raise more capital from public investors to support a pivotal clinical trial strategy for AZ01. While that will dilute the value of existing shares—never a popular thing—it will provide Allozyne the fuel it needs to execute on its plan, she says.
Bill Greene, a partner with MPM Capital in San Francisco, one of Allozyne’s founding investors, said the company should be able to appeal to investors on the prospects not just for AZ01, a long-lasting version of the blockbuster interferon beta for multiple sclerosis, but also for the technology platform that has potential to churn out more drug candidates.
“We believe interferon will remain a mainstay of MS therapy for the foreseeable future. It could be a really valuable property,” Greene says. Of course, “the company has to demonstrate that’s what it’s got.”
Investors are naturally asking a lot about how Allozyne stacks up in the competitive landscape of multiple sclerosis therapy. Many are aware that Weston, MA-based Biogen Idec (NASDAQ: [[ticker:BIIB]]), like Allozyne, is seeking to develop a long-lasting version of interferon beta. Longer-lasting drugs are thought to be desirable because they could enable patients to take fewer shots, and to keep a steady amount of drug in their systems without peaks and valleys around injection time that can complicate treatment of a chronic disease like MS.
Biogen, the world’s largest MS drugmaker, is further along in clinical development with its long-acting interferon, in the third and final phase of clinical trials. Allozyne could be a fast follower, partly because Biogen’s patient recruitment has been slowed down by the trial design, which randomly assigns patients to get the new drug or a placebo. Allozyne expects to run a different kind of trial, Chhabra says, in which it will randomly assign patients to its new drug, or an active comparator—Biogen’s standard interferon beta (Avonex). That means patients in the Allozyne trial won’t have to run the risk of getting a placebo, and therefore should be motivated to enroll.
The risk for Allozyne, though, is that its drug will have a higher hurdle to clear.
“We think we can show superiority in efficacy to Avonex,” Chhabra says.
There are also a couple oral pills on the market now for MS that any newcomer will have to contend with—Novartis’ fingolimod (Gilenya), and Acorda Therapeutics’ dalfampridine (Ampyra)—as well an emerging contender from Biogen known as BG-12. The Novartis drug has shown some promising effectiveness, but also some safety issues that have kept it from being used in newly-diagnosed patients. Allozyne is expecting that interferons will hold onto the catbird position as first-line therapy, a segment of the market where billions of dollars are being made.
And for the investors who want to see more than that, Allozyne is making sure to position itself as more than a single-product company. Through its protein engineering technology, which was originally licensed from Caltech, Allozyne says it can produce multiple kinds of protein drugs for different autoimmune diseases or cancers. I wrote about one of those drugs, an antibody designed to hit two biological targets instead of one, last November.
“Allozyne is one of those companies which is rare where you have a platform technology that’s building viable product candidates,” Chhabra says.
