By Karen Pihl-Carey

From the Atkins to the Zone, millions of obese people have tried diet after diet to lose the inches and pounds in order to live fuller, let alone slimmer, lives. But some biotechnology companies have long worked for a fat-reducing therapy that even Richard Simmons' Deal-A-Meal can't touch.

The spotlight for now is on Tarrytown, N.Y.-based Regeneron Inc.'s Axokine, a second-generation ciliary neurotrophic factor (CNTF) originally intended for amyotrophic lateral sclerosis (ALS), or Lou Gehrig's disease. In a trial testing it for its initial indication, scientists found patients taking Axokine suffered an unexpected side effect. They lost weight. With minimal neurological improvement in the ALS patients, scientists brought the compound back into preclinical studies to find out why patients lost weight.

Now, five years later and armed with Phase II results, they think they know why. Axokine seems to suppress the hunger signals in the brain so that people eat less and do not binge eat following a diet. The same results were found in a preclinical animal study described in a paper printed in the April 10, 2001, issue of Proceedings of the National Academy of Sciences.

"If further testing continues to show the remarkable efficacy seen in early trials, we believe this compound represents a potential blockbuster drug for Regeneron," said Michael King, an analyst with Robertson Stephens.

No other biotechnology companies have an obesity product that could reach the market in the near-term.

"We haven't been updated on Amgen's [Inc., of Thousand Oaks, Calif.] leptin in a long time," said Eric Hecht, an analyst with Merrill Lynch. "There are no other obesity drugs in the biotech industry that I'm aware of. Of course, they're always being developed in the pharmaceutical industry."

Axokine appears to activate the same intracellular signaling pathways as leptin, a protein hormone secreted by fat cells, and it binds to the Axokine/CNTF receptor in the hypothalamus stimulating the signaling pathways that suppress appetite and reduce body weight.

The interest in obesity may have come from the discovery of leptin, which Amgen Inc. licensed from Rockefeller University in 1995. The drug works effectively in patients with a lack of leptin less than 1 percent of obese patients but showed few results for the majority of obese patients. In April 1999, Amgen said it discontinued development of native leptin for diabetes and obesity because two second-generation molecules appeared more promising.

"Axokine appears to be active in the most common diet-induced obesity, where leptin has shown little effect," said Franklin Berger, an analyst with J.P. Morgan Securities Inc., in a research note.

So far, Axokine seems to be one of the only drugs showing positive effects in clinical trials.

"We really have an enviable intellectual property position," said George Yancopoulos, chief scientific officer of Regeneron.

Obesity seems to be the focus of a growing number of biotechnology companies, perhaps because the market grows at the same rapid pace of a fast-food society. The numbers vary, but indicate there are as many as 97 million obese people worldwide. Obesity could mean billions of dollars for a company that markets an effective therapeutic.

"It's a huge market potential," Hecht said.

"The severely obese are over 12 million in the U.S. alone," Yancopoulos said. "If you then add in the moderately obese, it's severalfold that."

Only two drugs to treat obesity are currently on the market: Xenical, marketed by Hoffmann-La Roche Inc., of Nutley, N.J., and Meridia, marketed by Knoll Pharmaceutical Co., of Mt. Olive, N.J. The result per year for these drugs has been a weight loss of between 5 and 10 pounds. The companies have a large claim on a huge market. Xenical, for instance, brings in $600M per year in sales.

Phase II Axokine results released late last year showed patients taking the injected drug lost about 10 pounds over a 12-week period, as compared to placebo. Better than that, these patients have kept the weight off for several months following the therapy, instead of regaining it quickly through bingeing.

"We think we understand the basis for this rebound effect and for binge eating," Yancopoulos said. "Whenever you diet and miss calories, your brain has this calorie counter and it sends out all these hunger signals until you make up those calories."

But Axokine seems to wipe out the memory of the missed calories, he said. "Preliminary results suggest that the amazing thing about this drug is that relative to placebo at 24 weeks you now have 14.6 pounds of weight loss," Yancopoulos said. "These are exciting results because it's a little distressing to the obese patients what few options they have."

With Axokine expected to enter a Phase III trial in the middle of this year, analysts predict a new drug application could be filed as early as 2003. Robertson Stephens has projected revenues for Axokine to be about $114 million in 2004 and $283 million in 2005, King said. And that doesn't include the "likely off-label cosmetic use" of the product.

J.P. Morgan had sales estimates of $25M in the first year, but that was before the Phase II data was released. "We still consider this drug development program to be high risk since the long-term safety and efficacy profile of Axokine remains unknown," Berger stated in the research note.

What is known is that Axokine has the potential of reducing an obese person's weight by up to five times the weight lost by patients taking one of the two marketed drugs. Those drugs also have shown some negative side effects. Xenical was only "minimally more successful than placebo in inducing weight loss, must be taken with every meal and is associated with bloating, diarrhea and abdominal discomfort," King said.

And Meridia, an appetite suppressant, has been associated with hypertension, he said.

Axokine, at high doses, has side effects of nausea, coughing and vomiting, as well as the activation of the herpes simplex virus. The Phase III trial is expected to include 1,000 patients randomized for one year of therapy, Berger said, and an oral version of the drug may soon follow.

Several companies, including Millennium Pharmaceuticals Inc. and CuraGen Corp., have recently entered into collaborations to discover new therapies for obesity. But most potential therapies are still in the discovery and preclinical stages, eliminating competition for Regeneron.

Genaera Corp., formerly Magainin Pharmaceuticals Inc., expects its obesity treatment, produlestan, to enter the clinic later this year. Likewise, Vernalis Group plc and F. Hoffmann-La Roche Ltd. are fast-tracking preclinical development with hopes of initiating clinical trials in obesity by the end of the year. Karo Bio AB and Bristol-Myers Squibb Co. have two clinical development candidates for obesity treatment. And both Genset SA and NeoTherapeutics Inc. have obesity products, Famoxin and AIT-202, respectively, in the preclinical stage.

Pharmaceutical companies, such as Pfizer Inc. and Eli Lilly and Co., have obesity products in early clinical trials, but none thus far have shown the promise of Axokine.

Said Yancopoulos: "The thing that's really remarkable is how few things are out there on the near-term horizon that can deal with this huge obesity epidemic."

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