Dan, great report on the shareholder meeting.
Just to add my impressions, both from the meeting, and general impressions of AMLN's overall position.
1. Cash / commercialization
Those are two separate, but related issues.
AMLN seems optimistic about their ability to establish a deal for the commercialization of pramlintide, but I wouldn't consider it a sure thing, nor, do I think, do they. These deals take a long time to negotiate, and the pharma companies are tough negotiators and are aware of AMLN's cash position. Also, there's still clinical risk. I think there's a high likelihood pramlintide is a viable drug ... but none of us will know until at least the European PIII results are available Q4 this year.
What did come across in Joe Cook's comments is that they are in discussions with several companies, and are pleased with the level of interest.
Cash is another issue. While cash is one of the two major reasons for wanting a commercial deal in the next 6-9 months (the other is of course the desire to leverage a large pharma's marketing and sales infrastructure), the low cash position and the high burn rate is an obstacle to achieving a deal that would be attractive to AMLN and its shareholders.
The best time to sign a deal from the standpoint of AMLN is of course with the European PIII results in hand. However, that puts them just a few months from running out of money.
If my memory serves me correctly, AMLN was in a similar position before they signed the J&J deal. They didn't have a lot of cash, and they were waiting for some important clinical results (the 28 day pII data that showed persistent reductions in blood glucose). At that point they did a private placement, much of which was subscribed by insiders at AMLN (folks like Ted Greene). They didn't really have to raise the cash then, but did so to give them a little breathing room as they were negotiating their deal, which ended up being with J&J.
Net, net, I suspect AMLN is looking at a variety of alternatives on the cash front, and on the corporate partnering front.
At the shareholder meeting, Joe did mention that the European diabetes market, I guess T1, is served primarily by specialists ... leaving open the speculation that a small company could commercialize in Europe if they were not able to strike an acceptable corporate deal. I'm sure he's making that point with the pharma companies he's talking with ... although I'm sure he has no intention of commercializing himself.
Lilly is obviously a candidate, given its diabetes franchise and Joe's background there. No one seems to be closing the door to J&J, either, though it would be a whole new deal, and there doesn't appear to be any discussions to that effect at this time.
2 - Joe Cook / esprit de corps
Joe comes across as being in command, and as an effective leader. There's no air of desperation or discouragement. There's a lot of optimism and determination, and Joe appears to have a lot to do with that.
This is after some significant trauma. The company has gone through a 25% reduction in force about 60 days ago.
3 - Expense control
The company is very focused, and is open about this. They are conserving cash in every way possible. The management team has taken a 15% salary deferral, to be paid in stock at today's prices in the middle of 1999. I believe Joe has taken an even greater deferral. It appears this has been a largely voluntary act.
4 - J&J
I think everyone was stunned when J&J pulled out. Joe was open about this during his presentation and the Q&A. When asked for his speculation as to why they did, he deferred, but mentioned analysts have commented that J&J is concerned about profitability this quarter (there's a certain amount of data that supports this).
Standing back and looking at things from J&J's perspective late last year, you have Ergo, with a product that reduces HbA1c by >.5%, orally available, and works in 90%+ of the diabetes market (T2), with an NDA already filed, which J&J can pick up for $30M or so, or continuing clinical development of pramlintide, with large scale clinical trials for another couple of years, optimism, but no guarantee that the product will reduce HbA1c by >.5%, with an injectable drug. Apparently pramlintide was J&J's single most expense pharmaceutical research project.
I have lots of respect for J&J, but this looks the decisions to pull of the deal with AMLN and to do the deal with Ergo were made by a financial person, not a scientist or an MD. On the surface, from a financial perspective, J&J's decisions made a lot of sense. But from a scientific point of view, as any reader of this thread (and particularly Henry Niman's comments, the decision to go with Ergo was an unwise one, as the subsequent FDA Advisory Committee vote indicated. It's a little harder to comment on the pramlintide decision.
5 - Ergo / FDA
The Advisory Committee had a number of objections to Ergoset. While the 6 month difference between placebo and drug in HbA1c levels was positive (>.5%), there were some troubling side effects (and a number known from bromocriptine's time on the market for I believe Parkinson's Disease), there's no clear explanation of the mechanism of action, and there are some questions about the persistence of effect.
The FDA is very clear that they will require 12 month data before approving another glucose-lowering drug (Rezulin was approved on 6 month data ... WLA is doing the longer-term studies now). This is why the latter two US pramlintide trials are 12 months. Apparently European regulators are more receptive to 6 month data, especially considering the product's potential for positive secondary effects in areas such as weight and lipids, hence AMLN's continuing the latter two European PIII trials as 6 month trials.
6 - PIII trials
The data mining on the 1st two PIII trials is proceeding. As has been already reported, and extensively discussed here, there's data supporting a >.5% reduction in HbA1c in stable insulin users, and in poorly controlled patients (entering the trial with >8% HbA1c).
While retrospective analysis is risky, and a big pitfall for biotechs, I think the reasoning here is sound, and the data are material.
There's some interesting data in the area of weight control, lipid effects, and just recently reported, in the incidence of severe hypoglycemic episodes in T1 patients (>50% reduction).
However, I have a significant issue with the weight control, lipid and hypoglycemic data as it's been discussed by the company so far, as the data has been presented on an intent to treat basis (across all patients enrolled in the trial).
We need to see the weight, lipid, and hypoglycemic data for the stable insulin and / or poor glucose control patients (where available), for two reasons.
a - AMLN quite reasonably argues that the stable insulin / poor glucose control patient data in the first two PIII trials give us important information on the drug effect, not available in the overall trial results. And given the trial design for the latter 4 PIII trials, potentially a better predictor of the type of glucose lowering effect we'll see than the first two trials' results.
b - Some of the weight, lipid (maybe) and hypoglycemic benefits shown in the first two PIII trials may have been the result of the same confounding variable of changes in insulin use. We know from the DCCT data that patients on intensive insulin regimens, while reducing HbA1c (and intendent diabetic complications), experienced weight gain and increased incidence of hypoglycemic episodes.
Btw, AMLN appears to be optimistic that the changes in trial design and management are successful in controlling the variable of insulin usage in the latter 4 Paradigm trials.
7 - Pramlintide
AMLN continues to gather impressive data on the mechanism of action of pramlintide, both pre-clinical and human. For some time AMLN has talked about pramlintide's effect on both gastric emptying and postprandial (after meals) liver glucose production (by suppressing the secretion of glucagon). At the shareholder meeting, Orville Koltermann's slides also discussed pramlintide's ability to inhibit pancreative enzyme levels, and ability to induce satiety to reduce food intake. I'm not sure yet of the relevance of inhibiting the pancreatic enzymes (amylase, lipase) ... I'll find out when I can, and this may have been discussed before, but this was the first I'd heard of the data supporting an effect on satiety. Koltermann described pramlintide as a neuro-endocrine hormone ... one having an effect in brain, which is as one would suspect, I guess, for an important chemical messenger involved in metabolic processes.
The net of this all, is that there's a fair and growing amount of data that supports the mechanism of action of pramlintide, and the relevance of amylin as a physiologically important molecule.
8 - product pipeline
Maurizio Denaro talked briefly about the product pipeline at the shareholder meeting. Two points were clear. First, research is continuing on the pipeline, but no major expenditures will be undertaken at this time, due of course to the focus on pramlintide. Second, the pipeline is continuing to develop, and is encouraging, though very early stage.
The furthest along is Exendin, which appears to be a highly potent GLP-1 agonist. It apparently enhances beta cell function (hence I guess stimulates endogenous insulin production in T2 patients), and is highly effective in lowering glucose in pre-clinical models. Exendin is ready to enter the clinic when funds and strategic focus allow.
AMLN continues to be excited about the lipid-lowering antioxidants from HMR, and there are other research initiatives in uncoupling protein (ATP production regulator which diverts nutrient energy to heat), and new adipocyte (fat cell) signals to regulate body weight. The latter two are very early on, in fact, this was the first I'd heard of the adipocyte proteins, but in the lipid-lowering antioxidant area, AMLN has apparently selected a candidate for preclinical development.
All in all, I remain a big AMLN fan, and believe pramlintide to have the potential to be a medically relevant molecule with significant commercial potential ... but there are significant risks here.
Peter
p.s., whew, I sure typed alot. chalk it up to the big cup of Peet's coffee after church this morning. gotta run ... have to pick up the girls. : ) |
