National Editor

A Series C financing that raised $51 million for Altus Pharmaceuticals Inc.'s lead product for pancreatic insufficiency and an FDA decree that cracks down on competitors have put Altus in an enviable spot.

The financing gives Cambridge, Mass.-based Altus about $70 million in cash, enough to operate for "the foreseeable future," said CEO Peter Lanciano.

The FDA directive likely is to give Altus an easier ride - and to provide problems for about 20 other firms that market pancreatic-insufficiency drugs in a market valued by research firm IMS Health at about $200 million in North America and $600 million worldwide. Those firms include the likes of Solvay Pharmaceuticals BV, Johnson & Johnson and Axcan Pharma Inc.

Specifically, the FDA in late April told the pancreatic drug makers (who began selling their products before the federal Food, Drug and Cosmetic Act of 1938, so their compounds were grandfathered in) that they must file and win approval for new drug applications in order to keep marketing the drugs. More than three dozen such products are being marketed. Only one has received formal FDA approval, but it is no longer for sale.

The FDA has "basically told the manufacturers of the old products, which are made from ground-up pancreas [of cow or pig] that they need to make a safe product that's effective," Lanciano said.

"It's a wonderful thing the FDA came out with, from our perspective," he told BioWorld Today. "A couple of long-term players like Solvay will stay in the game, but the cost of staying in the game is going up. We believe the majority of competitors will exit the business."

Spurred by patient-advocate groups who found that "a lot of patients were getting drugs with little or no activity," especially with the advent of generics, the FDA gave the pancreatic drug makers four years to get their products approved the usual way or take them off the market.

"They won't do it, because they can't reference any existing NDAs" under the agency's order, Lanciano said.

Altus, on the other hand, already is going about the procedure by agency specifications with its lead drug, TheraCLEC-Total, an oral enzyme-replacement therapy for the treatment of malabsorption caused by pancreatic slowdown. The condition affects most cystic fibrosis patients, as well as many with such disorders as chronic pancreatitis, pancreatic cancer and Shwachman-Diamond syndrome. A deficiency of pancreatic enzymes keeps the body from breaking down nutrients, leading to malnutrition, impaired growth and reduced survival.

Several yeas ago, Altus received $25 million in funding from the Cystic Fibrosis Foundation Therapeutics Inc., the drug development affiliate of the Cystic Fibrosis Foundation. About 90 percent of people with cystic fibrosis suffer from pancreatic insufficiency, giving them an average life expectancy in the early 30's, while those without pancreas trouble can live to about 50 years. (See BioWorld Today, March 8, 2001.)

TheraCLEC has been granted orphan drug status and fast-track status by the FDA, and data from the 125-patient Phase II trial are expected in the fourth quarter of 2005.

In 2002, Altus licensed European marketing and distribution rights to Dr. Falk Pharma GmbH, of Freiburg, Germany, for an undisclosed up-front payment, milestones, development funding and royalties. Altus intends to license out the Far East marketing and distribution rights but keep rights in North America, as well as global manufacturing rights.

The company also has an undisclosed partner for a manufacturing plant expected to be up and running in 2005, "so it can be making our final [batches of] drug for Phase III," Lanciano said, adding that the plant will supply material for the launch.

Altus will use some of the Series C money for expansion of its drug pipeline for chronic gastrointestinal and metabolic diseases, he said. Nearest behind TheraCLEC in the lineup is ALTU-238, a once-weekly crystalline formulation of human growth hormone (somatropin) for pediatric growth hormone deficiency. A Phase I/II trial with ALTU-238 will begin in the first half of next year.

"The end-of-the-line molecule is already known to be safe, and we're going directly into patients," Lanciano said. Not only is the product given once per week (rather than seven times), but also it's administered with a pain-free, 30-gauge needle.

"We have a huge amount of knowledge of how to crystallize protein in really large scale," he added. "We can make very high-value forms of the drug, and make them predominantly orally available or when injected, provide extended release" - and the process works with "virtually any type of protein."

Most of the drugs are orally delivered, and many have applications in diseases that would qualify as orphan indications with the FDA.

"Our [Crystalomics] technology allows the enzymes to stay active in the stomach and in the small and large intestines," Lanciano said. "They don't get broken down by pH or protease. Everybody else who has tried to do products orally in the protein world has tried to get the proteins to go into the circulatory system. That's an incredibly hard thing to do."

In the gastrointestinal/metabolic field, "there is about $36 billion of drugs sold on a worldwide basis, and we have a way to develop many more."

New York-based Warburg Pincus LLC led Altus' Series C financing, which the company is expected to disclose today. Stewart Hen and Jonathan Leff, managing directors at Warburg, have taken seats on Altus' board. With the financing, Altus also changed its name from Altus Biologics Inc.