It’s not often that a biotech with a single drug in clinical testing can bounce back from a trial that not only fails, but bombs spectacularly. But by the skin of its teeth, Cerulean Pharma has gotten that chance.
Over the next year, Cerulean (NASDAQ: [[ticker:CERU]]) will produce data from four early and mid-stage clinical trials of its lead drug, CRLX101, in a variety of cancers, and in tandem with different mainstay cancer therapies like bevacizumab (Avastin) and paclitaxel.
These are make-or-break studies for Cerulean: it’s trying to show that its foundational idea—nanoparticle technology that can make highly toxic chemotherapy agents safer and more effective—holds water.
By doing so, Cerulean hopes its drug can be a valuable agent in the mix-and-match game of cancer therapy combinations—one more weapon to use in the armamentarium. Perhaps that’s a template Cerulean could use to link its nanoparticles to a variety of other chemotherapy drugs.
“These are exciting times around here right now,” says president and CEO Christopher Guiffre.
The excitement isn’t registering on Wall Street, however. In the midst of the immuno-oncology craze, companies priming the immune system to fight cancer—Juno Therapeutics (NASDAQ: [[ticker:JUNO]]), Kite Pharma (NASDAQ: [[ticker:KITE]]), and the like—are commanding multi-billion dollar valuations. Cerulean is trading under $5 a share, with just a $125 million market capitalization, and hasn’t spent much time on the Nasdaq north of its $7 per share IPO price. Shares have basically been treading water since Cerulean went public in 2014. Suffice to say, the company has a lot to prove.
But Guiffre (pronounced GWEE-free) will take that sentiment. Cerulean could have easily been dead in the water by now.
It was formed in 2005 to commercialize a nanoparticle drug delivery technology developed at MIT and Caltech that links cyclodextrin-based polymers to chemotherapies. With their new properties, the drugs are supposed to be too large to get into healthy tissues, but small enough to slip through leaky holes in the blood vessels that feed tumors and deliver a toxin over a sustained period of time.
Cerulean raised over $80 million from backers like Polaris Partners and Venrock, and in 2011, began its big test: a randomized, open-label Phase 2 study of 157 patients with lung cancer whose disease had progressed despite one or two prior therapies. The trial had the hardest possible goal for a cancer drug: to prove whether CRLX101, when combined with the best supportive care, could help patients live longer than on supportive care alone.
The stakes were high. As then-CEO Oliver Fetzer told Xconomy in 2013 just before the results came in, Cerulean wasn’t going after a “squishy” endpoint like keeping tumors from spreading (what’s known as progression-free survival). It was targeting “what really matters,” Fetzer said—extending peoples’ lives.
The assumption, Fetzer said, was that patients on the best supportive care would live a median of about five months. Cerulean figured it would be in great shape if its drug led to a nine-month median of survival. The results weren’t even close to those projections: Patients on Cerulean’s drug lived a median of 6.3 months. Those on other therapies? Almost double that, 11.9 months.
“The first reaction I actually had when shown the data was, oh they just flipped the arms—we must’ve had 12 months and the best supportive care must’ve had six,” says Guiffre, who at that point was Cerulean’s chief business officer. When Cerulean realized that wasn’t the case: “We said, ‘Oh my goodness, do we have a drug that’s killing patients?’”
Not quite. What Cerulean found was that it had made a massive error in trial design. As Guiffre tells it, Cerulean ran the study in Russia and the Ukraine—“mistake number one,” he says—so that it could compare CRLX101 against the best possible supportive care. The thinking: front-line therapies for lung cancer are very similar there to what they are in the West, but there isn’t a standard of care in Russia and the Ukraine that comes after you fail the first treatment; it’s not reimbursed.
So patients would be willing to be randomized two-to-one—CRLX101 and best supportive care versus best supportive care alone—because “if they get the treatment arm, they get a two-thirds chance of getting an active drug that would be helpful to them. And if they don’t, they have chance of getting free healthcare they otherwise wouldn’t get.”
“At the surface level, if you have a certain level of naivete, that sounds reasonable,” Guiffre says. “What we learned is, Russians and Ukrainians actually want to live as much as Americans.”
What Guiffre means is, patients in those trials didn’t just follow the protocol. They tried to get the best possible care they could, and that skewed the results.
Here’s how: In an open-label study, patients know what they’re getting. So patients had
