Editor

"Short people got no reason to live," Randy Newman sang in a satirical, widely misunderstood 1977 tune about discrimination against the height-challenged.

As an endocrine disorder, failure to grow is a serious matter for children - and a potentially good opportunity for drug developers. Something of a race has developed between two companies - Insmed Inc. and Tercica Inc. - working on late-stage compounds for growth hormone insensitivity syndrome (GHIS), characterized by low blood levels of IGF-1, the primary mediator in growth hormone's functioning. Afflicted children cannot use their growth hormone to gain size, since it's essentially unavailable to the body.

It's not the same as a deficiency in growth hormone itself, noted Tim Lynch, chief financial officer for Tercica.

"The kids that we're going after are the ones who have sufficient levels of growth hormone but are resistant to it," he said. "Even if you gave them growth hormone, they couldn't produce enough IGF-1" to develop normally. Lynch likened the difference - hormonal deficiency vs. hormonal resistance - to Type I and Type II diabetes.

Having gone public earlier in 2004, Tercica in June disclosed positive Phase III results from its recombinant human IGF-1. The study in 65 children with severe short stature caused by IGF-1 deficiency found a statistically significant increase in growth rate (the primary endpoint) over an eight-year period in response to therapy.

Patients on Tercica's therapy showed a threefold increase in the rate of growth in the first year and a twofold increase in growth rate over the entire eight years, adding an inch of height per year for each year of therapy, when compared to their pre-treatment growth patterns. Without the drug, they would grow, at their tallest, to a 5-foot-1-inch male or a 4-foot-10-inch female adult.

Tercica plans to file a new drug application this quarter. The company's rival, Insmed, though, is one step ahead. Last week Insmed submitted its NDA to the FDA for SomatoKine, an IGF-1 therapy for GHIS composed of recombinant human IGF-I and IGF-binding protein-3 (rhIGF-I/rhIGFBP-3 complex). SomatoKine has another leg up on Tercica: The FDA granted SomatoKine orphan drug status.

Tercica - with licensor Genentech Inc. - has filed patent-infringement litigation against Insmed in the U.S. and in the UK. The company, Lynch said, has a "very extensive patent portfolio around IGF-1" based on "years and years of work," and it represents the strongest intellectual property "in the area we're focused on" - correcting short stature.

Insmed has vowed to fight the claims, saying they have no merit.

Tercica's latest quarterly SEC filing concedes that Tercica lacks "patent coverage on the [IGF-1] protein. Although we have licensed from Genentech its rights to its methods of use and manufacturing patents, it may be more difficult to establish infringement of such patents as compared to a patent directed to the [IGF-1 protein itself]." U.S. Patent No. 6,331,414 B1 licensed from Genentech, directed to methods for bacterial expression of IGF-1, expires in 2018.

Growth hormone first was used in 1958, said Ross Clark, Tercica's chief technology officer and founder. It was naturally derived from human pituitary glands, but "you could get contamination from things like prions," he said, and in 1985 that problem arose.

Recombinant growth hormone was "approved with a bang by the FDA, because clearly it was a safer product," he said.

Ross called growth hormone replacement "the original biotech idea. Replacing it is going to be relatively safe, because you're putting back something that was missing. [But] a lot of children are short not because they are lacking growth hormone, but because they are resistant to it."

Lynch said IGF-1 "was first trialed in 1991. At that point Pharmacia was doing studies in short stature, as well. We picked up the data from Genentech's studies, which began way back then. Some of the children have now been on drug for 11 and a half years." Other than growth hormone and IGF-1, there's not much else that can make a child grow, he added.

Genentech, noted Ross - who worked for the company in the late 1980s - "in part changed its focus in the mid-1990s, from endocrinology into cancer." He said it "never clicked into place, quite, at Genentech" to "position IGF-1 as a hormone that needed replacing."

Insmed noted in its 2003 annual report that the firm gained an exclusive license from Pharmacia Corp. (now Pfizer Inc.) to a large database of treatment information and regulatory submissions associated with IGF-1. "The data received through this license include results from 119 patients with GHIS who were treated intermittently for up to 14 years with [IGF-1]," according to the report.

SomatoKine could get Insmed into other markets, including more growth disturbances related to IGF-I deficiency, diabetes, myotonic dystrophy, HIV-associated adipose redistribution syndrome, severe burns and hip fracture, the company said.

However, much might depend on the legal case's outcome.

"We believe Tercica may also be planning to develop [IGF-1] for some of the same indications that we plan to pursue with [SomatoKine]," the annual report noted, somewhat ominously.

IGF-1 was discovered in the 1950s.

"It wasn't sequenced, though, until the early 1980s, and there was no patent on the protein," Ross said. "In 1983, Genentech filed for the DNA sequence. It took quite a while for the patent to issue for the expression." Now, however, Tercica has "protection for the way we make the drug, and the most efficient way to make it."

Is IGF-1 the next big thing? Ross is circumspect.

"Enthusiasm for molecules comes and goes," he said, but an IGF-1 research society has formed with meetings during which "probably several hundred people get together. It's a heavily researched, well-understood molecule."

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