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| ALTH > SEC Filings for ALTH > Form 10-Q on 5-Aug-2008 | All Recent SEC Filings |
5-Aug-2008
Quarterly Report
The following Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as information contained elsewhere in this report, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements concerning our projected timelines for the initiation of new trials and announcement of results from our ongoing clinical trials, including our Phase 2 PROPEL trial; the potential for the results of our Phase 2 PROPEL trial to support marketing approval of PDX; other statements regarding our future product development and regulatory strategies, including our intent to develop or seek regulatory approval for our product candidates in specific indications; the ability of our third-party manufacturing parties to support our requirements for drug supply; any statements regarding our future financial performance, results of operations or sufficiency of capital resources to fund our operating requirements; and any other statements which are other than statements of historical fact. In some cases, these statements may be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These statements involve known and unknown risks and uncertainties that may cause our, or our industry's results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to such differences include, among other things, those discussed in Part II, Item 1A of this report under the caption "Risk Factors." All forward-looking statements included in this report are based on information available to us as of the date hereof and we undertake no obligation to revise any forward-looking statements in order to reflect any subsequent events or circumstances. Forward-looking statements not specifically described above also may be found in these and other sections of this report.
Overview
We are a biopharmaceutical company focused on developing and commercializing innovative small molecule drugs for the treatment of cancer. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with one or more potential strategic partners. We strive to develop proprietary products that have the potential to improve the standard of care in cancer therapy. Our focus is on product opportunities for oncology that leverage our internal clinical development and regulatory expertise and address important markets with unmet medical need. We may also seek to grow our existing portfolio of product candidates through product acquisition and in-licensing efforts.
We currently have two small molecule chemotherapeutic product candidates in clinical development, PDX (pralatrexate) and
RH1.
PDX
PDX (pralatrexate) is a novel, small molecule chemotherapeutic agent that inhibits dihydrofolate reductase, or DHFR, a folic acid (folate)-dependent enzyme involved in the building of nucleic acid, or DNA, and other processes. PDX was rationally designed for efficient transport into tumor cells via the reduced folate carrier, or RFC-1, and effective intracellular drug retention. We believe these biochemical features, together with preclinical and clinical data in a variety of tumors, suggest that PDX may have a favorable safety and efficacy profile relative to methotrexate and other related DHFR inhibitors. We believe PDX has the potential to be delivered as a single agent or in combination therapy regimens.
In August 2006, we initiated PROPEL, an international, multi-center, open-label, single-arm Phase 2 clinical trial of PDX in patients with relapsed or refractory peripheral T-cell lymphoma, or PTCL, that we believe, if positive, will be sufficient to support the filing of a new drug application, or NDA, to seek marketing approval for PDX in this indication. Patients receive 30 mg/m2 of PDX once every week for six weeks followed by one week of rest per cycle of treatment. The treatment regimen also includes vitamin B12 and folic acid supplementation. The primary endpoint of the study is objective response rate, either complete or partial response, which will be assessed by central independent oncology review. Duration of response is the key secondary endpoint. All patients enrolled in the trial will continue to be followed for long-term survival.
In July 2006, we reached agreement with the U.S. Food and Drug Administration, or FDA, under its special protocol assessment, or SPA, process on the design of this Phase 2 trial. The SPA process allows for FDA evaluation of a clinical trial protocol intended to form the primary basis of an efficacy claim in support of an NDA, and provides an agreement that the trial design, including trial size, clinical endpoints and data analyses are acceptable to the FDA. The SPA agreement is not a guarantee of approval, and we cannot assure you that the design of, or data collected from, the PROPEL trial will be adequate to demonstrate the safety and efficacy of PDX for the treatment of PTCL, or otherwise be sufficient to support FDA or any foreign regulatory approval. In addition, the response rate, duration of response and safety profile required to support FDA approval are not specified in the PROPEL trial protocol and will be subject to FDA review.
In accordance with the PROPEL trial protocol, three pre-planned interim analyses of safety data and one pre-planned interim analysis of response data have been conducted. In January, September and December 2007, we announced that an independent data monitoring committee, or DMC, completed interim analyses of safety data from the first 10, 35 and 65 evaluable patients who completed at least one cycle of treatment with PDX, respectively, and recommended that the trial continue per the protocol at each analysis. No major safety concerns were identified by the DMC. In September 2007, we announced that the results of the interim analysis of patient response data exceeded the pre-specified threshold for continuation of the trial, which required a minimum of four responses, either complete or partial responses, out of the first 35 evaluable patients, as determined by central independent oncology review.
We completed patient enrollment in the PROPEL trial in April 2008, with more than 100 evaluable patients enrolled at sites across the United States, Canada and Europe. In May 2008, we reported interim response and safety data from the PROPEL trial. Twenty-nine percent, or 19 of the first 65 evaluable patients enrolled in the trial, experienced either a complete or partial response, as assessed by central independent oncology review. Forty-five percent, or 29 of the first 65 evaluable patients, experienced either a complete or partial response, as assessed by the PROPEL investigators. Patients are considered evaluable if they received at least one dose of PDX and their diagnosis of PTCL has been confirmed by independent review. The median duration of response for these patients could not be estimated due to the current length of follow-up. The most common drug related grade 3/4 adverse events were mucositis and thrombocytopenia, which were observed in 14% and 23% of patients, respectively. Patients received a median of three prior treatment regimens.
We currently expect to report top line results of the PROPEL trial by the end of 2008, although the actual timing may vary based on a number of factors. Following our review of the trial results, we intend to submit a New Drug Application for PDX for the treatment of patients with relapsed or refractory PTCL as expeditiously as possible.
Our decision to begin PROPEL was based upon interim data from an ongoing Phase 1/2 single-center, open-label, single-arm study of PDX in patients with relapsed or refractory non-Hodgkin's lymphoma, or NHL, and Hodgkin's disease. Interim data from this trial, which was most recently presented at the AACR-NCI-EORTC conference in October 2007, demonstrated a high overall response rate in patients with various subtypes of T-cell lymphoma. Notably, investigator-assessed responses were observed in 14 of 26 (54%) evaluable patients with T-cell lymphoma, including nine complete responses and five partial responses. The
addition of vitamins to the treatment regimen appeared to mitigate the occurrence of advanced grade stomatitis, or mouth ulcers, a toxicity commonly associated with PDX.
In July 2006, the FDA awarded orphan drug designation to PDX for the treatment of patients with T-cell lymphoma. The FDA may award orphan drug designation to drugs that target conditions affecting 200,000 or fewer patients per year in the United States. Under the Orphan Drug Act, if we are the first company to receive FDA approval for PDX for this orphan drug indication, we will obtain seven years of marketing exclusivity during which the FDA may not approve another company's application for the same drug for the same orphan indication. Orphan drug exclusivity would not prevent FDA approval of a different drug for the orphan drug indication or the same drug for a different indication. In October 2006, the FDA granted fast track designation to PDX for the treatment of patients with T-cell lymphoma. The fast track program is designed to facilitate the development and expedite the review of new drugs that are intended to treat serious or life-threatening conditions and that demonstrate the potential to address unmet medical needs. In April 2007, the European Commission, with a favorable opinion of the Committee for Orphan Medicinal Products of the European Medicines Agency, or EMEA, granted orphan medicinal product designation to PDX for the treatment of patients with PTCL. The EMEA orphan medicinal product designation, or OMPD, is intended to promote the development of drugs that may provide significant benefit to patients suffering from rare diseases identified notably as life-threatening, chronically debilitating or very serious. Under EU regulation, OMPD provides ten years of potential market exclusivity once the product candidate is approved for marketing for the designated indication in the European Union, which can be reduced to six years or terminated in certain circumstances.
In addition to the PROPEL trial, the following clinical trials involving PDX are also open for enrollment:
† a Phase 1/2a, open-label, multi-center study of PDX and gemcitabine with vitamin B12 and folic acid supplementation in patients with relapsed or refractory non-Hodgkin's lymphoma, or NHL, and Hodgkin's disease. We initiated patient enrollment in this study in May 2007. We plan to enroll up to 54 evaluable patients in the Phase 1 portion of the study and up to 30 additional patients with relapsed or refractory PTCL in the expanded Phase 2a portion of the study.
† a Phase 1, open-label, multi-center study of PDX with vitamin B12 and folic acid supplementation in patients with relapsed or refractory cutaneous T-cell lymphoma, or CTCL. We initiated patient enrollment in this study in August 2007. We plan to enroll up to 56 evaluable patients in the study, including at least 20 patients at what we believe to be the optimal dose and schedule. In June 2008, we announced interim data from the study. Data were presented on 17 patients, including 14 evaluable patients who completed at least one cycle of treatment with PDX at doses ranging from 15 - 30 mg/m2 as part of a weekly schedule for two or three weeks followed by one week of rest. Patients received a median of three prior systemic therapies. Investigator-assessed responses were observed in seven of 14 evaluable patients (50%), including two complete responses and five partial responses. Responses were observed in all four treatment cohorts. The most common adverse event was mucositis, with Grade 2 mucositis observed in six of 17 patients and Grade 3 mucositis observed in two of 17 patients. There were no Grade 4 toxicities and no thrombocytopenia above Grade 1.
† a Phase 1/2, open-label, single-center study of PDX with vitamin B12 and folic acid supplementation in patients with relapsed or refractory NHL and Hodgkin's disease. This study is currently focused on exploring alternate dosing and administration schedules in patients with B-cell lymphoma to further evaluate PDX's potential clinical utility in this setting.
† a Phase 1 dose escalation study of PDX with vitamin B12 and folic acid supplementation in patients with previously treated (Stage IIIB/IV) advanced non-small cell lung cancer, or NSCLC.
† a Phase 2b, randomized, multi-center study comparing PDX and Tarceva® (erlotinib), both with vitamin B12 and folic acid supplementation, in patients with Stage IIIB/IV NSCLC who are, or have been, cigarette smokers who have failed treatment with at least one prior platinum-based chemotherapy regimen. We initiated patient enrollment in this study in January 2008. The study will seek to enroll approximately 160 patients in up to 50 investigative sites worldwide. Based on current enrollment rates, we expect to complete patient enrollment in this study in the second half of 2009.
† a Phase 2, open-label, single-arm, multi-center study of PDX in patients with advanced or metastatic relapsed transitional cell carcinoma, or TCC, of the urinary bladder. We initiated patient enrollment in this study in July 2008. The study will seek to enroll approximately 41 patients in up to 20 investigative sites worldwide. The
primary endpoint of the study is objective response rate (complete and partial response). Secondary endpoints include duration of response, clinical benefit rate, progression-free survival, or PFS, overall survival and the safety and tolerability of PDX. In this study, patients will receive PDX as an intravenous, or IV, push administered on days 1 and 15 of a 4-week/28 day cycle. The initial dose of PDX will be 190 mg/m2, which may be adjusted based on criteria defined in the protocol. Patients will receive concurrent vitamin therapy of B12 and folic acid.
In addition to our ongoing NSCLC and bladder cancer studies, we are evaluating the potential future development of PDX for other solid tumor indications, including Stage III/IV head and neck cancer and Stage III/IV breast cancer, among others. There can be no assurances that we will pursue the development of PDX for one or more of these indications or that such development efforts will be ultimately successful.
In December 2002, we entered into a license agreement with Memorial Sloan-Kettering Cancer Center, SRI International and Southern Research Institute, as amended, under which we obtained exclusive worldwide rights to a portfolio of patents and patent applications related to PDX and its uses. The portfolio currently consists of two issued patents in the U.S., two allowed patent applications in Europe, and pending patent applications in the U.S., Canada, Europe, Australia, Japan, China, Brazil, Indonesia, India, South Korea, Mexico, Norway, New Zealand, the Philippines, Singapore, and South Africa.
RH1
RH1 is a small molecule chemotherapeutic agent that we believe is bioactivated by the enzyme DT-diaphorase, or DTD, also known as NAD(P)H quinone oxidoreductase, or NQ01. We believe DTD is over-expressed in many tumors, relative to normal tissue, including lung, colon, breast and liver tumors. We believe that because RH1 is bioactivated in the presence of DTD, it has the potential to provide targeted drug delivery to these tumor types while limiting the amount of toxicity to normal tissue.
In November 2007, we initiated patient enrollment in a Phase 1, open-label, multi-center dose escalation study of RH1 in patients with advanced solid tumors or NHL. We plan to enroll up to 60 evaluable patients in the study with the objective of determining the maximum tolerated dose, or MTD, recommended Phase 2 dose and safety profile of RH1 in this population. We plan to enroll three to six patients per cohort. Once we determine what we believe to be the optimal dose and schedule, we plan to recruit an expanded cohort of up to 24 evaluable patients who have tumor types with a high likelihood of DTD over-expression to explore possible markers of anticancer activity.
In December 2004, we entered into an agreement with the University of Colorado Health Sciences Center, the University of Salford and Cancer Research Technology under which we obtained exclusive worldwide rights to certain intellectual property surrounding RH1.
EFAPROXYNTM (efaproxiral) Development Discontinued
In mid-2007, we discontinued the development of EFAPROXYN, our former lead product candidate, after announcing top-line results from ENRICH, a Phase 3 clinical trial of EFAPROXYN plus whole brain radiation therapy, or WBRT, in women with brain metastases originating from breast cancer. The study failed to achieve its primary endpoint of demonstrating a statistically significant improvement in overall survival in patients receiving EFAPROXYN plus WBRT, compared to patients receiving WBRT alone. We are currently pursuing the sale of our rights to EFAPROXYN although we may not receive any material consideration for any sale.
Results of Operations
We are a development stage company. Since our inception in 1992, we have not generated any revenue from product sales and have experienced significant net losses and negative cash flows from operations. We have incurred these losses principally from costs incurred in our research and development programs, clinical manufacturing and from our marketing, general and administrative expenses. Our ability to generate revenue and achieve profitability is dependent on our ability, alone or with partners, to successfully complete the development of our product candidates, conduct clinical trials, obtain the necessary regulatory approvals, and manufacture and market our product candidates. The timing and costs to complete the successful development of any of our product candidates are highly uncertain, and therefore difficult to estimate. The lengthy process of seeking regulatory approvals for our product candidates, and the subsequent compliance with applicable regulations, require the expenditure of substantial resources. Clinical development timelines, likelihood of success and total costs vary widely and are impacted by a variety of risks and uncertainties discussed in the "Risk Factors" section of Part II,
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