Cancer vaccines still have the power to captivate the public imagination, but Bob Kirkman isn’t betting his company on them anymore. The CEO of Seattle-based Oncothyreon has reinvented this little biotech firm in a way that puts a pair of experimental cancer drugs, not vaccines, on the corporate front burner.
Kirkman learned from hard knocks a few years ago at Seattle-based Xcyte Therapies, which failed, like many others, to develop a treatment that stimulates the immune system to fight cancer. Nobody has pulled off this feat with an FDA-approved cancer vaccine yet, and the list of failures in the last two years includes Cell Genesys, Genitope, and Favrille. (Seattle-based Dendreon is holding its breath for important clinical trial results next month.) So I was curious last week, on a visit to Kirkman’s Belltown office, how Oncothyreon is positioned to keep some skin in the cancer vaccine game, while shifting most of its resources toward oral pills designed to block a couple of hot targets on cancer cells.
The company that Kirkman runs now looks completely different from when chairman Christopher Henney recruited him to take over as CEO in September 2006. The company changed its name from Biomira to Oncothyreon, which is Greek for cancer shield (and pronounced like on-koh-THEAR-ee-on). It reincorporated in the U.S. and moved its headquarters from Edmonton, Canada, to Seattle, where Kirkman lives. He bought a small company called ProlX Pharmaceuticals for about $20 million in cash and stock to diversify with two cancer drugs that showed promising results in animal tests, and were poised to enter clinical trials. He also did a very unpopular thing, a reverse stock split, which took six shares from the company’s investors and gave one back, in a painful but necessary move to keep its public listing (NASDAQ: [[ticker:ONTY]]).
Then, last December, as cash was running dangerously low and investors weren’t willing to pump in any more capital to keep the company going, Kirkman pulled the proverbial rabbit out of the hat. He sold off the company’s facility in Edmonton that makes Stimuvax cancer vaccine to his partner, Merck KGaA, for $13 million. The deal provided Oncothyreon another year’s worth of cash, shifted more of the manufacturing risk to his partner, helped avoid layoffs of 52 people there, and still allowed Kirkman to walk away with a “double digit” percentage royalty on future sales (even though he made some undisclosed concessions to take a smaller royalty rate).
The end result is a virtual company–you can hear a pin drop, walking through the office now—but it will live to see some intriguing results that will be presented this year. Rodman & Renshaw analyst Simos Simeonidis recently initiated coverage of the company, saying he thinks its stock has potential to more than double to $4.
“We’ve done a huge transformation here,” Kirkman says.
The company’s lead program in development, Stimuvax, like a lot of cancer vaccines, has a tortured history. It failed in a mid-stage clinical trial in 2004 of patients with lung cancer. But rather than giving up, the company dredged through the data and discovered after-the-fact (always a somewhat dubious statistical practice) that a subgroup of patients with Stage III forms of disease, confined to the local organ, lived for a median time of 30.6 months on Stimuvax and the best supportive care, compared with 13.3 months for those on best supportive care alone. No benefit was seen in patients with more aggressive Stage 4 disease, which caused the trial to fail.
Yet among Stage III patients, that kind of survival advantage is basically unheard of, in a field where a drug that prolongs life by just a few months can become a billion-dollar seller. So Oncothyreon and Merck KGaA decided
