West Coast Editor
More than two years after SuperGen Inc. said it “continued to enjoy a strong relationship” with partner Abbott Laboratories Inc., the pair’s worldwide sales and marketing collaboration valued at as much as $150 million has dissolved.
Dublin, Calif.-based SuperGen’s stock (NASDAQ:SUPG) lost about a third of its value Tuesday, closing at $5.41, down $2.64.
The deal made in 1999 focused on rubitecan, an oral topoisomerase I inhibitor extracted from the bark and leaves of the Camptotheca acuminata tree in China, which is being tested in several Phase III studies for pancreatic cancer. (See BioWorld Today, Dec. 23, 1999.)
Edward Jacobs, chief business officer and chief financial officer of SuperGen, said Abbott cited a need to conserve its resources, but noted other concerns about clinical trials specifically, trials in which patients refractory to other, comparison therapies were allowed, in certain instances, to try rubitecan.
“So many patients in that disease state are going to die, and they wanted a chance to be with the innovative drug,” Jacobs said. “This is an issue with Abbott, and it always has been. It’s not a pure situation. You don’t know which drug is actually working, in the minds of the FDA.”
Jacobs said another Phase III study, with almost 1,000 chemotherapy-na ve patients, may be used instead for the new drug application filing, which would then occur in late summer or early fall.
“We knew we had a problem here, but we also thought we had a solution,” Jacobs told BioWorld Today. “We had been renegotiating our contract to put more emphasis on what we had to do. We had it lined up and ready to go, when they decided to withdraw.”
All three Phase III trials two involving 430 refractory patients each, and one with the chemotherapy-na ve subjects have completed enrollment, but data have not been analyzed, Jacobs said.
“We’ve almost finished [analyzing] the first, and we’re 20 percent into the second,” he said. “The big trial we haven’t even started [analyzing].”
Ending the Abbott agreement returns all rubitecan rights to SuperGen, although a distribution pact remains in effect for Nipent, an approved small-molecule purine analogue for hairy-cell leukemia. It also means that Abbott no longer has “the right or obligation” to buy $52.5 million worth of SuperGen shares at market prices, SuperGen said. Abbott also loses an option to buy up to 49 percent of SuperGen, and gives up the right of first refusal to acquire the company.
SuperGen, while forgoing a potential $57 million in cash milestones from Abbott, gains more control of its destiny, Jacobs said.
“They had first right to look at everything partners, mergers and acquisitions,” he said, which made discussions of deals related to other drugs cumbersome.
“We had to wait 180 days for Abbott to make up its mind, and it was a real monkey wrench,” Jacobs said. “We had negotiated out of that,” but Abbott pulled out instead.
In September 2000, SuperGen’s shares toppled 29 percent on news that the filing of a new drug application for rubitecan would be delayed. SuperGen conceded that, in response to Abbott’s concerns, it had hired a contract research organization to conduct the Phase III trial. (See BioWorld Today, Sept. 5, 2000.)
At the time, analyst Peter Drake, then with Prudential Vector Securities Inc. in Deerfield, Ill., was widely credited with causing the stock to drop, by way of his skeptical research note on SuperGen. Drake told BioWorld Today then that SuperGen had “clinical trial control” problems, and cited multiple sources he declined to name. “You and I aren’t going to know if I’m right or not for another six-plus months,” he said.
Now, he said, we know. Drake has retired, but recalls the SuperGen imbroglio well.
“When SuperGen’s management responded with the vitriol they did, I knew we were onto something,” he said. “We’re appropriately dancing on their grave right now. And where are the other analysts that were piling on [me] back then? They did so with a great deal of their own judgment and reputation on the line.”
Even after the September drop, SuperGen’s stock still was trading around $20. Drake’s research note, he said, “was a no-brainer, and it has not been difficult in the intervening months to follow continued clinical slippages, as well as the growing degree of discontent on behalf of Abbott. This isn’t rocket science.”
Separately, SuperGen in March began enrollment in a Phase III trial of its anticancer compound decitabine as treatment for advanced myelodysplastic syndrome, and said it expected to have Avicine, a vaccine for colorectal cancer, in Phase III by mid-year and Nipent for graft-vs.-host disease in Phase III sometime after the summer. (See BioWorld Today, March 27, 2001.)
The Nipent Phase III trial has begun (and dozens of Phase II trials in leukemias and lymphoma are under way), but SuperGen decided to test Avicine in pancreatic cancer rather than colorectal, Jacobs said.
“We’re just in the process of setting that up,” he said.
Daunorubicin, another SuperGen drug, is approved for a variety of leukemias. Also in the pipeline are busulfan, delivered by way of a method called Spartaject (a microparticulate lipid suspension system, gained in the 1999 acquisition of Sparta Pharmaceuticals Inc.), and inhaled versions of rubitecan and paclitaxel.
When the Abbott deal was made, the pharmaceutical company “put a huge laundry list together of things we had to correct, which we did,” Jacobs said. “There was a change in our whole operation clinically. We spent probably $60 million, but we have over $103 million left and we can go forward” for about two and a half years, he said.
“We really wanted to get [rubitecan] in the hopper to the FDA last year,” Jacobs said. “Because of our reorganization, we probably lost six to nine months.” SuperGen no longer uses CROs, he added.
“We have a safe drug, and an effective drug; we just don’t know if it’s approvable,” Jacobs said. “Everybody’s suspicious when a big guy pulls out, and you’re finishing a Phase III. They may have made the greatest decision in the world. We’ll have to wait and find out.”
The company is striving in the meantime to make sure its NDA is “squeaky clean,” he added. “We have a lot of work ahead of us. This is not a slam dunk, in any case.”