Petisation. You might be tempted to call it revenge of the lab rats. But the technology developed by Australian animal health company Nexvet Biopharma to adapt monoclonal antibodies (MAbs) developed for humans for use in animals – maintaining efficacy at the proper dose without risk of rejection – takes the lucrative animal health business to the next level.

Nexvet, based in Melbourne, is developing its own product pipeline for domesticated animals, including lead candidate NV-01, a MAb fully customized to dogs that targets nerve growth factor (NGF) to treat osteoarthritic pain. The company also has NV-02, a feline MAb also targeting NGF for chronic pain in cats, and NV-06/NV-08, TNF-alpha drugs targeting chronic inflammatory diseases in dogs such as atopic dermatitis.

But Nexvet also has a partnering initiative, called Nexplora, designed to offer its Petisation technology for the development of veterinary products by conventional biopharmas. The platform could potentially position more biotech companies to target the estimated $25 billion companion animal health market, according to Mark Heffernan, Nexvet's CEO.

Heffernan previously was CEO of MAb developer Opsona Therapeutics Ltd., of Dublin, which was spun out of Trinity College Dublin in 2004. Last year, that company raised €33 million (US$43.2 million) in a series C round to advance its lead compound, OPN-305, which targets Toll-like receptor 2, into a phase II trial to prevent delayed graft function in high-risk kidney transplant patients. (See BioWorld Today, April 30, 2013.)

Heffernan was attracted to Nexvet by the pedigree of David Gearing, the company's chief scientific officer, a molecular biologist who co-founded Millennium Biotherapeutics Inc., a subsidiary of Millennium Pharmaceuticals Inc., now a unit of Takeda Pharmaceutical Co. Ltd., that was formed during a 1997 collaboration with Eli Lilly and Co., of Indianapolis, to discover and develop therapeutic proteins. Gearing's resume also includes tenure at CSL Ltd., of Melbourne, Systemix Inc., of Palo Alto, Calif. – acquired in 1997 by Novartis AG, of Basel, Switzerland – and Immunex Corp., which merged in 2002 with Amgen Inc., of Thousand Oaks, Calif., in a $10.3 billion deal. (See BioWorld Today, Jan. 14, 1997, May 30, 1997, and July 17, 2002.)

Petisation uses an algorithm that focuses on the structure of the antigen-binding domains of antibodies, retaining the binding affinity of the donor antibody more successfully than comparable approaches – such as complementarity determining region (CDR) grafting or germline substitution – without compromising speed or affinity.

The rapid process, which allows Nexvet's researchers to examine hypermutations, or diversity, is associated with a lower risk of immunogenicity, Heffernan explained, since structure and affinity are preserved.

In essence, Nexvet's technology reformulates monoclonal antibodies to be "species specific." By identifying sequences of circulating antibodies in humans or rodents, the technology determines which amino acid substitutions are needed to create customized MAbs that are fully functional and accepted by the immune system in the target species. The approach offers a quantum leap over the traditional approach to making drugs for animals by simply diluting or reformulating compounds originally designed for people.

"David's developed a very elegant algorithmic-based approach that enables you, in a single step, to convert a human antibody into a dog, cat or horse product," Heffernan explained.

The process also is safer for animals. In a study presented last month at a meeting of the American College of Veterinary Internal Medicine, NV-01 was shown to be effective in relieving pain in dogs, with no documented adverse events.

'NO ONE WAS FOCUSING ON THIS AREA'

Why focus on MAbs for pets?

"The first reason was that no one was focusing on this area," Heffernan told BioWorld Insight. "I had wondered why everyone was focusing purely on small molecules and not monoclonal antibodies or therapeutic proteins in companion animals."

Small molecules are associated with a number of safety issues in pets, particularly cats, whose livers are unable to process small molecules effectively, often leading to kidney or renal toxicity, he said.

"We started to look at monoclonal antibodies as an alternative," Heffernan said. "They're incredibly potent molecules and incredibly effective in humans, so we decided to take the leap from the human world – where we had experience – into the dog, cat and horse world."

As injectable-based projects, MAbs offer additional benefits in animal health associated with their long half-life, he added.

NV-01 already is moving toward a pivotal trial in dogs, scheduled to begin this year.

"The canine osteoarthritic market currently is being served with nonsteroidal anti-inflammatory drugs, and they sell approximately a half-billion dollars a year," he said.

The feline version, NV-02, is approximately six months behind in the pipeline and could become the first product approved for the chronic management of pain in cats, according to Heffernan.

REGULATORY PARTHWAYS FOR PET THERAPIES A CHALLENGE

Although Nexvet is taking a global approach, its initial focus is on the U.S. and European markets. The company is working with the same agencies that review human health products – the FDA and EMA – with additional input in the U.S. from the Department of Agriculture.

"For us, the challenge in dealing with monoclonal antibodies has been to work with and understand the regulatory pathways," Heffernan admitted. "However, we've built a really strong relationship with the regulators in Europe and the U.S., in helping to educate them and having them educate us on how to effectively develop these programs."

Despite the regulatory differences, the cost to bring animal health products, even MAbs, to market is just a fraction of that for human health counterparts.

"There's obviously a time savings," Heffernan said, estimating that an animal health drug can be developed in three to five years at a cost of $10 million to $15 million, from concept to launch. One of the biggest savings: smaller, faster and fewer safety studies.

"With highly pure, early stage research materials we can move into safety testing and efficacy testing with a small number of animals," he said. "We don't have to do rodent testing or monkey or primate testing."

With Nexplora, Nexvet aims to partner with biopharmas not only on animal health applications but also to advance human health. The thinking is that Nexvet will convert proprietary mouse or human antibodies from partners into canine-specific antibodies for testing in dogs to generate clinically meaningful results, which could be added to the safety or efficacy data package for the human version of the same drug.

"It's a great way of doing research," Heffernan said.

MORE BIOTECH PLAYERS MOVING INTO ANIMAL HEALTH

The animal health sector has attracted a number of players that are placing big bets. The biggest is Zoetis Inc., of Madison, N.J. The former animal health business unit of New York-based Pfizer Inc. completed its initial public offering (IPO) in February 2013 as a Pfizer spin-out, with its shares (NYSE:ZTS) opening at $31.50. Although the stock is paying dividends, shares have been stagnant, closing last Thursday at $32.27.

In May, the company reported first quarter revenues of $1.1 billion, an increase of 1 percent over the same period in 2013, and net income of $155 million, an increase of 11 percent over first quarter 2013 results. Zoetis is slated to report second quarter financials on Aug. 5.

Aratana Therapeutics Inc., of Kansas City, also closed its IPO last year, raising $39.7 million to propel a broad pipeline of therapies for companion animals that includes candidates for cancer, pain, viral diseases and allergy as well as an appetite stimulant. The company followed its public debut with an upsized public offering in January in which it raised $97.85 million. Earlier this year, Jefferies LLC analyst Jeffrey Holford predicted Aratana could see up to six product approvals by year-end 2016 on top of two approved products, forecasting risk-adjusted revenues of $200 million by 2020.

Last week, the company filed for a $100 million mixed securities shelf registration. Aratana's shares (NASDAQ:PETX), which opened at $7 on June 27, 2013, closed last Thursday at $12.78.

Kindred Biosciences Inc. is another prospect in the market, also closing its IPO in December for a 2013 trifecta in animal health. The IPO raised $60.4 million, and the company hauled in another $58.1 million in April to support its pipeline of small molecules and biologics. Kindred is seeking to in-license additional product candidates while it continues to advance its internal R&D efforts on Cerekin, an oral interleukin-1 inhibitor for osteoarthritis in dogs, Atokin, a high-dose antihistamine for atopic dermatitis in dogs, Sentikin, a non-NSAID, non-opioid analgesic for postoperative pain in dogs and other products.

The company's shares (NYSE:KIN) closed last Thursday at $15.24.

Most recently, another Australian transplant, Parnell Pharmaceuticals Holdings Pty. Ltd., filed an F-1 with the SEC for a proposed IPO, seeking to raise $57.5 million and to list on Nasdaq as PARN. The Sydney-based company, which opened an office in the U.S. last year, already markets five products for companion and production animals in 14 countries.

Last week, Jefferies LLC initiated coverage of Parnell with a "buy" rating and $18 price target. Holford called Parnell "the most attractive investment opportunity in the animal health universe, given its heavily discounted valuation." He predicted that, following the IPO, the company will "drive significant upside for shareholders with clear catalysts ahead," including a program in osteoarthritis for companion animals that could launch late next year.

'PETS ARE BECOMING PART OF THE FAMILY'

The animal health business is growing at a faster rate, year over year, than the market for human pharmaceuticals, according to Heffernan, and Nexvet wants some of those treats. As demographics shift – with people living longer, more likely to live alone and less likely to have children – many are turning to pets as their companions, he said.

"Pets are becoming part of the family," Heffernan pointed out. "They used to live outside. Now they're coming inside, and they're sleeping on the bed."

Once owners develop such an intimate relationship with their pets, they're more likely to spend big on the health of those animals, as well.

Nexvet hopes its approach in animal health – to develop a platform technology specific to dogs, cats and horses "from the outset" – will set it apart.

"We understood the issues of developing human biologicals – immunogenicity being one of the primary issues – so we engineered a platform that enabled us to reduce that risk," Heffernan said. "We're looking to dominate the space of biopharmaceuticals in companion animals." //

Editor's note: This story originally appeared in BioWorld Insight, the weekly news service that provides behind-the-scenes analysis and commentary on the biopharmaceutical marketplace. Subscribe by calling (770) 810-3144 or (800) 477-6307 if calling from the U.S. or Canada or email bioworld at salessupport@thomsonreuters.com.