INNOVATOR

Making the case for

Search and developmenT

This is a transformative time for biotech. In response to the economic and market challenges, as well as the rising cost for drug discovery and development, companies are changing the way they conduct their R&D. As industry looks for new approaches to drug design, the focus has shifted to strategic partnerships, collaboration and new business models that offer reduced risk for investors. iCo Therapeutics is a Vancouver-based biotech making impressive progress with the changing R&D model. The TSX Venturetraded company eschews traditional R&D, instead in-licensing drugs and working with strategic partners to develop new therapies, with a focus on ocular indications such as Diabetic Macular Edema (DME). Under the guidance of co-founder and CEO Andrew Rae, the start-up’s approach to R&D is geared more towards drug development than drug discovery.

It’s a model that’s paying off for the company. Since its foundation in 2005, iCo Therapeutics has secured the rights to two drug candidates, as well an oral drug delivery system. All target unmet medical needs.

In February, the company was ranked number one in technology and life sciences on the 2013 TSX Venture 50. It’s also in the midst of a lucrative research partnership for a DME treatment with the JDRF (formerly the Juvenile Diabetes Research Foundation), the world’s leading organization for Type 1 diabetes research.

For a company to achieve these successes within 10 years of starting up is an impressive feat.

“Our business model is basically that we don’t have research facilities, we don’t have a staff of scientists and we don’t do preclinical work. It’s very much focused on reducing the capital inputs,” says Rae. “We’ve been able to become a Phase 2 clinical stage company with just over $20 million invested into the firm. That is just a fraction of what it has normally taken companies in the past.”

This ‘No Research, Development Only’ (NRDO) business model focuses on getting drug candidates from big pharma or universities that are either off-patent, currently approved or near commercialization. iCo then redoses or reformulates the candidate for new or additional indications.

The model is a sign of the times. In

today’s financial climate, investors are attracted to companies that offer lower levels of risk than traditionally associated with biotech firms. In theory, NRDO models offer drugs that already have preclinical or clinical history, and therefore have a good safety signal and potentially efficacy related data. This in turn helps de-risk assets.

Another important factor is the lure of more efficient drug development. iCo Therapeutics licenses products that can be taken into clinical trials immediately. The company focuses on getting a drug from preclinical to Phase 2 studies, and then on finding strategic partners to advance the drug through Phase 3 and to market. Or as Rae explains: “Our focus is really running the second and third legs of a 4 x 100 relay.”

Rae is someone who knows how to get a biotech off the ground – and what business models will succeed in today’s financial environment. A serial entrepreneur, with a Bachelor of Science from the University of Western Ontario and an MBA from Simon Fraser University, Rae is on his third start-up company with iCo.

For iCo Therapeutics, setting up shop in Vancouver was an obvious choice says Rae. He and co-founders John Clement and John Meekison wanted to access the human capital in town.

One of those local talents was the company’s chief medical officer, Dr. Peter Hnik, who joined the company a year after it was founded. Dr. Hnik has a medical degree from the Medical Faculty of Charles University of Prague, as well as a Master of Health Sciences from the University of British Columbia.

“I practiced ophthalmology for several years and with the patients who had Diabetic Macular Edema, it was always very frustrating to see the limited treatment options available those days. At that time in many cases one could just watch them lose their vision over the years,” says Dr. Hnik.

Diabetic Macular Edema is a diabetic eye

“We’ve been able to become a Phase 2 clinical stage comPany With just over $20 million invested into the firm. that is just a fraction of What it has normally taken comPanies in the Past.” — andrew rae

“it tyPically comes in kids, small kids uP to tWenties in age. they suffer tremendously, and may end uP With corneal abrasions, ulcers With Potential corneal scarring. there are drugs of course that you can use, but they are only efficacious to a certain Point. it’s not enough.” — dr. Peter hnik

disease that involves fluid leaking from the blood vessels in the eye, which causes the retina to swell and results in blurring and loss of vision. If untreated, overtime DME can render patients blind.

After joining iCo Therapeutics in 2006, Dr. Hnik began working on the company’s first product iCo-007, a treatment for DME. The drug was designed by Isis Pharmaceuticals, from which iCo first in-licensed the candidate in 2005. When injected in the eye, iCo-007 blocks proteins that promote the growth of fragile blood vessels in the retina which can leak or burst and cause gradual vision loss, thus helping to improve a patient’s sight.

The current standard of care – the only approved product – is a drug called Lucentis, which requires monthly injections. The hope with iCo-007 is that patients would need injections only a few times a year, as opposed to every month, creating a large market opportunity by either replacing Lucentis or being positioned as a combination therapy with Lucentis. iCo Therapeutics announced at the beginning of this year that iCo-007’s iDEAL Phase 2 study, which is being conducted by the Wilmer Eye Institute of the Johns Hopkins University School of Medicine, had passed the patient recruitment threshold and had no drug-related adverse events in patients receiving iCo-007.

The iDEAL study is a rare get for a Canadian start-up. The multi-centre clinical trial can enroll up to 208 patients and is being conducted across the U.S. in some of the world’s leading eye centres. This is due in large part to the strategic partnership developed by iCo in 2011 with JDRF, a U.S. organization that over the years has awarded over US$1.5 billion for diabetes research.

This partnership is one of iCo’s most important to date, says Rae. “This is a significant study. We’ve enrolled 174 patients,” he states. “We believe it’s one of the biggest Phase 2 studies in this space currently, which is quite an accomplishment.”

Companies can realize significant advantages through partnerships of this sort. “Working with JDRF allowed us to reduce the cost of the study by about 40 per cent and also extend our payment schedule,” says Rae. “That kind of leverage allows us to finance quite economically. We also tapped into a clinical network that our CMO, Peter Hnik, is very close to; we have 27 sites that are involved in this study.”

In addition to iCo-007, the company is also developing iCo-008. Also known as Bertilimumab, the human monoclonal antibody has Phase 2 clinical history. iCo acquired the candidate in 2007 from MedImmune Ltd, the biologics division of top-10 big pharma company, AstraZeneca.

The drug candidate is being developed for severe ocular allergies, including vernal and atopic conjunctivitis, for which there is no viable treatment.

“It’s a horrible disease,” says Dr. Hnik. “It typically comes in kids, small kids up to twenties in age. They suffer tremendously, and may end up with corneal abrasions, ulcers with potential corneal scarring. There are drugs of course that you can use, but they are only efficacious to a certain point. It’s not enough.” iCo-008 aims to help fill this unmet medical need and leverage the value of other indications through partnerships. In 2011, a private Israeli firm called Immune Pharmaceuticals licensed the systemic rights to iCo008, to further develop the drug and to look into possible other indications, such as a treatment for Inflammatory Bowel Disease.

The final product that iCo is developing is iCo-009, its Oral Amphotericin B Delivery System. Amphotericin B, or Amp B, is the current Gold Standard for treating systemic fungal infections. However, Amp B can only be administered intravenously. This is not practical in developing countries with less advanced medical infrastructures, and where fungal infections are very common especially in patients with cancer, diabetes and HIV/ AIDS. iCo is the first company to develop an oral form of the IV-administered drug.

Currently at the preclinical stage, the Oral Amp B system was licensed from the University of British Columbia, with whom iCo is still working closely to develop the delivery system. Along with academic partnerships, the Oral Amp B System also secured government funding for iCo Therapeutics.

In 2012, iCo received $1.1 million in research funding from the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP) for the delivery system. The funding came under the Canadian HIV Technology Development Program.

“Acquiring the Oral Amp B Delivery System from the University of British Columbia was really about moving further up the food chain, because we were identifying a platform that could be used with generic products,” says Rae. “It is really an asset.”

In the future, along with further developing its pipeline assets, the company aims to find a license partner to get iCo-007 to Phase 3 and market. In addition, iCo is focused on finding global partnerships and joint ventures to further establish its presence as a leader in British Columbia’s ophthalmologic market.

To see this story online visit http://biotechnologyfocus.ca/ making-the-case-for-searchand-development/