Just three months after going public, Tercica Inc. reported positive Phase III data on its lead recombinant human insulin-like growth factor-1 (rhIGF-1) to treat severe short stature.

The company expects to file a new drug application in the first quarter of 2005.

"IGF-1 would be the first new drug for the treatment of short stature since recombinant growth hormone was approved in 1985," said Ross Clark, the company's chief technology officer and a founder.

The South San Francisco-based company issued a press release Wednesday previewing the rhIGF-1 Phase III results it presented Friday at the 86th annual meeting of the Endocrine Society in New Orleans. The study evaluated rhIGF-1 in 65 children with severe short stature caused by insulin-like growth factor-1 deficiency (IGFD) due to growth hormone insensitivity. Results showed a statistically significant increase in growth rate (the primary endpoint) over an eight-year period in response to therapy. More specifically, the patients on 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. They gained an additional inch of height per year for each year of therapy, when compared to their pre-treatment growth patterns.

Without therapy, children with short stature would grow to be, at their tallest, a 5-foot-1-inch male or a 4-foot-10-inch female adult.

"Those are the maximum heights," Clark told BioWorld Today. "So the average would be a lot shorter than that."

Designed as a multicenter, open-label trial, the Phase III study was co-led by researchers from the Children's Hospital Medical Center in Cincinnati and the University of North Carolina at Chapel Hill. Of the 65 children that participated in the trial, 54 were treated with rhIGF-1 for at least a year. Those patients were anywhere from 2 to 10 years old, with heights ranging from 28.6 inches to 41.2 inches. They received injections of rhIGF-1 twice a day at doses of 80-120 micrograms per kilogram of body weight.

The study demonstrated that long-term treatment with rhIGF-1 appears to be well tolerated with an acceptable safety profile. The safety analysis looked at all 65 children who were treated with rhIGF-1 for up to 10.5 years. None of them dropped out of the study, and most adverse events were not related to the therapy, Tercica said. Hypoglycemia was the most frequent adverse event, but it was easily managed by having the children eat more at the time of each injection.

Tim Lynch, Tercica's chief financial officer, said about 1 million children in the U.S. have short stature, and 380,000 are referred to pediatric endocrinologists to see if there's a hormonal basis for their condition. Less than 10 percent of those children receive therapy with growth hormones because many are IGF-1 deficient. The market potential for rhIGF-1 in the U.S. and Europe combined is about $1 billion, Lynch said.

Tercica licensed rhIGF-1 from South San Francisco-based Genentech Inc. in 2002. Genentech had been studying it since 1990. (See BioWorld Today, May 24, 2002.)

"This was a major drug development program at Genentech, and, by some accounts, the largest one when they decided to discontinue it and license it to us," Lynch told BioWorld Today. "And because of that we have an unusually large amount of preclinical and clinical data around these Phase III results that are going to make for a very robust NDA package."

The company will file with the FDA following the validation of its commercial-scale rhIGF-1 manufacturing process. Tercica also is gearing up to start a broad-scale Phase IIIb label-expansion study of rhIGF-1 in pediatric IGFD in the fourth quarter. Unlike the most recent Phase III trial, that trial would be evaluating the therapy in children with less severe forms of short stature. Results are expected in 2006.

Tercica holds marketing rights to the product in the U.S. and Europe.

"Our current plan is to build our own sales force of approximately 30 reps next year and launch the product toward the end of the year in the U.S.," Lynch said. "That's really why we sought to go public this year. We recently completed our IPO in March. It was really to obtain the funds to launch this product."

Insulin-like growth factor-1 is a naturally occurring hormone that is a 70-amino-acid protein. It must be present in tissues for a human's normal growth and metabolism. Deficiency of the hormone is a key cause of short stature in children who are growth hormone insensitive.

IGFD can lead to a range of metabolic disorders, and Tercica is studying rhIGF-1 in diabetes and other endocrine system disorders. But its initial target indication is primary IGFD in both children and adults.

As of March 31, Tercica had cash and equivalents, short-term investments and stock subscriptions receivable of about $80.1 million.

Trading slightly below its IPO price of $9 per share, the stock (NASDAQ:TRCA) rose 25 cents on Monday, to close at $8.60. It reached $9.61 Wednesday, when Tercica first announced the positive data. Including the underwriters' overallotment option, it pulled in $50.1 million net in its IPO conducted in March. (See BioWorld Today, March 18, 2004.)