Cardium’s diamonds in the rough strategy
Christopher Reinhard and his team at Cardium Therapeutics (AMEX:CXM) have shown an uncanny knack for finding “diamonds in the rough” that Big Pharma, venture and institutional investors have developed and are now are on the block.
“The strategy is intended to provide a diversified and more balanced portfolio of risk/return opportunities,” Cardium’s chairman and CEO says in an interview with BioTuesdays.com. “Small caps are usually known for one asset, and if it fails, it’s over. Our view is to avoid reliance on any single technology platform or product.”
Mr. Reinhard says the company is focused primarily on late-stage clinical development opportunities and revenue-based businesses. “In this challenging economic environment, we continue to see a steady stream of deal flow. We look at up to two dozen opportunities a year.”
According to Mr. Reinhard, Cardium normally uses equity to acquire cost-effective assets that have a strong value enhancement potential. “We have no interest in building a sales and marketing organization. Our objective is to place our product candidates into larger organizations or with partners that have existing commercialization resources and a need for innovative products.”
Cardium’s current portfolio includes: Excellagen, a recently FDA-cleared wound care product for the treatment of diabetic foot ulcers and other dermal wounds; Generx, a regenerative medicine product candidate for patients with coronary artery disease, which is currently in a Phase 3 registration study for international markets; and MedPodium Nutra-Apps, a lifestyle nutraceutical platform targeted for millennial consumers aged 20 to 35.
In 2009, in Cardium’s first asset monetization, the company sold its InnerCool Therapeutics medical device business to Philips HealthCare, a unit of Philips Electronics.
Prior to Cardium’s founding in 2003, Mr. Reinhard helped establish Collateral Therapeutics to develop various growth factor therapies licensed from the University of California at San Diego. Collateral was sold to Germany’s Schering in 2002 for $160-million. But after Schering’s merger with Bayer, the Collateral assets became a non-core holding in the merged company.
“We formed Cardium to acquire the portfolio from Schering because nobody understood the assets better than us,” Mr. Reinhard recalls.
Cardium paid around $5-million for the assets, which included Generx. “We are positioning this product outside the U.S. as a lower-priced alternative treatment for patients who may not have access to costly and invasive coronary artery bypass surgery and angioplasty and stents or [who] may not be ideal candidates for these procedures,” he adds.
Mr. Reinhard likes to point to the skylines of cities in developing countries where nearly every rooftop has a satellite dish. “If these homes can be wired, they’ll be able to afford our treatment.”
Generx has been evaluated in more than 650 patients in the U.S., Europe, South America and Canada, including 450 Generx-treated patients in four multi-center, double-blind, placebo-controlled clinical studies at 100 medical centers.
Mr. Reinhard explains that when key heart vessels become blocked or injured, the heart has the ability to grow minute blood vessels or collateral circulation. Generx is designed as a one-time treatment to boost the growth of these tiny blood vessels. It is delivered to the heart by a cardiologist through a standard catheter during an out-patient procedure.
“Generx is the most clinically advanced, DNA-based cardiovascular angiogenic growth factor therapeutic in the world,” he contends.
In March, the company initiated the 100-patient ASPIRE registration trial in the Russian Federation to evaluate the safety and efficacy of Generx for myocardial ischemia in patients with stable angina due to coronary artery disease.
The study will use SPECT imaging (Single-Photon Emission Computed Tomography) as a key clinical endpoint to measure profusion in microvascular circulation eight weeks after administration of Generx. Cardium’s clinical development partner is the bioRASI/Vendevia Group.
Mr. Reinhard points out that Russia was selected for a registration trial because it has a nearly fourfold greater death rate from cardiovascular disease than the U.S., where the life expectancy of an average male is 76 years, compared with 64 years in the Russian Federation.
The company also has approval for a Phase 3 study in the U.S. with end-stage angina patients. However, he says this represents a small patient population and would be difficult to recruit. If registration is obtained in Russia, the company intends to seek approval for Generx in India, China and Brazil before returning to the U.S. to discuss a regulatory pathway with the FDA.
“There is a very large patient population outside the U.S. and we think there is a greater opportunity there,” he adds. And at an expected cost of $2,000-to-$4,000, the Generx treatment is expected to be attractive, compared with expensive bypass surgery, he contends.
While the company looks for a sales and marketing partner for Generx in Russia, as well as in other newly industrialized countries, it also is advancing the international commercialization of its Excellagen product for diabetic foot ulcers in Europe, Russia and South Korea.
The FDA cleared the sale of Excellagen last November to manage diabetic foot ulcers and other dermal wounds, following surgical debridement procedures. The procedure involves cutting away dead tissue, applying Excellagen to the minor bleeding and bandaging the wound. Excellagen has been shown to activate human platelets, triggering the release of platelet-derived growth factor (PDGF) and one syringe can cover wounds up to five square centimeters.
“Excellagen is uniquely positioned as the only ready-use, syringe-based, professional use, formulated collagen for the treatment of diabetic foot ulcers that is specifically engineered for surgical debridement and platelet activation,” Mr. Reinhard says.
In March, Cardium announced the market introduction of Excellagen in the U.S. and a logistics agreement with Smith Medical Partners, a subsidiary of H. D. Smith. Initially, the company is using a web-based marketing approach, supported by Smith, while it looks for a strategic marketing partner.
There are an estimated 1.3 million Americans with diabetic foot ulcers, who see their physician 14 times a year on average. About half of these visits involve surgical debridement, resulting in a potential of 9.1 million debridement procedures annually for diabetic foot ulcers.
Cardium figures that every 1% penetration by Excellagen in the diabetic foot ulcer market would represent $10-million in annual revenue.
Excellagen is also cleared for use in the management of partial and full-thickness wounds; pressure, venous and chronic vascular ulcers; and tunneled, surgical, trauma and draining wounds.
While Mr. Reinhard admits that nutraceuticals is a crowded space, he says, “We took a fair bit of time deciding how to compete in a field dominated by products sold to baby boomers, aged over 50, who have issues with overall health, joints and metabolism, for example.”
As a result, Cardium identified millennial consumers, aged 20 to 35, as an underserved market. “What makes our products unique is that they are small, tasteless, once-daily pills that fit easily in a pocket or purse for use anytime and anywhere,” he says.
The MedPodium product line has been formulated to promote “personal health and wellness for today’s active and high-energy young professionals,” he adds. “Each formula features a key standardized, scientifically-validated ingredient at the clinically studied amount for efficacy.”
For example, Neo-Energy is a blend of caffeine, green tea leaf extract and vitamin B3, for an energy lift or pick-me-up. Neo-Chill features 200 mg of Suntheanine, which has been clinically shown to promote an alert state of relaxation. And Neo-Carb Bloc has been clinically shown to reduce the enzymatic digestion of dietary starches contained in many carbohydrate-rich foods, without blocking the absorption of “good” carbs such as fruit and vegetables.
Cardium plans to introduce a sleep product, Neo-Sleep, and other line extensions over the next year. “Our product line is packaged as an “impulse buy” counter item,” he says. They are initially is being sold through a web boutique, medpodium.com, convenience stores, and there are plans afoot to broaden their reach into food, drug and mass market retailers next year.