Staff Writer

Just two years after its founding, Alnara Pharmaceuticals Inc. agreed to be acquired by Eli Lilly and Co.

Terms of the all-cash deal were not disclosed, but they should be fairly significant given that Alnara's lead product, the pancreatic enzyme replacement therapy liprotamase, is under FDA review with an approval decision expected early next year.

No doubt the acquisition is good news for Alnara's venture investors, who've thus far put just $55 million into the Cambridge, Mass.-based biotech. (See BioWorld Today, Jan. 28, 2010.)

But liprotamase (formerly known as Trizytek) has consumed far more resources than that over the past decade. The drug was initially developed by the Cystic Fibrosis Foundation and licensed to Altus Pharmaceuticals Inc. in 2001. The CFF put $25 million into liprotamase, and Altus raised roughly $300 million in private and public financings over the years to support its pipeline, which also included a growth hormone product.

In 2008, liprotamase ran into trouble when a Phase III study hit its primary endpoint of significantly improving fat absorption, but the data were less robust than expected. Altus planned to file for approval anyway, based on FDA feedback, but the biotech couldn't find a partner and eventually ran out of money, returning liprotamase to the CFF and filing for bankruptcy. (See BioWorld Today, Aug. 13, 2008, Jan. 27, 2009, and Nov. 13, 2009.)

Meanwhile, Alexey Margolin, former chief scientific officer of Altus, had teamed up with serial entrepreneurs Richard Aldrich and Christoph Westphal to found Alnara. The start-up was focused on nonsystemic delivery of protein therapeutics for metabolic diseases, and at the time, Margolin thought he'd never work with liprotamase again. But when he heard the CFF was looking for a new partner for the drug, he couldn't resist: Alnara licensed liprotamase and refocused on getting the drug to market. (See BioWorld Today, March 25, 2009.)

With another $2.3 million from the CFF, Alnara completed a long-term follow-up study. The data showed liprotamase was well tolerated, and 96 percent of patients completing 12 months of treatment maintained or gained weight. Nutrient levels also were maintained, as was pulmonary function as measured by FEV1 tests. Alnara submitted a new drug application. (See BioWorld Today, Oct. 20, 2009.)

Margolin said Alnara initially planned to market liprotamase on its own. Pancreatic enzyme replacement therapy (PERT) is used to treat exocrine pancreatic insufficiency, a condition in which patients cannot properly digest fat, protein and carbohydrates, resulting in malnourishment and impaired growth. The condition affects 90 percent of cystic fibrosis patients, who comprise about half of the PERT market. Alnara figured it could reach them with a niche sales force.

But Margolin said that as Alnara talked to key opinion leaders in the space, it learned there were "great opportunities beyond cystic fibrosis," including chronic pancreatitis, pancreatectomy, pancreatic cancer and diabetes. "It became clear we would have a hard time marketing this alone," Margolin said

Then, after the J.P. Morgan Healthcare conference in January, potential pharma partners began to inundate the biotech with co-promotion, licensing and acquisition offers. Alnara hired J.P. Morgan to manage the process, from which Indianapolis-based Lilly emerged as the winner.

Why so much interest in the drug? In addition to its late stage, liprotamase is the first porcine-free PERT. Existing drugs including Creon (Solvay Pharmaceuticals Inc.), Ultrase (Axcan Pharma Inc.) and Pancrease MT (McNeil Consumer & Specialty Pharmaceuticals) are extracted from pigs.

Additionally, liprotamase is stable enough that it doesn't require a polymer coating like porcine-derived versions. That means patients need to take only five or six capsules per day rather than 20 daily capsules. And Alnara is working with the FDA on pivotal trial plans for a rapid-dissolving tablet formulation, which could be used in patients who can't swallow capsules, such as pediatric patients, or those on gastric feeding tubes.

Another bonus: the $500 million U.S. PERT market is growing, thanks predominantly to price increases now that recent FDA regulations have run most generics off the market. Many of the products predated the FDA, and the agency asked them to conduct clinical trials and gain approval or withdraw from the market. Most chose the latter.

Margolin predicts additional market growth through expansion beyond cystic fibrosis patients. The global PERT market is currently estimated at $1.2 billion.

Lilly's global reach is one reason Alnara chose the pharma as its partner, Margolin said. Lilly also offers experience introducing recombinant products and working in the pancreatic cancer and diabetes fields, he added.