International Biotechnology Trust (IBT) 22 sept 2003 Page 7
have been a string of timely drug approvals this year. New leadership at the Food and Drug
Administration (FDA) already seems to be having an impact with eleven new biotech drug
approvals in 2003, at the time of writing. The FDA appears to be committed to shortening the
time it takes to review new drug applications and improving the predictability of the review
process.
Recent approvals include two exciting first-in-class drugs in the cancer field. AstraZeneca's
Iressa was approved for the treatment of advanced non-small cell lung cancer and
Millennium Pharmaceutical's Velcade was approved for the treatment of relapsed and
refractory multiple myeloma less than four months after the application was made. Both
drugs were approved on the basis of Phase II trials rather than more typical larger controlled
Phase III trials. First-in-class drugs typically attract additional scrutiny from the regulatory
authority and these approvals illustrate the efforts of the FDA to be flexible about its
approach to the evaluation of drug candidates that address life threatening diseases where
little or no therapy is currently available.
A spate of positive recent clinical trial data has helped spur share prices. In May 2003,
Genentech presented results from a Phase III trial of Avastin, which showed an improvement
in the overall survival of colorectal cancer patients. Many investors were not expecting a
positive outcome following poor data in breast cancer in 2002 and the results played a major
role in rekindling interest in the sector. Avastin could be the first to market of a new class of
drugs called angiogenesis inhibitors, which choke off the supply of blood to tumours.
Further encouraging clinical data was released by one of IBT's investments, Esperion
Therapeutics. Esperion has a promising pipeline for the treatment of cardiovascular disease.
These drug candidates are designed to increase levels of HDL (the so-called good
cholesterol), and to reduce the build up of cholesterol-laden plaques in the arteries of
patients. In June 2003, initial Phase II results were released showing a reduction in plaque
volume in the arteries of patients with acute coronary syndromes. This is an exciting finding
and we await the full details of the trial, which will be reported in the coming months.
Company pipelines continue to broaden and mature and many of the announcements made
by later-stage portfolio companies are described later in the report. The pipelines of IBT's
earlier stage investments have also made progress. KuDOS Pharmaceuticals started Phase
II trials of its drug candidate, PaTrin, in metastatic melanoma and colorectal cancer patients.
AnorMED started Phase II trials with AMD 3100 for stem cell transplant in cancer patients.
Inflazyme's lead compound started a Phase IIa asthma study with partner Aventis, and
Targeted Genetics and the Cystic Fibrosis Foundation initiated a Phase IIb trial in cystic
fibrosis. Finally, Epimmune's HIV vaccine candidate entered Phase I/II trials and a second
vaccine entered Phase I/II trials in lung cancer and colorectal cancer patients.
The biotech sector has benefited from corporate activity as product acquisitions are used to
diversify pipelines and revenue streams. There were a number of mergers and acquisitions
(M&A) announcements from within IBT's investment portfolio. Novuspharma agreed to
merge with Cell Therapeutics (CTIC) adding a late stage drug candidate, pixantrone, to
CTIC's pipeline. OSI Pharmaceuticals acquired Cell Pathways, adding a marketed oncology
product and expanding its pipeline through an earlier stage therapeutic platform. Inflazyme
bought GlycoDesign to expand further in the area of inflammation and to boost cash
reserves. CancerVax brought in an early stage pipeline of angiogenesis inhibitors through
the acquisition of Cell-Matrix, and Corvas merged with Dendreon Corporation. Finally, Galen
announced in July 2003 that it was in preliminary discussions with a potential acquiror,
although these talks were terminated without the emergence of a bid for the company.
There have been some acquisitions of biotech companies by pharmaceutical companies, for
example Johnson & Johnson's acquisition of one of IBT's investments, 3-Dimensional
Pharmaceuticals. However, these acquisitions have been limited in number as
