West Coast Editor

With Vidaza standing firm against competitors, Pharmion Corp. is adding the Phase II anthracycline amrubicin for lung cancer to its pipeline in the $55 million net-of-cash buyout of privately held Cabrellis Pharmaceuticals Inc.

The deal calls for Pharmion to pay $59 million up front, with $12.5 million each for approvals of amrubicin in the U.S. and European Union. If the drug is cleared for a second indication in the U.S. or overseas, Pharmion would make another payment of $10 million for each market.

"I was a little skeptical that others would see the value of amrubicin like we saw it, unless we had completed the Phase II programs," said Christopher LeMasters, chief business officer of San Diego-based Cabrellis, noting that the company has four Phase II studies under way. "We had organized the company and structured ourselves to move forward alone."

Nippon Kayaku Co. Ltd., of Tokyo, markets amrubicin under the trade name Calsed in Japan, where the drug (originally developed by Osaka, Japan-based Dainippon Sumitomo Pharmaceuticals Co. Ltd.) won approval in 2002 for NSCLC and small-cell lung cancer. Cabrellis, known as Conforma Therapeutics Corp. before Biogen Idec Inc. bought Conforma in May, licensed North American and European Union rights in June 2005.

Amrubicin is the first totally synthetic anthracycline in the widely used class, which let Dainippon scientists make changes that will distinguish it from the likes of doxorubicin, daunorubicin and epirubicin, LeMasters said, particularly in the lack of cumulative toxicity. He added that SCLC will be the first indication sought, with NSCLC following closely.

"There's very little that improves the current treatment for SCLC," which makes up about 20 percent of lung cancers, LeMasters said. "Size-wise, [SCLC] compares favorably to a lot of the niche hematology indications." A breast cancer Phase II trial will start shortly, and the firm has "high hopes for [amrubicin against] non-Hodgkin's lymphoma."

In Phase II trials in Japan, the compound has proved itself as a single agent and in combination with cisplatin. Previously untreated SCLC patients showed an overall response rate of 76 percent when administered as a single agent and 88 percent when given with cisplatin. Median survival with single-agent amrubicin totaled 11.7 months and with cisplatin, 13.6 months.

Phase II results proved good with previously treated (sensitive or relapsed/refractory) SCLC patients, too, with amrubicin as a single agent yielding overall response rates ranging from 46 percent to 53 percent, with median overall survival rates of 9.2 months to 11.7 months. Pharmion plans to start Phase III trials in relapsed/refractory SCLC in the second half of next year, and to submit the data with Japanese results for approval in the U.S. and Europe in 2009.

In the takeover of Conforma, Cambridge, Mass.-based Biogen paid $150 million and agreed to another $100 million in milestones mainly to get CNF2024, a synthetic, orally bioavailable heat-shock protein 90 inhibitor. The amrubicin license became the main focus of specialty pharma firm Cabrellis, carved out of the Biogen arrangement. (See BioWorld Today, May 4, 2006.)

"I was selling the sexy of the sexy [in that deal]," LeMasters said, whereas would-be buyers of Cabrellis might have seen the amrubicin asset as somewhat ordinary when compared to the HSP90 drug. He largely credited Thomas Estok, Cabrellis' president and CEO, for the Pharmion deal. "He's a fantastic marketeer."

Having the investigational new drug application filed and the regulatory path laid out helped, as well. Even so, the buyout was not an obvious move for Boulder, Colo.-based Pharmion, nor was Pharmion's potential $270 million deal last year with GPC Biotech AG for overseas rights to the cancer drug satraplatin. (See BioWorld Today, Dec. 21, 2005.)

"I will argue all day long that you can't afford to buy the obvious," LeMasters said.

Third-quarter sales of Pharmion's Vidaza (azacytabine) for myelodysplastic syndromes at $36 million, which Matthew Osborne, analyst with Lazard Capital Markets in New York, characterized as "decent" - and well above consensus estimate of $32 million, despite threats from Dacogen (decitabine, SuperGen Inc.) and Revlimid (lenalidomide, Celgene Corp.).

Pharmion also sells thalidomide for multiple myeloma and leprosy, licensed from Warren, N.J.-based Celgene and Penn T Ltd. for all countries outside of North America, Japan, China, Taiwan and Korea. It also markets Innohep (tinzaparin), a low-molecular-weight heparin approved in the U.S. for deep-vein thrombosis, and Refludan (lepirudin), an antithrombin agent approved in the U.S., Europe and other countries for heparin-induced thrombocytopenia.

As for amrubicin, a number of companies had been familiar with the compound at Conforma before the merger with Biogen, and made "low-key inquiries relatively early in the course of the company," LeMasters said. Though amrubicin fell outside Biogen's areas of interest, "a lot of them at the company are looking at this [Pharmion deal] with some wonderment," he said. After Pharmion takes over, Cabrellis' San Diego facility will be closed and the firm's eight employees will move on, LeMasters said.