It’s been a busy year for Ottawa-based biotech company PharmaGap Inc., and CEO Bob McInnis says next year promises to be even busier, as the company prepares to take its leading cancer drug, GAP107-B8, into human clinical trials.
After researching and developing GAP107-B8 for more than a decade, McInnis plans to file PharmaGap’s application for clinical trial approval with the U.S Food and Drug Administration (FDA) by the end of next year.
“The challenge now is making sure all the pieces are lined up and thought about in advance so we can actually file next December,” he said. “It’s a challenge, but it’s something our people know how to do, so there’s not a lot of risk.”
Pick what you can win: ovarian cancer
In October, the company chose ovarian cancer as the target for its clinical trial. On November 15, it began in vivo testing of GAP-107B8 on human ovarian cancer cells in mice, which is required before proceeding with clinical trials in humans.
PharmaGap was originally testing GAP-107B8 in both ovarian and bladder cancer cells, but it decided to focus solely on ovarian cancer for its clinical trial application. It has consistently shown positive results, and can be delivered without being inserted into the bloodstream, which means a lower dosage is required.
GAP-107B8 works well against ovarian cancer, because it targets the group of enzymes that contribute to the growth of ovarian cancer cells.
“What you want to do to get first approval is pick what you can win,” McInnis said. “That being said, bladder cancer is a great target for us in the future. The goal is to get the drug approved for ovarian cancer, then expand the implication to many, many cancers.”
The in vivo study on mice is expected be completed by mid-December, and McInnis hopes to release results in early January
Dr. Barbara Vanderhyden, a cancer therapeutics researcher at the Ottawa Hospital Research Institute (OHRI) has been working with PharmaGap to test GAP-107B8 since 2009. She said GAP-107B8 works well against ovarian cancer, because it targets the group of enzymes that contribute to the growth of ovarian cancer cells. “[GAP-107B8] is unique in that it’s the only drug I’m aware of that targets this particular set of enzymes,” Vanderhyden said.
She also said the latest tests of GAP-107B8 have shown the drug has the ability to reduce ascites, which is a significant cause of death in women with ovarian cancer. Ascites is the build up of fluid in the tissue around the abdomen. While the reduction in ascites was not expected, it’s something Vanderhyden said she and her team are watching closely as they test the drug in mice.
LICENSING AND DEVELOPMENT
McInnis said it’s always been PharmaGap’s plan to license GAP-107B8 before it reaches the final stage of human clinical trials. Licensing agreements are common among small Canadian pharmaceutical companies, according to Cate McCready, vice president at BIOTE Canada, because they put less financial strain on the company.
“Companies like us, are the people companies like Pfizer and Roche look to, to get their next big blockbuster drug,” McInnis said.
In February 2011, PharmaGap announced its partnership with B.C.-based company, Northern Lipids Inc., a contract research and manufacturing firm, to look into a way to deliver GAP-107B8 through fat cells. With finances tight, McInnis said co-development deals and co-licensing agreements are always options the company explores.
Phase three, is too costly for PharmaGap to conduct on its own. It requires testing GAP107-B8’s effectiveness on thousands of patients, to receive market approval.
After the results from the in vivo tests are released in January, PharmaGap will prepare for phase one of its human clinical trial, the toxicology test, another step required to gain FDA approval. It will be the first time GAP107-B8 will be tested on humans. The toxicology test does not test the drugs effectiveness on cancer, but rather makes sure the drug is not harmful to humans. McInnis said he hopes the toxicology test will run in the second half of 2012, in time for PharmaGap to file with the FDA in December.
Ultimately McInnis hopes to sign a licensing agreement with a major pharmaceutical company during or after phase two of human clinical trials, which is when the drugs therapeutic affect on cancer is tested on 100 to 150 people. Phase three, is too costly for PharmaGap to conduct on its own. It requires testing GAP107-B8’s effectiveness on thousands of patients, to receive market approval.
“The job of big pharmaceutical companies really begins at phase three,” McInnis said. “ Our job is to get it as close to that point as we can.”
But first the drug must gain FDA approval, and PharmaGap needs the money to complete the necessary testing and development required to file the application.
The ongoing challenge of raising capital
The biggest challenge PharmaGap now faces is raising capital, McInnes said. That has been accomplished primarily through the private placement of its shares and equity units. But but the volatile nature of today’s market has made it a tough buy for investors.
“When times were better in the markets, we used to announce results and there’d be a huge amount of volume in our shares,” McInnis said. “So people could always see liquidity in our shares, move in and out and make a little profit.”
“For emerging companies in biotech there’s a dire need for investment from the private sector.”
Now, McInnis says when he approaches investors, they’re often impressed with PharmaGap’s endeavors, but lack the liquidity to invest.
PharmaGap’s share price has never been higher than immediately after going public in 2002, trading between $1.64 and $2.65. Since 2003, however, it has declined steadily and currently trades on the TSX at around $0.08.
Finding private sector investors is a challenge faced by many small Canadian pharmaceutical companies face, McCready said..
“For emerging companies in biotech there’s a dire need for investment from the private sector,” she said. “Capital is difficult to find and it’s very competitive globally for investment dollars right now.”
Money will continue to be a problem for PharmaGap as it gets closer and closer to beginning human clinical trials.
While it’s overall operating expenses were down 27% in the period quarter ending September 30, 2011, its clinical development expenses were up $47,000, and will likely rise as the company continues to work on the development of GAP107-B8.
While McInnis is confident PharmaGap has a drug that works, its success hinges on its ability to finance its operations until it reaches a co-licensing agreement with a major pharmaceutical company. The company has been too optimistic in the past, originally hoping to file for FDA approval in December 2011, but McInnis said he’s confident that this time the company is on the right track, as long as they have they have the money.
“I’m confident we’re doing everything we need to do to optimize the chance that the drug is going to work,” he said. “But that takes money to get there and we need resources to do that.”