Rhyming with "Enron" probably didn't help, but Enzon Pharmaceuticals Inc. had other, more tangible problems last year than a subliminal similarity to the scandal-plagued energy firm.
In February 2005, Enzon abruptly quit development of its lead cancer drug, Pegamotecan - a polyethylene glycol-enhanced (PEGylated) version of topoisomerase I inhibitor camptothecin for gastric or gastroesophageal cancers - after the company took an interim peek at Phase IIb data.
The Pegamotecan news came as part of Enzon's second-quarter earnings report, which was shortly after Jeffrey Buchalter was named president and CEO of Enzon. That happened in late December, and Buchalter had served as chairman board since September. (Before Enzon, Buchalter served as president, CEO and director of ILEX Oncology Inc., which was acquired by Genzyme Corp. for $1 billion in stock, in a deal disclosed during the first quarter of 2004.)
A little more than one month after Enzon's Pegamotecan fizzle, the company backed away from its North American marketing agreement for the cancer drug Marqibo with Inex Pharmaceuticals Corp., which had been the subject of a thumbs-down by the FDA's Oncologic Drugs Advisory Committee, and a subsequent not-approvable letter from the agency. Marqibo is a liposomal form of vincristine sulfate that was being tried as a therapy for relapsed, aggressive non-Hodgkin's lymphoma.
That move hit Inex hard, but in March of this year, Hana Biosciences Inc. asked the company to dance, agreeing to pay up to $42 million in cash and stock for three targeted chemotherapies, including Marqibo.
Under the terms of the deal completed last week, Hana will pay Inex $11.5 million up front, consisting of cash and shares of Hana common stock, with up to $30.5 million in Hana shares as milestone payments.
Also last week, Hana said it met with the FDA regarding the firm's most advanced drug candidate, Zensana (ondansetron), an oral spray version of the compound sold under the brand name Zofran by GlaxoSmithKline plc for chemotherapy-induced nausea and vomiting. Hana still plans to submit a new drug application this quarter.
Meanwhile, in the Inex deal, "all three in-licensed candidates [in the Inex deal] have shown preclinical antitumor activity," noted Ren Benjamin in a research report, adding that Marqibo has shown "promising" activity in NHL and acute lymphoblastic leukemia.
"The drug has potential," he told BioWorld Financial Watch. If Hana can negotiate a special protocol assessment with the FDA, the firm could have pivotal studies going with Marqibo as early as the fourth quarter.
Neither Enzon nor Hana officials could be reached for this article, but Hana said when the deal was made public that milestone payments are "a little weighted" in the direction of Marqibo, and the firm's CEO, Mark Ahn, recalled Erbitux (cetuximab), the colorectal cancer drug from ImClone Systems Inc. and Bristol-Myers Squibb Co., faced a tough regulatory road but ultimately gained approval. Marqibo, he said, might do the same.
As for Enzon, things appear to be looking up for what CEO Jeffrey Buchalter called the "new" company, which enjoyed a 12 percent stock jump earlier this month on Street-pleasing first-quarter earnings that included net income of $21.7 million, or 50 cents per share, compared to a net loss of a $3.1 million, or 7 cents per share, from first-quarter 2005. The net income included an investment gain of $13.8 million from the sale of shares of Nektar Therapeutics Inc., gained by Enzon as part of a January 2002 legal settlement.
Enzon also reported a revenue increase for the quarter, thanks partly to a 16 percent increase in sales of Oncaspar for ALL, which rose to $6.4 million, and a 16 percent increase in sales of Abelcet (amphotericin B lipid complex) for fungal infections, which hit $10.5 million.
DepoCyt and Adagen did fairly well, too. The former, a sustained-release form of cytarabine arabinoside for lymphomatous meningitis, increased to $2.1 million, or 13 percent. Adagen, an enzyme-replacement therapy for adenosine deaminase deficiency in patients with severe combined immunodeficiency disease, moved up 11 percent to $5.3 million, but Enzon noted patient numbers are small and fluctuate quarter to quarter.
Enzon's new leadership is focused on growing the top line and making maximum use of its PEGylation platform.
With Oncaspar, the company recently negotiated a reduction of the royalty paid to Sanofi-Aventis Group. Effective in January, Enzon has been paying a single-digit royalty percentage only on annual sales that exceed $25 million. Previously, Enzon was obligated to pay a 25 percent royalty for sales in the U.S. and Canada. For the reduction, Enzon made an up-front cash payment of $35 million.
Enzon also has filed a supplemental biologics license application seeking approval to expand Oncaspar's label to include first-line ALL patients, or those who require L-asparaginase in their treatment regimen, but have developed hypersensitivity to the native forms of L-asparaginase.
Did Enzon give up a good thing in Marqibo?
"The only problem was, as far as I can tell, that they submitted [the NDA] off a Phase II study," Benjamin said. "That didn't fly. ODAC said, 'You really need to do this the right way. Do a controlled trial in this patient population and come back to us and we'll have something to talk about.' At the same time, Hana got wind of this and that the drug was being tested in several other indications, including ALL," where Hana had efforts already under way.
"It seems to me [that Enzon] did not have the cash to run a pivotal study" acceptable to the FDA, he added. "So they did the next best thing, which is to out-license it."