In addition to the three articles I was expecting, an even more extensive article appeared on line by the author of the Business Week article. The complete article, including tables and pictures is link in the Background Table of home.att.net .
Lilly gets a Vitamin $hot from Ligand
The Retinoid Renaissance
Ligand Pharmaceuticals' recent deal with Eli Lilly to develop
retinoids for diabetes puts a spotlight on these versatile cousins
of Vitamin A. Years after retinoids were approved for acne and
psoriasis, and later wrinkles, new indications in cancer and now
diabetes may mean the biggest markets are yet to come. This
class of drugs represents the kind of scenario biotech pioneers
have been dreaming of -- from both a scientific and business
perspective. Progress with retinoids reflects the fundamental
insights of biology, specifically cloned receptor drug targets,
paired with the power of small-molecule chemistry.
By Joan O'C. Hamilton
Editor
Like chemical Forrest Gumps, some drugs keep popping up
heroically in the darndest places, turning their own presumed flaws
into advantages. Aspirin is certainly one such agent: It reduces
inflammation and quiets a headache. Take it too close to surgery
and your blood won't clot -- but it's that same property that can
prevent a heart attack. In the biotech arena, interferons have
shown new powers over the last two decades -- as anti-cancer
agents, dry mouth drugs and even hepatitis therapies.
Now, another class of agents is making a splashy encore. We
know them as potent skin nostrums for acne and psoriasis, and
more recently as wrinkle smoothers. But chemical cousins of
Vitamin A called retinoids are revealing some new possibilities, and
they have prompted a strategic shift for the biotechnology
company most actively pursuing them: San Diego's Ligand
Pharmaceuticals Inc.. Not only does Ligand have about a dozen
trials going using retinoids to treat several forms of cancer and
HIV, but now its lead compound, Targretin, is showing impressive
potential as a diabetes treatment. In the space of two years, all this
activity has contributed to the dismantling of one significant
relationship, the inking of another major alliance, and the
beginning of a footrace among a number of retinoid compounds to
be the first to market. It could open up a big opportunity in the
booming category of non-insulin diabetes drugs, forecast to more
than double from about $2 billion today to roughly $5 billion by
2005, according to Front Line Strategic Management Consulting
Inc. of Foster City, Calif..
Flying foxes and turbo-Clearasil
For centuries, cultures have recognized Vitamin A's powers, albeit
often indirectly. Vitamins are chemicals the body doesn't produce
but needs to ingest in order to maintain normal metabolic function.
Vitamin A is known, for example, to play an important role in cell
growth and differentiation, not to mention promoting healthy skin
and vision. Vitamins are obtained from food, synthesized in the
body by enzymes, and in Vitamin A's case, mostly stored in the
liver. More than 300 years ago, Chinese physicians used the livers
of flying foxes to cure night blindness. Modern physicians follow
exactly the same course, although the Physician's Desk Reference
offers a far less exotic explanation: "Retinal [a form of Vitamin A]
combines with the rod pigment, opsin, in the retina to form
rhodopsin, necessary for visual dark adaptation."
There are a handful of Vitamin A analogs on the market today,
mostly designed to shut off the damaging effects of proliferative
cell growth for skin conditions. In 1971, Johnson & Johnson won
approval for the retinoid dubbed Retin-A for severe cases of acne.
By the late 1980s, New Brunswick N.J.-based J&J began
promoting research showing that the active ingredient in Retin-A, a
retinoid called tretinoin, reduced wrinkles and brown spots. After a
seven-year wrangle with the Food & Drug Administration over
J&J's off-label promotion, the company won the right last year to
sell the drug, renamed Renova, for wrinkles.
Another retinoid on the market, from multinational Hoffmann-La
Roche, is Accutane, an oral formulation for very severe acne and
Roche's Tegison for severe psoriasis. Allergan Inc. won approval
last June for Tazorac, a retinoid marketed for psoriasis in the U.S.,
and, as Zorac, for psoriasis and acne overseas.
But there's always been a catch: Retin-A is only approved for
severe acne, for example, because it can over-sensitize the skin to
sunlight and produce extreme skin irritation. Meanwhile, Accutane
is prescribed only under very controlled conditions. First and
foremost, it's teratogenic, meaning it can cause birth defects.
Moreover, it causes dryness in mucous membranes, soreness and
pain in joints, and even mood swings.
In biology, however, a problem can often be
a clue to new insights. The broad array of
side effects was one clue that retinoids
worked through receptors that were
pervasive in the body, and in the mid-1980s,
basic biological study of the activity of
retinoids unearthed some new truths: It
seems that retinoids closely mimic the
behavior of hormones in the body, and exert
their activity by binding with intracellular
receptors, which in turn, directly turn genes
on and off inside the cell. Dr. Ronald Evans
of the Salk Institute for Biological Studies in La Jolla, Calif.,
discovered that All-Trans-Retinoic-Acid, or ATRA (the ingredient
J&J sells as Retin-A), worked by activating a particular receptor he
dubbed the Retinoic Acid Receptor, or RAR, which is also the
mechanism through which several naturally occurring hormones
influence cells. Further, Evans showed that ATRA also activated
several other intracellular receptors involved in widely different
tissues. "Conceptually, it was a huge breakthrough," explains
Richard A. Heyman, senior director of retinoid research at Ligand.
By the early 1990s, Evans had found another related receptor
called RXR, for Retinoid X Receptor, which was also found in
many key systems.
Next came the
realization that the
lock-in-key receptor
mechanisms involved
with retinoids often
worked in pairs, as
with both a deadbolt
and a main lock
needing to unlatch in
order for a door to
swing open.
Subsequently,
researchers have
discovered six or seven cases where a critical pairing of receptors
includes RXR, including Vitamin D signalling (involved in calcium
and bone activity); thyroid hormone (regulates heart rate and liver
function); RAR activity (involved with cell growth); and PPAR which
stands for peroxisome proliferator activated receptors (involved in
glucose signalling).
Death to vestigial tails
Knowing that underpinning suddenly opened up a new world of
possibilities to investigate. The retinoids' value in skin diseases
was fairly well understood, and related to the RAR mechanism
involving cell growth and differentiation. But companies began to
look for other ways to use retinoids for goals beyond the skin.
Roche uses the retinoid Vesanoid for a form of leukemia. A year
ago, Sparta Pharmaceuticals, Inc. of Horsham, Penn., sought to
investigate the retinoids' differentiating effects on several bone
marrow disorders characterized by a common stem cell defect.
With an agent called RII Retinamide licensed from the Beijing
Institute of Materia Medica in China, Sparta began clinical trials in
the U.S. and hopes to complete them before the end of next year.
In 160 patients treated in China with so-called Myelodysplastic
syndromes, 60 percent had positive responses.
But Evans also found that retinoids were involved in so-called
apoptosis, or programmed cell death, which scientists believe
occurs either when a cell's internal clock runs out, or when it
perceives there's a defect in the cell and it should die before it
proliferates. Apoptosis is credited, for example, with making the
webbed feet and vestigial tail structures of a human embryo
disappear at a particular stage of development.
Cancer can develop when a DNA mutation in a cell evades
apoptosis, and the cells grow unchecked. Ligand scientists have
shown that activating RXRs with retinoids can trigger cancer cell
death. Today, the company is testing its Panretin and Targretin
retinoid compounds against a number of cancers, including head
and neck cancers, ovarian cancer, several kinds of skin cancer
and leukemias. One value of this approach is that it is markedly
different from traditional chemotherapy, which generally just wipes
out fast-growing cells, friend and foe alike. Certain cancers resist
such treatment because they are not necessarily fast-growing,
including lung, colon and breast cancers. Using natural
mechanisms that are far more discriminating to damaged cells
could offer a new avenue to killing the cancer without killing the
patient. Indeed, the mild side-effect profile of Ligand's retinoid
analogs against cancer has been a significant positive result in
clinical trials to date.
Much of Ligand's work in cancer has been conducted with a
corporate partner, Irvine, Calif.-based Allergan. That 5-year-old
alliance began in 1992, primarily to pursue cancer, ophthalmic and
skin disorder products (the latter two being Allergan's key area of
expertise; press release). Ligand's bio-input was a slew of cloned
human retinoid receptors, used to assay and optimize potential
retinoid compounds. By 1994, Allergan and Ligand moved the
partnership to a new level and formed Allergan Ligand Retinoid
Therapeutics Inc. (ALRT) in Irvine, Calif. to further develop
retinoids, raising over $32 million in a public offering of rights to
Ligand and Allergan shareholders. (Allergan press releases: )
Poor, sweet little mice
David E. Robinson, Ligand's CEO, was
widely hailed for the innovative ALRT deal.
And once in hand, it fit into Robinson's
strategy to keep Ligand focused on oncology
and female health. Progress in cancer,
meanwhile, has been good. But about a year
ago, Heyman went to Robinson with a not
entirely welcome bit of news arising from the
work exploring the different receptor pairings
and how they could influence key body
systems. Heyman was growing increasingly
interested in the PPARs, which were clearly
linked with RXRs to regulate insulin and glucose signalling
--essential metabolic processes that go awry in diabetes. Heyman
directed his team to investigate whether retinoids working through
the RXR pathway could alter those processes. Working with mice,
the team found retinoids that could sensitize cells to insulin and
reduce circulating glucose, triglycerides and insulin levels -- all
desirable in fighting the disease (findings were published in Nature
March 27, 1997). Moreover, when paired with some new drugs
such as thiazolidinediones (or TZDs), the combination of the
retinoids and the agents specifically acting through PPARs alone
worked synergistically.
Heyman knew as well as anyone that one of the hottest drug
markets today is for non-insulin diabetes drugs. While insulin goes
a long way to stabilize the glucose levels in a diabetic, there is a
common misconception that having access to insulin is essentially
a "cure" for the disease. According to Simeon I. Taylor, M.D.,
Ph.D., chief of the diabetes branch in intramural research at the
National Institute of Diabetes, and Digestive and Kidney Diseases
in Bethesda, Maryland; there are several problems with insulin that
go beyond the obvious inconvenience of patients having to inject
themselves. "There is some evidence that for patients who are
insulin resistant at high levels, insulin can have undesired effects,"
Taylor explains Those include promoting further weight gain,
promoting appetite, and possibly even accelerating the onset of
atherosclerosis. Taylor adds that diabetics typically get used to the
bother of injecting insulin; however, because insulin injection does
not "cure" the problems associated with widely fluctuating blood
sugar levels, it is the constant monitoring and planning that the
disease requires that becomes so intrusive. And for some
diabetics, there is the reality that "even if you do everything right,
you can go blind, you can have your kidneys fail, or have an
amputation or a stroke," Taylor adds.
Focus vs. opportunity
With those shortcomings as backdrop, Heyman went to Robinson
with the recommendation that Ligand pursue a diabetes indication
for retinoids, too. If retinoids were to work as hoped, they offered
two advantages over insulin: They could treat the disease
immediately, helping the body use insulin more efficiently, and they
might block progression of the disease in a way insulin often can't,
and at least diminish the cardiovascular damage, kidney damage
and neuropathies that can have such ongoing, painful and deadly
consequences for diabetes patients. At a meeting of senior
executives in mid-1996, a wary Robinson quizzed Heyman: "He
said, 'Rich if I give you one choice, metabolic diseases or cancer,
and you can only build one program, what would you choose?'"
"Metabolic," was Heyman's reply.
"It's not what (Robinson) wanted to hear," laughs Heyman today.
"He was tough but understanding. We had to rethink our strategy
and put it to our senior business people to identify a good partner."
Adds Andres Negro-Villar, Ligand's chief scientific officer, "It was
clear to us late last year if we were going to mount a serious effort,
you had to have multiple studies in thousands of patients," and that
meant hooking up with a big, experienced partner, well-versed in
diabetes.
By then ALRT had developed roughly 2,000 retinoid analog
compounds, but Allergan clearly had no expertise in diabetes. And
then there were the messy details of the cross-development and
marketing agreement to clean up in order for Ligand to go forward
in metabolic disorders. "Metabolic disease was not contemplated in
the original ALRT contract," explains Negro-Villar; so Ligand
contacted a number of players, and also moved to exercise the
options of the ALRT deal. In September, Ligand and ALRT
announced they were buying back the rights from ALRT holders at
$21.97 a share, or roughly $71 million in cash and stock. These
shares cost ALRT holders $10 originally, but came with warrants to
purchase two additional Ligand shares for $7.12 a share until the
year 2000. As a result, on the close of the buyback, ALRT
shareholders received $7.69 in cash per ALRT share, plus 0.97 of
a Ligand share, plus twice the difference between Ligand's current
stock price of $14.66 a share and the warrant strike price, for a
total of $33.99 a share.
Allergan, in turn, paid Ligand over $8 million to claim its rights to
half the products that arose from the collaboration. Divying them
up was not such a straightforward task, however. Targretin had
always been Ligand's agent, but Panretin and many other agents
were committed to various licensing and marketing strategies.
Eventually, the parties agreed to give Panretin to Ligand, and
several promising agents for acne and psoriasis to Allergan. In
diabetes, while Ligand walked away with the primary retinoids that
have been shown to be orally active in animal tests, Allergan
retained the rights to several other closely related
"third-generation" molecules in that class that could also be potent
diabetes agents. Many other compounds were distributed between
the two partners by lottery, although in several cases, each partner
will share in the other's success by collecting one-third of
milestone payments from future partners, as well as a healthy
royalty cut from any future sales. (Allergan press release: )
By Oct. 20, however, the deal Robinson had been telling Wall
Street he was committed to making by the end of the became a
reality: Eli Lilly Co. of Indianapolis, Ind., announced it was stepping
up with almost $40 million in equity, $12.9 million in up-front
research funding, and about $50 million for the next five years in
research support, plus future royalty payments, in exchange for
significant rights to Ligand's retinoid compounds in metabolic and
other disorders (Lilly's press release). Lilly President Sidney Taurel
said the alliance was an "important opportunity to transform our
existing diabetes business into a broad franchise in all phases of
metabolic disease." Lilly already holds a significant share of the
U.S. market for insulin, including porcine-derived insulin and
Humulin, genetically engineered human insulin.
From partners to competitors
Allergan and Ligand officials don't seem to be crying any tears over
parting company, but in truth, the complex structure of
cross-royalties that continues will make them business associates
for some time. One of the most interesting things is that Allergan
has access to several retinoids it considers third-generation
molecules against diabetes that appear to be more selective than
the molecules Ligand retained, according to an Allergan
spokesman. Allergan is using the biological insights gleaned from
ALRT on another interesting product in development, as well. This
compound is not a retinoid per se, but rather an "inverse agonist"
aimed at the same receptor categories, and designed as an
antidote to the dry mouth associated with retinoid therapy. "We will
now be head-to-head competitors in dermatology, oncology and
metabolic disease," says the Allergan spokesman, who adds that
Allergan will be seeking an experienced diabetes partner, too. "We
think we have an advantage," counters Negro-Villar, "but you can't
sit on that advantage."
Progress with retinoids represents the long-discussed but to date
fairly elusive potential of second-generation biotech companies to
make the next great leap in drug development by combining
top-notch chemistry with biological sleuthing for the causes and
mechanisms of disease. In the next 10 years these molecular
targets are likely to be at the core of much of the progress in
diabetes. Hambrecht & Quist Group securities analyst Richard A.
van den Broek believes the Lilly deal is an excellent one for Ligand
and that the company is a great example of chance favoring the
prepared mind. "You would never think that a retinoid (active in)
skin disorders could have applications in metabolic disease," van
den BBBroek says. With the expertise it has built up in unraveling
molecular mechanisms in signalling, however, he believes Ligand
can become a significant player in diabetes.
Diabetes. Acne. Cancer. Psoriasis. As Forrest Gump might be
inclined to put it, delving into the biology of retinoids may be like
opening a box of chocolates. Researchers just never know what
benefits they're gonna get. |
