As it continues to focus on its immunological disease candidates, Pharmacopeia Drug Discovery Inc. partnered its lead compounds for ocular disease with eye expert Allergan Inc.

The compounds target angiogenesis and may represent a new way of treating the wet form of age-related macular degeneration (AMD), the leading cause of vision loss in Americans more than 55 years old.

"This is an alternative mechanism to blocking VEGF," said Les Browne, Pharmacopeia's president and CEO. "There's the opportunity, of course, if the compound turns out to be efficacious in patients, that it would have potential to be used as a monotherapy, or in combination with VEGF inhibitors."

Pharmacopeia will receive an up-front cash payment, and can receive preclinical and clinical milestone payments, as well as royalties on approved drugs for ophthalmology. The Princeton, N.J.-based company is retaining rights to the compounds for all indications outside of ocular disease.

"There is a link between this target and inflammation, as well, which has been pursued through monoclonal antibodies in the clinic," Browne said. "This may be where we'll be focusing our attention in anti-inflammatory indications."

The angiogenesis target clearly has potential in cancer, and Pharmacopeia plans to seek out a separate partner for that indication, Browne added.

He could not predict when Irvine, Calif.-based Allergan might be able to move the first compound into the clinic for wet AMD. Allergan will conduct all of the development work on its own, returning to Pharmacopeia only for further optimization needs. Browne said Allergan will take the compounds into toxicology studies, which follow Pharmacopeia's work in in vivo preclinical disease models.

"The compounds at that stage in preclinical evaluation were demonstrated to be efficacious in two different models of angiogenesis," Browne said. "That's why it's such an attractive program."

Several companies have shown a research interest in the wet AMD indication due to the market potential. Vancouver, British Columbia-based QLT Inc.'s photodynamic therapy Visudyne is expected to have sales of up to $530 million this year, while New York-based Eyetech Inc.'s VEGF inhibitor Macugen could bring in more than $170 million in its first year on the market.

Another potential competitor could be South San Francisco-based Genentech Inc.'s Lucentis, which is designed to bind to VEGF. It recently met its primary efficacy endpoint in Phase III studies, showing that 95 percent of those treated with the drug maintained or improved vision at one year, compared with about 62 percent of those in the control arm.

Boulder, Colo.-based Sirna Therapeutics Inc. also is advancing its VEGF inhibitor, Sirna-027, through Phase II studies in wet AMD. And Genaera Corp. is developing Evizon (squalamine lactate), preparing for two Phase III trials for choroidal neovascularization associated with AMD. That product selectively blocks all subtypes of VEGF, as well as other growth factors tied to angiogenesis.

Pharmacopeia's compounds are small molecules, Browne said, which have "cost of manufacturing advantages and a bit more flexibility on route of administration" than biologics.

The company's agreement with Allergan for wet AMD candidates comes at an earlier stage than what it had laid out in its business model - partnering products following early clinical validation. Pharmacopeia operated as a contract research organization until 2000, when it decided to move into therapeutics. It since has pushed two compounds a year into preclinical development with large pharmaceutical companies. Four of those products now are in Phase I trials for rheumatoid arthritis, allergies and asthma, respiratory-related diseases and inflammatory diseases. They are partnered with New York-based Bristol-Myers Squibb Co.; Osaka, Japan-based Daiichi Pharmaceutical Co. Ltd.; and Schering-Plough Corp., of Kenilworth, N.J.

The company's internal programs are focused primarily on immunobiology and immunological diseases, such as psoriasis, transplant rejection, rheumatoid arthritis and multiple sclerosis. Three of those compounds are approaching preclinical development.

Pharmaceopeia's stock (NASDAQ:PCOP) rose 25 cents Tuesday to close at $4.10.

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