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ConjuChem


10/19/2005 5:10:57 PM

ConjuChem (CJC.TO or CJHMF in the US) recently released data on the first 30 days (including a titration period) of the monotherapy portion of a Phase II trial in patients receiving DAC:GLP1 for type II diabetes. Just to remind readers-this injectable drug is an almost fully human version of glucagon-like peptide 1 (GLP-1) with a linker and chemical moiety that enables it to bind albumin once injected. The novel albumin binding aspect allows for a long duration of action as opposed to the naked GLP-1 molecule. GLP-1 has proven itself to be a good drug for type II diabetes. Amylin Pharmaceuticals (AMLN) in partnership with Lilly has taken a non-human version into late stage trials with excellent results. The problem with Amylin's product is that patients develop antibodies (so far non-neutralizing) and the drug has to be given twice daily by injection. They are currently working on a long-acting formulation with Alkermes but I believe that project could have some problems (nausea) if the depot release is not very precise. The point is that this approach is both well validated and novel. Novo Nordisk also has a compound ready to enter Phase III trials and it is likely to be dosed once daily-so it may be more convenient than Amlyin's Exenatide. I believe that ConjuChems entry may have a better dosing profile than any of the other competing products. The second portion of the current Phase II study due to complete in June will examine a few alternate dosing schedules. We should have the results later in the summer. Other large pharmas are in late stage trials with an oral agent designed to inhibit the enzyme that destroys GLP-1. So far this approach seems to work but I am very uncomfortable with the possible side-effect issues that could crop up with such a broad-brush drug (the DPPIV system works on other peptides as well) used over prolonged periods in a large population.

The current CJC trial is a monotherapy trial in which poorly controlled patients are taken off their current oral diabetic medications and treated only with the DAC:GLP1 product. There were no special dietary restrictions. The recently released results reported on the daily-dosing portion of the trial and in all respects were excellent. The data was very solid especially the .8% decrease in hemoglobin A1C (a long-term measure of glucose control). This is very good in light of patients only being on full doses of drug for a short time (part of the 30 days was a titration period to mitigate the nausea seen with this class of drug). When compared to an early study of Exenatide (Diabetes Care, vol. 26 No. 8 August 2003) where drug was used for a 28 day period in combination with other oral diabetic medications and diet---the results were similar (in the Exenatide study HbA1c reductions were from .7 to 1.1%) ---but again these patients were also on other diabetic medications and on a diet. One thing I found very interesting was that patients in the current study had a significant weight loss and this wasn't the case in the short-term Amylin trial. According to CJC management the weight loss did not correlate with nausea and vomiting so this makes it even more impressive. Another point of comparison is that Exenatide was given either two or three times daily by injection while DAP:GLP-1 was only given once daily. Nausea was about the same in both studies and was a cause of dropouts-but this will be true for all the GLP-1 products. There were no hypoglycemic events in the CJC trial-an important point. So with out going over all the details of the trial I think the results were impressive and I have a high level of confidence that release of data from the randomization phase (to longer dosing intervals) will show that DAC:GLP-1 can be dosed on an every-other-day or better schedule (at least in some patients)---but we will have to wait for the results this summer to find out.

The competition in the GLP-1 arena really boils down to a handful of companies: Amylin is the leader in late stage clinical trials, Novo Nordisk is about to start a Phase III trial of a once daily formulation called Liraglutide (they should have data at the ADA conference in June from a Phase II) and Zealand Pharma's twice daily ZP10 (out-licensed to Aventis) is in phase I/IIa clinical trials. The competitive landscape also includes the oral DPPIV inhibitors in development by a few big pharma including Novartis. I think ConjuChem may have the best product-although Novo Nordisk has been very quiet about their entry. CJC's market cap is about $500 million (fully diluted US), which makes this the cheapest play.

The stock has traded down some after moving up on the data release. I personally own CJC and plan to hold my position through the release of Phase II data later this summer. Other near-term drivers include a potential NASDAQ listing and a partnership event.

As a matter of disclosure, I want all readers to know that I own many of the stocks I write about in my personal account and always maintain a long position. I am not a stock broker or a registered investment adviser. I also write about some of these stocks in alerts for BioSpace, which can be found at www.biospace.com. Biotech Insight is a web-based newsletter published and archived at www.biotechinsight.com. Alerts and newsletters are sent electronically to subscribers. The following is further disclosure: Dr. Garren is an advisor to two funds investing in biotechnology. I recommend many of these same stocks to the investment funds mentioned above. It should be noted that certain funds go both long and short. The information in this column under no circumstances serves as a recommendation to buy or sell stocks. Please also see the disclosure about Biotech Insight archived on BioSpace.

Ronald Garren, M.D.

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