The Life Sciences Report: Please give us an overview of your company, Celator Pharmaceuticals Inc. (CPXX:NASDAQ).
Scott Jackson: Celator Pharmaceuticals is an oncology-focused biopharmaceutical company. Our mission is to improve and extend the lives of patients with cancer by transforming the science of combination therapy.
Most cancer patients are treated with combinations of drugs. Our proprietary technology platform, which we call CombiPlex, has resulted in our most advanced product candidate, CPX-351, a combination of two drugs, cytarabine and daunorubicin. We have recently completed a Phase 3 study of CPX-351 for patients with a form of acute myeloid leukemia, commonly referred to as secondary AML. To be clear, this is first-line therapy. We will have initial data from the Phase 3 study in Q2/15 for what's called induction response rate, which is a secondary endpoint. The primary endpoint is overall survival, and we expect that to be available in Q1/16. If those data are positive, we will be looking at a new drug application (NDA) submission in H2/16. That's our lead product, and the U.S. Food and Drug Administration (FDA) has awarded this fast-track designation for CPX-351 for the treatment of elderly patients with secondary AML.
TLSR: Do you have other products?
SJ: In addition to CPX-351, the CombiPlex technology platform is focusing on developing combinations of molecularly targeted therapies, as well as epigenetic modulators. We expect to have data packages inclusive of formulation work and preclinical data available for three different combinations in Q3/15.
TLSR: How did Celator Pharmaceuticals come into being?
Lawrence Mayer: Celator was a spinout of my laboratory at the British Columbia Cancer Agency in Vancouver. We went public in 2013 and uplisted to NASDAQ in November 2013. The company stemmed from our attempt to develop combinations of chemotherapeutic agents and use drug delivery systems—nanomedicines such as liposomes and nanoparticles—to deliver those combinations to cancer cells.
That takes us to the nature of what CombiPlex is. In its simplest form, CombiPlex ensures that the right ratios of drug combinations are exposed to cancer cells to maximize tumor cell kill. We use the drug delivery vehicles to encapsulate and control a patient's exposure to the drugs after administration into the body. That is important because, in the absence of a controllable drug delivery vehicle, drug combinations are metabolized and eliminated independently and differentially after they are injected into the body.
"CombiPlex ensures that the right ratios of drug combinations are exposed to cancer cells to maximize tumor cell kill."
We have identified drug combinations with drug ratio-dependent synergy. What that means is one ratio of the drugs may be synergistic: one plus one equals three. Another ratio is additive: one plus one equals two. Yet other ratios are antagonistic: one plus one equals one-half. If we cannot control the ratios after drugs are administered in their conventional forms, the tumor cells are exposed to antagonistic ratios, and that limits the ability to kill the cancer cells. CombiPlex locks the optimal synergistic ratio into a drug delivery system and then engineers that system so that after injection into the body, the combined drug maintains the optimal ratio as it circulates. When it's exposed to the cancer cells, it can exploit the full efficacy potential of that combination.
There are two components to CombiPlex. One involves investigation of the drug ratio-dependent synergy in vitro, in cell culture. We study the combination in a wide range of ratios in a number of tumor cell lines. We identify the optimal ratio by looking at trends of ratio-dependent synergy. Once we identify that ratio-dependent synergy exists, we use that information as a guide to formulation. The second component is applying our formulation technologies—our liposome technologies and proprietary nanoparticle technologies—to construct those combinations such that they are released at the same rate from the delivery systems after injection.
TLSR: Is it fair to say that the CombiPlex platform is a research methodology looking to develop a delivery system?
LM: While the platform is a methodological technology, the products we generate have composition of matter claims in terms of patent protection. CombiPlex is not limited to methods claims.
TLSR: When you're talking about different combinations of drugs, are you talking about drugs that already exist?
LM: CPX-351, as Scott indicated, contains cytarabine and daunorubicin. Those conventional chemotherapy agents have been the standard of care for the treatment of AML for 40 years. We identified that they exhibit ratio-dependent synergy and then used our liposome technology to formulate them such that the two drugs are maintained at the optimal 5:1 molar ratio for prolonged periods of time. The drugs are selectively delivered to leukemia cells in the bone marrow.
TLSR: In the past, were combinations of drugs not formulated using the kind of ratio analytics that you have developed? Or is it completely new to combine these particular types of drugs?
SJ: Combination approaches are frequently done in the treatment of cancer patients. I'll refer to two drugs as drug A and drug B for illustration purposes. Historically, a patient will receive drug A, which has a certain mechanism of action, assuming it's providing a favorable risk/benefit profile. Drug A would be studied to identify its maximum tolerated dose. When looking to combine drug B with drug A, drug B would have a different mechanism of action and, hopefully, the toxicities do not overlap. The dose of drug B, in combination with drug A, would be pushed to its maximum tolerated dose. The whole idea behind this historical approach is a belief that delivering more drug results in a greater cell kill and more clinical benefit.
What that system has failed to take into consideration is that the ratio of the drugs is an important factor. That's where CombiPlex comes in. We often use the expression, "It's the right ratio, at the right place, for the right amount of time."
TLSR: Is this ratio adjustable for every patient? Is there a need to adjust the rate of delivery and ratio depending on a patient's particular pathology or health?
LM: When we examined cytarabine and daunorubicin combinations for ratio-dependent synergy we looked for very robust trends in the synergy over a wide range of tumor cell lines, so that we could project how that would translate into a broad patient population. Certain aspects of the tumor type, or the patient's makeup, could result in the need for a different ratio if certain agents are specific in their ratio-dependent synergy as a function of cell line. That is why we looked at a wide range of tumor types—leukemias as well as other cancers. What we saw, in this case, was that a 5:1 molar ratio was consistently synergistic, without antagonism. Consequently, we could project that the CPX-351 ratio would be applicable to a fairly broad spectrum of patients.
TLSR: Can you talk about the progression through the various phases of the CPX-351 study?
LM: I'll start with our preclinical work. The in vitro drug ratio information was used as a guide to formulate the compound at the optimal ratio. Once that formulation work was complete, we tested it in preclinical models for efficacy. We use a range of established leukemia models, both human leukemia lines and rodent lines. We made formulations at various ratios to confirm that the drug ratio trend we saw in vitro was mimicked in an animal model.
"CombiPlex provides the right ratio, at the right place, for the right amount of time."
With CPX-351, we were able to show that the 5:1 molar ratio, as was observed in the cell culture studies, was optimal in our preclinical leukemia models. Not only was it optimal, it also provided long-term cures of 80–100% in mice, whereas the conventional agents gave only very small improvements in survival. All the conventionally treated mice died quite shortly after treatment was stopped. But mice treated with CPX-351 saw dramatic improvements. That evidence allowed us to carry the product forward into a Phase 1 clinical trial.
SJ: The Phase 1 study was done with 48 patients with relapsed or refractory AML or high-risk myelodysplasia. Typical of a Phase 1 study, we were looking to identify the safety profile of the drug, as well as a dose, to move forward into Phase 2. Our determination that the animal study safety profile was favorable was confirmed in our human clinical testing.
The Phase 1 study was published in the Journal of Clinical Oncology in 2011. After the Phase 1 study, we embarked on two randomized, controlled, Phase 2 studies. I emphasize the word controlled because it's not that common in the area of oncology to do randomized, controlled, Phase 2 studies.
The first Phase 2 study treated 126 patients with newly diagnosed AML, between the ages of 60 and 75, with a 2:1 randomization: for every two patients who got CPX-351, one patient got the current standard of care, which is cytarabine and daunorubicin administered in what's commonly referred to as the 7+3 regimen. The cytarabine was administered as a seven-day continuous infusion, and the daunorubicin was infused on days one, two and three. CPX-351 was administered as a 90-minute infusion on days one, three and five only.
In that particular study, we saw an improvement in remission rate, a reduction in early mortality, an improvement in event-free survival and an improvement in overall survival. What was most striking was the improvement in overall survival in patients with a poor/high risk—in patients with secondary AML, meaning they may have had myelodysplasia or a myeloproliferative disease that has progressed to AML, or they may have received chemotherapy or radiation therapy for a prior malignancy and developed AML as a result of treatment. With AML in general, the median survival is between nine and 12 months. For secondary AML, the median survival is only six to seven months. In that particular population, the overall survival improvement with CPX-351 was statistically significant. The median overall survival was 6.3 months on the 7+3 control arm, versus 12.1 months with CPX-351.
The second study—again, a randomized, controlled, Phase 2 study—was done in patients with first relapse AML. It enrolled 125 patients. It was, again, a 2:1 randomization, so for every two patients who received CPX-351, one patient got the control arm, which was investigator's choice because there is no established standard of care for first relapse AML. Again, the remission rate was higher, early mortality was lower, and event-free survival and overall survival were longer with CPX-351. The patients were stratified using the European Prognostic Index. In patients with unfavorable risk, which was about two-thirds of the population, the overall survival benefit was statistically significant.
We had consistent results across two Phase 2 studies that enrolled a little more than 250 patients in total. Because of the remarkable consistency across those two studies, we had options as to how to go forward in Phase 3. We picked secondary AML as our initial Phase 3 study because the survival benefit was more robust. But equally important is our strategy of going head-to-head against the current standard of care for AML patients, to hopefully show that we can outperform it.
TLSR: In the studies, what are your findings regarding side effects, especially as compared to the standard of care?
SJ: In terms of nonhematologic toxicities, no side effects were deemed clinically important. In terms of hematologic toxicities, the time to recovery of neutrophils and platelets was slightly longer for the CPX-351 patients. In the newly diagnosed AML study, in neutrophils, median time to recovery was four days longer, and in platelets, median time to recovery was nine days longer. As a result, we saw a higher rate of febrile neutropenia, as well as a higher rate of infection.
But we saw a reduction in early mortality, which seems counterintuitive. If you think about a drug causing more infection, you don't typically expect to see less mortality. We asked our clinical advisers that question. The feedback they provided was simply that if they are treating an AML patient, it's important to get that patient into remission, otherwise the patient has a poor prognosis. What they observed in the Phase 2 studies were more patients achieving remission with CPX-351. As far as the toxicities they were seeing, they were not new compared to the current standard of care, although the frequency may be different, and they have the supportive care measures to manage these adverse events. A key to the drug's safety is the reduced early mortality.
TLSR: Has there been enough time to look at the mortality endpoints and make any judgments?
SJ: In the Phase 3 study, no. We do not have access to that data. In the Phase 2 study you can see clearly that the early mortality figure favors CPX-351 compared to the control arm. In the newly diagnosed, 126-patient study, 60-day mortality with CPX-351 was 5%, and 60-day mortality with the 7+3 regimen was 15%.
TLSR: Why did the FDA fast-track the CPX-351 approval process?
SJ: After getting the results from the Phase 2 study, we had multiple paths to a registration trial. We selected secondary AML for the initial registration trial because the survival benefit in secondary AML was more robust, and our differentiation strategy is to become the foundation of care for AML patients. The only way we can achieve that is to go head-to-head against the current standard of care and demonstrate that we're better. We have that opportunity in this Phase 3 trial.
"Our differentiation strategy is to become the foundation of care for AML patients."
The Phase 3 was designed to enroll 300 patients. We enrolled 309 patients with a 1:1 randomization, so patients received either CPX-351 or the 7+3 regimen. We completed enrollment in Q4/14. We're on track to reaching the next milestone—the induction response rate—this quarter. But that is a secondary endpoint. The primary endpoint is overall survival, and we expect that data to be available in Q1/16.
In January, we received notification that the FDA granted fast-track designation for CPX-351 as a treatment for elderly patients with secondary AML. The fast-track designation is intended for drugs that treat serious or life-threatening conditions, and for which nonclinical or clinical data demonstrates the potential to address an unmet medical need. The designation is intended to facilitate development of a drug, as well as expedite review of drugs used to treat these serious or life-threatening conditions. We look upon the fast-track designation as a favorable step, but it is all contingent upon the overall survival readout.
TLSR: Let's talk about the business aspect. Obviously, these drug-testing regimens are very expensive. How are you funding them?
SJ: As of Dec. 31, 2014, we had approximately $32.5 million ($32.5M) in cash. We have drawn down all of a $15M term loan facility with Hercules Technology Growth Capital Inc. (HTGC:NYSE). We have sufficient cash to take us into H2/16—roughly six months beyond our expected overall survival readout.
TLSR: Do you have earned income?
SJ: We do not. We do have a partnership with the Leukemia & Lymphoma Society (LLS) via the LLS Therapy Acceleration Program (TAP). We were initially partnered with LLS prior to one of our Phase 2 studies. As a result of that partnership, LLS contributed $4.1M to the Phase 2 development of CPX-351 via TAP. Once we got the Phase 2 results, we went back to LLS to see if it would be interested in supporting Phase 3 development. We're the first company to receive a follow-on financing via TAP at LLS. LLS is contributing $5M to the Phase 3 development.
In addition, we are located in the state of New Jersey. The New Jersey Economic Development Authority has a program where nonprofitable companies can sell their net operating losses (NOLs) to profitable companies. This is the sixth year that we've been accepted to participate in that sale. We netted $1.9M from the sale of NOLs this past year.
TLSR: What's the discount rate on the NOLs sales?
SJ: Historically, we have averaged $0.92–0.93 on the dollar when we sell the net losses to a profitable company.
TLSR: Do you have any other products in the pipeline?
SJ: We want to demonstrate that CPX-351 can work for a range of blood cancers, not just AML. We are running a number of investigator-initiated studies. We are in various stages of discussion with investigators, as well as oncology cooperative groups, that want to study CPX-351 in other patient populations.
Our other focus is molecularly targeted drugs, as well as epigenetic modulators, as Lawrence mentioned. We have another drug called CPX-1, a combination of the drugs irinotecan and floxuridine. We have completed a Phase 2 study in patients with colorectal cancer for CPX-1.
But the company's focus is on CPX-351 and the CombiPlex technology platform. Obviously, CPX-351 represents a near-term opportunity for investors. The technology platform has a broad application beyond chemotherapy drugs, for example, in molecularly targeted therapies as well as epigenetic modulators. There are multiple companies going after these targets, so we hope to enter into potential research and development collaborations.
TLSR: Is the CombiPlex platform something you would license or sell to another company to use? Or is it intrinsically tied to the development of your own drugs?
LM: In the spirit of establishing potential research collaborations or partnerships, we would welcome opportunities to outlicense the technology. Or we could jointly develop a combination product with shared rights to the intellectual property.
TLSR: Do you have competitors for the CPX-351 product?
SJ: Other products are in development for AML. Unfortunately, the AML landscape has not had many successes. The 7+3 regimen has been the standard of care for nearly four decades, and nothing has come along to displace it. None of the other products are positioned, as we are, to become the new backbone therapy for AML. If we are successful at displacing 7+3, depending upon the product in question and the patient population, some of these other products could be complementary to CPX-351, as opposed to being competitive.
TLSR: How would CPX-351 be priced in the market?
SJ: We haven't disclosed what our anticipated pricing is. Additional work needs to take place after we see the final results from the Phase 3 clinical trial.
TLSR: Are you looking to build on your success on CPX-351 going forward, or would you be an acquisition candidate?
SJ: Our strategy is to commercialize CPX-351 on our own in the U.S. A very lean, focused, commercial organization can hit all the intended target audiences. We will look to partner outside the U.S.
TLSR: Why should a retail investor buy Celator shares?
SJ: We have several near-term milestones coming up. We have an asset that has completed Phase 3 enrollment and will have data readout this quarter. The primary endpoint of overall survival is expected in Q1/16.
In addition to the Phase 3 trial, we have a number of investigator-initiated studies up and running as we look to demonstrate a broader commercial opportunity beyond the lead indication. With respect to the technology platform, the work that's underway with three novel combinations is expected to be available by the end of Q3/15. So, there are a number of value inflection points coming up over the next 12 months.
TLSR: Thank you both for being with us today.
Scott Jackson was appointed Celator's chief executive officer in April 2008. He joined Celator in October 2007 as head of commercial Development. Mr. Jackson has more than 23 years of experience in the pharmaceutical and biotechnology industry and has held positions of increasing responsibility in sales, marketing and commercial development at Eli Lilly & Co., SmithKline Beecham, ImClone Systems Inc., Centocor (now Janssen Biotech Inc.), Eximias Pharmaceuticals and YM BioSciences (acquired Eximias). Mr. Jackson holds a bachelor's degree in pharmacy from the Philadelphia College of Pharmacy and Science and a master's degree in business administration from the University of Notre Dame.
Lawrence Mayer, Ph.D., Celator's founder, president and chief scientific officer, has played a lead role in the discovery and development of numerous anticancer drugs, several of which achieved market approval. Dr. Mayer held senior management positions at the Canadian Liposome Company and QLT Inc. before joining the BC Cancer Agency, where he directed the Investigational Drug Program. Dr. Mayer has authored more than 250 publications and has more than 35 patents either awarded or pending. Dr. Mayer received his bachelor of science degree summa cum laude from Wartburg College and his Ph.D. degree from the University of Minnesota.
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1) Peter Byrne conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns shares of the following companies mentioned in this interview: None.
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