{"id":1389,"date":"2010-12-27T09:15:16","date_gmt":"2010-12-27T14:15:16","guid":{"rendered":"http:\/\/www.cusjc.ca\/ottawainsight\/?p=1389"},"modified":"2017-11-19T18:35:20","modified_gmt":"2017-11-19T23:35:20","slug":"in-for-the-long-haul","status":"publish","type":"post","link":"http:\/\/www.cusjc.ca\/ottawainsight\/?p=1389","title":{"rendered":"In for the long haul"},"content":{"rendered":"

You don\u2019t have to be big to compete in today\u2019s pharmaceutical industry. Robert McInnis, CEO of Ottawa-based biotech company PharmaGap, says you just have to survive.<\/span><\/p>\n

\u201cBig is almost a negative because then you start needing too much cash that the financial world isn\u2019t funding,\u201d McInnis says. \u201cYou have to be very lean and productive, so the whole size thing really works in our favour.\u201d<\/p>\n

For McInnis and his seven colleagues at PharmaGap, raising capital has always been the number one challenge. Like any development stage enterprise, it can be difficult to grab the interest of the financial markets.<\/p>\n

But one of the things we\u2019ve shown is that when we announce results, our stock price goes up.<\/p>\n

\u201cOur CEOs tend to be incredibly clever and resourceful when it comes to how they staff an operation,\u201d explains Cate McCready, vice president of external affairs at the industry association BIOTECanada. \u201cCanadian biotech companies are known for being incredibly frugal with any investment money that they do attract because it\u2019s so difficult to bring investment dollars in.\u201d<\/p>\n

But frugality will not be an option in the upcoming year as the company\u2019s chief therapeutic drug candidate for cancer treatment, GAP-107B8, moves closer to clinical trials. PharmaGap investors can expect to see research and development costs increase significantly from here on in.<\/p>\n

\u201cBut one of the things we\u2019ve shown is that when we announce results, our stock price goes up,\u201d McInnis says. \u201cSo if you get your timing right, you can make a lot of money.\u201d<\/p>\n

A YEAR OF RESULTS<\/span><\/strong><\/p>\n

And in the last year, PharmaGap has announced plenty of positive results.<\/p>\n

In April, personnel from both PharmaGap and the Ottawa Hospital Research Institute appeared at the American Association of Cancer Research conference in Washington, D.C., to present data showing the effectiveness of GAP-107B8 in the treatment of ovarian cancer.<\/p>\n

PharmaGap had approached the OHRI in late 2008 to test its drug \u201cin the dish\u201d (in vitro) and in mice.<\/p>\n

The trend in the industry right now has been to rationalize your in-house research capacity to the best skill level possible.<\/p>\n

Dr. Barbara Vanderhyden, a senior scientist at the OHRI and the lead researcher on the PharmaGap project, says collaborations like this don\u2019t happen often but do occur \u201cwhenever companies approach us with compounds that look promising.\u201d<\/p>\n

\u201cWe thought the PharmaGap compound would be worth trying in our model systems to see whether it might actually be effective as preclinical work for human studies,\u201d says Vanderhyden.<\/p>\n

PharmaGap and the OHRI will continue to work together for the \u201cforeseeable future\u201d as Vanderhyden also noted testing on animals was already scheduled for well into the new year.<\/p>\n

In October, PharmaGap also announced the success of toxicity testing of GAP-107B8 by a research team at LAB Research Canada in Montreal. Led by PharmaGap\u2019s vice president of clinical development, Dr. Ken Sokoll, the tests measured whether the drug could be tolerated by the system when injected intravenously.<\/p>\n

Because it operates with such a small staff, PharmaGap has benefited immensely from collaborating with contract research organizations and research institutes to move its drug compound forward through the development cycle.<\/p>\n

CO-DEVELOPMENT<\/span><\/strong><\/p>\n

According to McCready, partnering and co-licensing agreements like these provide better opportunities to co-develop therapies and technologies. It has become a popular strategy for many biotech companies struggling for capital.<\/p>\n

\u201cThe trend in the industry right now has been to rationalize your in-house research capacity to the best skill level possible,\u201d says McCready. \u201cAnd then outsource some of your research to a CRO or back out even to a research institution to do some of the work for you.\u201d<\/p>\n

In 2009, the U.S. National Cancer Institute selected PharmaGap\u2019s compound PhG-alpha-1 for in vitro testing in its labs in Bethesda, MD. These tests screened the drug against a panel of human cancer cells using their 60-cell drug-testing program \u2013 at no cost to PharmaGap.<\/p>\n

The next hurdle will now be to pass all of the safety requirements necessary to get through FDA approval.<\/p>\n

The parties directly involved with the research and lab work are not the only ones who gain, either. Vanderhyden says the biggest benefit is being able to serve the public.<\/p>\n

\u201c[It\u2019s about] being able to utilize our expertise to help get promising new drugs out of the lab and into a clinic,\u201d she says.
\nMcInnis initially joined the management team in December 2004 as part of an agreement between PharmaGap and SC Stormont Inc., which specializes in providing strategic direction and capital to Canadian businesses in need of such services.<\/p>\n

\u201cLots of little companies around had technology expertise but had no idea how to run a company,\u201d McInnis says. \u201cAnd PharmaGap was one of them we thought had the technology but wasn\u2019t going to make it.\u201d<\/p>\n

McInnis added that neither he nor his Stormont colleague and current PharmaGap Chairman of the Board, Rod Bryden, had any real experience with the biotech industry when they first came on board. But six years in, he is confident that the company has a drug that works.<\/p>\n

The next hurdle will now be to pass all of the safety requirements necessary to get through FDA approval, which McInnis says he hopes to be in a position to apply for by the end of 2011, with clinical trials on humans beginning early in 2012.<\/p>\n

It\u2019s a daunting task, but McCready says that the reason nine out of 10 products that go into the research and development cycle for health end up failing is because the science wasn\u2019t provable. PharmaGap, with its consistent positive results for GAP-107B8, has already established it doesn\u2019t have that problem.<\/p>\n

FINANCING THE NEXT STEP<\/span><\/strong><\/p>\n

And unlike the majority of the very few other emerging biotech companies currently trading on the TSX, PharmaGap stock is not illiquid.<\/p>\n

\u201cWe\u2019ve traded as low as $0.08 and as high as $1.14 in the last two years,\u201d McInnis says. \u201cAnd there are lots of people who\u2019ve doubled their money on not very much movement.\u201d<\/p>\n

Still, financing will be an ongoing struggle for PharmaGap as it moves through the development cycle. In financial statements released Nov. 22, the company reported a net loss for its third quarter ending Sept. 30 of $883, 371, up more than $350, 000 from the $531, 429 loss posted in the same quarter last year. Costs for research and development will only continue rise from this point on until the drug comes to market.<\/p>\n

PharmaGap has already posted net losses of $2.4 million for 2010 \u2013 an increase of $300, 000 from the $2.1 million loss in the first nine months of 2009. As of Sept. 30, it is operating with a capital deficit of $1.1 million.<\/p>\n

\u201cWe\u2019ve moved the drug along, we\u2019ve come a long way\u2026 and we\u2019ve been able to raise the money needed to do it,\u201d says McInnis. \u201cWith hindsight, we could have done what we\u2019ve done a couple of years quicker. But without hindsight, it took the time it took.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

You don\u2019t have to be big to compete in today\u2019s pharmaceutical industry. Robert McInnis, CEO of Ottawa-based biotech company PharmaGap,<\/p>\n","protected":false},"author":146,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[209],"class_list":["post-1389","post","type-post","status-publish","format-standard","hentry","category-corporate-profiles-2010","tag-rebecca-ryall"],"_links":{"self":[{"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts\/1389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/users\/146"}],"replies":[{"embeddable":true,"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1389"}],"version-history":[{"count":16,"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts\/1389\/revisions"}],"predecessor-version":[{"id":4383,"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts\/1389\/revisions\/4383"}],"wp:attachment":[{"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1389"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}