Glickman swinging for the fence again in Isotechnika merger
Richard Glickman is poised to hit another home run with the proposed merger of his closely-held Aurinia Pharmaceuticals and Isotechnika Pharma (TSX:ISA) to create a global nephrology leader.
Dr. Glickman has a decades-long track record of successfully developing and selling pharmaceutical and biopharmaceutical companies. For example, in 2001, he co-founded Aspreva Pharmaceuticals which went on to conduct one of the largest and most important lupus nephritis studies in history, called the Aspreva Lupus Management Study (ALMS). It resulted in the emergence of CellCept as a new standard treatment for the potentially fatal disease. In 2008, Aspreva was sold to Swiss-based Galenica Group for $915-million.
“There is an emerging body of data, suggesting that the combination of a calcineurin inhibitor (CNI), like Isotechnika’s voclosporin, and CellCept can dramatically increase complete remissions in patients, the rapidity at which they reach remission and the duration of remission,” Dr. Glickman says in an interview with BioTuesdays.com.
Lupus nephritis is an autoimmune disease that causes an inflammation of the kidneys. Dr. Glickman says that the disease flares up in patients taking CellCept on average 1.7 times a year. “We believe the combination of a CNI like voclosporin and CellCept can produce a more durable response in patients and allow us to reduce steroid use in patients as well.”
Under the merger accord, Isotechnika will acquire 100% of the outstanding securities of Aurinia in a stock swap, resulting in a 60-40 post-merger ownership split between Isotechnika and Aurinia, respectively.
If shareholders approve the transaction, the new company, to be named Aurinia Pharmaceuticals, plans to initiate a global Phase 2b clinical trial, which will treat about 220 lupus patients with a combination of voclosporin and CellCept.
Some 2,700 patients have already been treated with voclosporin, which Isotechnika has been developing to prevent transplant rejection in kidney patients. “So, we have established very good safety and efficacy data already,” says Robert Foster, president and CEO of Isotechnika. “Voclosporin is a potent CNI, and we clearly understand its mechanism.” Dr. Foster will be CEO of the new Aurinia.
Dr. Glickman is no stranger to voclosporin either. Aurinia is a spinoff of Vifor Pharma, a member of the Galenica group. In January 2012, Isotechnika granted Vifor an exclusive license to develop voclosporin for the treatment of lupus and proteinuric nephrology indications.
“Last year, I was approached by the CEO of Vifor and asked to do something entrepreneurial with the CellCept legacy—specifically how we could utilize our lupus expertise in further developing drugs to treat the disease,” Dr. Glickman recalls. Ultimately, he chaired a team that put together the spinoff of Vifor.
The Vifor assets that moved to Aurinia included the voclosporin license from Isotechnika, the people who ran the clinical programs for Aspreva and all of the data from the ALMS study (which, Dr. Glickman says, has been instrumental in developing the clinical protocols for voclosporin) and Vifor financing for Aurinia.
The Phase 2b trial will be conducted at many of the clinical sites that Aspreva used for the ALMS study, with the same steering committees that led the CellCept trials. “Those key opinion leaders are behind the design of the voclosporin combination program, which is very important,” Dr. Glickman points out.
“As the standard of care, CellCept hasn’t delivered the levels of complete and partial responses that we thought the drug should,” he admits, pointing out that Aurinia reviewed two other CNI drugs – cyclosporine and tacrolimus – as possible therapies to be combined with CellCept.
Noting various side effects with cyclosporine and tacrolimus, which are not found with Isotechnika’s voclosporin, Dr. Glickman says, “We believe voclosporin represents the best in class therapeutic agent for treating lupus in combination with CellCept. As in other multi-drugs therapies, we would like to possibly use less of each drug with the idea to suppress the immune system in a gentler, balanced way, which could lead to fewer infections and relapses.”
He says the idea is not to displace CellCept but, rather, add to it with voclosporin. “Market entry is very attractive, given the large number of patients now on CellCept.” He figures lupus nephritis is a billion-dollar market. “There’s high interest in Big Pharma to develop drugs in the lupus space, and we believe positive data will be extremely attractive to those partners. Either we’ll become financeable or be acquired.”
Asked whether Aurinia will continue developing voclosporin for transplant, Dr. Glickman says lupus nephritis will be the primary focus of the company’s clinical development. “We believe the value in this franchise is voclosporin for the treatment of lupus nephritis and other proteinuric nephrology indications. Transplant will be de-prioritized and only developed if we have significant interest in a global partnership.”
Dr. Foster explains that transplantation, as part of nephrology, has been the focus of Isotechnika since day one. But it’s an expensive development program, with two pivotal trials costing in the order of magnitude of $60-million. On the other hand, the Phase 2b lupus nephritis trial is anticipated to cost around $14-million.
“We have the opportunity to build value back in the company and raise our market cap with a highly recognized lupus group from Aspreva and roll them into a new company with us,” Dr. Foster says. “Then, we have the flexibility to be opportunistic in the area of transplantation, if the opportunity presents itself. So, I see the merger as a fresh beginning to build the value that shareholders are expecting.”
The name, Aurinia, comes from the Latin, meaning a mature butterfly, Dr. Glickman says, adding that this is very apropos, since the company will be working in lupus, which is known as the butterfly disease, owing to the butterfly rash that is the first symptom of the disease.
“Very early on, Bob and I recognized that the wisest thing to do was to consolidate our IP as a way to create value and offerings to Big Pharma,” Dr. Glickman says. “It was complex, because Isotechnika had a number of partners in voclosporin that had to be worked with to end up with an integrated IP portfolio. It took about six months to get our heads around that.”
The major shareholders of the new Aurinia will include ILJIN Life Sciences of South Korea, 3SBio (NASDAQ:SSRX) of China, Vifor, Paladin Labs (TSX:PLB) and the shareholders of Isotechnika and the current Aurinia.
The merged company also wants to raise $25-million to $30-million to support its clinical program. Management plans to raise interim financing in the next few weeks, ahead of the shareholders meetings, with a larger financing planned in April, which will be followed within 60 to 90 days by the start of clinical testing.
Dr. Glickman contends Aurinia is proceeding with a large Phase 2b trial to reduce execution risk. “By using the team that has done it before and making the study large enough, we’ll get a definitive answer on the potential of voclosporin.”