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Lucentis sits in the crosshairs as Pfenex seeks $74.75M IPO for biosimilar rival

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By Marie Powers
Staff Writer

Pfenex Inc. filed with the SEC for an initial public offering (IPO) of up to $74.75 million, aiming to finance a planned phase III trial of lead candidate PF582, a biosimilar to Lucentis (ranibizumab, Genentech Inc./Novartis AG). Filing as an emerging growth company, San Diego-based Pfenex set its sights on the big board, with plans to list on the New York Stock Exchange as PFNX.

The filing did not disclose the number of shares or price range for the proposed offering.

The company's Pfēnex expression technology platform is based on high-throughput screening of large libraries of genetically engineered Pseudomonas fluorescens bacterial expression strains, constructed from expression vectors that are incorporated into engineered P. fluorescens host strains. Pfenex then selects strains that express a protein of interest at optimal yields, purity and potency.

The technology originated at Mycogen Corp., acquired in 1998 by Dow Chemical Co., and originally was used for the low-cost manufacturing of a broad range of proteins for industrial applications. In 2009, Dow spun out Pfenex, which continued to improve the technology for biopharma applications. According to Pfenex, the platform offers a number of competitive advantages over traditional protein production techniques, including the ability to produce complex proteins with better accuracy and a greater degree of protein purity, at a faster rate of speed and lower cost.

PF582, for example, was advanced from concept to clinic in just 24 months.

PF582 is in a phase Ib/IIa trial in wet age-related macular degeneration, or wet AMD, with results expected in the fourth quarter. In its filing, the company said it expects to initiate a phase III trial in mid-2015, with results expected to report in 2017. Pfenex plans to commercialize PF582 on its own in North America and Europe, building an internal sales and marketing team. The lion's share of funds from the IPO are expected to finance the compound's remaining clinical program and early commercialization plans.

Lucentis, a vascular endothelial growth factor, or VEGF, inhibitor, initially was approved by the FDA in 2006 for neovascular age-related macular degeneration (wet AMD), later adding macular edema following retinal vein occlusion. In 2012, the agency elevated the drug to blockbuster status with approval for the additional indication of diabetic macular edema (DME), offering patients the first improvement on standard-of-care in 25 years. (See BioWorld Today, July 5, 2006, and Aug. 13, 2012.)

But competition came quickly, especially from off-label use of Avastin (bevacizumab, Roche AG), which was subsequently found equally effective and safe in treating wet AMD in a head-to-head study funded by the UK Department of Health. In 2011, Regeneron Pharmaceuticals Inc.'s Eylea (aflibercept) muscled into the space, and that company has moved aggressively to amp up Eylea's potential in a recent follow-on deal with Bayer AG, of Leverkusen, Germany, and a collaboration with gene therapy specialist Avalanche Biotechnologies Inc. (See BioWorld Today, Nov. 22, 2011, Jan. 15, 2014, and May 6, 2014.)

Still, Lucentis still generated approximately $4.3 billion in global sales last year, and Pfenex is hungry for a share of that revenue stream.

Pfenex reported that it completed bioanalytical similarity studies comparing PF582 to multiple lots of U.S. and European Union (EU)-sourced Lucentis as well as comparability studies between multiple lots of PF582 at pilot and commercial scale. The company also completed a preclinical study in an animal model that showed PF582 and Lucentis yielded similar tolerability and pharmacological profiles.

In January, the company held a biosimilar initial advisory meeting with the FDA to discuss its existing data, phase III trial design and strategy for comparing U.S. and EU reference products. Pfenex said it is in similar discussions with the European Union's Committee for Medicinal Products for Human Use.

Behind PF582, Pfenex has PF530, a biosimilar candidate to Betaseron (interferon beta-1b, Bayer), a multiple sclerosis drug whose global sales topped $1.4 billion in 2013. Pfenex plans to move PF530 into a phase I trial in the second half the year.

The company's pipeline includes five other biosimilar candidates, as well as vaccine, generic and next-generation biologics. Since its inception, Pfenex has partnered with a variety of biopharmas, including Boehringer Ingelheim GmbH, Bristol-Myers Squibb Co., Astrazeneca plc unit Medimmune, Merck & Co. Inc. and Sanofi SA. The company received funding from National Institute of Allergy and Infectious Diseases and the Biomedical Advanced Research and Development Authority for its vaccine platform, which includes anthrax and malaria candidates.

Pfenex reported cash, equivalents and short-term investments of approximately $5.1 million and an accumulated deficit of approximately $91.0 million as of March 31, and approximately 27.2 million outstanding shares.

William Blair & Co. LLC and JMP Securities LLC are acting as joint book-running managers for the offering with Mizuho Securities USA as co-manager.