Last week's cover story examined the scourge of non-small-cell lung cancer - the dismal prognosis for patients and the limited options for treatment. But "limited options" isn't really the right phrase, since the problem is not the number of drugs available to try against NSCLC. The problem is that none of them work for long.

Hence the enthusiasm for talotrexin, the new-generation anti-folate therapy from Hana Biosciences Inc., being tested as a single agent in second-line NSCLC therapy, and in ongoing and planned trials in solid tumors, leukemia and cervical cancer.

The Phase I/II in NSCLC started this year, as did a Phase I/II study with the drug as a single agent in adults with relapsed or refractory acute lymphoblastic leukemia.

Talotrexin's competitor in the class would be Alimta from Eli Lilly and Co., but Hana's drug - unlike such compounds as Alimta and methotrexate - doesn't need a process called polyglutamation to work. The three-dollar word stands for the way by which multiple glutamic acid residues are added enzymatically in the body.

Because talotrexin goes after tumors without it, the drug "has the potential to displace Alimta, as well as other treatments and dominate the market in the NSCLC single-agent, second-line setting," said analyst Chrystyna Bedrij of Griffin Securities in a research report on the compound.

"We'll know by the end of the year if [talotrexin] is going into Phase II" trials that likely would be larger, Bedrij told BioWorld Financial Watch, adding that she has "spent a lot of time doing due diligence" on the compound, and "there's a lot of data available on it" already.

Hana officials said during a pipeline update Sept. 15 that preliminary results of the Phase I/II NSCLC trial will be presented during the fall American Association for Cancer Research meeting. In August, the company won a $159,000 Small Business Innovation Research grant from the National Institutes of Health to expand preclinical studies of talotrexin in combination with other agents for cancers.

But investors are looking at NSCLC. Mark Ahn, president and CEO of Hana, is "going after Lilly's Alimta head-on," Bedrij said. "If you look at the efficacy, [Alimta] doesn't do that much for a patient, but it's less toxic than the other choices. Basically, that's why it got approved."

Bedrij has been studying not only talotrexin but also Ahn and his company, as well. Hana's "second potential home run," IPdR, is the third product candidate to enter patient studies in 18 months. The compound, an oral radiation sensitizer that is a prodrug of IUdR and was discovered at Yale University, has started a Phase I study against gastric, pancreatic, colorectal and liver cancers.

Last summer, Hana changed its name from Hudson Health Sciences while completing a reverse merger with Email Real Estate.com, raising $8 million in a private placement round led by Rodman & Renshaw and becoming a publicly traded firm.

Ahn, whose background includes working at Genentech Inc., Bristol-Meyers Squibb Co., and Amgen Inc., told investors during that pipeline update that the company is on track to meet its second-half 2005 goals of reporting the preliminary talotrexin data, starting IPdR trials and establishing a registration path for a third product - the oral spray version of ondansetron called Zensana for preventing chemotherapy induced nausea and vomiting.

Sold as a pill called Zofran by GlaxoSmithKline plc, ondansetron as the Zensana spray is likely to be better received, Bedrij said, since nauseated patients seldom want to ingest anything.

Hana said a survey of 162 oncologists in the U.S. by the Winokur Consulting Group found that 90 percent of oncologists believe Zensana, a 5-HT3 antagonist, might be more convenient for their patients than a tablet.

"Zofran comes off patent in 2006, and these guys [at Hana] will be done with their pivotal trial by the end of the year," Bedrij said. The Winokur survey also found, in interviews with pharmacy directors at major private insurers, that Zensana "could support a proprietary price level of branded 5-HT3s, even after the launch of generics, based on projected patient benefits of convenience and faster time to drug delivery."

In October 2004, Hana gained a license to exclusive U.S. and Canadian rights to Zensana from NovaDel Pharma Inc., with Hana agreeing to provide milestone payments and royalties.

It's all enough to give cancer patients several kinds of hope, and to make Bedrij a huge fan.

"I like the business model," she said, pointing out that Hana has been "funded with non-dilutive capital, all the way. Usually in biotech, you dilute yourself to heck, but all the proof of principle [at Hana] has been done by grants."

Ahn, she said, "knows how to access everyone he worked with at Genentech, Amgen, Bristol-Meyers, and he gives back. I've had companies with problems who call him and he hooks them up [with the right people]."

As of June 30, the company had about $6.75 million in cash and cash equivalents, with total liabilities of about $680,000. For the second quarter, research and development expenses totaled about $1.2 million, as compared to $615,019 for the same quarter last year, due mainly from increasing full-time employees from two to eight. Hana's stock has been trading at around $5 per share.

Nothing has been disclosed publicly, but Bedrij said she wouldn't be surprised if the firm has begun to look like an enticing takeover prospect for a large pharmaceutical concern, especially one with a focus in cancer therapy, thanks to Ahn and his staff.

"It's a seasoned team," Bedrij said. "[Ahn] is going to make this into a billion-dollar company."

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