Riding the popularity of drugs targeting vascular endothelial growth factor (VEGF), Regeneron Pharmaceuticals Inc. and partner Sanofi-Aventis Group are pushing forward with the VEGF Trap, positioning the product as a chief competitor for Avastin.
The narrowing of its therapeutic focus, along with recent advances in its manufacturing capabilities, and the completion of two major collaborations, also prompted Regeneron to reduce its work force by more than 150 people. As a result, the company expects to end the year with between $285 million and $295 million in cash, expected to sustain the company through mid-2008.
A portion of Regeneron's revenue for the last two years has stemmed from the potential $485 million deal signed with Paris-based Sanofi-Aventis to develop the VEGF Trap program. According to terms of the deal, Sanofi-Aventis pays 100 percent of all development costs, though Regeneron agrees to reimburse the pharmaceutical giant for 50 percent upon product approval. Revenue from sales will be split 50/50. (See BioWorld Today, Sept. 9, 2003.)
Monday's news reinforced the goals of that collaboration, said Len Schleifer, president and CEO of Tarrytown, N.Y.-based Regeneron, who indicated that "Sanofi is committed to aggressively moving forward."
As many as 16 studies of the VEGF Trap could begin during the next year, including six safety and efficacy studies conducted by Sanofi-Aventis and Regeneron. Three of those will evaluate the product as a single agent in late-stage cancer patients, and those could begin as early as the fourth quarter. During the second half of next year, the companies plan to initiate the remaining three studies of VEGF Trap in combination with standard chemotherapy in earlier stage patients. In addition, the National Cancer Institute could agree to sponsor up to 10 exploratory studies of VEGF Trap in several cancer types, under a clinical trials agreement between the Cancer Therapeutics Evaluation Program, NCI and Sanofi-Aventis. Those trials are planned for 2006.
This program expansion "accelerates the timeline and the breadth of the program," Schleifer told BioWorld Today, adding that "our lead molecule, VEGF Trap, is going to have an incredibly important opportunity."
Because it's designed as a direct blocker of VEGF, Regeneron's drug most closely resembles South San Francisco-based Genentech Inc.'s Avastin (bevacizumab), approved in February 2004 as a first-line treatment for metastatic colorectal cancer in combination with chemotherapy. Avastin, which also is being evaluated in several other cancer types, recorded sales of $246 million during the second quarter.
"We think that we'll be the major competition for Avastin," Schleifer said. "In terms of direct mechanism of action, VEGF Trap mops up VEGF, just like Avastin."
In preclinical studies, the product has demonstrated an ability to "trap" the VEGF produced by a tumor to prevent it from stimulating the VEGF receptor, and to inhibit blood vessel growth. "There are other ways of attacking the pathway, but those data have not turned out as good," he added, referring to PTK787, a VEGF-blocker developed by Basel, Switzerland-based Novartis Pharma AG and Berlin-based Schering AG that missed in Phase III trials earlier this year. (See BioWorld Today, March 22, 2005.)
Schleifer said analysts have estimated that Avastin, at its peak, will draw between $5 billion and $10 billion. By "dramatically expanding the effort" of its own development work, Regeneron can "increase the probability that we're going to be able to get an important share of that market."
As its partnership with Sanofi-Aventis gets a boost, Regeneron also has refocused efforts on some of its other pipeline candidates. The company has discontinued development of the Interleukin (IL-1) Trap in adult rheumatoid arthritis, a product that has been difficult to develop and failed a Phase II trial in fall 2003.
However, Regeneron will keep advancing its IL-1 Trap against specific diseases in which IL-1 is known to play a key role, Schleifer said, such as CIAS1-associated periodic syndrome, defined as a family of rare genetic diseases, and systemic-onset juvenile arthritis. The company is in discussions with the FDA to begin a pivotal registration study during the fourth quarter.
Also on Regeneron's plate is the VEGF Trap to treat wet age-related macular degeneration (AMD) through an intravitreal injection into the eye. The company initiated a Phase I study in June, and plans to begin enrolling patients in a Phase II trial as early as the end of this year or early in 2006. At this time, Regeneron is funding the AMD program itself, though it intends to seek a partner before moving into Phase III development.
As the company streamlines its research and development work, it also plans to cut about 23 percent of its staff - 165 of 730 employees - by the end of the year.
Schleifer said that reduction is due partly to its increased efficiency in manufacturing and the 2006 completion of a manufacturing contract with Whitehouse Station, N.J.-based Merck & Co. Inc. Regeneron also concluded its relationship in June with Cincinnati-based Procter & Gamble Inc. for development of an obesity drug.
"We've decreased some of the other efforts, and we're narrowing our research focus," Schleifer said, adding that the firm is preparing for the transition from "a late-stage product development company to a product-driven company."
Regeneron reported a net loss of $27 million, or 48 cents per share, for the second quarter. As of June 30, it had cash and marketable securities of about $351.6 million.
Shares of Regeneron (NASDAQ:REGN) gained 24 cents Monday to close at $8.50.