mile area of downtown Boston. Point-of-care capillary blood glucose tests (which are blinded to the subjects) are taken during the day under 1:1 nursing conditions. At night, patients sleep in a hotel with blood glucose monitoring under 1:2 nursing conditions. Patients are required to be in thehotel from 11:00 pm to 7:00 am. The study began in February 2013 and Dr. Damiano expects to collect over 3,000 hours of data. The study is slated to complete by the end of September.
• The system requires only the patient’s weight for initialization. The system then adapts insulin dosing based on glucose information at five-minute intervals and over longer time scales. Dr. Damiano believes that the latter is key to adapting to the higher insulin needs of adolescents and to adjust for inter-current illnesses. The system takes 6 to 12 hours after initialization to adapt to the individual and is comprised of three independent controllers: one for basal insulin needs (proportional–derivative algorithm), one for glucose excursions (model predictive control algorithm), and one for priming boluses (patients can indicate whether they are about to consume a meal, but the algorithm still controls the size of the meal-priming bolus). Patients are told about the pre-meal dosing option, but are not required to use it. Said Dr. Damiano, “we completely crush the standard of care,” whether or not priming is used. Dr. Damiano explained the bolus functionality in greater detail at the recent FDA-JDRF- NIH Workshop on Innovation Towards an Artificial Pancreas: patients select if meals are more than, less than, or about equal to the number of carbs they typically eat (i.e., no precise carb counting).
• For the five patients who have completed thus far, average blood glucose was 128 mg/dl on days 2-3 and 128 mg/dl on days 4-5 with low incidence of blood glucose less than 60 mg/dl (0.9% and 0.1%, respectively). In individual patients, pre-meal priming may or may not have significant impact. In the case of the patient with day 2-3 blood glucose average of 133 mg/dl, Dr. Damiano explained that the drop to 115 mg/dl on day 4-5 coincided with the patient’s decision to take advantage of the pre-meal bolus functionality. Blood glucose readings under 60 mg/dl decreased from 0.9% to 0%. However, said Dr. Damiano, even if patients chose not to bolus or inconsistently bolus, the system maintains good glycemic control.

	CGM Average (mg/dl)		BG Average (mg/dl)
	Day 2-3	Day 4-5	Day 2-3	Day 4-5
Individual  Patients	109	110	116	108
	124	130	126	136
	132	114	133	115
	130	128	143	146
	129	122	121	133
Average	124	121	128	128

* Dr. Damiano noted that CGM tends to underestimate moderate hyperglycemia

• Dr. Damiano posited that patients whose blood glucose levels are harder to control may be due to previous exposure to more immunogenic animal insulins. The ongoing outpatient study does not measure insulin pharmacokinetics; however, based on their experience from previous clinical studies, they have hypothesized that anti-insulin antibodies from prior use of more immunogenic insulins may slow absorption of the insulin in people with type 1. In these studies, patients who had only been exposed to the less immunogenic analogs typically had faster insulin absorption.
• By moving from a laptop to a mobile, iPhone-based system, Dr. Damiano and his team will be able to collect more hours of closed-loop data in the first eight months of 2013 than in the past 4.5 years. He emphasized that the final version of the product will not use an iPhone, but a medical grade device that can potentially communicate with a smartphone. The current system (which he described as the penultimate version) streams data from the CGM onto an unadulterated iPhone. The system’s algorithm was translated from Matlab to C++ in order to embed it into the iPhone application. The iPhone is locked into the application, such that users cannot use the phone for other purposes.
• The current system uses Lilly’s formulation of glucagon and Lilly’s Humalog (insulin lispro). Dr. Damiano noted that there is no commercial path forward for his bionic pancreas with Lilly’s glucagon (due to its lack of chemical stability); however, Dr. Damiano believes that a stable glucagon formulation could be approved in two-years time; several small pharmaceutical companies have developed promising formulations.
• CGM data collected in Dr. Damiano’s third clinical study (i.e., the one before Beacon Hill) suggested that the Dexcom G4 Platinum had superior accuracy amongst commercially available CGMs. As such, the bionic pancreas in the ongoing Beacon Hill study uses the G4 Platinum. Dr. Damiano and his team conducted three clinical feasibility studies leading up to Beacon Hill. In each clinical study, CGM accuracy between the three main commercial players was compared.

CGM	MARD
2008-09
Dexcom Seven	23%
Medtronic Guardian RT	18%
Abbott Navigator	10%
2010-11
Dexcom Seven Plus	16.5%
Medtronic Guardian RT	20.3%
Abbott Navigator	11.8%
2012
Dexcom G4 Platinum	10.8%
Medtronic Enlite	17.9%
Abbott Navigator	12.3%

Questions and Answers

Q: I have child who was diagnosed with type 1 diabetes at 14 months. Your approach is reality based. It’s amazing how far we’ve come. Do you have any idea what percent of patients with type 1 diabetes will actually wear a device? This idea that digital technology will increase compliance, unless we incentivize people, I’m not so sure.

A: I don’t know. We know roughly the percent of people that wear pumps. The T1D Exchange data set are showing 30-40% wear pumps in the US – this might be a little elevated due to self selection. CGM usage is slim to none: 1-3%. The first CGMs that hit the market were inaccurate devices. Unfortunately, people were colored by these early CGMs that weren’t ready for prime time. That’s a frustration to overcome. What will make the difference [with the bionic pancreas] is that the difference from standard of care is going to be so much greater. There will be a huge effect. It will be unconscionable for endocrinologists to not push this technology. It’s hard to get people to wear these things, but when my collaborator asks why people aren’t on the pump, they say, not enough benefit. So we ask, what if it was completely automated? Every one of these people – even MDIs – say they will wear it. It’s how ambitious we are being that makes the difference. We want to hit a home run the first time out. That’s been my strategy from the beginning and I still think that’s the right way to go. Hopefully the tremendous improvement in glycemic control is what will get people to wear these devices.

Q: How do you solve the glucagon issue?

A: Technically, it is not such a hard problem. Small pharmaceutical companies have built formulations that are stable in different solutions. They use standard human glucagon. You don’t have to make a glucagon analog, which has a tremendous runway through the FDA. With insulin, it’s different because human insulin is so slowly absorbed. With glucagon, it’s a small peptide – the 29 amino acid sequence is rapidly absorbed. You don’t have to make a new molecule, just a new formulation. This will have a shorter regulatory pathway, hopefully on the order of two years.

Q: Your device is dependent on stable glucagon?

A: Yes, we will be suggesting that patients fill their glucagon reservoir with one of these new rescue glucagon formulations that are stable for three to four days in the pump.

Q: What about implanting chambers under the skin?

A: There’s been a lot of work in Europe and early studies in the US. There are challenges to overcome with implanting devices in the abdomen. One of the problems is the crystallization of insulin at body temperature. You have to use more highly concentrated insulins. When the system does clog up, purging the system is a major ordeal. The problem is building insulin that is rapidly absorbed that is also stable and does not crystallize at high concentrations. There may be solutions there – there is work by Thermalin for example – but for the time being, there has never been anything FDA approved like this except for pace makers. I see this as a much bigger regulatory burden. I would love to see something reliable and safe, but it will not come in the order of four years.

Q: When you commercialize this, will it be as three components or as one product?

A: It has to be built into a single product. We can build a network of small companies. Ultimately, since it has to be a PMA, someone in the group has to take over and align with the others. It has to be one product, one integrated system. Xeris has glucagon that uses 5 mg/ml concentration, so the additional reservoir you would need for that would be quite small. Most insulin pumps are still accurate enough to deliver our smallest glucagon doses if the glucagon were as much five-fold more concentrated than Lilly glucagon (1 mg/ml). The pump wouldn’t have to be that much bigger because we don’t need as large a volume of glucagon as we do insulin.

Q: What about strenuous exercise, like a marathon? Can you build that into these trials? Can you build the most rigorous challenges into the trials: fight or flight, vomiting? Can you stress your system to the utmost?

A: Exercise is a tricky thing. With some kinds of exercise, you see blood glucose rise; others it’s the opposite. The hardest thing in my kid was walking through the streets of London last summer – we were pumping dextrose tablets into him and running an extremely low basal and his blood sugar was running at 50 mg/dl the whole time. If he gets onto the basketball court for a game, his blood sugars rise. But in practice, with nothing at stake, with the same level of exertion, his blood sugars drop. His state of mind is critical to this. Moderate exercise at heart rates of 120-140 bpm gives rise to tremendous glucose clearance by the muscle. Activities that you might think of as not particularly challenging can sometimes pose more of a hypoglycemic threat than a marathon. The thing that is cool is that we can test our system in adolescents, who are, in fact, superhuman. Adolescents can use three fold as much insulin as adults. Our system doesn’t know it’s controlling the blood sugar of an adolescent or an adult. The only way we can test extremes in the insulin demands of our subjects is to design a study in both cohorts using a system that is initialized in the same way. What happens in the first 12 hours is profoundly dependent on the subject’s insulin requirements. Our system’s ability to adapt to such large intersubject variability gives us some confidence that we will be able to handle intrasubject variability that comes and goes rather suddenly. We do have a feature that can announce exercise. We haven’t tested that infrastructure, but we will test it for the first time in the camp study to see if it is necessary. There are Achilles heels with our system – if you fast, for example, you might deplete your glycogen stores and exhaust your liver of the substrate glucagon needs to act upon in order to raise blood sugar.

STATE OF THE HEALTHCARE WORLD AND DIABETES IN THE FUTURE

G. Steven Burrill (CEO, Burrill & Company, San Francisco, CA)

​In a fast-paced and engaging presentation, Mr. Steven Burrill argued that healthcare systems are beginning to focus on outcomes and value rather than on procedures and costs. He began with an overview of the healthcare landscape, noting that the world’s aging population and the rise of noncommunicable diseases are placing a significant burden on today’s healthcare systems. Both factors are expected to escalate the cost of care. Diabetes in particular represents a global challenge, as 370 million people currently have the disease. In elaborating, Mr. Burrill cited two concerns: 1) nearly 50% of patients are not aware that they have the disease; and 2) diabetes led to 4.8 million deaths in 2012. Mr. Burrill highlighted that the current healthcare system does not incentivize patients to maintain their health (since payers foot the cost of treatment) and posited that placing greater responsibility with the patient would lead to better long-term outcomes. Throughout his talk, Mr. Burrill emphasized the disproportionately large influence of payers, noting that payers individually decide the value of a therapy: “Value is in the eyes of the beholder. In our world, it’s the payer. Remember, the payer is God.”

• Mr. Burrill explained that an aging population and the rise of chronic care are changing the healthcare landscape. He noted that in general, birth rates are decreasing while populations are aging; China’s has roughly 465 million people over the age of 65 years – one and a half times the population of the US. Mr. Burrill also highlighted that one in three babies born today will live to be 100 years old. These trends point to a future situation where a shrinking working population will need to support a growing unemployed population (i.e., people under 20 years and over 65 years). Furthermore, while healthcare systems were originally designed to treat infectious diseases and acute sickness, they are increasingly burdened by chronic illnesses and noncommunicable diseases (which now account for 63% of deaths). Mr. Burrill remarked that this problem is by no means a problem only seen in the US.
• Mr. Burrill then framed the “massive” global burden of diabetes, emphasizing that more than 370 million people now have the disease. After a swift review of the related complications, he highlighted that even small countries have a significant disease burden: for example, the prevalence of diabetes has reached 37% in the Federated States of Micronesia, 30% in Nauru, and 23% in Saudi Arabia. Mr. Burrill cited two particular concerns: nearly 50% of patients are not aware that they have the disease; and diabetes led to 4.8 million deaths in 2012.
• US healthcare spending now totals $3 trillion and is expected to reached $5 trillion in the next few years. Mr. Burrill stated that this increase “will have nothing to do with ObamaCare” and will be driven by the US’ aging population and the rise of chronic care, which will allow people with illnesses to live longer. He pointed out the declining popularity of the pharmaceutical industry, citing a recent poll that found that in general, people believe that prescription drugs account for 60% of total healthcare spending. In reality, prescription drugs represent only 11% of costs while hospital spending accounts for the majority (~40%) ofhealthcare expenditure. In ending this discussion, Mr. Burrill underscored the point that spending does not equal results: The US only has the sixth best healthcare system in the world despite spending more than twice the amount of healthcare (on a per capita basis) compared to other countries.
• Mr. Burrill addressed a fundamental question: What is the patient’s obligation to stay well? He emphasized that the US healthcare system is the only place in the economic ecosystem where patients and doctors are disconnected from the payer, leading to a “menu without prices.” As a result, healthcare has become highly payer-dependent: “Value is in the eyes of the beholder. In our world, it’s the payer. Remember, the payer is God.” Mr. Burrill commented that such a system leads to disparities in care, as payers often have differing priorities. He posited that a system that burdens patients more when they become sick may result in higher payoffs (i.e., less spending) in the long run.
  • Mr. Burrill posed several arresting questions for the audience to consider: 1) Who should pay for healthcare and who should decide the course of care? 2) How should we balance individual responsibilities with societal costs? 3) Should safety and efficacy alone be the standard for approval, or should cost be a factor? 4) What does innovation mean today? And 5) How do we determine value?
• Turning back to diabetes, Mr. Burrill gave a whirlwind overview of the “extraordinary opportunities” in diabetes therapies, as well as the associated safety concerns. He emphasized to main points:
  • Digital health will play a critical role in improving healthcare access and delivery. Mr. Burrill estimated that among the seven billion people in the world, 6.2 billion have a cell phone, opening the door for remote monitoring and diagnosis of disorders. He believes that the greatest challenge will be determining which data points provide the most meaningful information.
  • The US is moving toward a predictive, preventative, and wellness-based healthcare system, Mr. Burrill said. To support this point, Mr. Burrill cited Tethys Biosciences, whose PreDx blood test measures seven biomarkers to assess a person’s likelihood of developing type 2 diabetes within five years. He noted that the US has already adopted a focus on wellness: in general, people pay more for fitness and nutrition programs than they do for drugs.
• Throughout his presentation, Mr. Burrill highlighted that the US is adopting a value-based healthcare system. “Value” today is defined as achieving better outcomes at lower costs. Mr. Burrill noted that the concept of value changes across geographies (“a house has different prices in difference cities”). Value also changes over time – Mr. Burrill reminded the audience that Human Genome Sciences declined Amgen’s $7 billion purchase bid in 2010 but accepted GlaxoSmithKline’s bid of $3 billion in 2012 (for further details on the purchase, please see our July 16, 2012 Closer Look at http://www.closeconcerns.com/knowledgebase/r/b35ecbb3). Mr. Burrill again emphasized that value changes on a per-payer basis “Forget the guidelines, understand what the payer is and what the payer is going to do.” To cite an example, he mentioned that the government CMS recently instituted a competitive bidding program for diabetic supplies (for details, please see our February 13, 2013 Closer Look at http://www.closeconcerns.com/knowledgebase/r/993d586e).

Questions and Answers

Q: You’ve painted an interesting picture of today and the future. How long is the transition going to take? Who will lead it?

A: We’re deep in it already. If you go to Kaiser and they’re going to buy a drug, it’s based on how they practice medicine and what their priorities are. That’s the world we live in. It’s based on outcomes. If you’re doing your clinical trial today, you’re not doing it just to prove safety and efficacy. You have to figure out for each payer out there, how they will figure out the value. You have to derive that data when you do clinical trials. You have to show that the drug increases value. If you go to the FDA, they will say, “tell me which patient populations responded.” That’s not in the guidelines. And Congress says that they’ll only approve things that will lower costs. So that’s the world we live in.

Q: How will our healthcare system go from being sickness-focused to being wellness- focused?

A: We’re already there. For example, one or two years ago, Safeway – one of the largest employers in California – had healthcare costs that totaled $1.9 billion. Their profit was $1.2 billion, so to increase their profit margin they had to decrease their healthcare cost. They gave their employees an incentive: every time they went to a fitness program, they got a 10% discount on their copay. In two years, Safeway halved its healthcare costs. As copays go up, people begin to think that it’s expensive and they want to manage their health. We didn’t have this incentive before. It’s not a vision for the future; it’s happening now. On a global basis, it’s very much with us.

Q: Do you believe that it rests more with the employer versus the payer? I know that Blue Cross Blue Shield is trying to reduce healthcare costs, but it seems like it might take effect much quicker from the perspective of the employer.

A: Who pays for healthcare? The employer does, the government does, and you do. That’s where it’s going to come from. As soon as your copay goes up, you’re going to behave differently. Don’t forget – at the beginning of my presentation, I noted that we’re moving from a procedures- and cost-based system to an outcomes- and value-based system. The British government will only pay for a drug if you reduce cost and improve outcomes. Germany and Australia are the same way. The US is late. The rules are being written by people outside of the US. But that’s the world that we live in.

New Therapeutic Targets for Diabetes

BETA CELL REPLACEMENT FOR DIABETES: THE PROBLEM OF BETA CELL SUPPLY?

Gordon Weir, MD (Joslin Diabetes Center, Boston, MA)

Dr. Gordon Weir began his presentation reminding the audience that beta cell replacement could be a treatment for type 2 diabetes, as well as type 1 diabetes. According to Dr. Weir, the key remaining challenges for islet transplantation are 1) developing a supply of insulin-producing cells and 2) protecting the transplanted cells from transplant rejection and autorejection. Dr. Weir believes the most-likely answers to our shortage of insulin-producing cells is embryonic stem cells or induced pluripotent cells and he highlighted the potential of ViaCyte’s beta cell progenitor device, VC-01. At the Rachmiel Levine Diabetes and Obesity Symposium ViaCyte stated that they are planning to enter clinical development in 2014. Regarding, beta cell expansion, Dr. Weir sighed “that’s a tough one;” however he still sounded pretty positive on the area’s potential. Though he is worried if beta cell replication can be effectively stimulated pharmacologically though he expressed hope that neogenesis – which he thinks occurs in adults – can “somehow” be harnessed.

• Discussing the recent Cell paper by Dr. Douglas Melton (Harvard University, Cambridge, MA) on the discovery of betatrophin, Dr. Weir offered several important questions for future research (see the Cell paper at http://www.cell.com/abstract/S0092-8674(13)00449-2). Dr. Weir noted that the researchers did not demonstrate that betatrophin directly leads to beta cell replication, which he thought was “odd” though he stated, “I don’t want to say that doesn’t [occur], they were just eager to get the paper published.” If betatrophin acts indirectly on beta cell replication, Dr. Weir indicated that the brain might be an interesting player in translating a betatrophin signal to the beta cells. Additionally, he questioned what the relationship is between betatrophin and glucose and if betatrophin causes insulin resistance. He explained that while the paper did include results from a test suggesting that betatrophin does not cause insulin resistance he felt it was a “bare bone test” that did not put the question to rest.
• Dr. Weir described ViaCyte’s beta cell progenitor device, VC-01 or TheraCyte, stating that the company “should get huge praise” for its work on turning embryonic stem cells into real beta cells. Dr. Weir noted that curiously, ViaCyte needs to put its cells into mice for them to effectively develop; when the cells are developed in vitro, they do not become “honest” beta cells. He stated that ViaCyte is “itching to bring [VC-01] to clinic; at the Rachmiel Levine Diabetes and Obesity Symposium, ViaCyte remarked that they plan to initiate a phase 1/2 trial in 2014. For more details on this trial and VC-01, see page 18 of our full report on the Symposium at http://www.closeconcerns.com/knowledgebase/r/b09a28eb.
• Dr. Weir believes that beta cell replication and neogenesis occur in adult pancreases. However, some KOLs have claimed that no new beta cells are generated after a person reaches 25 years old, including Dr. David Harlan (University of Massachusetts School of Medicine, Worcester, MA) at the Rachmiel Levine Diabetes and Obesity Symposium (for more details on Dr. Harlan’s comments see page 8 of our full report from the conference at http://www.closeconcerns.com/knowledgebase/r/b09a28eb). Dr. Weir noted that this hypothesis is largely founded on autopsy research. Autopsy samples from people who were younger than 20 years old, however, also have very low beta cell turnover rates. Dr. Weir therefore hypothesized that the autopsy process might hide evidence of beta cell turnover. In a rodent study, he found that pancreas samples preserved via autopsy conditions displayed significantly lower rates of turnover than control samples (kept at room temperature and then a refrigerator). Thus, he thinks if a number of conditions are met (including that beta cells in adults have 0.5% Ki67 [a protein associated with cell proliferation] and that Ki67 positivity lasts 12 hours), beta cell mass could more than double every 100 days. He believes that new beta cells are generated through beta cell replication and neogenesis and that neogenesis could be more important in humans than it is in mice.
• He reminded the audience that beta cell replacement could be a treatment for type 2 diabetes, as well as type 1 diabetes. Dr. Weir explained that many people who have insulin resistance do not develop type 2 diabetes; those who develop type 2 diabetes often have only 40- 60% of normal beta cell function, suggesting that type 2 diabetes is a disease of beta cell deficiency and insulin resistance. It may be easier to use beta cell replacement for type 2 diabetes since one does not need to concurrently address a person’s autoimmunity.

Questions and Answers

Dr. Denise Faustman (Harvard Medical School, Boston, MA): In type 1 diabetes research, we always hog the islet transplant field. Everyone has woken up and said “type 1 diabetes is a hard field, why have we ignored type 2 diabetes all along?” Type 2 diabetes is an area where beta cell replacement might be easier due to not having the autoimmunity to address.

Dr. Faustman: We were talking about Dr. Melton’s paper. The critical question is whether humans with diabetes already have this compensatory response. If humans already have high levels of this hormone then a pharmaceutical approach with this hormone will not be that useful.

A: The paper did not have a demonstration that if you put betatrophin with islets of beta cells that you get replication. It may be working through an indirect pathway. If it worked in vitro – in test tubes – you might be able to grow islets in culture. They did not take the protein itself and add it to islets showing that there is increased replication. I don’t want to say that it doesn’t work, they were just eager to get the paper published.

CELL-BASED THERAPIES TO TREAT DIABETES

Norma Sue Kenyon, PhD (University of Miami Miller School of Medicine, Miami, FL)

Dr. Norma Sue Kenyon discussed investigations into the possibility of using mesenchymal stem cells (MSC) to prolong islet allograft survival, to enhance engraftment, or reverse rejection episodes. Toxicity of immunosuppressants remains a challenge in islet transplantation (Dr. Kenyon showed data from normal cynomolgus monkeys treated with steroid-free immunosuppression demonstrating a blunted insulin response). Since MSCs have anti-inflammatory, immunomodulatory, and tissue-regenerative properties, they have been attractive candidates for the treatment of type 1 and type 2 diabetes and for the incorporation into islet cell transplant protocols. Preliminary proof of concept has been achieved in rodent and non-human primate models: cynomolgus monkey MSCs prolonged islet allografts in the liver, enhanced engraftment (vascularization), and caused reversal of rejection episodes when administered at the time of rejection (around day 110). Clinical trials are still early stage; as of April 25, 2013, there were 19 open trials for MSCs in diabetes.

PANEL DISCUSSION HIGHLIGHTS

Moderator: Richard Caroddo, MPA (Senior Business Development Executive, Medpace, Cincinnati, OH)

Panelists: Norma Sue Kenyon, PhD (Diabetes Research Institute, University of Miami, Miami, FL); Karen Segal, PhD (Senior VP, Diabetes and Metabolic Diseases, Mesoblast, New York, NY); and Gordon Weir, MD (Joslin Diabetes Center, Boston, MA)

Mr. Caroddo: Betatrophin is the breaking news that you guys referenced. Do you have any comments on the next steps in development? From what I have read it looks like there have been some in-licensing deals: J&J has been mentioned through a small company called Evotec.

Dr. Weir: This got a lot of press. I think that there is going to be an explosion of work on this. It will be easy for people to get the peptide and to inject it into livers and who knows what else. There are important questions to answer; does this hormone have a direct effect on beta cells? And notice that the paper does not address this question. It is kind of odd that they do not have definitive data on that. If it does not work directly on the beta cells than how is it working? I think that the brain is particularly interesting. Is there something that triggers the brain to release factors to the pancreas? The other question is what is its relationship with glucose. Denise [Faustman] brought up a really important question: what are the levels of this in people with insulin resistance. Are we already maximally exposed? An answer to that question will help determine if we add more, whether anything good will happen. The other thing is that the paper only did one test to see if it causes insulin resistance. However, that was a bare bones test. There are too many questions on if it causes insulin resistance.

Mr. Caroddo: On iPS [induced pluripotent stem] cells, there has been a lot of publicity around those because of the Nobel Prize. Can you make any comments on the next steps in the development of possible products?

Dr. Weir: Well I may just again say that I have this preoccupation with type 2 diabetes. It’s great being an academic type because I can daydream about totally impractical things. I’ll bring up the idea of whether we could make iPS cells for each individual. And people say to me, “Oh my God, do you have any idea how much that would cost?” You guys are amazing at running these numbers, and I understand why you have to do that. But on the other hand, once you get some traction the prices fall. So if you think about what the reagents will cost to make iPS cells into some product, the cost of reagents is actually trivial. It’s the development costs. I look at my iPhone and think about the technology that went into this thing yet you can buy it for a few hundred dollars. I don’t know where the next 10-20 years will take us, but I think the idea of using iPS cells for studying pathogenesis is going to largely be academic, but I think assuming iPS cells don’t have weird genetic breaks and things that make them unusable or cause cancer – which all these are important questions – but assuming you can make an honest to goodness beta cell, it seems like all kinds of things are likely to happen, and prices will fall.

Q: Do you have any perspective on how the FDA has been thinking of stem cells?

Dr. Segal: My impression with interacting with CDER [Center for Drug Evaluation and Research] is that the biologics division is extremely enthusiastic on the topic. […] They are focused on the cellular, biologic aspect of it. In my opinion they do not have enough experience with the therapeutic aspect of diabetes and they do not reach out to people who do have that background. They make comments on therapeutic trial design for diabetes that one would never see from the therapeutic area of CDER; just sort of bread and butter diabetes things – inclusion and exclusion – that are standard in diabetes clinical trials. In that respect it is a bit of a challenge. The CDER group is small and they cover every therapeutic use of biologics including cellular therapies. I think their enthusiasm, however, outweighs their lack of background.

Mr. Caroddo: A lot of the discussion here is on treatment approaches. Have there been recent technologies that help with the diagnostic part of it? Are there any technologies that you are very excited about on that side?

Dr. Kenyon: I think there are opportunities with gene expression but the challenge is that it does not add value at this point because we do not have a way to treat people according to the findings yet. The science is ahead of what we are able to do therapeutically. Eventually, I think we will be able to much more quickly assess a person’s status. Years ago I developed a test that could predict if an islet transplant was going to be rejected. It has held true. The problem is how we do not know how to reverse islet rejection. I think there is a lot of technology that will ultimately be helpful.

A NEW TARGET FOR DIABETES

William Bachovchin, PhD (Tufts University, Medford, MA)

In a fast paced presentation, Dr. William Bachovchin, Executive VP, CSO, and Co-Founder of Arisaph Pharmaceuticals, described the potential for treating type 2 diabetes by inhibiting fibroblast activation protein (FAP). He opened his presentation by giving his view that several early-stage DPP-4 inhibitor candidates (e.g., Arisaph’s ARI-2243 [phase 1] and DARA Biosciences/Point Therapeutics’ Glu-boroPro [PT-360; preclinical]) appear to be associated with better glycemic efficacy than those currently on the market. He attributed these candidates’ greater efficacy to their inhibition of FAP in addition to DPP-4. For background, FAP is strongly homologous to DPP-4 and, similar to DPP-4, will cleave GLP-1 and GIP. Arisaph’s preclinical oral selective FAP inhibitor, ARI-3099, does not have acute benefits on glucose tolerance (after first dosing) but is associated with significantly improved glucose tolerance after four weeks of use. Dr. Bachovchin proposed that a selective FAP inhibitor could be used as a monotherapy or in combination with a DPP-4 inhibitor, or that a FAP/DPP-4 dual inhibitor could be an effective treatment option. We think that patients might adhere less well to a drug when they do not see benefits for about a month; however, it could be a more effective option in a fixed-dose combination or dual inhibitor, where the other mechanism of action provides more immediate benefit to drive adherence.

• Dr. Bachovchin presented preclinical data suggesting that ARI-2243 and Glu- boroPro provide superior glucose control to Novartis’ vildagliptin. ARI-2243 produced a 2.5% placebo-adjusted reduction in A1c levels following eight weeks of daily dosing in ZDF rats compared with no significant change with vildagliptin (baseline A1c of ~8% for both) – given that vildagliptin is associated with significant improvements in glycemic control in humans we are surprised by these findings. In another study in ZDF rats, Glu-boroPro did not outperform vildagliptin in an acute OGGT, however it caused a placebo-adjusted A1c reduction of 1.7% after 44 days. In contrast, according to Dr. Bachovchin, vildagliptin was associated with an A1c decline of around 0.5-0.9% (baseline A1cs not provided).
• In addition to improved A1c, ARI-2243 and Glu-boroPro were associated with 1) a~50% reduction in triglyceride levels; 2) improved insulin secretory profiles; 3) increased whole body insulin sensitivity index; and 4) a reduction in fasting glucose levels by 50%.
• Dr. Bachovchin hypothesized that ARI-2243 and Glu-boroPro’s superior efficacy over DPP-4 inhibitors is due to their additional inhibition of FAP. As evidence, he noted that both ARI-2243 and Glu-boroPro are known to inhibit FAP as well as DPP-4 while none of the approved DPP-4 inhibitors significantly inhibit FAP. Additionally, FAP knock-out (KO) mice demonstrate superior glucose tolerance but only in a chronic setting (similar to how ARI- 2243 and Glu-boroPro had superior efficacy over vildagliptin after chronic use).
• Arisaph has a preclinical FAP-specific inhibitor, ARI-3099. In a mouse study, four weeks of treatment with ARI-3099 was associated with a 50% reduction in glucose AUC (as measured by OGTT) compared to control. ARI-3099 was also associated with a significant reduction in blood glucose at 20 minutes (p<0.01), 40 minutes (p <0.01), and 60 minutes (p<0.05). Looking at the OGTT results in individual mice, Dr. Bachovchin noted that the glycemic results were robust.
• Dr. Bachovchin stated that he would not postulate on why FAP inhibition improves metabolic parameters; however, he noted that a high-fat diet only upregulated FAP activity in adipose tissue. During Q&A, he remarked that an FAP inhibitor’s impact must differ from that of a DPP-4 inhibitor because its effects are only seen with chronic use – in contrast, effects are seen with DPP-4 inhibitors following the first dose.
• FAP knock-out (KO) mice exhibit improved glucose tolerance, though to a lesser degree than DPP-4 KO mice (FAP KO vs. control p<0.05; FAP KO vs. DPP-4 KO p-value not disclosed). FAP KO mice appear to be slightly more protected against high fat diet (HFD) induced hyperinsulinemia than DPP-4 KO mice. FAP KO mice on either chow or a HFD had a serum insulin level of ~40 ng/ml, whereas DPP-4 KO mice had a serum insulin level of ~50 ng/ml on a chow diet and ~60 ng/ml on a HFD (wild type mice serum insulin level on chow was ~45 ng/ml and on a HFD was ~110 ng/ml). FAP KO and DPP-4 KO mice are significantly (and to a similar extent) protected from HFD induced weight gain: FAP KO mice and DPP-4 KO on a HFD gained 4% of their body weight, whereas control mice gained ~7% of their body weight. FAP KO mice eat (~4 g/day) less than wild-type mice (~4.5 g/day) and more than DPP-4 KO mice (~3 g/day). FAP KO mice were also resistant to elevated serum cholesterol induced by HFD.

Questions and Answers

Q: It is a small molecule inhibitor?

A: It is a small molecule that is orally active. We have a stable of them. This data suggests that FAP may be a target for an agent that is specific for FAP. However, you might add this inhibitor to Januvia or you might use a dual inhibitor and then you would not need to use a DPP-4 inhibitor too.

Q: Has anybody looked at the distribution of FAP in humans?

A: That data is going to be published very soon. I am publishing a paper on human distribution.

Q: There have been questions raised about fibroblasts and scar formation being impacted by DPP-4 inhibitors? Have anybody studied that in FAP?

A: Not yet. Healing wounds does have more FAP in them than any other tissues, as do tumors. I think that is probably true. I am beginning to doubt if you can target FAP in the cancer environment.

Q: Can you comment on why it is only effective with chronic exposure?

A: I have some ideas but I do not think I can expand on them at the moment. Obviously, it means that it is not doing something like DPP-4 inhibitors that has a spontaneous impact. It is doing something over time.

Q: Are adipocyte macrophages involved?

A: We have not looked at that.

A NEW THERAPEUTIC OPTION FOR INSULIN DEPENDENT PATIENTS

Hakan Edstrom (President & COO, MannKind Corporation)

Mr. Hakan Edstrom reviewed MannKind’s work to develop its inhaled ultra rapid-acting insulin candidate Afrezza (i.e., Technosphere insulin). Mr. Edstrom opened his presentation by recounting both the large burden of diabetes (25.8 billion people with diabetes in the US, according to the 2010 CDC National Diabetes Fact Sheet) and the large market potential for Afrezza (the US market for rapid acting analogs is $3 billion and growing, said Mr. Edstrom). He believes that Afrezza’s time to peak action (12-14 minutes) and duration of action (~2.5-3 hours) gives it a more physiologic profile than rapid acting analogs. Further, he commented that the lower hypoglycemia, lower weight gain, and greater ease-of-use could be important market differentiators. MannKind expects to announce top line results from its phase 3 program the week of August 11, which would enable an FDA filing in September/October. The company anticipates that a PDUFA date in March/April 2014 would follow. This timeline is the same as the one presented in January at the JP Morgan Healthcare Conference (see page 26 of our report at https://closeconcerns.box.com/s/rj1edd12eld3qorndbgl). Mr. Edstrom remarked that MannKind’s manufacturing facility in Danbury, CT can service up to 450,000 patients at launch and can service two million patients after bringing additional capacity online (which would take six months to do post-approval).

• Mr. Edstrom reminded the audience of MannKind’s ongoing phase 3 program to vet its second-generation inhaler DreamBoat. The company’s type 1 diabetes study compares Afrezza delivered via the DreamBoat inhaler (n=133) to Afrezza delivered via the first-generation inhaler (n=133) to conventional rapid acting analog injections (n=133). The study is expected to complete May 17. The company’s type 2 diabetes study compares Afrezza delivered via the DreamBoat inhaler (n=123) to placebo (n=123) in patients failing on metformin or metformin plus another drug. The study is slated for completion on June 12. Mr. Edstrom believes this study will expand the market for Afrezza by enabling earlier use of the product in patients with type 2 diabetes.

Questions and Answers

Q: What will it cost?

A: We expect it to be tier 2, which has a patient copay of ~$25. We expect it to be about same as insulin pens.

Q: Why is there less hypoglycemia?

A: The lower hypoglycemia happens because once you’ve digested your meal, your insulin level is back down to basal so you are not sitting there with a high amount of insulin in your blood.

Q: It doesn’t affect the liver?

A: As we sit down for a meal, and the initial bolus of insulin is released, there is a signal effect to the liver. The belief is that you have such a fast uptake of insulin in the blood with Afrezza that it somehow mimics the signaling effect to the liver.

Q: Where does Afrezza fit into the treatment guideline from the ADA?

A: Our expectation is that patients will probably still start with metformin and maybe something else, but as you get to third type of option, insulin could come into play. Again, Afrezza might get an earlier use, particularly at mealtime and in transitioning patients not to a long acting, but to mealtime insulin.

Q: The trials done were in combination with metformin?

A: In our type 2 diabetes trial, those patients were on metformin. They continue their metformin therapy and then get an inhaler with Technosphere powder.

Q: The challenges of Exubera were at the dosing and pharmacy level. [Editor’s note: this was Pfizer’s failed inhalable insulin candidate.]

A: Afrezza will be at 10 and 20, then 30 and 40 insulin units (IUs). Ten IUs is equivalent to about 3.5 IUs of injected insulin. Our dosing is linear – that was the other problem of Exubera.

Q: In trials with Exubera, patients with type 1 diabetes showed increases in antibodies.

A: We have looked at immune responses, but there was nothing out of the ordinary. Exubera even had different kinetics for smokers – ours doesn’t. We still won’t recommend it for smokers, but in terms of insulin effect, it is the same.

GLYOXYLATE A POTENTIAL DRUG TARGET FOR TYPE 2 DIABETES MANAGEMENT

Dietrich Rein, PhD (Manager, Biomarker Development, Metanomics Health)

Metanomics Health is exploring the potential to use metabolite panels to detect diabetes earlier in disease progression. Dr. Dietrich Rein opened his presentation with a high-level overview of Metanomics’ approach to metabolomics, which includes a pilot phase, identification phase, and validation phase to determine potential biomarkers for a disease and develop a metabolite profile. In type 2 diabetes, the company has identified over 80 metabolites associated with diabetes. Dr. Rein described one of the company’s clinical cohorts for diabetes that contributed to Metanomics’ identification of glyoxylate as a potential biomarker. In collaboration with the Bavarian Red Cross, Metanomics identified blood donors at high risk for diabetes and invited high-risk donors in for an OGTT to determine their diabetes status. Metanomics could then profile each individual’s metabolites at the time of the OGTT and at three previous time points (~1.5 years, three years, and six years prior) by looking at the blood bank repository. Glyoxylate emerged as a potential early biomarker for diabetes (it hasn’t been the strongest marker, but it is an interesting marker, said Dr. Rein). The company aims to better understand the role of glyoxylate in diabetes. Broadly, Dr. Rein believes that Metanomics company-wide efforts can help elucidate disease pathways, contribute to biomarker identification, and contribute to drug discovery.

Questions and Answers

Q: There’s been a lot of interest in microflora and diabetes and obesity. What role does microflora play in glyoxylate?

A: Glyoxylate metabolism is high in gastrointestinal microflora. We did test if it comes from there by injecting glucose – it’s an animal model – but we see the glucose injection stimulated the glyoxylate concentration, so we don’t expect that microflora plays a role.

Q: Is there any data to suggest that glyoxylate is an earlier, better biomarker than glucose?

A: We are putting metabolite panels together from our pilot study that contains metabolites that changed earliest in the progression towards diabetes. We’re working with two large cohorts where we can look at the progression. With panels of metabolites, we will be able to detect diabetes quite a few years earlier. The exact contributions of glyoxylate, we don’t know yet.

TARGETING THE TRKB/BDNF AXIS FOR THE TREATMENT OF METABOLIC DISEASE

Mylène Perreault, PhD (Senior Manager and Lab Head, Pfizer, Boston, MA)

Dr. Mylène Perreault discussed the unsuccessful development of a BDNF-based therapy for metabolic disease. BDNF is a neuropeptide that binds to and activates TrkB to increase neuronal survival, plasticity, and function. Genetic studies have shown that loss-of-function in TrkB or BDNF leads to severe obesity in mouse and humans. These initial data led Pfizer to develop a TrkB agonist antibody called 29D7 that binds to TrkB and activates the downstream signaling cascade. In DIO mice this candidate potently lowered body weight by stimulating appetite suppression, with no effect on energy expenditure. Further studies showed that in ob/ob mice, 29D7 lowered blood glucose levels through pathways independent of body weight. Based on these studies, Pfizer developed a second-generation molecule called TAM-163 for human studies. TAM-163 lowered body weight in multiple rodent species, as well as in dogs. However, TAM-163 conferred the opposite effect in obese rhesus monkeys, increasing body weight by up to 35%. Subsequent studies showed that this species variance cannot be explained by differences in drug exposure or brain localization. Currently, Pfizer hypothesizes that different animals have differing neuronal compositions in the areas accessible to TAM-163; at this time, the theory has not been confirmed. Dr. Perreault ended by reviewing a single-ascending dose study of TAM-163 in healthy volunteers that found no effect of TAM-163 on appetite, food intake, or body weight. She concluded that agents targeting TrkB are unlikely to be suitable as a therapeutic approach for metabolic disorders.

Questions and Answers

Q: When we study the metabolic syndrome, we often see that the patients are at the end- stage of the disorder. They’ve had the disease for probably 20 to 30 years, and now we see them with obesity and diabetes. It’s interesting –your rodent models were already overweight and insulin resistant and had these manifestations. The monkeys were lean and were not the typical kind of metabolic syndrome patients.

A: We tested in two strains of monkeys. Some were lean and some were obese.

Q: Were there differences in the neural physiology between the animals at the early stage of the disease versus animals at the end stage?

A: We didn’t see any difference. There may be some difference in the circulating levels of BDNF, but studies need to confirm this. From lean to obese animals, we saw consistent effects.

Q: The direct question is what would the antibody do in lean mice?

A: They lose weight. We also tried guinea pigs. Every single species we looked at in the preclinical stage lost weight.

Q: Regarding the dose response, you couldn’t go above 120 milligrams?

A: The trial was designed to go above 200 milligrams, but it was limited by the toxicology.

Q: There must be some endogenous regulation of BDNF. How is that affected by the drug?

A: We looked at circulating levels of BDNF after TAM-163 and 29D7, and we didn’t see any effect. Again, it’s not clear that circulating BDNF levels mean much in this disease state.

Comment: I think it’s so valuable at these meetings to present negative data as well as positive data. It also shows the value of doing human trials at an early time point because preclinical models don’t paint the whole picture.

MSIA IN DIABETES ANALYTICS

Urban Kiernan, PhD (Business Development Manager, LCD-Affinity Pipette Consumables, Thermo Fisher Scientific , Boston, MA)

In a very technical talk, Dr. Urban Kiernan posited how scientists can use next-generation technologies to re-examine old biomarkers and generate new insights. He focused on Mass Spectrometric ImmunoAssay (MSIA), a “simple and elegant” approach to purifying proteins and peptides for high- sensitivity analytical measurements. Thermo Fisher’s technology uses pipettes that house a proprietary immuno-affinity column filled with antibodies. The antibodies can bind to analytes (e.g., protein of interest) in complex biological fluid and pull them out of the solution. After a series of separation and purification steps, the protein is ready for mass spectrometric analysis (e.g., identification, quantification, etc.). In discussing the clinical applications of MSIA, Dr. Kiernan focused on two examples. First, he highlighted that MSIA has an advantage over conventional immunoassay approaches because it is able to differentiate between different forms of a target. For example, though insulin has historically been a difficult biomarker to analyze, MSIA can differentiate between Apidra, Novolog, and Humalog. Second, Dr. Kiernan noted that MSIA can be used as a functional bioassay to determine DPP-4 activity. He remarked that this technology could help HCPs identify DPP-4 inhibitor users that are particularly susceptible to developing cancer as a result of the therapy.

Questions and Answers

Q: You mentioned the DPP-4 inhibitor activity assay. Then you mentioned cancer and other changes. I didn’t see the link between measuring the activity level and the actual pathophysiology that you described.

A: That’s a good question. We’ll let the end users look at the samples to see if there is a pathophysiological link. I want to see if there is a biomarker that can identify whether the patient is going down the wrong road and if we need to take him off the DPP-4 inhibitor and put him on an alternative path. The pathophysiology is important and we’ll let other people – much smarter than I am – look at that. This is one piece of data that can be added to a complex picture.

Q: I don’t see the link either. Unless you say that you can identify substrates that are accumulating toxically.

A: I understand your point. This is an example of the technology being able to look at the activity of specific enzymes. This is just a point that’s more applicable to what this conference is doing. There are other systems where this technology can be applied. This may be a piece, it may not be a piece. But there is a clear-cut need with the DPP-4 inhibitors in terms of identifying a biomarker to improve treatment.

Q: [Jokingly] You must have a lot of interest from the Olympics and sports authorities.

A: Actually, not so much with humans because there are legal issues involved. There was the big debacle with Lance Armstrong. But for the regulatory bodies, the less information for them the better because they don’t want to get sucked into the legal aspect. There are other industries, like horse racing, that are keener on getting more information because there is less litigation involved.

CLINICAL PHARMACOLOGY AND THERAPEUTIC EFFICACY OF ANTIDIABETIC DRUGS IN THE DIABETIC MINIATURE SWINE AND NON-HUMAN PRIMATE

Alain Stricker-Krongrad, PhD (Sinclair Research Center, Columbia, Missouri)

Dr. Alain Stricker-Krongrad expounded that the miniature swine and non-human primate represent better models for type 1 and type 2 diabetes, respectively, compared to rodents. To open, he noted that mouse models of diabetes have been heavily criticized, with good reason. While most type 1 and type 2 research has been conducted in rodent models, rodent-based discoveries have been associated with high rates of failure. He concluded that rodent models have extremely limited clinical value and listed several drawbacks to their use. Dr. Stricker-Krongrad then highlighted the benefits of using diabetic miniature swine. Showing several slides of data, he explained that swine represent a valid and predictive model for subcutaneous insulin administration in type 1 diabetes for three reasons: 1) they have the same skin structure as humans; 2) insulin has identical potency in swine and humans; and 3) humans and swine metabolize insulin in similar ways. Dr. Stricker-Krongrad then remarked that while swine represent the best preclinical model for type 1 diabetes, they are poorly suited for type 2 diabetes because they react inappropriately to a high-fat diet. In contrast, non-human primates make excellent models for type 2 diabetes. Monkeys exhibit nearly identical responses as humans after a high-fat diet or SGLT-2 inhibition, and have been used to assess myriad pharmaceuticals. In closing, Dr. Stricker-Krongrad stated that animal models for diabetes should be based on scientific rationale and should be selected to answer specific clinical questions.

Questions and Answers:

Q: So you don’t believe in transgenic rodents that are supposed to mimic humans?

A: If you’re interested in the link between type 2 diabetes and Alzheimer’s, for example, don’t look at the rodent. Look at other animals like dogs or cats or non-human primates. The point is that although initial research is based on what is observed in the rodents, we shouldn’t put too much weight on the data. Let’s go back ten years. Ten years ago, a lot of the clinical failures were due to a lack of safety, poor metabolism, etc. So what did the industry do? It went back to the drawing board to do more safety assessments in the right species. What I’m arguing for is that instead of doing a mouse study and jumping into a phase 3 trial, let’s do more exploratory work in other models.

Investment and Mergers and Acquisitions in Diabetes

PANEL DISCUSSION

Moderator: Richard Caroddo (Senior Business Development Executive, Medpace, New York, NY).

Mostafa Analoui, PhD (Head of Healthcare and Life Sciences, The Livingston Group, New York, NY); Tomas Landh, PhD (Director, Novo Nordisk, Copenhagen, Denmark); and Thomas Kuhn (CEO, Poxel, Lyon France).

Mr. Caroddo: A good place to start might be the partnering deals done within big pharma recently. For example BI/Lilly and BMS/AZ. Can you comment on your perspective on those recent deals among big pharma? Is this a trend?

Dr. Landh: So Novo Nordisk is not very famous for making large alliances in the diabetes area. Trust me, we are approached by many of our colleagues in the peer group from time to time. This has been more frequent in the last two years, indicating the increasing appetite for doing these kinds of AZ/BMS deals. Of course, in diabetes that’s going to be a challenge for us. The pipeline we have at Novo Nordisk does not really permit sharing. Of course the environment can change at any time. We’re watching the whole ecosystem very carefully, from the payers to the regulatory environment. We are, of course, always adapting to that. But right now Novo Nordisk is not taking that approach, but we can clearly see an indication of increase in this type of activity.

Mr. Kuhn: I want touch on that. We’ve seen the Lilly and BI deal. We’ve seen the BMS and AZ deal. We’ve seen it also in Japan – there have been a lot of agreements this way. More and more are coming, even in China and in the emerging countries. I anticipate that given the market access conditions and the regulatory hurdles, there will be more and more deals. We heard this morning that AZ is pleased with its deal with BMS. They rely on these three products now. I anticipate that we’ll see more similar deals among big pharma in the future.

Dr. Analoui: This morning, I saw that Pfizer and Merck announced a major collaboration on the SGLT-2 inhibitor program. The rumor is confirmed. I used to be at Pfizer, and in my tenure there, Pfizer acquired three companies adding up to $30 billion all together. Then we said we weren’t going to do that anymore, then it happened. This type of collaboration can be driven by what a portfolio needs, what a market demands. It can also depend on individuals driving these deals. Big pharma is like musical chairs, someone who was at Amgen is now somewhere else where someone knew someone at Wyeth, and this discussion was ongoing in the past. There’s a very difficult chemistry there. Even if we have our own quantitative method for assessing the value of an asset, we always get surprised by the personal relations angle, which surprises us. In fact you heard this morning of the $210 million private investment supporting phase 3 [for Intarcia’s ITCA-650] – the largest private investment we have seen in recent years. From my perspective, it’s very difficult to purely analyze from a portfolio management aspect. It’s a very complex situation.

Mr. Caroddo: I know that it seems like one of the main drivers of deals among big pharma is that it’s a way to minimize risk. Diabetes drug development is a risky proposition. For you guys, what do you see as the main drivers for the big pharma deals?

Dr. Landh: It’s such a crowded space. Furthermore, combinations are starting to become extremely important. The offerings to the HCP and prescribers are getting more and more complex. Share of voice is extremely important. If you don’t have the share of voice out there, it’s not going to happen for you. When you launch, you know that the first weeks set the trajectory for success. I think this type of collaboration is as much about share of voice as it is about share of risk. That’s my opinion on why we have seen such an increase in the number of collaborations.

Dr. Lauren Shearman (Executive Director Scientific Licensing & Acquisitions, Merck, Whitehouse Station, NJ): With regard to the Merck/Pfizer collaboration, it was a very strategic decision. We recognized that we had a portfolio gap in that we had not developed an SGLT-2 inhibitor internally. In the past, our franchise wasn’t really keen on the mechanism. But with clinical proof of concept and Invokana [J&J’s canagliflozin] getting approved by FDA, that really drove us to continue to consider that type of collaboration. A lot has to do with risk and costs. Given the CVOTs required for these types of therapies, they end up being really expensive large clinical trials, so if you can share it with someone that’s great. And of course, leveraging the possibility of combination therapies is attractive. So an FDC of sitagliptin/ertugliflozin and metformin/ertugliflozin – so with the monotherapy that’s three therapies that we’d get out of the partnership. Each party bringing something to the table to leverage makes it more appealing to both parties.

Mr. Caroddo: Are there any highlights or differences between this deal and the BI/Lilly deal or some of the others?

Dr. Shearman: I can’t really speak to that. It’s a global deal but it’s worldwide ex-Japan –we realized that the drug would have a late entrance to the Japanese market because there are a lot of companies close to filing in Japan. That’s one difference from some of the other collaborations. Also, the deal is just around the SGLT-2 inhibitor. No insulin, for example. So maybe it’s not quite as broad as some of the other collaborations. But you know, you think of Merck and Pfizer as always competing. You always refer to them as the evil empires. We realize that we’re actually more alike than we thought. It ended up being a very good collaboration. Hopefully it goes forward in a good way.

Q: For 50 or 60 years, pharma had a free ride on the Framingham study or similar studies. Those kinds of studies provided biomarkers, and all we had to do was improve cholesterol or glucose or blood pressure levels. And major classes of blockbusters got approved off of those measures. Now outcomes are being asked for, and there aren’t Framingham studies to show SGLT-2 inhibition has done that so it’s going to cost a lot more. So it’s a strategy to reduce the risk of these bigger studies. And we heard this morning from Steve Burrill about outcomes and how important it’s going to be to have those as endpoints as opposed to biomarkers.

Mr. Caroddo: Even if you look at the recent J&J approval [of Invokana], they have a whole host of post- approval studies that they have to do. They’re going alone. It’s pretty expensive.

Mr. Kuhn: All DPP-4 inhibitors and GLP-1 agonists have already started their post-approval trials. It’s just standard now to anticipate that. There’s a huge cost associated with that, as well as a risk. The study design might mitigate some risk, but you still have a risk. From a shareholder perspective, the resources are just tremendous to bring such a product to market. Combining forces can mitigate that.

Q: A question probably for big pharma folks – I’m curious on your perspective on SGLT-2 inhibitors as a class. Clearly it’s not a perfect mechanism. Where do you see it being positioned in the treatment algorithm? And I’d like to hear your perspective too, Lauren, at Merck. The DPP-4 inhibitor/SGLT-2 inhibitor combination has shown impressive and durable A1c control. How do you envision this new pharmacology coming into the marketplace?

Dr. Shearman: I guess that the liabilities haven’t born out too badly yet with respect to urinary tract infections. I’m hearing a lot about other infections, but it’s more a tolerability issue. Given that you’re getting weight loss, the drug is very appealing. Certainly it can be a second or third line therapy. I think J&J is positioning it as a second line therapy. They’re going after sitagliptin. For us, we’re thinking of it as a third line therapy. If someone fails sitagliptin or metformin, we can add an SGLT-2 inhibitor. But J&J is viewing it more as a second line treatment. But it will be determined by the physicians that prescribe it.

Dr. Landh: I would like to make a comment on CVOTs. I think we’re facing an even more challenging regulatory environment, and we’ll simply have to adapt and probably also do more adaptive launch strategies. That’s something that we foresee. We’ve always gone with global strategies so far. As you know Tresiba was not approved here in US but has been approved in a number of other countries and regions. I think it’s very important that we adapt to increased challenges. The regulatory environment changes from time to time. You really don’t know if your outcomes studies will be post-approval or pre-approval. It’s just that nobody can foresee that based on the data. We all try to do the best development plan of course, and this is a really big risk.

Mr. Kuhn: That’s another reason why pharma companies partner. Clearly there are different regulatory considerations in different countries. And pharma companies have different experiences. Some may have more experience in the US, some in Europe. By concentrating all that, it’s a win-win situation.

Mr. Caroddo: Related to that, obviously years ago, there were so many deals between small pharma and big pharma with in-licensing and acquisitions. That seems to have slowed down in the diabetes space, maybe because of the risk. Poxel, as a small company developing a diabetes drug, how do you see that changing in terms of potential partners for you? In general terms, how do you see it in terms of general partners and the appetite of the companies you could partner with?

Mr. Kuhn: Clearly we’ve seen a change there. I think someone said this morning, and we’ve really seen this, is that more and more now pharma is interested in early stage assets. So in the past we used to have this statement that clinical data were important and represented interesting inflection points. Now pharma is interested in the early stages. So there is clearly much more emphasis and focus there, much more than anticipated. Then, as you said, in contrast to that for late stage assets, in terms of ability to progress, as a biotech company you’re limited by financing from progressing on a global scale into a phase 2b or a phase 3 program. So it’s definitely difficult. The discussion with pharma is difficult because of your lack of back up plans.

Mr. Caroddo: From the Novo Nordisk perspective, what is your viewpoint on working with and licensing products from early stage companies? In general, do you view that as an area of opportunity? Or do you look for even earlier stage opportunities and academic opportunities?

Dr. Landh: We are always open minded to any stage. We definitely focus on pre-IP and early academic work. Hopefully, we have not missed too many opportunities in the clinical stage. If we did, I would probably lose my job, I guess. But we see even collaborative efforts pre-IP before there have been any IP generated. That’s the trend for us. I think that many pharma companies are following that. We also see that there were collaborations between big pharma and medium-sized pharma a few years ago. That has dampened. Now we are trying new models. Now it’s more pre-IP discussions with academia. That’s where it’s going now. We realize that we can do so much more in supporting them for both the translational aspect of a new target, and also in exploring new areas that we might be interested in. So we can direct them in the way we’d like to see.

Mr. Caroddo: From an investment perspective, obviously some big pharma companies have done strategies for partnering with VCs. GSK did that deal with Avalon to set up smaller companies. Merck, I’m sure, has done things setting up virtual-type companies. Is that something that will continue to happen as a way for bigger companies to spread the risk and get multiple product opportunities?

Dr. Analoui: That seems to be a strategy. The idea is creating small pockets of research that collaborates with local academic communities and also, interestingly, creating venture funds they co-invest in with other companies. And even more interestingly at that, like what Merck has done, companies are now developing two types of funds: one that is invested strictly in the line of the product or business, and something like a global health or innovation fund that Merck and others have. In such a fund, they invest generally in tools and platforms that may or may not directly benefit Merck but in general moves the ball in the right direction. That shows some open-mindedness of pushing science, since it benefits the whole of pharma companies. Similarly, there are private/public partnerships involving NIH. Those are all positive signs. Bear in mind that for some, it’s very difficult for pharma to make a quantitative assessment of what the ROI is. Based on my experience, I was involved with an initiative, they tend to die very quickly. As the next bean counters come to the table, they say, “Alright this is the money to put into this particular initiative, what is the ROI?” It’s very difficult to measure, and therefore they have a very short lifespan. Now coming back to give you our perspective on the M&A side, before today’s discussion I looked at our database to see if I could come up with some meaningful numbers regarding diabetes. Because it’s so sparse, it’s hard to say, but to give you a general landscape on what’s happening in M&A in the past 12 months, definitely M&A is up in terms of multiples. When you look at multiples of 2012 compared to the first part of 2000, we have gone from 1.5X to 3.4X, which is very important. That means that buyers are willing to pay and pay more these days. The other thing that was surprising for me was that the multiples for European deals were almost half of what we pay in the US. It seems to me that either you’re doing bigger deals that are more expensive or more optimistic deals. It’s hard to say what the reason is. These are all positive in my view. The negative side here is still you’ve gone from five years from initial investment to exit to roughly nine years of investment required for companies to exit. That’s the challenge we see in smaller biotech. Is there enough to support them and keep them alive to support them until exit?

Mr. Caroddo: Regarding the nine years, it seems to be on the horizon of what a traditional investor will stick around for. Is that a limitation?

Dr. Analoui: That’s definitely a limitation. The typical life in healthcare is about 10 years. From coming in to getting out – if you add the due diligence and exit – at best, you’re looking at 12 years. And this is the nature of life science investments. Sixty percent of investments never pay off. Maybe you lose money. Of the other 40%, some break even and some will make money for the investment. That’s always the general rule. It’s difficult for those coming from other fields to see these numbers – they seem quite shocking. If you look at the odds of drug development, from screening to the end of phase 3, what is the chance of success? Even if you have an FDA approval, it doesn’t ensure that you will make money.

Dr. Landh: Mostafa, do they have any figures on returns or multiples for diabetes in the Saudi area?

Dr. Analoui: I do have numbers in my database. The numbers are so sparse, and taking the average creates very unrealistic numbers. The easiest way is to just share the numbers. Most of the numbers are not publicly available. Pharma does not disclose, so we have to rely on our sources or use our best guesses in these areas. That’s why we don’t publish these numbers – because we’re not sure this is 100% comprehensively accurate.

Mr. Caroddo: Another topic is the indications associated with type 2 diabetes. In addition to the disease, you have other comorbid conditions. Do you see any of those associated areas or indications as investment areas? As the incidence of type 2 diabetes goes up, the incidence of some of these diseases will go up as well. Is there an opportunity there?

Dr. Landh: We entered the area of late complications only two years ago. We’re newcomers to the field and have almost nothing in the clinical pipeline. We’re very open minded to listening to big pharma in this area. We clearly see that some of the microvascular complications are difficult to pursue due to the endpoints and the lack of biomarkers. There are some challenges there. But we have announced that we’re focusing on retinopathy and nephropathy. There are definitely some low hanging fruits in those areas. It’s being vigorously explored by other companies so competition will be sharp, but the unmet need is enormous. Of course, we’ll focus on proteins and peptides, and certain mechanisms of actions that we have not disclosed. However, when it comes to the macrovascular complications, it’s difficult for us. We’re not a cardiovascular company. We’re in diabetes and diabetes, and more diabetes. The cardiovascular component is certainty a big part of it. But that’s an area where I think we’d very much welcome a more collaborative effort. The unmet need is there – there’s no doubt about that.

Mr. Caroddo: Is it a different sell, though, from a marketing point of view if you get a product to market with associated implications would that require new capabilities at Novo?

Dr. Landh: Definitely, but that’s a luxury problem at that point. In a way, we also have done that for a number of years – we design any diabetic asset to have benefits for CV or complications. And that’s always been something we strive for. So if we find a new blood glucose-lowering agent, we would definitely then try to identify an additional, or multiple additional, benefits for comorbidities or complications. We always do that. But we don’t see ourselves launching something in the future that doesn’t have these properties.

Dr. Analoui: I think that part of your question is related to whether the pharmacologic solution is the only player in this market. It seems that therapeutics is the central focus of today’s conference. From our perspective, we see a lot of device approaches either for the management of diabetes or for the following complications. I think that that Ed Damiano talked about the feedback loop system that he’s created for optimizing diabetes. When you look at it and see that there is a 40% lack of compliance among diabetes patient that are undertreated, you can achieve a lot by optimizing treatment. So we see a lot of efforts from our perspective. Companies are coming up with solutions in those areas. As you go downstream in the disease progression – one of the most brilliant efforts that we haven’t dared to touch yet (because it’s too early) is the regeneration of kidney tissue that’s being done at Massachusetts General Hospital. It’s so fabulous that it’s hard to believe. We see those activities – anything from a software to the recreation of kidney tissue. From our perspective, we consider them as a diabetes portfolio.

Mr. Caroddo: Is anyone in the audience involved in devices or diagnostics?

Comment: I think one of the things you brought up was late stage disease affiliated with diabetes but that happens much later. Foot ulcers is one of those indications that has very few treatment options available. I didn’t hear much about any of the big or small pharma companies spending lots of resources developing treatments for it. The biggest problem is an endpoint. It’s very hard to reach a conclusion primarily because there’s not much debate on it. For example is a person’s foot closer good enough vs. getting complete closure? There have been lots of things that have not been brought up.

Dr. Landh: We’re not interested because of the lack of endpoint. So we’re into this loop now. We’re very open minded – if there is good evidence for new endpoints, we’d go into this area as well. However, we would not go into topical treatments. That’s not our focus.

Mr. Kuhn: I think another aspect of tackling microvascular complications specifically has been the years and years of work and the many failures, unfortunately. I work in pharma, and before I worked a lot on neuropathy for diabetics. We made huge investments there, and we never succeeded despite investing in one target after another. So I think nephropathy is currently where there are several cases – the endpoints are more clearly defined. You’ve got biomarkers, and in terms of the clinical progression, you can work into that. The potential is just enormous there like you said. So we shall see, but I think the risk is so high that pharma and even biotech are not fully ready to jump into this.

Mr. Caroddo: On the topic of diabetic foot ulcer, there’s one company that’s doing a pivotal study in diabetic food ulcer. I only bring this up because they’re a small company. Clearly, with an indication like that, they can finance a program in that specific indication. I’m sure that if it were for the larger type 2 population, they wouldn’t be able to finance it. It’s an example of a specialized indication where a company could go alone.

Comment: We took a different tactic. We have an integrated practice unit, an IPU, or what Michael Porter calls organizing around the condition. We created a composite disease severity index. Every patient with a type 2 diabetes diagnosis, when they come through they get a phenotypic diagnosis. We’re building an IT platform that is an EHR-coded diabetes registry, which allows it to be mobilized. We’re creating a population where you can study biomarkers and a real world patient population for new drugs. Or for old drugs you can see where they work. We’re on the other end of things, but we think there’s going to be a meeting of some sort.

Comment: I hear your points that the endpoints are not very clear. What we’ve seen is that the interest in the small companies have been a little higher on those comorbid conditions, primarily because there is a lot of flexibility, regulatory-wise, for defining the endpoints and defining your disease outcomes. There have been some success stories, primarily because it doesn’t take a lot of investment to do a medical device trial, for example. Since the endpoints are not very defined, you know very quickly with a small population if it’s working. When we went to the FDA for discussion, we saw a lot more flexibility in terms of accepting different approaches. But we’re seeing very few of those from companies that have more experience than the smaller companies.

Dr. Shearman: I was just going to say that we have a similar strategy to Novo Nordisk with regard to diabetic foot ulcers. We’re also not interested in topicals, but we have a more opportunistic view on it. If someone has phase 3 data, we are interested in looking at it.

Mr. Caroddo: One other topic to address is emerging markets. Tomas, we were discussing Novo Nordisk in China earlier. Maybe if you guys could speak to if you see certain countries or regions as drivers of investments or acquisitions that you might make. Or is it just part of an across the board strategy?

Dr. Landh: So we invest heavily in China, of course. There’s no doubt about that. We’ve done that since 1989. It’s a long-term investment that has paid off fairly well in diabetes. Quite often, that’s new to a certain extent – we are more and more forced to make investments in emerging markets to have market access. This is of course both good and bad, I would say. It’s something that we oblige to. But that’s new when you enter emerging markets in particular. You can see this trend in the Mediterranean area, in  North Africa, and in the Arabic regions. Diabetes is common in Africa. There’s much more undiagnosed diabetes of course. There’s an enormous untapped opportunity in Novo Nordisk getting people to be   under control and compliant. Any innovation in that space would help so much, even more so in emerging markets. Because there, you have the issue where people can’t afford to buy 30 days of insulin supply. There is no way. You have to be innovative in that space. There’s a lot of room for innovation and opportunity.

Mr. Caroddo: My understanding is that Novo Nordisk has done it more as an in-house approach to setting up operations and marketing in countries as opposed to doing any kind of joint venture partnerships.

Dr. Landh: As I said, we are not very famous for these kinds of partnerships. When we can do it on our own, we try to do that.

Mr. Caroddo: Mostafa I know this is a bit of a general question, but do you see investment opportunities revolving around specific countries?

Dr. Analoui: Again, we haven’t made any investment in those markets. This is based on my personal experience. It’s clear that diabetes is growing much faster than many other areas. I have a couple of observations. You know that in India, there has been a lot of progress in creating different types of insulin. Biocon is probably the poster child there. They’ve managed to create so much insulin that they’re selling it to their western counterparts. That’s a good sign. There’s a positive parameter in those areas: most healthcare systems in those areas are managed by the government. So they can tolerate a little bit more expensive therapies and solutions for the population. What makes it difficult is the lack of general education and adherence with treatment. These are based on my personal experiences.

Comment: I actually had five trips to mainland China in the last year. One was to see a diabetes hospital that they are building in a third-tier city. I started to get some understanding of the Chinese system and the emerging market that’s there. And then another opportunity I had, because I’m an infectious disease specialist, was to do a consult in an infectious disease ward in Ganzhou. What we found is that it’s very different on the ground from what we hear here in the US. Most people there cannot afford the types of drugs we can afford, and the providers and hospitals don’t even have access to the drug. This patient had scrub typhus, and they didn’t even have IV doxycycline. What we’re told, and what is actually happening, is sometimes different. What is definitely happening is capitalism driving a fee-for-service model like in the US a few decades ago. The hospital worries about making the money and the patient is discharged with no structure to manage care at home. From a capitalistic standpoint, that’s what’s driving the emerging market there. They’re really not interested in some things we’re interested in, like improving health and improving wellness. So there’s a real disconnect there. It’s like we’re talking about two different incentives.

Dr. Landh: It’s extremely important to meet with the Chinese government, both local and central. We can help them a lot. We have academic programs. We’re really trying to educate both the HCP and physicians and the patients – the whole value chain. It’s extremely important that we take that responsibility once we’ve been granted a marketing authorization in China. We have a responsibility. They want to give care to everyone in China. But it’s 1.3 billion people. That’s not easy, especially from a logistics perspective. We can help them.

Comment: In spending time with them, they are very suspicious of Americans and very suspicious of anything western. So that approach, “let me help you understand this,” is sometimes rebuffed because   they believe that they are the Middle Kingdom. So part of this is that “we don’t need to be told what to do.” It’s a fascinating culture, and I’m speaking from experience.

Dr. Landh: That’s not the approach you should take, of course, you should try to take a much more humble approach and a “let’s do this together” approach. If you do it in the right way, it’s very successful

Comment: And it’s not just how you frame it, they have a long history of distrust of the West, and it’s hard to get over. And I’m speaking from an American standpoint here from interactions with many different people. Many people coming from the West say doing business in China is challenging. Companies can suddenly be nationalized. I know people like Novo Nordisk have been doing this for a long time. But unless you have, it can get very dicey.

Comment: I’ve been to China more than 40 times. At one point, I owned a pharma company there; it was a disaster. What we know is that China had a national healthcare system not unlike a place like Cuba. That has essentially been destroyed in the last 12 years. They put in a new system built around doctors writing prescriptions for expensive medications. That system now has 900 million people without healthcare. We think we have problems with our healthcare system – China’s got it in spades. It is going to be a huge problem going forward. It is a system that is designed in a capitalist model and it’s designed for the 300- 400 million people that, on a world standard, are lower-middle class.

Innovative Partnering & Licensing Strategies

SURVIVAL OF THE FITTEST: INNOVATION HURDLES AND CONTEMPROARY DEAL MAKING IN TYPE 2 DIABETES AT HEPTARES THERAPEUTICS

Daniel Grau (President, Heptares Therapeutics, Hertfordshire, UK)

Daniel Grau introduced us to Heptares’ two discovery-phase diabetes programs: Heptares aims to develop a small molecule oral GLP-1 agonist for type 2 diabetes and a GPR39 agonist. Mr. Grau stated that Heptares solved the structure of the Family B G-protein coupled receptors (GPCRs), the family of which the GLP-1 receptor is a member, and that the company has identified novel binding sites that are applicable to GLP-1 agonism. Thus, Heptares aims to develop a small molecule GLP-1 agonist that can fit the GLP-1 receptor and that can be taken orally. Mr. Grau described GRP39 as an emerging GPCR target that requires zinc as a cofactor. He explained that a number of animal models have suggested that GRP39 could be disease modifying, as it is not just protective of beta cell function, but also appears to promote beta cell neogenesis (he did present specific data on this front).

PARTNERING OPPORTUNITY: NEXT GENERATION GPR119 AGONIST, ARRY-981

Brad Fell, MS (Senior Research Investigator, Array BioPharma, Boulder, CO)

With Array’s shift in focus to oncology, the company has decided to license out its GPR119 agonist, ARRY-981. ARRY-981 is an incretin secretagogue and a glucose-dependent insulin secretagogue. Brad Fell presented Array’s preclinical data on the compound in hopes of catching the eye of a sourcing director in the audience, stating that if Array had the funds to allocate to diabetes, it would have taken this into phase 1 on its own. Array has completed preclinical studies for ARRY-981, and it is ready for IND submission (this is the first update we have heard on the compound’s status since Array announced the commencement of preclinical studies). For more background on ARRY-981, please see our report on Mr. Fell’s presentation at GTCbio 2012 on page 6 of our GTCbio 2012 Day #2 report at  http://www.closeconcerns.com/knowledgebase/r/24d6f92d.

• Mr. Fell stated that ARRY-981 is different from previous clinical candidates in structure, has shown superior efficacy in preclinical trials, and has improved physiochemical properties (Mr. Fell stated that “poor physiochemical properties have plagued this field”). In terms of structure – whereas GSK’s, Arena’s, and Metabolex’s candidates were structurally very similar, ARRY-981 is structurally distinct. According to Mr. Fell, ARRY- 981’s unique structure gives it an advantage in terms of solubility, which has translated into a favorable PK profile. He noted that Array has demonstrated the efficacy of ARRY-981 with mixed- meal tolerance tests and oral-glucose tolerance tests in ZDF rats to address previous issues seen with Arena/J&J’s candidate (details below). ARRY-981 has shown durable and superior glucose- lowering in 28-day studies in ZDF rats and DIO mice compared to other GPR119 agonists, and the 3 mg dose has demonstrated additive efficacy in combination with metformin, sitagliptin, and dapagliflozin (with a synergistic effect on nonfasting glucose in combination with metformin). It has also been shown to lower triglycerides.
• Mr. Fell remarked that, “The clinic has not been kind to GPR119.” Four clinical candidates have been dropped or have had rights returned: AZ returned the option to Prosidion’s PSN-821 in 2012 after a phase 2 study in type 2 diabetes; Sanofi returned rights to Metabolex’s MBX-2982 in 2011 after a phase 2 study; J&J returned rights to Arena’s APD-597 in 2011 after a phase 1 study in type 2 diabetes patients in which modest single-dose AUC glucose lowering did not translate into meaningful 24-hour weighted mean glucose lowering after 14 days (J&J also stated that it was not effective in the presence of food); and GSK halted development of GSK1292263 in 2011 after a phase 2 study in type 2 diabetes in which the compound did not reduce 24-hour glucose profiles on day 14 despite reductions in AUC glucose on day 1. To our knowledge, companies continuing to develop GPR119 agonists include Zydus Cadila (ZYG19, phase 1) and Neurocrine/BI (preclinical).

Questions and Answers

Dr. Tomas Landh (Novo Nordisk, Copenhagen, Denmark): What was the primary reason for letting these diabetes assets of yours go?

A: We had, and we have had, a number of different therapeutic areas we’ve worked on. We felt that in order to be competitive, we needed to focus. We partnered 11 projects with different people. Seven, well six are in phase 2, one in phase 3. The projects we’ve kept in house and pushed into clinic are oncology projects. So we felt that as a company we should focus on those. That’s it. So we’re now an oncology company.

MERCK’S PARTNERING STRATEGY IN METABOLIC DISEASES

Lauren Shearman, PhD (Executive Director of Scientific Licensing & Acquisitions, Merck, Whitehouse Station, NJ)

Dr. Lauren Shearman reviewed many facets of Merck’s partnering strategy in diabetes. Most interestingly, she discussed Merck’s expectations for the future of the diabetes landscape, described what Merck sees as the unmet needs in diabetes, and identified Merck’s strongest areas of interest in next generation oral therapies. Notably, Dr. Shearman commented that fixed-dose combination (FDC) is “where everyone is going” and forecasted that very few new oral mechanisms would emerge in the next five years. Like many others today, Dr. Shearman expressed the sentiment that new diabetes therapies need to do more than “just” lower glucose, whether it be reducing risk of macrovascular or microvascular complications, protecting beta cell function, or simplifying current treatments.

• Dr. Shearman outlined her expectations for the future of the diabetes landscape. She forecasted that metformin would remain the mainstay first line therapy, with the use of sulfonylureas (SFUs) continuing to decline; that safety concerns would continue to impact the TZD class, limiting the impact of pioglitazone going generic; that the DPP-4 inhibitor class would continue to grow and increasingly displace SFUs and TZDs; that GLP-1 agonists would continue to grow, primarily in obese patients and those failing oral therapy; that insulin analog use would continue to grow, especially in emerging markets; and that very few new oral mechanisms would emerge in the next five years. She speculated that perhaps GPR40 agonists could make an entry, but beyond that, there does not seem to be an obvious next wave of oral therapies.
• In Merck’s view, the unmet needs in diabetes include new therapies that can be used in combination with existing agents to improve glycemic control; therapies with improved durability that prevent or reverse beta cell failure; therapies that reduce risk CVD or other comorbidities; therapies that prevent the onset, delay progression, or reverse microvascular complications (though one could also argue that achieving good glycemic control would effectively achieve the prevention of microvascular complications); insulins with improved benefit/risk profiles (e.g., with regard to hypoglycemia and weight gain); therapies that simplify treatment and improve adherence (she stated that fixed-dose combinations is “where everyone is going”); and obesity agents that are safe, efficacious, and well-tolerated.
• Dr. Shearman highlighted glucose-dependent insulin secretagogues, novel insulin sensitizers, and novel gut peptides as Merck’s areas of focus in developing next generation oral agents. Merck publishes its areas of interest twice a year (in January around JPM and in June around ADA) that can be found at www.merck.com/licensing.

NOVO NORDISK PARTNERSHIP AND DEVELOPMENT STRATEGY

Tomas Landh, PhD (Novo Nordisk, Copenhagen, Denmark)

Dr. Tomas Landh discussed Novo Nordisk’s R&D strategy and focus. He stated that Novo Nordisk does not “entertain drug discovery of small molecules anymore” and focuses solely on protein development, since this is where its expertise lies. Notably, he relayed that Novo Nordisk’s strategy is to use phase 1 studies as more of an exploratory development stage as opposed to only advancing compounds to phase 1 that it has an interest in pursuing commercially. After the phase 1 experience in the clinic, Novo Nordisk continues to tweak and mutate candidates to optimize their PK/PD profiles. Dr. Landh described the research strategy at Novo Nordisk as “focus, focus, focus, on insulin and GLP-1 in diabetes and obesity.” Novo Nordisk is now heavily focused on the oral delivery of these peptides and is also interested in the concept of tailored tissue selectivity (Dr. Landh says he would like to see an insulin that targets the liver). In line with sentiments expressed by others at this meeting, Dr. Landh stated that glucose-lowering is no longer enough; diabetes drugs must have some additional benefit. Worryingly, Dr. Landh stated that the number of new targets being investigated for diabetes has been declining. Novo Nordisk has created new strategies to encourage innovation: 1) the Diabetes Innovation Award program, which awards $150,000 or $500,000 competitive research awards; and 2) Novo Nordisk is hosting diabetes research summits in which academics are invited to submit ideas in a discussion-based setting.

Diabetes and the Metabolic Syndrome Drug Development

TRIALS AND TRIBULATIONS OF CARDIOMETABOLIC DRUG DISCOVERY

Sethu Reddy, MD, MBA (VP US Medical Solutions, Merck, Whitehouse Station, NJ)

Dr. Sethu Reddy delivered a broad-ranging and comprehensive overview of the mounting challenges that cardiometabolic drug developers face and also proposed meaningful future steps. He opened by presenting the new NHANES analysis of diabetes goals (published just last week in NEJM) demonstrating that we haven’t optimized current cardiometabolic therapies. Dr. Reddy identified many socio-political factors that pose challenges to cardiometabolic drug development, including 1) unrealistic expectations from KOLs and the public for the “perfect drug” and 2) the swiftness with which drugs that work for the majority of the population can be written off if any safety concern arises in a small minority. Dr. Reddy also discussed challenges for developing drugs for prediabetes, stating that a regulatory pathway is not in place because of a lack of good endpoints. Dr. Reddy then enumerated various novel drug classes coming through the development pipeline, opening with the caveat that many agents presented at meetings like these “are not actually going anywhere” and that people share the data to demonstrate that the mechanism has been validated. He then identified a number of new approaches for future diabetes therapies, bemusedly stating that the evidence is accumulating for gut flora playing a role in precipitating obesity: “Obesity and type 2 diabetes may actually be infectious diseases. When this idea came up a decade ago it sounded like something from the middle ages. There is a wealth of data now.” He stressed that patients would benefit from pharmaceutical companies developing comprehensive behavioral programs in conjunction with drug development – he reported that having a patient championship program alone can lower A1c by 0.6-0.7%. He closed with a number of elegant analogies, for example, stating, “We are attempting to alter the journey, when the train has almost arrived at its final destination.” We commend Dr. Reddy for not only conveying the enormity of the challenges that pharmaceutical companies now face in developing cardiometabolic drugs, but also for offering actionable and meaningful steps forward.

• Last week’s publication of the new NHANES analysis of goal achievement for A1c, blood pressure, cholesterol, and smoking cessation demonstrates that we have not optimized current cardiometabolic therapies. The percentage of people achieving an A1c<7% actually declined between the 2003-2006 to 2007-2010 periods (Ali et al., NEJM 2013).
• Dr. Reddy discussed his thoughts on the greatest challenges to cardiometabolic drug development.
  • Macroenvironmental factors (what he identified as socio-political factors) include 1) unrealistic expectations set by KOLs and the public that there is such a thing as the perfect drug in diabetes; 2) loss of sight of the “greater good” and the silent majority when deciding to take a drug off the market due to adverse events that occur in only a small minority of the treatment population – Dr. Reddy would like to see a pharmacoeconomics study looking at health outcomes after loss of access to an agent (presumably he is referring to TZDs); and 3) the highly connected world with a minimal attention span that propagates impetuous reactions to small but attention-grabbing safety concerns – Dr. Reddy relayed that a friend recently lamented to him that it takes the most rigorous evidence to gain approval but only the flimsiest evidence to lose it.
  • Microenvironmental (relating to pathophysiology) challenges include 1) the complex, heterogeneous pathophysiology of diabetes and obesity (making it impossible to target only a single gene or pathway to achieve clinical success); 2) the need to better predict responders vs. non-responders; 3) risk stratification for more targeted diseasemanagement; and 4) the “four-dimensional nature” of the disease (that it involves multiple hormones, multiple pathways, multiple organs, and multiple decades). Dr. Reddy stated that longitudinal assessments would be more effective than the current cross-sectional approach we take where we see patients and diagnose them at the tail end of the pathophysiological symptoms.
  • Developing drugs for diabetes prevention is a challenge, Dr. Reddy said, due to a lack of “anatomical” endpoints and our inability to clearly predict who with IGT is most likely to progress to diabetes. Dr. Reddy stated that a regulatory pathway for prediabetes needs anatomical endpoints that demonstrate altering of the disease’s natural history rather than just glucose endpoints, since IGT is not a perfect predictor of progression to diabetes. Notably, during Q&A, Dr. Reddy seemed to suggest that it was the FDA that requested BMS submit metformin for a prediabetes indication, though we are not clear if BMS is moving ahead on this. Dr. Reddy’s believes that a TZD used in combination with “one of the newer classes of drugs” would be the best choice for prediabetes.
• Dr. Reddy provided his opinion on novel drug classes currently in development, stating that many agents presented at meetings like this “are not actually going anywhere” and that companies are willing to share the data because they’ve proved the mechanism but won’t actually be licensing or marketing it as an end product.
  • Glucokinase activators (hepato- and non-hepatoselective): Dr. Reddy stated that these have been associated with hypoglycemia and a lack of durability, leading him to think they would not gain market acceptance in their current forms. Additionally, some agents have shown liver toxicity. On the positive side, some researchers have posited that targeting glucokinase in the brain may reset hypoglycemic unawareness, which could be a huge gain for type 1 diabetes.
  • Novel means of insulin absorption: Dr. Reddy pointed out that while we’ve been working on oral insulin for almost 20 years, it still has not come to fruition. Since, at this point, it does not seem like one can make an oral or inhaled long-acting insulin, Dr. Reddy expressed doubt that short-acting oral insulins would be a great stride forward with regard to convenience, since patients would still need to take regular injections of basal insulin. However, we still believe that going from five injections a day to one can be huge for someone who is needle-phobic, and that oral short-acting insulins can pave the way for one day having an injection-free insulin regimen if an oral (or inhalable or transcutaneous) basal insulin is ultimately developed. Dr. Reddy also mentioned that Halozyme was working on enhancing insulin absorption (with PH20).
  • GLP-1 analogs: Dr. Reddy alluded to companies exploring a one-to-two dose/year analog (i.e., Intarcia), stating that he hopes it is well accepted by patients.
  • Dual PPAR alpha/gamma agonist aleglitazar: Dr. Reddy commented that it was interesting that Roche was emphasizing the cardiovascular aspect of the drug and minimizing the metabolic aspects in the regulatory process.
  • Glucagon receptor antagonists are thought to be very powerful but none have come to late stages of testing. Concerns have been raised about increases in LDL cholesterol and blood pressure. Dr. Reddy stated that in the current regulatory environment, a drug that lowers blood sugar well but raises LDL by 10% is a “non- starter.”
  • FGF-21 analogs: Dr. Reddy stated that Lilly was leading in this field but that its candidate failed to show the same effect in humans as it did in rodent models. A frequent topic of discussion at this meeting has been the inadequacy of rodent models.
  • GPR-119 analogs may have synergistic effects with DPP-4 inhibitors, since GPR-119 analogs are incretin (and insulin) secretagogues. Dr. Reddy stated that Takeda is leading the way in this area (though to our knowledge, Takeda has a promising GPR40 agonist, rather than a GPR119 agonist; we believe GPR119 agonists have met pretty difficult challenges in clinical trials).
  • PTP-1B inhibitors show early indications of glucose-lowering, reducing triglycerides, and reducing weight.
• Dr. Reddy proposed several (in his words) potentially controversial future approaches to developing novel cardiometabolic therapies. He stated that the evidence is accumulating on the importance of differences in gut flora between lean and obese people and that we might even conceivably think of obesity or type 2 diabetes as an infectious disease using such a model. He also identified metabolic surgery as an important tool for learning how to develop new medical advances, but called it an antiquated procedure for weight loss.
• Another means of improving drugs’ success that Dr. Reddy proposed was to have pharmaceutical companies develop complementary behavioral intervention programs. He proposed that if companies were able to patent and systematically develop such programs as part of a drug’s clinical trial program, that that would provide a very effective means of improving drugs’ effectiveness. He stated that studies have shown that patient championship programs alone can lower A1c by 0.6-0.7%, which is “as good as any drug.”

​Questions and Answers

Q: Can you comment on prediabetes?

A: In what way?

Q: Management and how you hope to see that situation evolving?

A: Right now, we know that the FDA has asked BMS to file for the indication for metformin. Many internists, proactive internists are already using metformin off-label. Unfortunately there is no official indication for metformin so no pharmaceutical company could promote it to physicians as a prediabetes treatment. People have also used starch blockers. There has been experience with TZDs but the downside is we don’t have the same long history of experience that we do with metformin. So people feel more comfortable with metformin. Of course there’s the DPP study in the US. My personal belief is that a TZD with one of the newer classes of drugs might be phenomenal, but I think the TZDs are going to have a challenge going forward. Early use of insulin hasn’t been shown to be effective in preventing diabetes. The lifestyle and exercise are still going to be critical. Are you making a political point or what did you want me to say?

Q: The question really had to do with the fact that you’ve got a very nice indicator, which is fasting blood glucose. The question is whether the intervention really slows that or not and whether there’s a different endpoint one could use to treat patients.

A: In reality it’s not as clear-cut as you say. There are folks at 105 mg/dl, 110 mg/dl who, ten years later, are still the same. I know one of the most reliable markers is beta cell secretion. If you follow people with IFG, those who have dropping of insulin secretory capacity will really develop diabetes.

HYPERSECRETION OF INSULIN NOT INSULIN RESISTANCE AS THERAPEUTIC TARGET

Barbara Corkey, PhD (Boston University School of Medicine, Boston, MA)

Dr. Barbara Corkey explored the possibility that hypersecretion of basal insulin, as opposed to the more-frequently studied insulin resistance, may play a central role in diabetes etiology. Dr. Corkey explained that since researchers have spent years trying to cure insulin resistance, and thus diabetes, without success, that led her to question whether hyperinsulinemia is the problem as opposed to the solution. She presented a convincing line of evidence, showing that 1) it’s quite clear that hyperinsulinemia can cause insulin resistance; 2) some environmental agents can increase insulin secretion in the absence of a stimulatory fuel (i.e., without glucose or fat); thus, insulin resistance may be a beneficial adaptive response to hypersecretion of insulin; and 3) a drug could, fairly easily, be designed to decrease basal insulin secretion while preserving glucose-stimulated insulin response. Dr. Corkey published an article in Diabetes Care in 2012 in which she explores this topic (you can read the article at http://care.diabetesjournals.org/content/35/12/2432.extract).

• Hyperinsulinemia can initiate insulin resistance: if normal beta cells are exposed to 18 hours of elevated fat and glucose, basal insulin secretion more than doubles, while glucose- stimulated insulin secretion declines slightly. When rats were put on insulin minipumps over 10 days, their starting glucose values were normal. But at the end of the experiment, the hyperinsulinemic rats had an impaired glucose response.
• Thus, insulin resistance may be an adaptive response to serve to maintain normoglycemia in the presence of high insulin. In such a model, some environmental agent precipitates the hyperinsulinemia, and insulin resistance would actually be a beneficial adaptation in order to avoid hypoglycemia.
• Dr. Corkey has investigated a number of environmental factors that have changed in the past few decades that could also cause hyperinsulinemia. These include increased exposure to monoglycerides (used as emulsifiers and preservatives in dairy), artificial sweeteners, and iron (increased consumption of red meat increases iron consumption). All of these three were associated with increased basal insulin secretion in the absence of a stimulatory fuel.
• Dr. Corkey suggested that developing an agent to inhibit basal insulin secretion without compromising the glucose-stimulated insulin response would not be terribly difficult. Using islet cells isolated from the Zucker rat model, Dr. Corkey’s group showed that rimonabant decreased basal hypersecretion due to obesity or glucolipotoxicity (GLT), that it did not affect glucose-stimulated insulin secretion (GSIS) relative to basal insulin secretion in islets from obese rats, and that it improved GSIS in GLT islets. The fact that a successful compound could be identified through a screen, Dr. Corkey asserted, suggests that drug companies with expertise in designing molecules could be successful in designing a drug for this purpose. As a reminder, rimonabant is an anti-obesity cannabinoid CB1 receptor agonist that was withdrawn from the market; previously it had been shown to improve glucose tolerance and insulin sensitivity.

Questions and Answers

Q: I like your way of thinking. Have you identified in food stuffs or nutrients anything that would impair or increase GSIS?

A: Yes we’ve got about 50 compounds that we’ve identified in a screen that included all of the FDA- approved drugs, some chemical diversity libraries, and some compounds our chemistry department has devised that are supposed to have some very unusual architecture. We’ve got a lot of compounds. It would be a lot of work in a basic research lab to test a lot of them. I started with a few things that I thought would have some meaningfulness in the current food environment.

Q: What is your take on artificial sweeteners and diet sodas? They’re thought to maybe cause obesity potentially?

A: It’s hard to make that point without doing testing. There is so much misinformation in this field, and I don’t want to be a part of it. I don’t know what circulating levels can be of these artificial sweeteners. We have a dose response relationship, and my conclusion from the literature is the only one that is likely to achieve those levels in circulation could be saccharin. The others may not, but I don’t know if they accumulate, I don’t know the half-life. That information is not that easy for me to get. I don’t want to imply that [the artificial sweeteners are] the problem, or the monoglycerides for that matter. There are almost no measurements of monoglycerides in blood. And it may not even be the levels in blood that matter anyways.

NOVEL TREATMENT FOR DIABETIC DYSLIPIDEMIA: RAPID AND ROBUST LOWERING OF LDL, NON-HDL CHOLESTEROL, APOLIPOPROTEIN B AND TRIGLYCERIDES AFTER MULTIPLE DOSES OF MGL-3196, LIVER-DIRECTED THYROID HORMONE RECEPTOR-Β AGONIST IN PHASE 1 STUDIES

Rebecca Taub, MD (CEO, Madrigal Pharmaceuticals, Fort Washington, PA)

Dr. Rebecca Taub described Madrigal’s lead asset, MGL-3196, a phase 2-ready liver-directed thyroid hormone receptor beta (THR-β) agonist. In a phase 1 multiple ascending dose study in healthy volunteers with slightly elevated LDL cholesterol (>110 mg/dl), the compound demonstrated significant up-to-30% lowering of apoB, LDL cholesterol, total cholesterol, and non-HDL cholesterol. It also demonstrated a trend for up to 60% triglyceride lowering (non-significant). LDL reductions were observed as early as two days after first treatment. Madrigal will focus primarily on patients with diabetes or fatty liver disease, though Dr. Taub stated that she also believed the drug could be competitive in the LDL-cholesterol arena because the mechanism is complementary to that of statins. THR-β agonists are thought to promote reverse cholesterol metabolism by increasing the uptake of cholesterol into the liver and increasing cholesterol excretion out of the body through excretion into bile. Since MGL-3196 targets only thyroid hormone β receptors in the liver, it is able to mediate the favorable metabolic benefits of thyroid hormone without the undesirable side effects mediated by the β receptor that is present throughout the rest of the body. Previous clinical thyroid analogs were not very selective for the β receptor (as demonstrated in a functional assay by Madrigal) and were associated with elevated liver enzymes.

Questions and Answers

Q: What is the plan for this compound? Will you take it through phase 2 and try to partner?

A: We’re looking, like many small companies, into the next stages of financing or partnering. It’s interesting that potential partners may favor different approaches. This is a compound that could be taken for hypertriglyceridemia and developed in a much smaller group of patients or genetic dyslipidemias that wouldn’t require a large safety database. Or it could be used in LDL-lowering in combination with statins where, at least for approval, you’d predictably need the large safety population similar to what you’d need with a diabetes drug. Some more regional approaches are interesting as well. Asian markets, for example, don’t require the same type of safety for an LDL drug. It really depends where we end up. But my own feeling is that this is going to be best suited for a more endocrine, diabetes, metabolic syndrome-type population, and that’ll be where it’ll be most efficacious.

USING HT-MSIA IN DEVELOPING BIOSIGNATURES FOR DIABETES AND COMORBIDITIES

Randall Nelson, PhD (Arizona State University Biodesign Institute, Tempe, AZ)

Dr. Randall Nelson discussed opportunities for high-throughput mass spectrometric immunoassays (HT-MSIA) to enhance diabetes prevention, treatment, and drug development. HT-MSIA is a method for purifying and characterizing proteins in a highly sensitive way – it can differentiate between genetic or post-translational variants of a single protein, which may allow for highly specific biomarker analysis. Dr. Nelson identified several opportunities for utilizing this technology for diabetes if proper biomarkers are established: 1) earlier identification of for progressing to prediabetes or diabetes; 2) faster biomarkers of efficacy so patients and payers do not have to sink money on a drug for three months before deciding whether it works based on the “slow” marker of A1c; and 3) identifying signatures for type 2 diabetes cardiovascular disease risk, which could help drastically reduce the time and resources spent on cardiovascular outcomes trials. To corroborate his last point, Dr. Nelson showed some fairly impressive data. Based on markers of glycation, oxidative stress, and insulin signaling, he produced a three-dimensional stratification that was able to separate out the following populations with ~85%+ accuracy: type 2 diabetes (T2D), myocardial infarction (MI), cardiac heart failure (CHF), T2D + MI, T2D + CHF.

APPLICATION OF NONHUMAN PRIMATE MODEL OF OBESITY, DIABETES AND METABOLIC SYNDROME IN DRUG DISCOVERY AND DEVELOPMENT

Jim Wang, MD (President, International Institute of Biomedical Research, CrownBio)

Dr. Jim Wang argued that monkeys can provide excellent translatable animal models for type 2 diabetes. He noted that there are two types of diabetic monkey models: fat-induced diabetes and spontaneously developed diabetes. His presentation focused on the latter. He drew attention to the similarities between the human disease and the monkey model: 1) human clinical symptoms, complications, and metabolic defects are also observed in monkeys with spontaneously developed diabetes; and 2) common procedures used to assess human diabetes can also be applied to monkeys. To demonstrate the latter, Dr. Wang showed data from myriad clinical tests in normal monkeys versus diabetic monkeys. In oral glucose tolerance tests, intravenous glucose tolerance tests, insulin tolerance tests, graded glucose infusion tests, hyperglycemic clamps, and euglycemic clamps the monkeys with diabetes responded in a manner that aligned with expectations based on how patients with type 2 diabetes respond. He did note, however, that the definition of diabetes is monkeys is different: monkeys’ normal glucose levels are lower than in humans. Being short on time, Dr. Wang briefly mentioned that the monkeys’ response to rosiglitazone was similar to patients with diabetes’. As such, he believes that monkeys with spontaneously developed diabetes can be an important tool for translating preclinical discovery into clinical application. Monkeys may be a more translatable model than other animal models in use; however, we expect it is also a more difficult one due to cost and availability, for example.

Questions and Answers

Q: Are these rhesus monkeys or cynomolgus monkeys?

A: Cynomolgus. We have other models as well.

Q: How did you induce the diabetes?

A: One model is fat induced. I did not speak on this. This model is spontaneously developed. We screened thousands of monkeys. They have to be over 10 years old. We’ve never seen any monkey below 10 years develop diabetes. Then we check glucose and a lot of other criteria to determine diabetes status. We picked up ~100 monkeys.

Q: What does spontaneous mean?

A: It’s like a human being. A lot of the time, you don’t know why some develop diabetes and some do not.

 

Type 2 Diabetes Innovation

PANEL DISCUSSION

Moderator: Richard Caroddo, MPA (Senior Business Development Executive, Medpace, Cincinnati, OH)

Panelists: Mason Freeman, MD (Massachusetts General Hospital/Harvard Medical School, Boston, MA); Daniel Grau, MPhil (President, Heptares Therapeutics, Hertfordshire, UK); Dennis Kim, MD (CMO, Zafgen, Cambridge, MA); Sethu Reddy, MD (VP, US Medical Affairs, Merck, Whitehouse Station, NJ)

Mr. Caroddo: I guess a good place to start would be for you guys to comment on new classes of product or new mechanisms that are exciting or interesting.

Dr. Freeman: I will let the other panelists talk about new targets and innovations. The interest I have is actually structural: how the pharmaceutical industry can work more closely with academia. The effort that is going on in the academic world is to be better partners in drug development. I think that everyone recognizes that for the past 30 years, academic-industry partnerships have been money thrown over the wall. We have really failed, in my view, to form productive partnerships because of a failure to align the needs of academia and industry. Frankly, academia needs to be a better partner to industry out of necessity given where federal government funding appears to be going. Academic centers need to hire people with industry experience that know something about drug development so that there is a better dialogue about what a partnership should look like. So that was not an answer to your question and it is probably unusual that the academic person on a panel would be talking about structural things and not new targets.

Dr. Reddy: There are two areas of innovation. They may be competing with each other. One is looking at developing new therapies and the other is making existing therapies better. I recently reviewed the NEJM article on NHANES data and with all the advancements in diabetes therapies; only 14% of patients with diabetes have met their targets for A1c, LDL, and blood pressure. There’s a long way to go – it’s a system problem. The healthcare system is not optimized. The competition is that if you have a healthcare delivery system that optimizes existing therapies, it becomes more difficult for a new therapy to distinguish itself. For new therapies, I think the infectious theory for obesity and diabetes is growing; microflora is growing. We were talking earlier about antiretroviral therapy in HIV, which causes metabolic syndrome in some people. For researchers, lets ask totally out of left field questions. If this drug is causing metabolic syndrome, what is the mechanism of how that drug is working and could it lead to a potential solution for the metabolic syndrome? We have a lot of good therapies, but we are not there yet. The real answers are going to be disruptive.

Mr. Grau: On the question of novel mechanisms, I think at Heptares Therapeutics we probably have an ambivalent view of this. On the one hand we would like to pursue novel mechanisms with the hope that they will be disruptive. On the other hand they are terribly risky. You can pursue novel chemistries and/or novel mechanisms. We are going after entirely new chemistries. To couple that with going after new mechanisms is a bold and a risky thing to do. We are doing it in a couple of instances, including diabetes, but generally we do not do this. We have a small molecule GLP-1; all we are trying to do there is come close to the current GLP-1 mimetic with a small molecule – I think that would be quite an achievement. Frankly, it does not have to be oral. I think that as long as it is non-invasive it will be an achievement. The other thing we are doing is going after a GPR39 agonist. There is some evidence that not only could this target protect islets it could promote neogenesis; and we would be first in class. When you see something as special as that you decide that it is worth it – lets take a shot. We have to generate the chemistry and prove the disease modifying benefits. So we are game to do it, but we are very cognizant of the risk that is involved when we do it.

Dr. Kim: I may be thinking too proximally. SGLT-2 inhibitors seem to be the next kid in the block. They are mostly in phase 3. There is a good possibility that we will see an influx of SGLT-2 inhibitors in the market over the next three to four years. Is it interesting? I think so. It lowers glucose moderately and has some attractive features, like caloric loss. But it also has some downsides. It’s not a terribly scientifically interesting compound. You’re letting more glucose escape the body through the urine. We’ll see what happens with regard to cardiovascular morbidities and mortalities. Other than that, the panelists have already mentioned a lot of companies working on GLP-1 analogs. There are DPP-4 inhibitors in the pipeline and there are small companies working to optimize GLP-1. Not surprisingly, with the GLP-1 class being the latest to disrupt the diabetes marketplace, there are a lot of companies working to make GLP-1 analogs and DPP-4 inhibitors better. There is a company in Boston working to get a device approved for type 2 diabetes. We briefly mentioned Roux-en-Y Gastric Bypass (RYGB) in our type 1 discussion. We are trying to figure out why RYGB has such a profound affect on glycemic control even before weight loss is realized. What is so magical about RYGB that’s causing this? Several companies are working on this platform. GI Dynamics has a device called the EndoBarrier. It’s a 60 cm liner that is inserted endoscopically, it’s relatively noninvasive, and the device is left in for a year. Preliminary data show that glycemic control improves, probably not as well as RYGB, but impressively so and with some weight loss. There are other devices in development to replicate different parts of RYGB. Another class of drugs we have not talked about that will play a role is the class of obesity drugs. There are two obesity medications: one by Vivus and one by Arena. Vivus was extremely close to pursing a diabetes indication with Qsymia and they may still do so in the future. The EndoBarrier that I mentioned was almost pursued for just an obesity indication but because it had such a big effect on glucose lowering the company decided to pursue diabetes – largely because it is easier to get reimbursed. I think the two roles [targeting obesity and targeting diabetes] will start to overlap more and more. As we get better drugs that can cause a relatively high degree of weight loss, we will see the two drug classes merge.

Mr. Caroddo: Dr. Reddy, do you have any comment on the SGLT-2 given the partnership between Merck and Pfizer?

Dr. Reddy: Nothing more than what you already know. It is a marriage between the Yankees and the Red Sox, so we will see how it goes. If you are not first in class it is very difficult to be successful commercially. Even if you are first in class, if you do not have the outcomes, then it is hard to get reimbursed. Unless you have a differentiating characteristic it will be hard to enter the market second or third in class. As you said, there are 10 to 15 companies investigating the SGLT-2 mechanism and one wonders how they are all going to succeed.

Mr. Caroddo: Academic centers are getting more involved in translational work. Can the rest of you comment on your views on this topic?

Dr. Reddy: There is great interest in pharma to collaborate with academic centers. You can want to dance but the other person has to want to dance with you. The scientists get along fine; it’s the regulatory environment that creates the obstacles. There are differences in overhead cost charged by certain institutions versus others. It’s also important that if you like someone, you should like them A to Z. Academic medical centers need to accept the fact that the reason industry can support research is through its commercial success. That’s a basic fundamental principle. It’s hard psychologically to say I want your funds to do more research but nothing to do with your core business. There has to be some acceptance that there is a multiplicity of interest. One clear thing is that there’s no way that industry has all the intellectual capital, but on the other hand, can academic centers scale up to deliver something to the masses? There are strengths and weaknesses on both sides. For pharma, it’s getting risky. It takes a lot of investment. Is there a way to spread the risk and work with a number of smaller partners? There is interest in collaborating not just with the academic center as a whole, but centers of excellence within the academic center.

Mr. Grau: I can give a couple of quick comments on the academic side; I think that was a point well taken: that industry does not have all the intellectual capital. Candidly, there is sometimes a commercial naiveté at the academic institutions. You may interface and have the opportunity to look at some intellectual property with an academic institution and it turns out that the lab had an advisor at another institution – turns out they are unsure if that advisor was involved in the patent; they are unsure if they even own the intellectual property. There is sort of a readiness to engage on the industry side that is not always there on the academic side. The parameters that the commercial side is looking for need to be well understood on the academic side.

Dr. Kim: I’ll tell a short story to demonstrate how I’ve seen industry and academia work together. We say academia and think of one thing or industry and think of one thing. There are a lot of different forms of industry. These companies all have different flavors and preferences for how they work with academia. It’s unfair to say academia should work better with industry; it’s more complicated than that. Exenatide was discovered at the VA hospital at the Bronx, New York by Dr. John Eng. It was an accidental discovery and he tested the compound in diabetic mice and discovered it lowered glucose very effectively and acted like a GLP-1 analog. He presented the findings at ADA and one of our people from Amylin saw it and we took it through phase 1, 2, and 3. As I got to know John Eng better, his desire was to be more involved with the development of the drug. He had his own vision for the drug. Now after all the development stages and the launch, he said he realized that discovering exenatide was like giving birth to a child where he hopes it fulfills its potential and helps a lot of people and hopefully doesn’t hurt a lot of people. He likened licensing exenatide to letting a child go to high school. He thought there was a certain amount of letting go and realizing that the child would learn more from colleagues and teachers. When Lilly came in and licensed the compound 50-50, he likened that with the child going to college. I thought that was a really good metaphor for how academia and industry often interact. Just because the child is at high school or college doesn’t mean the high school or college doesn’t have a responsibility to the parent. I took away a lot of lessons from that experience. No child and parent coupling is the same as another child and parent coupling. Every situation is different and flexibility with how you approach these is important.

Mr. Caroddo: We all hope that our children gave us the royalties of exenatide [laughter].

Dr. Kim: That is public information; he gets 1%.

Dr. Freeman: The academic centers recognize the history you just gave and are changing. I ran translational medicine at Novartis, now I do at MGH, I know the things that you are talking about. We have actually made an SGLT-2 ourselves – five of us. We have done an industry standard drug development program. There are a handful of academic centers that are interested in doing this work – I mentioned two of them Duke and UCSF. Everyone comes with a set of biases – I think the world is changing here. Our team is completely invested in the success of this SGLT-2. There are lots of obstacles and hurdles to make that happen. All of the animal work you do preclinically – there has not been a mouse model yet that tells you about how a diabetes drug will work in humans. Genomics, metabolomics, all of the ability of academic centers have, can tell you if that molecule is worth investing in – you cannot do that on your own in industry. And we cannot do it on our own. We have to do this together. There are other places in the world where these partnerships are facilitated by the government, rather than blocked as in the US. Part of what we have to do is talk to Congress about changes that need to occur in order for the US to remain the leader in medical research and innovation.

Mr. Caroddo: When you look at the Massachusetts General Hospital translational center, is there a certain cut off point where you intend to take programs before licensing or making a transaction?

Dr. Freeman: Phase 2a, maybe 2b. There are places like Brigham that runs major cardiovascular trials. But the ability to interrogate clinical biology - where do academic centers have their strengths? It’s up to treating 50-100 patients. That’s where we’re focused. We’re not trying to be a fully integrated pharmaceutical company. What we have to offer is our ability to produce physician scientists and put them in a room with patients and a potential drug and see if the drug opportunity is real.

Q: How can we handle IRB with that kind of initiative at a place that does not have a history of translational research? Even to get a diabetes registry started takes a bit of a hurdle.

Dr. Freeman: I am probably the least popular faculty member at Partners with our IRB. I think there is movement there. At our own program, in order to set up the translational center we got an approval to do IRB approvals in 21 days – that is in comparison to their previous average of over 60 days. There is actually a discussion going on now to develop a national IRB, particularly for early drug development. You want people who recognize the time sensitive nature of drug development. Our IRB members are typically Associate professors who drew the short end of the stick and do not know much about the drug development process and do not ask very informed questions.

Q: Collaboration is the name of the game. Is the same true for other academic health centers? Could Massachusetts General Hospital partner with other centers?

Dr. Freeman: The attraction for rare diseases – it used to only be by biotech but now almost every big pharma company has a rare disease program. It’s impossible to recruit those patients without a consortium. A single protocol at multiple institutions could help a lot.

Dr. Reddy: I noticed one trend in the US is that the not-the-top academic centers are stepping up. In my experience, at some centers the processes of bureaucracy within the organization was often the stumbling block. I know people from institutions who would come to us all smiles with an idea and protocol, and then by the time they got through their institution’s process, we only had two weeks left to recruit and we missed the deadline. I have noticed that centers that are a step above community hospitals – clinically strong though not top academic centers that tend to be in urban centers and serve minority populations – they realize that they have to work fast. They are very responsive to Pharma’s requests. It is very competitive to be part of a trial; it is not just US competition but global. Today, about 20-25% of trials are done in the US. Everyone is competing for a smaller pie.

Comment: I work at Medpace. We try not to use academic centers for precisely that reason. That’s both our own choice and the direction we get from sponsors. Academic centers are just too slow. By time they get around to approving protocols... Our sponsors are sensitive to that. They want to get the drug developed as cheaply as possible.

Dr. Reddy: We should be like the airline industry where we overbook for recruitment. But I think it’s very important that the senior professors in the country have exposure to the mechanism and knowledge of the drug. These are our best teachers of scientific thought. We need to balance speed with getting the appropriate amount of exposure to academic centers.

Dr. Kim: We used to do the same thing at Amylin. We had an internal ratio of academic centers to non- academic centers that we would allow. We would not allow more than 20% of the centers to be academic because otherwise it would enroll too slowly. Of course the 20% of academics that are in the trial are the lowest recruiters. Industry needs academic participation because that is where the KOLs are and you need them to speak on behalf of the drug’s science. What I have noticed at other companies is that they will essentially separate the two completely now. All of the centers are non-academic and the trial’s executive steering committee is all academics. The academics oversee the trial so they can be authors on the paper but they do not participate in the trial. They are not actually treating patients with the drug. This is what we are evolving to.

Comment: Quite often when we have academicians sitting on these design committees, they design a protocol that can’t enroll. It might be perfect science but it is not practical in the clinic.

Mr. Caroddo: What are your comments on cell therapy and regenerative approaches in type 1 and type 2 diabetes?

Dr. Reddy: It’s an interesting concept. I’d liken it to a betting parlor. Imagine everyone at a meeting, if they had a dollar to bet, where would you place your bet? For example at the Kentucky Derby, by looking where everyone bets, you can tell which horse will win. I don’t know about stem cells versus the engineers with the artificial pancreas. I think the engineers will win by 10 years or more in diabetes. I can imagine if one patient out of 1000 gets severe hypoglycemic coma with the stem cell program that it will really put a dent in the program. Insulin secretion is more complicated than Parkinson’s or other diseases.

Mr. Grau: We are spending sometime trying to think this through. One conundrum is that for neogenesis the question is how much should you have? Can you go too far? There could be an oncogenic risk. It raises questions about therapeutic windows or holidays. Another question is what counts as disease modifying to the FDA – what would the label actually say? For pancreatic islet cells, what imaging is available? There are a lot of people at Yale and other companies working on this. It is a space where you are creating endpoints and solving clinical problems.

Q: What is happening in the nutritional space? There are some big players coming in. How does each of you view that spectrum? I think there are other regulatory categories – is anyone thinking about what’s happening here? Specifically, for example, there is Nestle’s diabetes initiative. We can’t really talk about type 2 diabetes without that being part of the discussion.

Dr. Reddy: Big pharma has not really entered nutritional science. I think there is something to that.

Comment: The sciences are still separated. We might need to converge some of that science. We know that there is relationship there and we do not fully understand it.

Mr. Freeman: Nutritional science is not well represented in academic centers. It does not have the pinache or rigorousness that academic centers thinks is required. It could be this will change. Historically, that has not been true.

 

Cure for Type 1 Diabetes: What, Why, How, and When?

PANEL DISCUSSION

Moderator: Natalia Borinshteyn, MD, PhD (Head of Portfolio Strategy Novel Prevention & Cure Approaches, Global Diabetes Division, Sanofi)

Panelists: Lisa Jansa (CEO, Exsulin, Minneapolis, MN); Denise Faustman, MD, PhD (Harvard Medical School, Boston, MA); Lisa Rotenstein (Harvard Medical School, Boston, MA)

Dr. Borinshteyn: Why are we talking about type 1 diabetes today? What is so important for us to understand about type 1 diabetes in effort to find a cure? What are your views on this topic?

Ms. Jansa: Type 1 diabetes has a smaller total population, but it has a high unmet clinical need. It’s been 90 plus years since the discovery of insulin and there have been incremental improvements over time. It’s remarkable that we haven’t seen a breakthrough, but we’ve learned a great deal about causes. There have been improvements in clinical trials. It’s not a perfect journey, but all the discoveries are working towards a cure. We shouldn’t expect to see a silver bullet.

Ms. Rotenstein: From the perspective of the patient, Kelly Close wrote a really touching introduction to our book, Targeting a Cure for Type 1 Diabetes in which she talks about the 24/7 nature of type 1 diabetes. She wrote that of course, a cure means different things to people at different stages of type 1 diabetes. To her, a “cure” would mean she would never have to think about it. No more days when she would do everything right and her blood sugar seems to do everything wrong. No more counting carbohydrates, dosing insulin, and fearing hypoglycemia. And no more haunting concerns that she might be diagnosed with retinopathy when she visits the ophthalmologist. We have talked about really big grand cures and I think that we have to remember that there is a lot of room for incremental improvements. The small changes and improvements that we are making can really impact the lives of patients.

Dr. Faustman: If you’re sitting here, you’re obviously interested. I would like to debunk the concept that it’s a small disease. It’s a small disease, but it’s not really a small disease. It’s not quite fair to compare it to type 2 diabetes. From a pharma perspective, most people who work on the lymphocyte side would agree that many of the autoimmune diseases work on the same theme. Some of these treatments are translatable across multiple autoimmune diseases. The other thing is from a trial perspective, we are impressed by how dedicated people with type 1 diabetes are to these trials. When our type 1 patients come in, we call them virgins because they are only on insulin. They are not on five other drugs like in type 2. For trial design, they are faster and sleeker. Why wouldn’t you study type 1 diabetes? From the patient side, we’ve gotten complacent at setting our goals for what we should be achieving. With the AIDs field, I remember the news stories at that time. A couple people popped their heads up and said we have to work on prevention. And that was silenced in the media when they said, let’s not just work on prevention, but cures. I think from a patient’s perspective, we haven’t been as demanding of the researchers to get the advances. So I think there’s two reasons why type 1 diabetes is appealing. From a patient perspective, ask more of researchers, and from a pharma perspective, why not type 1 diabetes?

Q: I would like to know why everyone is convinced that this is primarily an autoimmune disease. I know that it has an autoimmune component but I am beginning to think that there may be an earlier defect that needs to be looked at and nobody is looking at that.

Dr. Faustman: We published data on an earlier defect in the NOD mouse. In 2001 when we found that we could regenerate the pancreas from stem cells, we found that they had a different structure than the endogenous pancreas. It made us go back and look at more data from regeneration; why when it regenerated was it resistant against the autoimmunity? In the NOD mouse – we do not know if it is the case in humans – they have abnormal ear structures and taste buds. In the NOD mouse there are structural defects in the tissue itself that might help predict complications. People studying Sjrogen’s, another autoimmune disease, are publishing data showing that people with Sjrogen’s have the same defects as the NOD mouse. If this is the case in humans, it might help predict neuropathy, etc. It is a really important question.

Ms. Jansa: I would add from a translatable development vantage point, you’ve got to do all of these tests to meet regulatory requirements. A combination approach is a level of complexity. We’re getting ready to do a clinical trial, which is targeting underlying issues, but there may be other things that are part of that. How do you design trials and get people to invest?

Q: What causes autoimmunity?

Ms. Rotenstein: We have a lot to learn about that. But speaking to your first point, where we can make a big dent is in the recently diagnosed space. We have the most experience. I think prevention is definitely the goal and in terms of trial design and regulatory approval, the hurdles are higher. We need to take what we’ve learned from recent trials with single agents and apply it to the recently diagnosed space.

Q: Eluding back to what you said Denise, people with type 1 diabetes in my opinion are extremely well organized in comparison to type 2 diabetes. Can you imagine how enormous of a force the type 2 community could be? But they do not have any advocacy groups. What can we do about that?

Dr. Faustman: It is unreal. My group sees some people with type 2 diabetes, but people with type 1 are the ones I love the most. People with type 1 are told to be more of an advocate for people with type 2 diabetes but they are concerned about being told “eat less and workout more.” I think that they are worried about the push back.

Ms. Rotenstein: A large component of this is about perception, the idea that type 2 diabetes may be something you bring upon yourself. A big step forward…

Comment: There was shame with HIV.

Ms. Rotenstein: Exactly, we need to change public discourse around it.

Comment: We should learn what the HIV community did.

Comment: There is a tendency when we do not understand what is happening and why it is happening to blame the patient. For type 2 diabetes this is the dominant scenario. With this negative perception of the patient, nobody is advocating for them and fund raising for type 2 diabetes research is quite difficult.

Dr. Borinshteyn: It’s a fair observation regarding blaming the patients, but ADA is raising funds for type 2 diabetes research and patient support initiatives.

Comment: We are talking about philanthropy not money from pharma.

Ms. Jansa: Part of it is the way patients access the system; people with type 2 diabetes are coming in at the family practice level. I have been at practices where they are told, “well you have a little sugar in your blood.” That diffuseness of how you come in and you are educated is very different from type 1 diabetes – with type 1, you are diagnosed in the hospital and it is life or death. The slow progression with type 2 diabetes, I think, results in a completely different mindset. My dad has type 2 and just went on insulin. He is not an obese type 2, so it is not just lifestyle. He would have done anything to not go on insulin and now he is. It is a very difficult journey. You look at the families that are kind of managing this disease – that might be an opportunity.

Ms. Rotenstein: One of the things we can do as a scientific and medical community is talk about similarities in therapies, particularly around regeneration agents. There are a lot of type 2 diabetes therapies that we can use in type 1 diabetes. I think linking the two diseases in the public mind could go a long way.

Dr. Borinshteyn: There could be a lot of synergies with other autoimmune disorders.

Q: This year they had the first announcement of a single gene tied to type 1 diabetes. I was wondering what you think about the opportunity this presents.

Dr. Faustman: I kind of have an opinion on this one. Keep in mind there is a 50% chance a child will get that gene from his or her parent who has it. I do not like to be wrong 50% of the time. I think that genes are important, but I like proteins a lot more, because proteins predict the phenotype more. Even if you had all the genes you would be wrong at least 50% of the time. My colleagues might throw me off the panel though.

Ms. Jansa: It’s the pursuit of the silver bullet. From the development side, to chase down every new theory is a long journey. We have to stay focused as a biotech, to show data. Maybe in the future it’s another part of the equation or combination. I like how you framed it – we can’t effectively sub-stratify patients in a clear way right now. If we could get more detail on whom these various combinations work for. A child with type 1 is probably very different than an adult who comes down with type 1. Are they identical? Probably not.

Ms. Rotenstein: For any prevention therapy, the threshold is high for safety and efficacy, because like you mentioned, we are unsure whether the disease will progress. We need more research and more understanding to reach the threshold where we are willing to give a compound to someone who will maybe get the disease.

Dr. Borinshteyn: I agree, we still do not know what the triggers are. Understanding the trigger would be a huge advancement and would help us in development of preventative or curative therapies.

Dr. Borinshteyn: How do you define success? In some audiences, when you say the word “cure” it scares people. How would you define a “cure” for type 1 diabetes from interim and long-term goals perspective?

Ms. Rotenstein: At the most basic perspective, a cure would be something that would cause diabetes to go away once it has been diagnosed. In our trials, I think that we have accepted that; we are looking at C- peptide as an outcome etc. I do not think that we should be moving away from the ultimate goal of a cure. I think we want to discuss what are the intermediate goals of a cure and ensure those meet up with patients’ desires. For example, it could be less hypoglycemia. I think that the closed loop system, while it would not cause type 1 diabetes to go away, would make the disease a lot less burdensome and would be a good intermediate.

Ms. Jansa: I would put it in perspective. When insulin was discovered, it was considered a cure. It’s been in place for many years and we found out it wasn’t a cure. A cure for cancer? What does that mean? It means better outcomes, better survival rates. I think again when we look at it as a cure, maybe because it is a well-organized, interconnected group, it has these bigger implications. It may be a series of small incremental steps.

Dr. Faustman: About ten years ago, I went to hear a woman speak who had had type 1 diabetes for over 50 years. Her definition of a cure was to not have hypoglycemia at night. That was a definition I had not thought of before, but I think that there are definitions of a cure like that. I still think that we have to aim high. The easy thing is to tweak new insulins. I think that we still have an obligation to aim as high as we can but “cure” does have different meanings to different people.

Dr. Borinshteyn: What will be the next true advancement in type 1 diabetes?

Ms. Jansa: From a business perspective, over the last 10 years, islet transplant had a lot of investment and excitement. I think we learned a lot. By restoring islet mass, we can cure the disease for a period of time, but it wasn’t the silver bullet. Right now there is tremendous focus on closed-loop systems. It’s not just about detailed insulin therapy; we have to add some of the other hormones. There could be things learned from that. I have a bias because we are looking at a combination of regeneration. That would be a therapeutic advance. Maybe even if we are only restoring a small percentage of function, we are getting rid of the risk of hypoglycemia. When we first started, there was a debate whether regeneration occurred and that is still ongoing – is it regeneration or replication? But does that matter to the patient?

Dr. Faustman: I think that the biggest opportunity is doing immune intervention trials in people who have long-term diabetes. I think that there is good news that the NOD mouse does not match the human. There is data showing that with the NOD mouse, once the disease begins, it is very rapid and complete. I have a bias here, my data shows that in humans, the pancreas lives on for decades. I think we have forgotten that the therapy should not be just for the privileged few who only got diabetes last week. With more sensitive C-peptide assays we are seeing that C-peptide can last decades in humans. That opens up the window for trials.

Ms. Rotenstein: There are three areas we are particularly excited about. Closed loop is an area of great opportunity. One of the things done well in the artificial pancreas field is communication – that it will be incremental steps towards an artificial pancreas. Hypoglycemic minimizers are going to make a big difference in people’s lives in the short term. For immune therapies, we are excited about combinations and we are looking at the learnings from phase 3 trials. We are picking those apart and learning how to target therapies at specific subgroups. We are understanding where we can target trials next. The last area is smart insulin – this is something Merck has taken up on its pipeline. It’s still early stages but we’re excited to see where it goes.

Q: …has anyone ever done a gastric bypass on a person with type 1 diabetes?

Dr. Borinshteyn: That is a very interesting question; I am going to look into that.

Comment: I don’t think I have ever seen that, I wonder what it would do.

Comment: It has been done in lean people with type 2 diabetes with some benefit.

Dr. Borinshteyn: When I was training, the people with type 1 diabetes I saw were primarily very fit. Nowadays there are more and more patients with type 1 diabetes with excess weight

Ms. Jansa: There are some people that are working on therapies that mimic the gastric bypass procedure and there are some differences. I’m not an expert in the field, but there are subtle differences as to whether the procedure results in a good or bad outcome.

Comment: In type 2 diabetes there is a lot of familiarity with gastric bypass.

Q: You all have been working with patients for a number of years. The FDA tries to balance the benefit and risk of these treatments. What would you classify as the top three concerns of patients in terms of having diabetes?

Dr. Faustman: It depends on what stage they are in. I think it would be complications, hypoglycemia.

Dr. Borinshteyn: The trade-off of short-term/acute and long-term complications.

Ms. Rotenstein: We cannot ignore that people still die from diabetes complications. We cannot ignore that insulin is a dangerous drug. It has a very narrow therapeutic range. The acceptable risk for a therapy   might vary between the different stages of the disease.

Ms. Jansa: I agree. In our trials, even with injectable-type therapies, patients have been incredibly committed to participating in the trial due to its potential to eliminate hypoglycemia and the difficulties of insulin itself. They are committed to participating to make it a more normal – whatever that may mean – life.

 

Clinical Drug Development in Diabetes

DIABETIC NEPHROPATHY: A SILVER LININGS PLAYBOOK?

Bernard Ilson, MD, FACP (VP, Medical Affairs and Nephrology, Medpace, Cincinnati, OH)

Dr. Bernard Ilson gave a comprehensive overview of past and ongoing developments in the diabetic nephropathy (DN) field. He opened by reviewing the burden of end-stage renal disease (ESRD) in the US: diabetes leads to ~50,000-60,000 new cases of ESRD each year. Current therapies can delay the progression of the disease; however, no therapy has emerged to reverse it. Said Dr. Ilson, “There is a huge unmet medical need and this is a ripe area for research.” Despite what he called “spectacular failures” – he classified aliskiren and bardoxolone as such – he believes that there are silver linings in the DN space. First, many new therapies are under investigation. ClinicalTrials.gov lists 384 studies, 101 of which are active, in DN. Second, he believes that the FDA is open to novel development programs and willing to discuss the use of novel endpoints.

• From 2006 to 2010 in the US, there were 227,740 new cases of end stage renal disease (ESRD) attributed to type 2 diabetes; 23,357 cases were attributed to type 1 diabetes (USRDS 2010). In 2010, this contributed to ~$13 billion in total ESRD costs (including hospitalization) due to diabetes.
• Landmark clinical trials in the diabetic nephropathy (DN) space show that therapies to date have been able to slow, but not reverse, the progression of the disease. The Captopril trial was a prospective randomized control trial comparing captopril (ACE inhibitor) to placebo in 409 patients with type 1 diabetes (Lewis et al., NEJM 1993). “The field hasn’t moved on much more since then,” said Dr. Ilson. The trial found a 50% reduction with treatment in the composite endpoint of ESRD, death, and the doubling of serum creatinine. However, the disease continued to progress in the treatment arm. The RENAAL trial, which investigated losartan (angiotensin II receptor antagonist) vs. placebo in ~1,500 patients with type 2 diabetes, painted a similar picture: losartan resulted in a reduction in the composite endpoint, but the disease still progressed (Brenner et al., NEJM 2001).
• Dr. Ilson classified the ALTITUDE trial for Novartis’ aliskiren (renin inhibitor) and the BEACON trial for Reata/Abbott’s bardoxolone methyl (oral antioxidant inflammation modulator) as the field’s “spectacular failures.” Both studies were phase3. ALTITUDE was terminated in December 2011 after the seventh interim analysis due to whatDr. Ilson described as futility or a slight increase in the primary endpoint with aliskiren; the primary endpoint was defined as a composite of time to CV death or first occurrence of cardiac arrest with resuscitation, nonfatal MI, stroke, hospitalization for heart failure, ESRD, death attributable to renal failure, need for renal-replacement therapy, doubling of baseline serum creatinine. BEACON was terminated in October 2012 due to safety concerns, namely excess serious adverse events and mortality in the bardoxolone arm – a “huge disappointment” for theDN field, said Dr. Ilson. For our report on the BEACON termination, see our October 18 Closer Look at http://www.closeconcerns.com/knowledgebase/r/6c6ed7ef.
• Dr. Ilson comprehensively reviewed new clinical entities currently under investigation. Below we include his list, organized by mechanism of action.
  • Chemokine inhibition: 1) ChemoCentryx has two CCR-2 receptor antagonists in development. CCX-140 is in phase 2 (n=270) and CCX-872 is in phase 1; 2) Noxxon’s CCL2/MCP-1 receptor antagonist candidate NOX-E36 in phase 2 (n=75); 3) Pfizer’s CCR- 2/5 receptor antagonist candidate PF-04634817 is in phase 2 (n=176); and 4) BMS’ CCR- 2/5 receptor antagonist candidate BMS-813460 is in phase 2 (n=75).
  • Nitric Oxide inhibition: Genkyotex is planning to advance its Nox-1/4 inhibitor GKT- 137831 into phase 2.
  • Endothelin antagonism: AbbVie’s endothelin antagonist astrasentan is in phase 2 (n=92).
  • Pentoxifyline analogue: Concert’s CPT-499, a deuterium analog of an active metabolite of pentoxifyline, is currently in phase 2 (n=170).
  • PDE-5 inhibition: Pfizer’s long-acting PDE-5 inhibitor candidate PF-00489791 is in phase 2 (n=230).
  • Aldosterone antagonism: 1) Relypsa is developing a high capacity cation binder + spironolactone, RLY-5016, which is currently in phase 3; 2) Pfizer’s selective aldosterone antagonist candidate PF-03882845 is in a small phase 2a trial (n=9); and 3) Lilly’s mineralocorticoid receptor antagonist LY-2623091 is in phase 2a (n=48).
  • Inhibition of gut Na+ absorption: Ardelyx/AstraZeneca NHE-3 inhibitor AZD-1722 (tenapanor) is currently in phase 2 (n=140).
  • Rho kinase inhibition: Sanofi’s rho kinase inhibitor SAR-407899 is in phase 1.
  • TGF beta: Lilly’s TGF beta antibody LY-2382770 is in phase 2 (n=400).
  • JAK-1/Jak-2 inhibition: Lilly/Incyte’s candidate baricitinib, LY3009104, is in phase 2 (n=250).
  • AGE-breakers: Torrent has a novel AGE-breaker TRC-4189 in development; Dr. Ilson could not find information as to what stage the compound was in.
  • Connective Tissue Growth Factor inhibition: Fibrogen’s has a phase 2 study “underway” for FG-3019, a monoclonal antibody to CTGF.
  • Urotensin II inhibition: Dr. Ilson did not identify any candidates under active investigation in this space. Sanofi discontinued development of its long acting urotensin- II receptor antagonist SAR-101099.
• Dr. Ilson believes that the FDA is open to considering novel development programs that could accelerate the approval for a DN therapy. Subpart H approval provides an accelerated regulatory pathway for new drugs for serious or life-threatening illnesses, whereby the Agency can grant provisional market approval based on a surrogate endpoint and post- provisional approval based on hard endpoints. Further, Dr. Ilson believes that the FDA is also open to discussing novel endpoints; however, he noted that the Agency was reluctant to publishformal guidelines on the matter and would rather discuss new endpoints and programs on individual bases.

Questions and Answers

Q: What is your opinion of the biomarker cystatin?

A: It’s more accurate than creatinine.

Q: Is it widely used?

A: Yes, but it’s a bit more expensive. It’s more accurate than serum creatinine.

Open Innovation

INNOVATION TAKES ON THE DIABETES PANDEMIC

John Brooks, (President and CEO, Joslin Diabetes Center, Boston, MA)

Mr. John Brooks, President and CEO of the Joslin Diabetes Center, described Joslin’s many strategies for driving innovation in the diabetes field. Given Mr. Brooks’ tremendous leadership of diabetes research, we hoped to hear his characterization of- and vision for innovation in the diabetes field more broadly. During Q&A he stated that one of his key concerns for the future of innovation is funding, since NIH funding will likely remain stagnant (we are concerned it will decline). He is especially concerned about funding for young researchers entering the field.

• Mr. Brooks detailed Joslin’s projects in diabetes technology connectivity. For example, Joslin Inside is an initiative to use telemedicine, risk-stratification tools, and data analytics to enable affiliates to leverage Joslin’s care models in real time. Joslin Everywhere is a mobile diabetes management initiative to connect patients and physicians online and to help patients better self manage. Mr. Brooks stated that Joslin Everywhere’s first phase is focusing on educating patients and providing reminders for appointments, medications, when to check blood glucose, etc. The second phase is to connect meters and pumps to the cloud. Joslin also plans to then utilize a predictive and adaptive algorithm that provides real-time support for care decisions. Mr. Brooks stated that the third and final phase of the initiative is to provide patients with a “safety net” – the technology would be able to “look over the patient’s shoulder” to ensure that the user is on track.
• Mr. Brooks stated that Joslin is collecting measures of cost-effectiveness in addition to the traditional measures of safety and efficacy. Given current cost-pressures, he believes that researchers can no longer think of a new therapy, technology, or education program’s safety and efficacy in isolation of its economic impact.
• Mr. Brooks described Joslin’s efforts to be more involved in the global fight against diabetes. Joslin has 46 US affiliates and international collaborators. Joslin is working to increase global diabetes literacy, and is emphasizing the importance of exercise and nutrition. Mr. Brooks stated that Joslin appreciates the difference in type 2 diabetes across cultures and therefore has developed different approaches and toolsets for people with type 2 diabetes who are Asian, Latino, or black.

Questions and Answers

Q: In your mind or in the mind of your institution, what is the biggest challenge to innovation?

A: What I tend to worry about is funding for keeping this engine running. About half of Joslin is research; we have about a $40 million research budget. We have done a great job over the years of getting NIH funding but knowing the state of the federal budget I don’t think we are going to see that NH budget go up substantially. My other worry is making sure that the next generation of researchers get the funding they need. There are people who are spending three-fold more time on writing grants for funding. It is particularly difficult for younger, new researchers. My son is looking to enter this field and sees himself as having ten to fifteen years before he gets funding.

Strategies for Bridging Clinical Development and Commercialization

DISRUPTIVE INNOVATION

Kurt Graves (Chairman, President and CEO, Intarcia Therapeutics, San Francisco, CA)

In front of an intent audience, Mr. Graves outlined the development and market potential of ITCA 650, as well as Intarcia Therapeutic’s general business strategy. As background, ITCA 650 is a matchstick- sized osmotic minipump that rests under the skin and delivers a steady stream of heat-stabilized exenatide for up to one year. Mr. Graves highlighted that ITCA 650 combines exenatide with two key technologies: 1) the ability to stabilize proteins at high temperatures for long time periods; and 2) the FDA-approved DUROS minipump, which delivers a drug with zero order kinetics. Mr. Graves remarked that the once- or twice-a-year administration allows ITCA 650 to resolve several challenges of injectable GLP-1 agonist therapy, leading to less injection-related adverse events, greater compliance, and better long-term outcomes. ITCA 650’s phase 3 program began in 1Q13, and Intarcia expects a regulatory submission in 2H15, with an approval and launch by 2016. We found Mr. Grave’s commentary on the healthcare market particularly interesting: he noted that the market is shifting from a physician-centric system to a payer-centric system focused on outcomes. In response to this shift, Intarcia aims to “make payers our biggest partners and biggest promoters,” and plans to conduct several clinical and real- world head-to-head trials to demonstrate superiority for ITCA 650 (details below). On this topic, Mr. Graves described Intarcia’s recent payer advisory board meeting that solicited feedback from nine major payers and found that they were particularly interested in the long-term compliance associated with ITCA 650.

• Intarcia’s lead candidate ITCA 650 combines the GLP-1 analog exenatide with two novel technologies: First, Intarcia’s in-house technology allows for protein stabilization at high temperatures for long periods of time. The company has incubated exenatide at 104 C for three years with perfect stability, suggesting that ITCA 650 could even be dosed less frequently than its current once- or twice-a-year administration. Second, Intarcia acquired the DUROS osmotic minipump, which delivers a drug with zero order kinetics. Mr. Graves highlighted that the smooth release optimizes the efficacy of the contained drug (in this case, exenatide) and improves tolerability. Mr. Graves remarked that using an already-approved technology lowers the regulatory risk for ITCA 650; however, combining exenatide with these technologies still allows for robust patent protection, as the drug’s IP market exclusivity extends to 2031.
• Mr. Graves described Intarcia’s approach to developing ITCA 650. In 2011 the company partnered with Quintiles, who will conduct ITCA 650’s phase 3 global development program. At the end of 2012, Intarcia raised $210 million in financing ($50 million in debt, the rest in equity), allowing it to develop ITCA 650 through phase 3 without a pharma partner – a rather unconventional approach. We note that this represents the largest funding achieved by a private biotech company in the past 25 years (further details are available in our November 15, 2012 Closer Look at http://www.closeconcerns.com/knowledgebase/r/c214dfca).
• Intarcia recently initiated ITCA 650’s phase 3 program; it plans to file the drug in 4Q 2015, with an approval by the end of 2016. Our March 22, 2013 Closer Look contains the full details of the phase 3 program and is available at http://www.closeconcerns.com/knowledgebase/r/ab30a6c3. We have included a table below that summarizes the trials. Speaking on the phase 3 program, Mr. Graves remarked that Intarcia expects to see an A1c reduction of 1.6-1.9%, a weight loss of 3-4 kg (7-9 lbs), a nausea profile in the low/mid-single-digit range, and 100% compliance. Of note, Mr. Graves previously highlighted that FREEDOM-2 will be key to Intarcia’s marketing strategy, as the company plans to position ITCA 650 as the optimal second line therapy after metformin.

Parameter	FREEDOM-1	FREEDOM-1 HBL	FREEDOM-2	FREEDOM-CVO
(Expected) launch date	Launched in 1Q13	Launched in 1Q13	May 2013	1Q 2013
Date of expected results	2H14	2H14; interim data possible by end of 2013	1H15	Late 2015
Study design	US-only, placebo-controlled, double-blind	US-only, open-labeled	Global, active comparator, double-blind, double-dummy	Event-based CVOT evaluating non-inferiority to placebo
Study population	450 type 2 patients on 0-3 oral antidiabetic agents (A1c 7.5-10%)	Type 2 patients on 0-3 oral antidiabetic agents (A1c >10%)	500 type 2 patients on metformin only (A1c 7.5%-10%)	ITCA 650 20 μg/d for 13 weeks followed by 60 μg/d until study end
Drug Regimen	ITCA 650 20 μg/d for 13 weeks followed by 40 μg/d or 60 μg/d for six months	ITCA 650 20 μg/d for 13 weeks followed by 40 μg/d or 60 μg/d for six months	ITCA 650 20 μg/d for 13 weeks followed by 60 μg/d for 39 weeks; sitagliptin 100 mg/d for 52 weeks	ITCA 650 20 μg/d for 13 weeks followed by 60 μg/d until study end
Primary Endpoint	Change in A1c at nine months	Change in A1c at nine months	Change in A1c at 12 months	CV events (unspecified)

• Looking forward, Intarcia anticipates a “very payer-driven market” and has built its clinical development strategy around showing superior outcomes. Mr. Graves explained that the healthcare market is moving from a physician-centric system to a payer-driven system that focuses on outcomes. In response to this shift, Intarcia employs an unusual business model that aims to make payers its “biggest partners and biggest promoters.”
  • Intarcia held a payer advisory board meeting in February 2013 to solicit input. The company met with nine payers, which together represented 160 million people (while Mr. Graves did not disclose names, he remarked that Intarcia met with “all the big guys in the US”). Mr. Graves highlighted that while the payers considered ITCA650’s glycemic efficacy, they were most impressed with the drug’s ability to assure long- term compliance, and thus better outcomes.
  • Mr. Graves highlighted that in a payer-centric world, showing superior outcomes will be key. He explained that ITCA 650’s phase 3 program will include a head-to-head study with Januvia, as Intarcia hopes to include a superiority claim in the drug’s label. Intarcia also plans to conduct several “real-world” studies post-approval to compare ITCA 650 with oral therapies and with injectable GLP-1 agonists. On a longer time scale, Intarcia expects to evaluate ITCA 650’s CV benefits, as well as the drug’s potential as a front-line therapy, as a treatment to delay or prevent type 2 diabetes, and as an add-on to insulin therapy.

Questions and Answers

Q: The convergence is really exciting. Where do you implant this and is it a challenge for the patient to put it in and take it out? Is it something where you can move to a rechargeable device in situ?

A: That’s a great question. We’ve spent a lot of time on this between the end of phase 2 and the start of phase 3. We’ve been learning best practices from people who did the procedures in phase 2. The procedures are not performed by the patient; they’re done in the office by a healthcare professional – a doctor, nurse, or physician’s assistance. We held several focus groups before starting phase 3 trials – I challenged the team to treat the phase 3 program like a product launch and to make it as flawless and as user-friendly as it can be. The biggest lesson we learned from phase 2 is the importance of placing the device shallow, right under the skin. It is important because it makes the process of removing the device as easy as possible. The procedure is pretty simple: you clean the area (usually the abdomen), numb the area, nick the skin with the tip of a scalpel, and then use a little tool to place the device just under the skin. The operating time for the doctor is under three minutes. Sometimes it’s under one minute for people who are very familiar with the technique. Replacing the device is the key training that we’ve focused on for phase 3. You have to place it right under the skin. If you do that, you can make a small nick, pop the old device out, and insert another one in the same place.

Q: Is there not much in the way of site reactions?

A: It’s just for a few days. You have the normal healing process for a nick.

Q: What is the risk of infection? Do patients scratch at the insertion site?

A: That’s a great question. The whole procedure needs to be done with aseptic techniques and there is a tool kit. Viadur [a prostate cancer drug that used a similar minipump] was on the market for eight years and it had a low infection rate under 1% in the label. We also had a very low rate of infection in phase 2 (two cases that were treated and resolved while the patients stayed on therapy).

Q: What is the duration of the delivery of the GLP-1 that’s being examined in phase 3?

A: As always, you’ll have a starter device: three months at the 20 g dose. This is to introduce the patient to the drug’s effects and to measure the A1c level at three months. After that, we plan to have both six- month and 12-month devices at the chronic dose of 60 g. The phase 3 program uses the six-month devices, but we’re have a plan (including planned discussions with the FDA) to have the 12-month device approved. You’re not changing anything about the device – it’s the same size and components, etc. It’s just about how much drug is in the device. Our challenge isn’t really the 12-month devices. Those have been on the market for years previously and not one failed. We had to back into the six-month and three-month devices based on needs for this indication and product. We’ve mastered this because we’ve used and tested 3, 6 and 12-month devices a lot.

Q: Does your regulatory strategy involve Europe? Can you talk to that and how there might be different payer considerations there relative to in the US?

A: No matter what kind of geographical payer you are, you care about fundamentally moving outcomes and cost of care in a better direction. We believe you can do that if you have the A1c and weight effects with the long-term compliance and control ITCA 650 can provide. We think that the very core of what matters to payers is whether you can show that you can delivery superior outcomes. You’ll see us doing a lot of head-to-head outcomes trials. We have a lot of real-world trials designed for after we get ITCA 650 approved. So you have to show superiority from an outcomes point of view and you have to show it in the real world. Secondly, you have to think about your price point in this market. Regarding GLP-1 agonists, if you’ve got a product that’s limited to third or fourth line use, that would make me think about pricing it in a certain way. If you have a once yearly non-injectable drug and the cost of goods is 10%, it gets me to think about pricing it strategically so we don’t price our product out of the oral market, which is much bigger.

Q : So the increased compliance is a big part of the equation.

A: It’s what you can do in a clinical study versus a real world study. In clinical trials, we’re doing 12-month studies and we can show how many people adhere to our product; we know it’ll be close to 100%. I think that where the real compliance and long-term control is really going to be demonstrated is in the real- world setting. I think we’ll see a marked difference with our product versus anything else because it’s virtually guaranteed when the device is in.

Q: I know its relatively unique, the deal between Intarcia and Quintiles. How does it differ from the typical pharma/CRO deal?

A: When we were going through phase 2 and getting ready for the phase 3 program, we were thinking about whether to partner with pharma before phase 3 or whether to finance it ourselves. We were thinking about both paths in parallel. It became clear that we needed to have an option to not rely on a big pharma partner in phase 3, if we were to finance it ourselves. We elected to go with Quintiles for two reasons. First, they’ve done more diabetes work than any other CRO. Second, Dennis Gillings (the founder of Quintiles) and Chip Gillo0ley were really behind our diabetes drug – they were excited about it and they said they wanted to do a novel deal like we did which would really align us as partners. The deal we did was a standard performance-based deal at the core, but we also did a separate strategic alliance deal, which provided non-dilutive capital and further aligned our interests as partners. They made an investment in the form of equity and non-dilutive cash. Our real goal was to have something on top of the traditional deal to get them to think like a partner and like an investor.

Q: Are you planning to commercialize it by yourself?

A: We definitely are planning on doing this in the US as a company – we are thinking and executing on every aspect of the business and we’re bringing in top talent in the relevant areas. I don’t think you’ll see us doing it outside the US as a company. At the moment, we’re planning to have a global partner for 100% of the ex-US rights. For the US portion of that, we’ll see. If it’s the right partner, we’ll certainly look at that. But now that we’ve made the decision and we’ve financed the full phase 3 program, we’ll certainly be ready to do it on our own and we will deserve a big piece of it no matter the final structure.

TRENDS FROM FDA’S RECENT APPROVALS FOR DIABETES DRUGS: PRACTICAL CONSIDERATIONS FOR CREATING NEW DRUGS FOR TYPE I AND TYPE II DIABETES FOR THE PATIENTS IN THE US

Mukesh Kumar, PhD (Senior Director, Regulatory Affairs, Amarex Clinical Research, Germantown, MD)

Dr. Mukesh Kumar gave a basic and broad overview of the FDA’s expectations for drug approval. After reviewing the challenges to developing diabetes drugs (diabetes a chronic disease with multiple comorbidities and complications), Dr. Kumar briefly reviewed the two FDA guidance documents for diabetes medications. Turning to clinical trials, he discussed the various types of trial designs (from preclinical to phase 3) and emphasized that safety is the greatest concern for sponsors. He endorsed the use of adaptive study designs – e.g., switching from non-inferiority to superiority trials, adjusting the randomization ratio (going from 1:1 to 2:1), and combining the different phases of drug development. Mr. Kumar ended on a somber note, remarking that there are few “wonder drugs” in development.

EARLY OR LATE STAGE PARTNERING IN T2DM: A DILEMMA FOR A BIOTECH COMPANY

Thomas Kuhn, Pharm D, M.Sc. (CEO, Poxel, Lyon Area, France)

Mr. Thomas Kuhn gave the biotech perspective on early versus late stage partnering in the type 2 diabetes space. He opened his presentation by giving background on his company: Poxel has six small molecules under investigation for diabetes. The company’s lead compound, imeglimin, is currently in phase 2b. As a reminder, this first-in-class drug belongs to a tetrahydrotriazine-containing class of compounds called "glimins." For our latest update on imeglimin, see our January 15 Closer Look email at https://closeconcerns.box.com/s/5ykorkvbw4w0ks6xjmd2. Next, Mr. Kuhn transitioned the discussion to the myriad factors that small biotech companies, like Poxel, should explore when deciding when and how to partner: 1) what is the business’ overall corporate strategy? 2) what is its financial strategy? 3) what is the cash position of the company? 4) how attractive is the product from both an R&D and commercial standpoint? 5) what is the competitor landscape? Is it first in class or a follower? 6) who are the target partners? Do they have any programs in direct competition? Is the potential partner committed to the target? 7) what are the investors’ objectives? What is the timing for the return on investment? and 8) what stage of development is the product in? Perhaps one of the biggest questions for small biotech, is whether to seek an early stage partner or late stage partner. In Mr. Kuhn’s view, the attractiveness for an early stage partner is increasing; however, he still considers a late stage deal to be the Holy Grail.

-- by Jessica Dong, Hannah Deming, Kira Maker, Nina Ran, and Kelly Close

Editor’s note: The panel discussion “Cure for Type 1 Diabetes: What, Why, How, and When?” was updated on May 9.