Wall Street Reporter interview with Uli Hacksell about 6 months ago (August 13, 2004).
WSR: For those members of our audience here that haven't had the opportunity of tracking and following ACADIA Pharmaceuticals Inc. and its history, let's start with a timeline and background here on the company.
ACAD: ACADIA started as a drug discovery company in 1997 with a small group of people that has been increasing in number over time. Currently, ACADIA has about 100 people in total, with operations in San Diego, where we have our biology facilities and headquarters, and in Copenhagen, where we have our chemistry operations. Today, ACADIA has reached a stage where we have a very exciting drug development pipeline that is quickly maturing. It consists of five development programs. Three of these are run entirely by ACADIA and are at the Phase II stage. Two additional programs are being developed in collaboration with our partner, Allergan. ACADIA’s discovery engine has produced all of these five development programs. Hence, the productivity of our discovery platform is validated through the generation of a robust development pipeline. It continues to generate additional opportunities in the area of diseases for the central nervous system, or CNS, which is our focus, but also in other areas where we can partner our assets and use those revenues to fuel our development pipeline and move forward more aggressively.
WSR: What are the things we should note here about addressing the central nervous system disorders market space, and what are the trends here that you see shaping the way in which you operate and develop products?
ACAD: We are focusing primarily on three different CNS areas: Parkinson's disease, schizophrenia, and neuropathic pain. Let me start with the schizophrenia market, because it is currently the largest market. Schizophrenia is treated with antipsychotic agents, and the worldwide market for antipsychotic agents is around $12 billion. The market leader is Zyprexa, which has annual sales of over $4 billion. Risperdal, the most frequently prescribed antipsychotic drug, is number two in the market with annual sales of over $2 billion. These drugs are blockbusters despite the fact that they provide suboptimal treatment. They are associated with a large number of side effects and they are not effective in all patients. In addition, they do not treat the cognitive deficiencies associated with schizophrenia, which is one of the major unmet medical needs. ACADIA has two development programs in schizophrenia that deal with deficiencies of the current therapies: adjunctive therapy with ACP-103, which we expect will improve clinical outcomes for patients using existing antipsychotic agents, and ACP-104, which we expect will provide effective antipsychotic therapy with cognitive benefits.
In Parkinson's disease, patients are currently treated with dopamine replacement therapies such as L-dopa or dopamine receptor agonists. These treatments deal relatively effectively with the disease symptoms. Unfortunately, they also cause severe side effects. About 30% of patients develop treatment-induced psychosis, and about 80% of patients develop treatment-induced dyskinesia. Currently, there is no approved drug therapy in the US that addresses these treatment-induced dysfunctions. ACADIA offers a potential solution with ACP-103: This drug is intended to be administered along with the dopamine-replacement therapy, and we expect that it will allow the patient to take the optimal dose of L-DOPA or dopamine agonist without experiencing any treatment-induced dysfunctions.
ACADIA’s third targeted CNS indication, neuropathic pain, is another disease area with major unmet medical needs. Only one drug has been approved for this indication, Neurontin. It has multi-billion dollar sales, but it is not a very effective treatment for neuropathic pain. It is, at best, partially effective. ACADIA is working with Allergan on a proprietary mechanism that provides highly efficient treatment of neuropathic pain. Allergan has announced that it will take this program into Phase I clinical trials this year and that it expects that one of our drug candidates will be tested on patients with neuropathic pain in 2005.
WSR: When you talk about Parkinson's disease, give us a sense of your lead product candidate there.
ACAD: We are developing a compound called ACP-103, which acts as a selective inverse agonist on 5-HT2A receptors. It is a small molecule with desirable drug properties, attractive pharmacokinetic properties, and a great safety profile. We have been through Phase I and initial Phase II clinical trials with ACP-103. It demonstrated high safety and tolerability in Parkinson’s disease patients as well as in normal healthy volunteers. We have studied ACP-103 at very high doses in Parkinson's disease patients; patients did not develop any side effects from ACP-103, and the drug was well tolerated by patients. Interestingly, we did see initial indications of anti-dyskinetic efficacy of ACP-103 in patients that entered the trial with treatment-induced dyskinesia. We will continue to study the antidyskinetic activity of ACP-103 in future clinical trials.
We are currently conducting a large Phase II clinical study with ACP-103. In this study, we use treatment-induced psychosis in Parkinson's disease patients as the primary clinical endpoint. We give patients ACP-103 or a placebo, initially 20 milligrams of ACP-103 once daily, on top of their stable dopamine replacement therapy and we do that for 28 days. We also look at tolerability to demonstrate, once again, this aspect of the profile of ACP-103. We also will get information about antidyskinetic activity in this trial and in a clinical pharmacology study that will start shortly.
WSR: When we talk about the treatments and the applications as adjunctive therapy for schizophrenia, give us a sense of the ongoing Phase II program with ACP-103.
ACAD: In addition to having the Parkinson's disease program with ACP-103, we have a schizophrenia program. This program consists of three different components, one of which is a Phase II efficacy study that will start this fall and which will evaluate the utility of ACP-103 as an adjunctive therapy to current antipsychotic agents. In this trial, we will give ACP-103 adjunctively with the traditional antipsychotic haloperidol or with the atypical antipsychotic risperidone. This is a major study and we expect to report results from it in 2005. There are two additional studies in the Phase II clinical program for ACP-103 in schizophrenia. One study will investigate the ability of ACP-103 to treat haloperidol-induced motoric side effects in patients. That study will start shortly. We also have an ongoing clinical pharmacology study, where we are treating haloperidol-induced motoric disturbances in healthy volunteers.
I think it is appropriate also to mention our schizophrenic program with ACP-104 in this context. While clozapine is a well-known antipsychotic drug, we recently published our discovery that the positive cognitive benefits of clozapine therapy, seen in some patients, is due to the formation of large amounts of ACP-104, the major metabolite of clozapine. In addition to blocking the targets responsible for antipsychotic activity, ACP-104 has the unique ability to stimulate muscarinic m1 receptors, thereby improving cognitive processes. ACADIA has good IP protection around ACP-104, and we are moving forward aggressively with our development program for this drug. The Phase II clinical program for ACP-104 consists of four different studies and the first clinical trials with ACP-104 will start shortly.
ACADIA expects to report results from the ACP-104 program during 2005. Results from the Phase II program for ACP-103 in schizophrenia should be reported during 2005 as well. When it comes to the Parkinson's disease program with ACP-103, we expect to be able to report results in the first half of 2005.
WSR: Can you give us a sense of the depth of the relationship with Allergan and the importance of it in the development of the company here at this juncture?
ACAD: It is a very important relationship for ACADIA. We have formed three different collaborations with Allergan over the years. The first one was established in 1997, the second one in 1999, and the third in 2003. The collaborations already have led to the initiation of two development programs, the one in neuropathic pain that I mentioned earlier, and one in glaucoma, in which Allergan nominated a development candidate late last year. In my opinion, the relationship between ACADIA and Allergan is one of the best and most productive biotech-pharma collaborations ever.
WSR: Give us a sense of some of the highlights of the past 12 months and what it means now for the company as it is trading on the public market?
ACAD: We have arrived at an important inflection point in the development of our business. We have generated a broad and deep pipeline that should produce a continuous flow of clinical and other milestones over the next 12-18 months and which also should drive value for ACADIA’s shareholders. Funding from our IPO makes it possible for us to continue to push forward aggressively with our development pipeline. For these reasons, it is an exciting time to be a public company.
WSR: With the IPO completed, is everything in place here to accomplish the mission at ACADIA?
ACAD: Our mission has always been to improve patient care and clinical outcomes by discovering and developing novel drugs aimed at unmet medical needs. As a privately held company, ACADIA did a good job of assembling a highly productive proprietary drug discovery platform and validating it through initiation of several exciting development programs. With the recent completion of our IPO, we now possess significantly greater capital to support continued discovery efforts as well as generation of important clinical data. We believe we have sufficient resources in place to achieve numerous value-adding milestones.
WSR: Give us a sense of some of the key executives at ACADIA, along with their experience.
ACAD: We have a rare mix of management expertise - a team that knows how to both discover and develop drugs. This is one of the reasons why we have been so successful in generating a broad development pipeline from our discovery efforts. We have experience from big pharma companies and from important industrial and academic laboratories for CNS research. We have done it before - we have taken more than 20 drugs into the clinic in our previous careers and we have taken several of them all the way to the market. I spent a number of years in executive R&D positions at Astra and both Robert Davis, our Executive Vice President of Drug Discovery Development, and Bo-Ragnar Tolf, our Vice President of Chemistry, have extensive experience with drug discovery and development in large pharmaceutical companies. ACADIA also has access to great scientific competence through our President, CSO and Founder, Mark Brann.
ACADIA’s capable management team is complemented by a strong scientific advisory board, which comprises some of the very best people in neuroscience and neuropsychiatry including clinical key opinion leaders, Herb Meltzer, Charley Nemeroff, and Carol Tamminga, as well as Nobel laureate Arvid Carlsson.
The combination of our advisors and the competence and expertise within the management team provides an excellent foundation for ACADIA’s success. In addition, it is very important to mention the discovery engine itself, which is based on ACADIA’s core technology, R-SAT, which provides us with ongoing drug discovery opportunities. We are continuously using this proprietary engine to search for new starting points for drug discovery and development programs. So far, we have found new chemistries for more than 100 different targets mainly from the nuclear receptor and the G-protein coupled receptor families. Those opportunities are constantly being updated and prioritized so that we can select the very best candidates from this asset base and move them into development.
WSR: Given the technology, the science behind ACADIA, and the chemical genomic advantages that you have, what is the next great step for ACADIA?
ACAD: In the area of central nervous system disorders, we will continue to use our drug discovery capability to identify novel drug candidates, and then transform these discoveries into viable development programs. It is important to realize that we are also generating an exciting asset base in other therapeutic areas. While we don't possess the same internal expertise outside the CNS space, we have identified compelling opportunities in areas such as endocrinology, the metabolic syndrome, and ophthalmology. In ophthalmology, we have partnered with Allergan, which has the expertise, the clinical experience and the commercial capability to optimize these assets and provide great returns on investment. We expect to do the same thing with capable partners in the areas of endocrinology and the metabolic syndrome.
WSR: In looking at the shareholder perspective, what are the things that they should be excited about and the opportunities for participating in the ACADIA of today and the ACADIA of tomorrow?
ACAD: I think that ACADIA is at a truly exciting stage. We expect that our pipeline will provide a large number of clinical milestones in the next 12 to 18 months. Our pipeline is broad and deep and consists of programs that deal with major unmet medical needs in areas like schizophrenia, neuropathic pain, and Parkinson's disease. Because we are dealing with major unmet medical needs, our drug candidates address huge commercial opportunities. It is also very important to note that our most advanced programs are owned entirely by ACADIA. Therefore, there exists through these programs a tremendous potential for value creation.
For certain of ACADIA’s drugs, in particular those requiring extensive distribution and marketing, we likely will seek to establish partnerships to maximize our market reach. In other cases, such as with our Parkinson's disease program, we intend to commercialize the drug independently with a small, dedicated sales force, because this essentially is a high value specialist market. Finally, I want to say that one very special thing about ACADIA is the sustainability of our business, the fact that we continuously generate new research findings that can be transformed into valuable clinical programs. Fortunately, we have a management team in place that can see to it that we successfully continue to pursue these findings.
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