UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 |
| or |
 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to |
PROGENICS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
13-3379479 (I.R.S. Employer Identification Number) |
777 Old Saw Mill River Road
Tarrytown, NY 10591
(Address of principal executive offices, zip code)
Registrant’s telephone number, including area code: (914) 789-2800
Securities Registered pursuant to Section 12(b) of the Act: None
Securities Registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.0013 per share
(Title of Class)
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No
Indicate
by check mark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act). Yes No
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to
the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K.
The aggregate market value of the voting stock held by non-affiliates of the registrant on March 26, 2003, based upon the closing price of the Common Stock on the Nasdaq National Market of $4.64 per share, was approximately $25,707,000.(1) As of March 26, 2003, 12,742,450 shares of Common Stock, par value $.0013 per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III – Portions of the Registrant’s definitive Proxy Statement with respect to the Registrant’s Annual Meeting of Stockholders, to be filed not later than 120 days after the close of the Registrant’s fiscal year.
(1) Calculated by excluding all shares that may be deemed to be beneficially owned by executive officers, directors and five percent stockholders of the Registrant, without conceding that any such person is an “affiliate” of the Registrant for purposes of the Federal securities laws.
TABLE OF CONTENTS
PART I
This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements. Factors that may cause such differences include, but are not limited to, the uncertainties associated with product development, the risk that clinical trials will not commence or be completed when planned, the risks and uncertainties associated with dependence upon the actions of our corporate, academic and other collaborators, and of government regulatory agencies, the risk that products that appeared promising in early clinical trials do not demonstrate efficacy in larger-scale clinical trials and the other risks described in this report, including those described under the caption “Item 1. Business—Risk Factors.”
Available Information
We file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission, or SEC, under the Securities Exchange Act of 1934, or the Exchange Act. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including Progenics, that file electronically with the SEC. The public can obtain any documents that we file with the SEC at http://www.sec.gov.
We also make available, free of charge, on or through our Internet website (http://www.Progenics.com) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Item 1. Business
GENERAL
Overview
Progenics Pharmaceuticals, Inc. is a biopharmaceutical company focusing on the development and commercialization of innovative therapeutic products to treat the unmet medical needs of patients with debilitating conditions and life-threatening diseases. We apply our expertise in immunology and molecular biology to develop biopharmaceuticals to fight viral diseases, such as human immunodeficiency virus (“HIV”) infection, and cancers, including malignant melanoma and prostate cancer. In symptom management and supportive care, we are developing therapies to provide patients with an improved quality of life. Progenics’ most clinically advanced product is methylnaltrexone (“MNTX”), a compound in phase 3 clinical testing that is designed to block the debilitating side effects of opioid analgesics without interfering with pain palliation. The Company is conducting multi-dose phase 2 clinical trials with its lead HIV product, PRO 542, a viral-entry inhibitor, and is in preclinical development with PRO 140 and other follow-on product candidates in HIV infection. The Company is developing cancer immunotherapies based on prostate-specific membrane antigen (“PSMA”) technology and currently is conducting phase 1 clinical studies of a therapeutic prostate cancer vaccine. GMK is a cancer vaccine in phase 3 clinical trials for the treatment of malignant melanoma.
Product Development
We apply our expertise in clinical medicine, immunology, and molecular biology to develop novel therapeutics to meet unmet medical needs. Our principal programs are directed toward symptom management and supportive care, HIV infection, and cancer. In the symptom management and supportive care area, we have initiated a late-stage clinical development program for methylnaltrexone. MNTX is being tested in the clinic for the prevention or reversal of the debilitating side effects of opioid analgesics, and we expect to begin testing MNTX soon for treating post-operative bowel dysfunction. In the area of HIV infection, we are developing viral-entry inhibitors, molecules that inhibit the virus’ ability to attach, bind or enter certain immune system cells. Our most advanced therapeutic product in this area is a genetically engineered molecule that functions as an antibody and selectively targets HIV for neutralization. We are also actively engaged in research, discovery, and preclinical development of compounds based on the primary HIV receptor, CD4, and the HIV co-receptor CCR5, and their roles in viral attachment, fusion and entry. In the case of cancer, we are developing monoclonal antibodies as well as therapeutic vaccines that are designed to induce specific immune responses to cancer antigens. Through our joint venture with Cytogen Corporation, PSMA Development Company LLC, we are pursuing in parallel programs for the development of monoclonal antibodies directed against PSMA and the development of vaccines designed to stimulate an immune response to PSMA.
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We are actively seeking out other promising products and technologies around which to build development programs. Our in-licensing strategy has been the basis for our clinical development programs for MNTX, novel HIV therapeutics, and cancer immunotherapies. Except with respect to our development programs targeting PSMA, which are being conducted through our joint venture with Cytogen, we own the worldwide commercialization rights to each of our product candidates.
The following table summarizes the current status of our principal development programs and product candidates:
Program/Product |
Indication/Use |
Status(1) |
| Symptom Management and Supportive Care |
||
| Methylnaltrexone | Reversing opioid side effects
in patients with advanced medical illness |
Phase 3 single-dose (occasional use); second phase 3 study expected to begin in 2003 (chronic use) |
| Treating post-operative bowel dysfunction | Phase 2 expected to begin in the first half of 2003 | |
| Reversing opioid side effects in patients with chronic pain | Phase 1 expected to begin in the second half of 2003 | |
| HIV Therapeutics | ||
| PRO 542 | HIV therapy | Phase 2 multi-dose |
| PRO 140 | HIV therapy | Preclinical; IND expected to be filed in 2003 |
| CCR5 and gp41 fusion inhibition | HIV therapy | Research |
| ProVax | HIV vaccine | Research |
| Cancer Immunotherapeutics | ||
| GMK | Vaccine for melanoma | Phase 3 (Stages IIb and III disease) |
| Phase 3 (Stage II disease) | ||
| PSMA(2): Vaccines |
Immunotherapy for prostate cancer | rsPSMA vaccine in phase 1 |
| Immunotherapy for prostate cancer | Viral vector vaccine IND expected to be filed in the second half of 2003 | |
| Monoclonal antibody | Immunotherapy for prostate cancer | IND expected to be filed in the second half of 2003 |
| (1) | “Research” means initial research related to specific molecular targets, synthesis of new chemical entities, assay development or screening for the identification of lead compounds. |
| “Preclinical” means that a lead compound is undergoing toxicology, formulation and other testing in preparation for clinical trials. Testing in the research and preclinical phases is often referred to as in vitro, in vivo or ex vivo. In vitro refers to tests conducted in an artificial environment, such as a test tube or culture media, as opposed to in-vivo, which refers to tests in animals or otherwise in a living body, or ex vivo, which refers to tests conducted outside the body on samples of blood or other tissue that have been removed from the patient. |
| Phase 1-3 clinical trials are safety and efficacy tests in humans as follows: |
| “Phase 1”: Evaluation of safety. |
| “Phase 1/2”: Evaluation of safety with some measure of activity. |
| “Phase 2”: Evaluation of safety, dosing and activity or efficacy. |
| “Phase 3”: Larger scale evaluation of safety and efficacy. |
| See “Business—Government Regulation.” The actual timing of events can vary dramatically relative to the expected timing described in the table above due to a variety of factors. See “—Risk Factors—Our clinical trials could take longer to complete than we expect.” |
| (2) | Programs conducted through our joint venture with Cytogen Corporation. |
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Symptom Management and Supportive Care
Opioids are the mainstay in controlling severe pain, with approximately 190 million prescriptions written annually in the U.S. To relieve pain, narcotic medications such as morphine, codeine, and other opioid derivatives interact with receptors that are located in the brain and spinal cord. Opioids also activate receptors outside the central nervous system resulting, in many cases, in undesirable side effects, including constipation, delayed gastric emptying, nausea and vomiting, pruritis (itching) and urinary retention. Reversing the peripheral side effects of opioid pain therapy, while maintaining pain relief, represents a major treatment dilemma and a large, unmet medical need.
Methylnaltrexone
In October 2001, we entered into an agreement with UR Labs, Inc. to obtain the worldwide exclusive rights to MNTX, an investigational drug in late-stage clinical development. MNTX is designed to reverse certain side effects of opioid pain medications and to treat post-operative bowel dysfunction. UR Labs licensed MNTX from the University of Chicago, where it was discovered. MNTX is designed to block opioids from activating the peripheral receptors in the body that cause side effects. As MNTX does not cross the blood-brain barrier in humans, it does not interfere with brain-centered pain relief.
MNTX has been studied in approximately 400 patients and volunteers in 15 clinical trials. Published studies and clinical trials to date have demonstrated that the compound was well tolerated and highly active in blocking opioid-associated side effects without interfering with analgesia.
In October 2001, we announced statistically significant positive results from a phase 2 clinical study of MNTX. Clinicians at the University of Chicago reported that administration of MNTX prevented morphine-induced bowel paralysis and reduced, in the aggregate, 12 common side effects of morphine. Investigators further reported that subcutaneous administration of MNTX produced clinical activity similar to that of intravenous or oral administration of the drug.
There are an estimated 1.2 million deaths in the U.S. each year associated with advanced medical illness, and the vast majority are treated with opioids for moderate-to-severe pain. Most of these patients experience constipation and other side effects. Laxatives and stool softeners have significant limitations in this setting.
In December 2002, we reported preliminary results from a phase 2b clinical trial of subcutaneous MNTX directed to the reversal of opioid-induced constipation in patients with advanced medical illness, particularly cancer. An analysis of the open-label portion of this multi-center study showed that patients were 2.6 times as likely to have a bowel movement within four hours after receiving the highest MNTX dose versus the lowest dose analyzed (67% versus 26%). There was also a significant dose-dependent laxation response to the four doses of MNTX used in the open-label portion of the study. Patients entering the clinical trial averaged 1.7 bowel movements per week, which increased to more than three laxations per week during the MNTX treatment phase. The preliminary results from the open-label portion of the phase 2b methylnaltrexone study confirmed and extended the findings obtained from 14 previous clinical studies. The complete results from the phase 2b study are scheduled to be fully analyzed and announced in the first half of 2003.
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There have been no serious adverse events reported to date related to MNTX in the phase 2b trial. The most common side effects were flatulence and abdominal cramping, necessary physiological prerequisites to a bowel movement in patients with significant constipation. As in previous trials, no evidence of opioid withdrawal was observed in the phase 2b trial, and there was no increase in analgesic requirements.
Based upon the positive preliminary results of the open-label portion of the phase 2b study and the findings of prior clinical trials, we initiated a placebo-controlled phase 3 clinical study in December 2002 to evaluate the ability of single subcutaneous doses of MNTX to induce laxation within four hours. This clinical trial also includes a four-week open label phase wherein patients receive MNTX as requested. We also plan to expand the phase 3 program to include additional randomized, multi-dose trials of MNTX in 2003.
We also believe that preclinical studies and clinical results support expanded clinical testing of MNTX as a potential treatment for post-surgical bowel dysfunction, a paralysis of the gastrointestinal tract that frequently occurs after surgery and is accompanied by nausea, vomiting, and urinary retention. An estimated four million patients annually in the U.S. are at high risk for developing post-operative bowel dysfunction. We intend to initiate in the first half of 2003 a phase 2 clinical study of intravenous MNTX in post-operative bowel dysfunction.
We plan to pursue further the use of MNTX in the reversal of opioid-induced bowel dysfunction in ambulatory patients with chronic pain, including those suffering from headaches, arthritis, lower-back pain, sickle-cell disease, fibromyalgia, and other disorders. According to a national survey conducted for the American Pain Society and American Academy of Pain Medicine, approximately four million patients take opioids for chronic pain relief associated with various diseases and conditions. We expect to initiate in the second half of 2003 a phase 1 clinical trial with oral MNTX for bowel dysfunction in patients who must take opioids for chronic pain.
Given the extent of MNTX clinical testing completed or planned to date, we believe that we will be able to chart a development path that is designed for timely submission of this compound for regulatory consideration. Pending successful completion of clinical trials and medical and regulatory reviews, we believe that MNTX may be the first product candidate in our pipeline to be approved for marketing, which may occur as early as 2005. Furthermore, with our MNTX phase 3 clinical program well underway, we have recently initiated early stage discussions with a number of pharmaceutical companies concerning strategic partnering opportunities for MNTX. We have requested and expect to receive and review proposals in the first half of 2003, however no assurances can be given with respect to the nature of these proposals or whether any such proposal will result in a strategic partnership.
The Human Immune System
The human immune system protects the body from disease by specifically recognizing and destroying invading viruses, bacteria and other pathogens. In addition, the immune system is capable of recognizing and eliminating from the body abnormal cells, such as cells infected with viruses and bacteria, and cancer cells. This recognition function relies on the immune system’s ability to identify as foreign specific molecular configurations which are generically called antigens. White blood cells, particularly B and T lymphocytes, have the ability to recognize antigens made by infectious agents and abnormal cells and react to them. For example, B lymphocytes produce antibodies that recognize specific antigens. Antibodies are complex protein molecules that can bind to these antigens and neutralize or eliminate infectious agents and cancer cells.
Vaccines are designed to induce the production of antibodies against specific antigens on infectious agents and abnormal cells and thereby protect the body from illness. Although vaccines have historically been used prophylactically to prevent the contraction of an infectious disease, more recently vaccines are being developed as therapeutic agents to fight ongoing diseases. In addition, genetic engineering techniques have enabled the production of antibodies or antibody-like molecules in the laboratory. These genetically designed molecules are intended to mimic the body’s own immune response and are administered in situations where the immune response has been suppressed or is otherwise inadequate.
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HIV Therapeutics
HIV infection causes a slowly progressive deterioration of the immune system which results in Acquired Immune Deficiency Syndrome or AIDS. HIV specifically infects cells that have the CD4 receptor on their surface. Cells with the CD4 receptor are critical components of the immune system and include T lymphocytes, monocytes, macrophages and dendritic cells. The devastating effects of HIV are largely due to the multiplication of the virus in these cells resulting in their dysfunction and destruction.
Viral infection occurs when the virus binds to a host cell, enters the cell, and by commandeering the cell’s own reproductive machinery, creates thousands of copies of itself within the host cell. This process is called viral replication. Our scientists and their collaborators have made important discoveries in understanding how HIV enters human cells and initiates viral replication.
In the 1980s, our scientists demonstrated that the initial step of HIV infection involves the specific attachment of the virus to the CD4 receptor on the surface of human immune system cells. These researchers also showed that a specific glycoprotein, gp120, located on the surface of the virus, binds with high affinity to the CD4 receptor. Although these researchers demonstrated that binding to CD4 was necessary for HIV attachment, further discoveries have shown that attachment alone is not sufficient to enable the virus to enter the cell and initiate viral replication.
Subsequently, our scientists, in collaboration with researchers at the Aaron Diamond AIDS Research Center (“ADARC”), described in an article in Nature the discovery of a co-receptor for HIV on the surface of human immune system cells. This co-receptor, CCR5, enables fusion of HIV with the cell membrane after binding of the virus to the CD4 receptor. This fusion step results in entry of the viral genetic information into the cell and subsequent viral replication. These scientists further determined that the gp120 binding site on CCR5 is a discrete region at one end of the CCR5 molecule. Further work by other scientists has established the existence of a second co-receptor, CXCR4.
The HIV therapy research and development programs we are pursuing, alone and in collaboration with our academic and commercial partners, have been awarded $3.6 million in National Institutes of Health grants and research contracts during 2002.
Progenics’ HIV Receptor Technologies
Based on our participation in the discoveries of CD4 and CCR5, we are pursuing several approaches in the research and development of products designed to block entry of HIV into human immune system cells. Our PRO 542 product candidate and our viral-entry inhibition programs are based on the CD4 receptor, and our PRO 140 and HIV co-receptor/fusion programs are based on the CCR5 co-receptor.
Because HIV must first attach to the CD4 receptor to infect human cells, we believe that the part of the HIV gp120 glycoprotein that attaches to the CD4 receptor on immune system cells must remain constant across all strains of the virus. The gp120 glycoprotein is located on the exterior of HIV. PRO 542 incorporates a part of the CD4 receptor into genetically engineered molecules that function like antibodies and are designed to bind specifically to the gp120 glycoprotein of HIV. In in vitro tests, these molecules have demonstrated the ability to bind with high affinity to gp120 glycoproteins from a wide range of HIV strains, including the most prevalent strains. Our technology is targeted to a part of HIV that is believed to be necessary for the virus to enter cells. Mutation at this site would likely render the virus non-infectious, as it would be unable to attach and infect immune system cells. By targeting this attachment site of the virus, we believe that our technology may address the viral resistance seen with other HIV therapeutics caused by the high mutation rate of the virus.
In another program, we have developed a panel of monoclonal antibodies against CCR5 that have been shown to block the ability of HIV to infect cells isolated from healthy individuals by inhibiting virus-to-cell fusion. One of these monoclonal antibodies, which we have designated PRO 140, has been shown to inhibit HIV fusion in vitro at concentrations that have no apparent effect on the normal function of CCR5.
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Target Market
The World Health Organization (“WHO”) estimated that as of the end of 2002, 1.6 million people in North America, Western Europe, and Australia and 42 million people worldwide were living with HIV. According to WHO, approximately 75,500 people in high-income developed countries were newly infected with HIV during 2002. Since the late 1990s, many HIV patients have benefited from combination therapy of protease and reverse transcriptase inhibitors. Increasingly, after years of HAART (highly active anti-retroviral therapy), patients begin to develop resistance to these drugs. Our viral-entry inhibitors represent a potential new class of drugs for such patients.
Current Therapies
At present, three classes of products have received marketing approval from the U.S. Food and Drug Administration (“FDA”), the agency that regulates new drug approvals in the United States, for the treatment of HIV infection and AIDS: reverse transcriptase inhibitors, protease inhibitors and entry inhibitors. Both reverse transcriptase and protease inhibitors block viral enzymes and have shown efficacy in reducing the concentration of HIV in the blood and prolonging asymptomatic periods in HIV-positive individuals, especially when administered in multi-drug combination.
While combination therapy slows the progression of disease, it is not a cure. HIV’s rapid mutation rate results in the development of viral strains that are resistant to reverse transcriptase and protease inhibitors. The potential for resistance is exacerbated by interruptions in dosing which lead to lower drug levels and permit increased viral replication. Non-compliance is common in patients on combination therapies, since these drug regimens often require more than a dozen tablets to be taken at specific times each day. An additional problem is that many currently approved drugs produce toxic side effects in many patients, affecting a variety of organs and tissues, including the peripheral nervous system and gastrointestinal tract. These side effects may result in patients interrupting or discontinuing therapy.
Viral Entry Inhibitors
Based on our pioneering research, we believe we are a leader in the discovery of viral entry inhibitors, a promising new class of HIV therapeutics. For the large number of patients who are failing conventional antiretroviral or combination therapy, viral entry inhibitors will likely become the next generation of therapy. Fuzeon™ (formerly referred to as “T-20”) is an entry inhibitor developed by Trimeris, Inc. in collaboration with F. Hoffmann-La Roche Ltd that was approved for marketing by the FDA in March 2003. PRO 542, PRO 140 and Fuzeon inhibit different steps in the sequence of events leading to the entry of HIV into target cells, and therefore may act synergistically in their ability to block HIV infection of healthy cells.
PRO 542: HIV Therapy
We are developing PRO 542 for the treatment of HIV infection. PRO 542 is a proprietary antibody-like product with four binding sites for the gp120 glycoprotein on HIV. PRO 542 is designed to neutralize HIV through one of two mechanisms: (i) binding to the gp120 glycoprotein and thereby preventing infection of healthy cells; or (ii) binding to and detaching the gp120 glycoprotein from the virus.
In in vitro and ex vivo tests that we conducted in collaboration with scientists at the Aaron Diamond AIDS Research Center (“ADARC”) and the Centers for Disease Control and Prevention, PRO 542 neutralized a wide variety of clinical strains of HIV as well as viruses from the blood of HIV-positive individuals. In studies at ADARC, PRO 542 protected severe-combined-immune-deficient mice transplanted with human peripheral blood lymphocytes against infection by the three HIV strains tested, including strains of the virus isolated from HIV-positive individuals.
We completed two dose-escalation phase 1/2 clinical trials of PRO 542 which were designed to measure the safety, pharmacokinetics, immunogenicity, and antiviral activity of PRO 542. Pharmacokinetic studies analyze how the body acts on a drug once the drug is administered and will determine, for example, how long the drug persists in the body. Immunogenicity studies analyze to what extent a patient’s immune system mounts a response to the drug, which could impair the drug’s ability to have its desired therapeutic effect and could, in some cases, have serious health consequences to the patient. Immunogenicity can be a serious problem, particularly for antibody-based drugs.
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Our first dose-escalation clinical trial of PRO 542 was conducted in 15 HIV-positive adult patients at Mount Sinai Medical Center in New York City. Findings indicated peak and one-week serum concentrations of PRO 542 compared favorably with preclinical models, approximating drug levels previously shown to neutralize clinical HIV strains in vitro. Data from this trial demonstrated that in patients receiving the highest dosage of PRO 542, infectious HIV was reduced to undetectable levels for prolonged periods following treatment. Results from this trial also indicated that administration of a single dose of PRO 542 was able to produce a statistically significant reduction in viral load in patients treated with the highest dose. Viral load is the concentration of virus nucleic acid, or genetic material, in the blood and is a widely used indicator of infection levels. PRO 542 serum concentrations remained above HIV inhibitory levels for greater than one week. In addition, PRO 542 was well tolerated and non-immunogenic in all patients treated. We believe that these results support expanded clinical testing of this agent as a potentially non-toxic therapy for HIV infection.
The second dose-escalation phase 1/2 clinical trial was conducted in HIV-positive children at Baylor College of Medicine in Houston, the University of California at San Francisco, and the University of Pennsylvania by the AIDS Clinical Trials Group, a leading cooperative HIV research group supported by the National Institute of Allergy and Infectious Diseases. This trial was the first time PRO 542 was tested on children or in multiple doses. All patients treated demonstrated a decrease in viral load. Additionally, the drug was well tolerated by all patients tested. During 2000 we initiated, in cooperation with the Pediatric AIDS Clinical Trial Group (PACTG) of the National Institutes of Health, a new phase 2 trial to define the dose and frequency of administration of PRO 542 for HIV-infected children, including those resistant to available antiviral therapies.
We also determined in preclinical in vitro testing that the combination of PRO 542 and Fuzeon™ demonstrated significantly enhanced anti-HIV activity in blocking the entry of HIV into healthy cells. In further preclinical in vitro studies, it was also shown that a “triple cocktail” of PRO 542, PRO 140 and Fuzeon, each of which inhibits a different step in the sequence of events leading to the entry of HIV into targeted cells, acted synergistically to block HIV infection of healthy cells. A scientific article regarding this research subsequently appeared in the Journal of Infectious Diseases.
In October 2001, we announced the results of preclinical studies that demonstrated that PRO 542 possesses potent antiviral activity when given by multiple routes of administration, including subcutaneous injection. The studies demonstrated that PRO 542 reduced viral load to undetectable levels in a well-recognized animal model of HIV infection and may point the way towards simplified dosing regimens in man.
In June 2001, we entered into an agreement with Formatech, Inc., to assist in the development of improved product formulations for subcutaneous and intramuscular delivery of PRO 542. This agreement is subject to expansion based on the results and successful completion of the first phase of the product formulation work.
During 2002, two major milestones in the PRO 542 clinical program were achieved. We identified a target population of patients who are most likely to benefit from PRO 542, those with advanced disease, and we established clinical proof-of-concept that infrequent dosing with PRO 542 yielded prolonged viral-load reduction. In September 2002, we reported final results from a phase 2 clinical trial of PRO 542, which showed that this monoclonal antibody-like molecule reduced plasma concentrations of HIV in infected individuals who were no longer responding to currently available antiretroviral medications. In these treatment-experienced patients, a single dose of PRO 542 reduced viral concentrations in the blood by 60% to 80% on average. The viral-load reductions were sustained throughout the six-week follow-up period, and no serious side effects were observed. Additional findings from this phase 2 clinical trial of PRO 542, announced in February 2003, indicate that the magnitude of viral load reductions were correlated strongly with viral susceptibility to PRO 542 prior to drug treatment, as measured by the PhenoSense™ HIV Entry assay from ViroLogic, Inc. We believe that viral-resistance testing may identify patients who will derive the greatest benefit from therapy with HIV entry inhibitors. In addition, patient viruses collected six weeks after treatment initiation showed no evidence of having developed resistance to PRO 542.
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Achieving sufficient supplies of PRO 542 has been an on-going challenge. In February 2000, we entered into a development and supply agreement with Genzyme Transgenics Corporation, continuing the collaboration we commenced in September 1997. The objective of this program was to develop a transgenic source of PRO 542 using Genzyme Transgenics’ proprietary technology. This collaboration was designed to result in commercial-scale manufacture by producing PRO 542 in the milk of transgenic goats. The expanded agreement was entered into upon the completion of transgenic feasibility studies conducted by Genzyme Transgenics. During 2001, the first transgenic goats containing the PRO 542 gene were born. However, the development of transgenic animals that express adequate concentrations of PRO 542 in their milk in sufficient volumes to make it commercially viable, has continued to take longer than expected. We are conducting an ongoing examination of the merits of this project and the results achieved to date and expect to make a determination of its future viability in 2003.
During the course of 2002, we devoted concentrated efforts both internally and with third-party collaborators to enhance our ability to supply adequate quantities of PRO 542 for our clinical program through the creation a high-producing genetically engineered PRO 542 cell line and to expanding our internal manufacturing capabilities. In March 2003, we entered into an agreement with Gala Design, Inc. to create a high-producing genetically engineered cell line that expresses PRO 542. Additionally, in the second half of 2003, we plan to commence installation of a 1,000-liter bioreactor that will utilize the new cell line to increase productivity and to provide an additional source of PRO 542 to support of the clinical program in early 2004. The investment in cell-line development provides us with a viable strategic alternative to our reliance on transgenic goats as a source of PRO 542.
We are presently conducting a multi-dose open-label phase 2 clinical study of PRO 542 in the advanced disease setting in patients who are no longer responding to currently available anti-retroviral medications. Patients are receiving three intravenous doses of PRO 542 per week for three weeks. The goal of the study is to determine if repeat dosing can induce sustained viral load reductions beyond the 60% to 80% range seen in the single-dose phase 2 study. Sustained reduction in viral load is a primary goal of HIV therapy. Results from this study are expected in the second half of 2003.
Our phase 2 clinical program also includes studies that employ repeated subcutaneous dosing of PRO 542. In these studies, we intend to use the PhenoSense™ HIV Entry assay to select for those patients harboring the most sensitive viruses to PRO 542 neutralization. In July 2002, we announced an agreement with ViroLogic, Inc., to use their proprietary HIV resistance-testing technology, the PhenoSense™ HIV Entry assay, in the development of PRO 542 and PRO 140, our second experimental viral entry inhibitor.
Additional clinical trials may include treating patients with PRO 542 in combination with Fuzeon™. The initiation of such studies will depend on the commercial availability of supplies of Fuzeon for use in clinical trials. In preclinical studies, PRO 542 and Fuzeon were shown to be synergistic in inhibiting HIV, as each drug was designed to block the virus in a different manner before it enters the human immune cells.
PRO 140: HIV Therapy
In May 1999, we announced the development of a panel of proprietary anti-CCR5 monoclonal antibodies created at Progenics and evaluated in collaboration with the Aaron Diamond AIDS Research Center. These antibodies are designed to block the ability of HIV to infect cells isolated from healthy individuals by inhibiting virus-cell fusion, an approach not targeted by current HIV therapies. One murine monoclonal antibody, which we have designated PRO 140, inhibited HIV infection at concentrations that had no apparent effect on the normal function of CCR5. We believe that these properties were correlated with PRO 140’s ability to bind to a distinct site on CCR5 that does not interfere with the normal receptor function of CCR5. Effective April 1999, we entered into a development and license agreement with Protein Design Labs, Inc. (PDL), for the development of a humanized version of PRO 140 that retains the antibody’s antiviral activity but is more suitable for chronic use in humans.
We subsequently announced in 2000 the findings from a preclinical study carried out in collaboration with ADARC in which PRO 140 potently blocked each of 17 primary HIV isolates that use CCR5 as a fusion co-receptor. These viruses are typical of those associated with person-to-person transmission of HIV and predominate during the early stages of infection, when antiviral therapies have proven to be most effective. PRO 140 was shown in these in vitro models to be effective at protecting both primary T-cells and macrophages, immune system cells that provide the major targets for HIV infection in vivo. We also announced in 2000 the results of preclinical in vitro studies where it was shown that a “triple cocktail” of PRO 542, PRO 140 and Fuzeon™, each of which inhibits a different step in the sequence of events leading to the entry of HIV into targeted cells, acted synergistically to potently block HIV infection of healthy cells.
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We achieved further advancements in the development of PRO 140, which were announced during the course of 2001. In January 2001, the publication of a scientific article in the Journal of Virology described how PRO 140 demonstrated potent, broad-spectrum antiviral activity against more than 40 genetically diverse “primary” HIV viruses isolated directly from infected individuals in vitro. In April 2001, we announced that single doses of a murine-based PRO 140 reduced viral burdens to undetectable levels in a well-recognized animal model of HIV infection. In mice treated with PRO 140, initially high HIV concentrations became undetectable for up to nine days after a dose of the experimental drug.
Later in 2001, we also reported that we had elucidated the molecular basis for the synergistic antiviral activity observed for HIV entry inhibitors PRO 542, PRO 140 and the fusion inhibitor Fuzeon™. The multi-step nature of HIV entry into cells-attachment, co-receptor binding and fusion, may leave the virus susceptible to inhibition by combinations of drugs that act at different stages of the process. In laboratory studies, the drug combinations provided a synergistic activity whereby actions of the first drug (PRO 542 or PRO 140) temporarily immobilizes the virus and “holds” it in a way that makes it more susceptible to the second drug (PRO 140 or Fuzeon). Preclinical studies also demonstrated that HIV failed to develop resistance to PRO 140 despite 40 weeks of continued exposure to the drug. This period is considerably longer than that required for HIV to develop resistance to other classes of antiviral agents in similar laboratory studies.
Additionally, in December 2001, we further reported that multiple doses of PRO 140 reduced and then maintained viral loads at undetectable levels for the duration of therapy in an animal model of HIV infection. Sustaining undetectably low levels of virus in the blood is a primary goal of HIV therapy.
In February 2002, we announced that we had selected a humanized form of the PRO 140 antibody for clinical testing. Unlike its mouse-based predecessor, humanized PRO 140 is designed to be suitable for repeat dosing in humans. Humanization of the PRO 140 monoclonal antibody was accomplished under our collaborative agreement with Protein Design Labs, Inc. entered in April 1999. We expect to file an Investigational New Drug Application with the FDA for humanized PRO 140 in 2003. We plan to use ViroLogic’s PhenoSense HIV Entry assay to select for patients harboring the most sensitive viruses to PRO 140 inhibition.
Small-Molecule Drugs
Co-Receptor/Fusion: HIV Therapy
Our HIV co-receptor programs are based on the CCR5 co-receptor and the important role the molecule plays in virus-to-cell fusion and subsequent viral replication. CCR5 belongs to a larger family of cellular receptors, known as seven-transmembrane G-protein-coupled receptors. These receptors have been successfully exploited as targets by commercialized therapeutic drugs addressing a wide range of human diseases. Additionally, studies have indicated that a naturally occurring genetic mutation that disables the CCR5 co-receptor prevents HIV infection without compromising immune function. For these reasons, we believe that our co-receptor/fusion technology offers significant commercial opportunities.
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We have developed proprietary fusion assays based on our HIV co-receptor technology. These assays model fusion of HIV with human cells rapidly, automatically, sensitively and without the use of infectious virus. In December 1997, we entered into a collaboration with the Roche Group of Basel, Switzerland to use these assays to discover and develop small-molecule HIV therapeutics that target the fusion co-receptors, including CCR5 and CXCR4.
Subsequently we reported, in February 2002, the identification of small-molecule CCR5 inhibitors with novel antiviral properties, which were identified under this collaboration with the Roche Group, using our proprietary approach to identifying CCR5 inhibitors. The compounds potently and specifically blocked HIV entry in multiple laboratory studies. In addition, these compounds had little or no effect on the normal function of CCR5.
In March 2002, Roche exercised its right to discontinue funding of the research being conducted under this agreement. Discussions conducted with Roche subsequent to this decision resulted in an agreement by which we gained the exclusive rights to continue the research and development of these small molecule CCR5 inhibitors identified during our collaborative effort and to their commercialization, subject to certain reservations of rights in favor of Roche. (See Corporate Collaborations)
In March 2000, we entered into a research and license agreement with Pharmacopeia, Inc., to discover small molecule HIV therapeutics that block the attachment of the virus to its primary cellular receptor, CD4. This agreement expanded on a collaboration with Pharmacopeia commenced in September 1997. Under the terms of this agreement, we have provided proprietary CD4 attachment assays and expertise related to the interaction between HIV and CD4, and Pharmacopeia is engaging in a screening program of its internal compound library. In August 2000, we expanded our collaboration with Pharmacopeia to add two additional programs, including one program directed to the HIV envelope glycoprotein gp41. Under the terms of the Agreement we are entitled to an exclusive, royalty-bearing license to active compounds identified in these programs.
In November 2001, we were awarded approximately $600,000 from the National Institutes of Health (“NIH”) for the development of novel inhibitors of HIV entry and infection. Entry inhibitors are a promising new class of HIV drugs that may offer significant benefits in both safety and efficacy over currently available HIV therapies. The grant supports an ongoing collaboration between Progenics and Pharmacopeia, Inc. to develop orally available small-molecule inhibitors of the HIV envelope glycoprotein gp41, which mediates fusion and entry of HIV into cells of the human immune system. The project combines Pharmacopeia’s proprietary, high-throughput assays with screening technologies developed at Progenics for identifying fusion inhibitors. Pharmacopeia has utilized these technologies to screen its libraries of several million novel, drug-like compounds, and screening of other libraries is underway for other undisclosed targets. We continue to assess the results of this collaboration as they become available.
Sulfated Peptides
In collaboration with ADARC, we have identified specific naturally-occurring chemical modifications to CCR5 that govern its binding to HIV. Synthetic peptides incorporating these modifications potently blocked the binding of HIV to CCR5 on the cell surface. The modified CCR5 co-receptor peptides also inhibited certain HIV strains from entering target cells in vitro. The modified CCR5 co-receptor peptides may constitute a new class of HIV fusion inhibitors and also may provide a tool for identifying small-molecule drugs that target CCR5. Our subsequent preclinical work on these modified CCR5 peptides with our academic collaborators at Albert Einstein College of Medicine, resulted in the identification of the specific binding site for HIV on CCR5, the selection of a lead therapeutic sulfated CCR5 peptide and the identification of a sulfated CCR5 peptide that was only nine amino acids long yet was the core structure recognized by HIV in its bid to gain entry into a cell. Scientists from Progenics and the Albert Einstein College of Medicine reported these later findings in the Journal of Virology.
Given the focus of our efforts on our other more advanced programs, we have at this time scaled back our internal work directed to the development of sulfated peptides and are currently examining strategic alternatives relating to our progress achieved in such program to date.
ProVax: HIV Vaccine
We are conducting research with respect to our ProVax vaccine, a vaccine candidate which we believe may be useful as a prophylactic for uninfected individuals and/or as a therapeutic treatment for HIV-positive individuals. We are currently performing government-funded research and development of the ProVax vaccine in collaboration with the Weill/Cornell Medical College.
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Prophylactic HIV vaccines, which are under development by companies and academic laboratories worldwide, are designed to work by eliciting antibodies that target viral surface proteins and neutralize the virus. The surface of HIV is studded with envelope spikes that consist of three copies each of the gp120 and gp41 glycoproteins in a trimeric configuration. These envelope trimers mediate entry of the virus into immune system cells. Blocking this viral-entry process thus impedes infection. However, the instability of the natural form of the timer complex in the laboratory has been a major obstacle to the creation of a vaccine, as the dissociated components, monomeric gp120 and gp41, do not reliably elicit antibodies that neutralize circulating strains of HIV.
We are developing two novel strategies for producing the stabilized gp120/gp41 proteins in their native trimeric form. The first approach involved modifying the gp120 glycoprotein to enhance trimer stability, whereas the second method employed modifications to gp41. Importantly, the trimers can be isolated in homogenous form, as required for use in a vaccine. A vaccine containing the trimeric structure of HIV surface proteins may be crucial to eliciting an immune response able to neutralize the virus in humans.
In 2002, we announced the development of vaccine candidates that contain critical surface proteins whose form closely mimics the structures found on the virus. The findings were described in articles in the Journal of Virology.
Cancer Immunotherapy
Cancer is a category of diseases, each of which is characterized by aberrations in cell growth and differentiation. The establishment and spread of a tumor is a function of its growth characteristics and its ability to suppress or evade the body’s normal defenses, including surveillance and the elimination of cancer cells by the immune system. Eradication of malignant cells that can metastasize, or spread, to vital organs, leading to death, is central to the effective treatment of cancer.
Despite recent advances in treatment, therapies for many types of cancer suffer from serious limitations. The principal therapies for cancer have historically been surgery, radiation and chemotherapy. A significant drawback to conventional anti-cancer therapy is that both occult, or hidden, and residual disease is difficult or impossible to eliminate fully, which can lead to relapse.
GMK: Therapeutic Vaccine for Malignant Melanoma
GMK is a proprietary therapeutic vaccine for melanoma that is currently in two pivotal phase 3 clinical trials. GMK, which is the first cancer vaccine based on a defined cancer antigen to enter phase 3 clinical trials, is designed to prevent recurrence of melanoma in patients who are at risk of relapse after surgery. GMK is composed of the ganglioside GM2 conjugated to the carrier protein keyhole limpet hemocyanin, or KLH, and combined with the adjuvant QS-21. QS-21 is a compound in the StimulonTM family of adjuvants developed and owned by Aquila Biopharmaceuticals, Inc., a wholly owned subsidiary of Antigenics, Inc. GMK is designed to stimulate the immune system to produce specific antibodies to the ganglioside antigens. These antibodies have been shown in vitro to recognize and destroy cancer cells. Based on the in vitro results and the clinical trial results described below, we believe that vaccination of cancer patients with ganglioside conjugate vaccines may delay or prevent recurrence of cancer and prolong overall survival.
Target Market
Melanoma is a highly lethal cancer of the skin cells that produce the pigment melanin. In early stages, melanoma is limited to the skin, but in later stages it can spread to the lungs, liver, brain and other organs. The National Cancer Institute (“NCI”) estimated that in 1999 there were 480,000 melanoma patients in the U.S. The American Cancer Society estimates that there were 53,600 new cases of melanoma diagnosed in the U.S. during 2002. Melanoma accounts for 4% of skin cancer cases, but 79% of skin cancer deaths. Melanoma has one of the fastest growing incidence rates of any cancer in the U.S. Increased exposure to the ultraviolet rays of the sun may be an important factor contributing to the increase in new cases of melanoma.
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GMK is being developed for the treatment of patients with Stage II or Stage III melanoma. The American Cancer Society estimates that approximately 50% of new melanoma patients are diagnosed with Stage II or Stage III melanoma and that approximately half of all Stage III melanoma patients will experience recurrence of their cancer and die within five years after surgery.
Current Therapies
Standard treatment for melanoma patients includes surgical removal of the cancer. Thereafter, therapy varies depending on the stage of the disease. For Stage I and II melanoma patients, treatment generally consists of close monitoring for recurrence. The only approved treatment for Stage III melanoma patients is high-dose alpha-interferon. However, treatment with high-dose alpha-interferon causes substantial toxicities, requires an intensive treatment over twelve months (intravenous administration five-days-a-week for the first month followed by subcutaneous injections three-days-a-week for the remaining eleven months).
Other approaches for treatment of Stage II or III melanoma patients are currently under investigation, but none has been approved for marketing in the U.S. These experimental therapies include chemotherapy, low-dose alpha-interferon, and other vaccines.
Clinical Trials
GMK entered a pivotal phase 3 clinical trial in the United States in August 1996. A pivotal clinical trial is one that is designed to produce results sufficient to support regulatory approval. GMK was administered in this study on an out-patient basis by 12 subcutaneous injections over a two-year period.
This ongoing U.S. phase 3 clinical trial compares GMK with high-dose alpha-interferon in Stage IIb (advanced Stage II) and Stage III melanoma patients who have undergone surgery but are at high risk for recurrence. This randomized trial, which exceeded its targeted enrollment of 851 patients by September 1999, has been conducted nationally by the Eastern Cooperative Oncology Group (ECOG) in conjunction with the Southwest Oncology Group (SWOG) and other major cancer centers, cooperative cancer research groups, hospitals and clinics. ECOG and SWOG are leading cooperative cancer research groups supported by the National Cancer Institute and are comprised of several hundred participating hospitals and clinics, primarily in the United States. The primary endpoint of the U.S. trial is a comparison of the recurrence of melanoma in patients receiving GMK versus patients receiving high-dose alpha-interferon. Additionally, the study is designed to compare quality of life and overall survival of patients in both groups.
In May 2000, as a result of an unplanned early analysis of a subset of the 880 patients enrolled in the trial, ECOG recommended to clinical investigators participating in the trial that they discontinue administering GMK. ECOG’s decision was based on its early analysis of data from the subset group which, according to ECOG, showed that the relapse-free and overall survival rates for patients receiving the GMK vaccine were lower than for patients receiving high-dose alpha-interferon.
We believe ECOG’s action was premature. At the time of the ECOG action, many of the patients had not yet completed their full course of therapy with GMK. Since the onset of biological activity for the GMK vaccine may appear later than that of alpha-interferon, which is given in high doses over a shorter time period, we believe that in the longer term the benefits of GMK to melanoma patients may be demonstrated. In addition, the analysis conducted by ECOG indicated that GMK was better tolerated and had five times less frequent and much less severe side effects than high-dose alpha-interferon.
Based on these considerations, we have continued this trial as an extension study and will continue to monitor these patients at high risk of relapse until the scheduled completion of the trial. ECOG is assisting us in continued patient follow-up and data compilation. We are planning to meet with FDA in 2003 to finalize the method of analysis for this study. Given recent FDA actions on similar product candidates, we are considering amending our statistical plan for this study to compare median 5.5 year survival between the two treatment groups. We anticipate reaching 5.5 year median survival in late 2003 and would plan to perform the final analysis in the first half of 2004.
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In May 2001, we initiated a large international phase 3 clinical trial of the GMK vaccine to prevent the relapse of malignant melanoma, the deadliest form of skin cancer. The study is being conducted with the EORTC (European Organization for Research and Treatment of Cancer), Europe’s leading cancer cooperative group. The EORTC phase 3 trial expects to enroll 1,300 patients who are at intermediate risk for recurrence of the disease. The study is recruiting patients from Europe, as well as Australia. EORTC will randomize patients after surgery to receive either GMK or the current standard of care, which is no treatment but close monitoring. Patients on the vaccine arm of the study will receive 14 doses of GMK over three years, with an estimated two years of additional follow-up. The primary endpoint of this trial is to compare the recurrence of melanoma in patients receiving GMK versus in patients receiving observation with no treatment. The study will also compare overall survival of patients in both groups. Patient accrual for this study has proceeded more slowly than anticipated due to regulatory delays, however, at present we expect to enroll all 1,300 patients by the end of 2004.
MGV: Therapeutic Vaccine for Certain Cancers
MGV is a proprietary therapeutic vaccine for cancers which express GD2 or GM2 gangliosides. These cancers include colorectal cancer, lymphoma, small cell lung cancer, sarcoma, gastric cancer and neuroblastoma. MGV has three components: (i) GM2-KLH, or GM2 ganglioside conjugated to KLH; (ii) GD2-KLH, or GD2 ganglioside conjugated to KLH; and (iii) QS-21 adjuvant. MGV is designed to prevent recurrence of cancer and prolong overall survival of patients after their cancer has been removed by surgery or reduced by chemotherapy or radiation therapy.
MGV completed a phase 1/2 clinical trial in 2000 under an institutional IND at Memorial Sloan-Kettering Cancer Center (MSKCC). This study, which had as its primary objectives the establishment of the safety of MGV and the ability of the vaccine to induce specific immune responses to both GD2 and GM2, showed that the combination of GM2-KLH/GD2-KLH/QS-21 could produce antibodies to GM2 and GD2 and was well tolerated. We announced, in January 2001, the publication of MGV clinical trial results in the journal Clinical Cancer Research. Specifically, MGV induced antibodies to the GM2 ganglioside in 97% of patients. In addition, 91% of patients who received an optimal dose of the vaccine also developed antibodies to GD2. The study demonstrated that for the first time in cancer patients that it is possible to induce antibody responses to two gangliosides using a bivalent vaccine.
Due to our increased focus on its more advanced programs, internal work directed to the development of MGV has been scaled back at this time. However, with our support our collaborators at MSKCC continue to evaluate an optimized GD2 vaccine component through additional phase 1/2 studies.
PSMA
Prostate cancer is the most common form of cancer affecting U.S. males and is the second leading cause of cancer deaths in men each year. The American Cancer Society estimates that 30,200 men will died from prostate cancer, and 189,000 new cases were diagnosed, in 2002. Conventional therapies include radical prostectomy, in which the prostate gland is surgically removed, radiation and hormone therapies, chemotherapy and “watchful waiting.” Surgery and radiation therapy are associated with urinary incontinence and impotence. Hormone therapy and chemotherapy are generally not intended to be curative and are not actively used to treat localized, early-stage prostate cancer.
Through PSMA Development Company LLC (the “Joint Venture”), our joint venture with Cytogen Corporation, we are engaged in a research and development program relating to vaccine and antibody immunotherapeutics based on Prostate Specific Membrane Antigen (“PSMA”). PSMA is a protein that is abundantly expressed on the surface of prostate cancer cells, but not normal cells. We believe this antigen may have applications in immunotherapeutics for prostate cancer and potentially for other types of cancer. In December 2001, the Joint Venture announced that it had characterized the native molecular structure of PSMA, a finding that may have fundamental implications for development of prostate cancer immunotherapies.
In December 2002, the Joint Venture announced the initiation of a phase 1 clinical trial with its novel therapeutic recombinant soluble PSMA (rsPSMA)vaccine, which is designed to stimulate a patient’s immune response system to recognize and destroy prostate cancer cells. The vaccine combines the PSMA cancer antigen with an immune stimulant to induce an immune response against prostate cancer cells as foreign and to eliminate them. The genetically engineered PSMA vaccine generated potent immune responses in preclinical animal testing. This clinical trial is the first of a series designed to elicit potent and durable immune responses to PSMA. The clinical trial is designed to evaluate the safety and immune-stimulating properties of the vaccine in patients with either newly diagnosed or recurrent prostate cancer.
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In October 2002, the Joint Venture also announced that it had been awarded approximately $1 million from the National Cancer Institute of the National Institutes of Health (“NIH”) for the development of novel immunotherapies for prostate cancer. The funding comes from four Phase I Small Business Innovation Research (“SBIR”) grants for therapies that use components of the immune system to target cancer cells for destruction. Funding is intended to support development of monoclonal antibodies and therapeutic vaccines directed against PSMA.
Two of the grants will support production and preclinical development of lead vaccine candidates, a purified protein vaccine and a viral-vector vaccine. The projects seek to optimize two vaccines, first individually and then eventually in novel “prime-boost” combinations. In these latter studies, the immune system is “primed” with a first vaccine and then “boosted” with a second vaccine in a manner that induces an optimal balance of killer T cells and antibodies capable of eliminating PSMA-expressing prostate cancer cells. The two additional grant awards will support the preclinical development of anti-PSMA monoclonal antibodies for the treatment of prostate cancer. The projects will explore the development of the antibodies both in unlabeled form and labeled with alpha- and beta-emitting radioisotopes.
We are also pursuing, in parallel, a vaccine program that utilizes novel and proprietary viral vectors designed to deliver the PSMA gene to the immune system in order to generate potent and specific immune responses to the prostate cancer cells. PSMA-based immunotherapy is designed to destroy cancer cells while sparing healthy tissue. In September 2001, the Joint Venture entered into a worldwide exclusive licensing agreement with AlphaVax Human Vaccines, Inc., to use the AlphaVax Replicon Vector (“ArV”) system to create a therapeutic prostate cancer vaccine incorporating the PSMA antigen. Preclinical studies of this viral-vector prostate cancer vaccine generated a potent dual-immune response against PSMA, yielding both antibodies and killer T cells, the two principal mechanisms used by the immune system to eliminate abnormal cells. We are completing our preclinical development activities on the PSMA ArV vaccine in anticipation of phase 1/2 clinical studies in the first half of 2004.
The Joint Venture has also developed a new generation of novel murine monoclonal antibodies which identify and bind to the three-dimensional structure of PSMA as presented on cancer cells. These antibodies represent potentially excellent candidates for therapy development since they possess a higher affinity and specificity for PSMA than antibodies that do not recognize the physical structure of the target antigen. The Joint Venture entered a collaboration with Abgenix, Inc. in March 2001 to use the company’s XenoMouse technology for generating fully human antibodies to PSMA and subsequently announced the successful creation of these human antibodies to PSMA. Subsequently In May 2002, we announced that we had selected a monoclonal antibody that targets PSMA as a clinical candidate for development as a novel therapy for prostate cancer. The high-affinity antibody was produced under our collaboration with Abgenix.
In November 2002, we reported that fully human monoclonal antibodies substantially reduced tumor growth in an animal model of human prostate cancer. These antibodies demonstrated the ability to selectively deliver a lethal payload to cells that expressed PSMA on their surface. We are in the process of selecting the optimal toxin and radioactive payloads in parallel with producing clinical-grade antibodies. We expect to begin phase 1 clinical studies with this antibody in the first half of 2004. Clinical trials in prostate cancer patients of a human monoclonal antibody to PSMA are scheduled to begin in 2004.
Stroke: DHA
We licensed from Memorial Sloan-Kettering Cancer Center patent rights and technology relating to a derivative of vitamin C called dehydroascorbic acid, or DHA. We have obtained exclusive worldwide rights to use DHA for treatment of disease involving oxidative damage to tissue, including tissues of the central nervous system. In preclinical studies conducted in an animal model of human stroke, DHA demonstrated significant dose-dependent decreases in brain damage, neurological deficits, and death caused by stroke when administered as long as three hours after a stroke.
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While we continue with certain preclinical research and activities in conjunction with our academic collaborators at Columbia University, we are also examining our overall strategic alternatives in the DHA program to date.
Corporate Collaborations
Roche Group
In December 1997, we entered into a collaboration agreement with the Roche Group of Basel, Switzerland to discover and develop novel HIV therapeutics that target the fusion co-receptors CCR5 and CXCR4. This collaboration, among other things, provided for Roche to apply its library of small-molecule compounds to our original screening assays in order to identify inhibitors of the interaction between HIV co-receptors and HIV.
Subsequently, in March 2002, Roche exercised its right to discontinue funding of the research being conducted under this agreement. Discussions conducted with Roche during the course of 2002 resulted in a successive agreement by which we gained the exclusive rights to continue the research and development of the small-molecule CCR5 inhibitors identified during our collaborative effort and to their commercialization, subject to certain reservations of rights in favor of Roche. Under the terms of the new agreement, Roche retains an option to resume joint development and commercialization of these compounds at defined intervals in their development. If Roche does not exercise such option, it is entitled to receive specified fees upon the achievement of identified milestones and royalties on any net sales of therapeutics based on these CCR5 inhibitors. We are currently optimizing compounds in order to select a clinical development candidate.
Cytogen Corporation
We have entered into a joint venture collaboration with Cytogen Corporation to develop vaccine and antibody-based immunotherapeutic products based on prostate specific membrane antigen (“PSMA”). This collaboration is a joint venture structured in the form of a mutually owned limited liability company. All patents and know how currently owned or acquired in the future by Progenics or Cytogen and useful in the development of PSMA-based antibody or vaccine immunotherapeutics have been licensed to the joint venture. The principal intellectual property licensed initially are several patents and patent applications owned by Sloan-Kettering that cover PSMA. By the terms of the agreement, we are responsible for preclinical and clinical development, and Cytogen is principally responsible for product marketing. In addition, we have certain co-promotion rights. The license agreement terminates on the last to expire or termination of any licensable rights to patents or patent applications licensed by Progenics or Cytogen to the Joint Venture.
The joint venture aspects of the collaboration are governed by a limited liability company agreement. This agreement provides generally for joint management. The agreement also provided for our payment of not more than $3.0 million of the initial research and development funding and $2.0 million in payments the joint venture was required to pay Cytogen through December 31, 2001. Any subsequent funding obligations are to be shared 50/50, with voting and ownership dilution resulting if a party fails to fund its share.
Genzyme Transgenics Corporation
We have entered into a collaboration with Genzyme Transgenics to develop a transgenic source of the PRO 542 molecule. Under this agreement, Genzyme Transgenics has engaged in a program designed to result in the establishment of a line of transgenic goats capable of expressing the molecule in lactation milk. We are obligated to pay Genzyme Transgenics certain fees to conduct the program as well as additional fees upon the achievement of specified milestones. If the program is successful, we may elect to enter into a further agreement for production by Genzyme Transgenics of commercial-scale quantities of the molecule, the principle terms of which have been agreed upon. However, the development of transgenic animals that express adequate concentrations of PRO 542 in their milk in sufficient volumes to make it commercially viable has continued to take longer than expected. We are conducting an ongoing examination of the merits of this project and the results achieved to date and expect to make a determination of its future viability in 2003. See also “HIV Therapeutiucs - PRO 542: HIV Therapy”
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Formatech, Inc.
In June 2001, we entered into a collaborative agreement with Formatech, Inc., to develop improved product formulations for PRO 542. We are obligated to pay Formatech certain fees for the conduct of its activities under the program, which is subject to expansion based on the results of the first phase of the work. The Formatech agreement may be terminated by us upon 30 days prior written notice.
Pharmacopeia, Inc.
In March 2000, we entered into a research and license agreement with Pharmacopeia, Inc., to discover small molecule HIV therapeutics that block the attachment of the virus to its primary cellular receptor, CD4. This agreement expanded a collaboration with Pharmacopeia commenced in September 1997. Under the terms of the agreement, we have provided proprietary CD4 attachment assays and expertise related to the interaction between HIV and CD4 and Pharmacopeia is engaging in a screening program of its internal compound library. In August 2000, we expanded our collaboration with Pharmacopeia further to add two additional programs, including one program directed to the HIV envelope glycoprotein gp41. Pharmacopeia has utilized these technologies to screen its libraries of several million novel, drug-like compounds, and screening of other libraries is underway for other undisclosed targets. We will be granted a license to active compounds identified in the program. We are obligated to pay Pharmacopeia fees for its screening programs as well as additional amounts upon the achievement of specified milestones and royalties on any sales of therapeutics marketed as a result of the collaboration.
Licenses
We are a party to license agreements under which we have obtained rights to use certain technologies in our cancer and HIV programs, as well as certain other human therapeutics. Set forth below is a summary of these licenses.
Sloan-Kettering. We are party to a license agreement with Sloan-Kettering under which we obtained the worldwide, exclusive rights to certain technology relating to ganglioside conjugate vaccines, including GMK and MGV, and their use to treat or prevent cancer. The Sloan-Kettering license terminates upon the expiration of the last of the licensed patents or 15 years from the date of the first commercial sale of a licensed product pursuant to the agreement, whichever is later. In addition to patent applications, the Sloan-Kettering license includes the exclusive rights to use certain relevant technical information and know-how. A number of Sloan-Kettering physician-scientists also serve as consultants to Progenics. We are also a party to a license agreement with Sloan-Kettering under which we obtained an exclusive, worldwide license to certain patent rights relating to DHA. The license continues for 20 years or to the end of the term for which the patent rights are granted.
Columbia University. We are party to a license agreement with Columbia University under which we obtained exclusive, worldwide rights to certain technology and materials relating to CD4 and its use to treat or prevent HIV infection. The license agreement will terminate upon the expiration of the last of the licensed patents.
Aquila Biopharmaceuticals. We have entered into a license and supply agreement with Aquila Biopharmaceuticals, Inc., a wholly owned subsidiary of Antigenics, Inc., pursuant to which Aquila agreed to supply us with all of our requirements for the QS-21 adjuvant for use in certain ganglioside-based cancer vaccines, including GMK and MGV. QS-21 is the lead compound in the Stimulon family of adjuvants developed and owned by Aquila. The license terminates upon the expiration of the last of the licensed patents.
Protein Design Labs. We have entered into a development and license agreement with PDL for the humanization by PDL of PRO 140. Pursuant to the agreement PDL granted us certain exclusive and nonexclusive worldwide licenses under relevant patents, patent applications and know how covering or relating to the humanized PRO 140. The licensing agreement terminates on the later of ten years from the first commercial sale or the last date on which there is an unexpired patent or a patent application that has been pending for less than ten years. Thereafter the license is fully paid.
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UR Labs, Inc. In October 2001, we entered into an agreement with UR Labs, Inc. (the “URL Agreement”) to obtain worldwide exclusive rights to intellectual property rights related to methylnaltrexone. UR Labs has exclusively licensed MNTX from the University of Chicago, where it was discovered. In consideration for the license, we paid a nonrefundable, noncreditable license fee and are obligated to pay additional payments upon the occurrence of certain defined milestones associated with the MNTX product development and commercialization program. In addition, we are required to pay royalties based upon net sales of the licensed products, subject to certain set off rights of the Company and the right of the Company to buy-down the royalty rate under defined circumstances. The URL Agreement may be terminated under specified circumstances that include the Company’s failure to achieve certain milestones; however, the consent of UR Labs to revisions to the due dates for the milestones shall not be unreasonably withheld under certain circumstances. If not terminated early, the URL Agreement continues until the later of the expiration of the UR Labs patents or the defined period.
Abgenix, Inc. In February 2001, the Joint Venture entered into a worldwide exclusive licensing agreement with Abgenix, Inc. (the “ABX Agreement”), to use Abgenix’ XenoMouse technology (the “XenoMouse Technology”) for generating fully human antibodies to the Joint Venture’s proprietary PSMA antigen. In consideration for the license, the Joint Venture paid a nonrefundable, noncreditable license fee and is obligated to pay additional payments upon the occurrence of certain defined milestones associated with the development and commercialization program for products incorporating an antibody generated utilizing the XenoMouse Technology (the “Antibody Products”). In addition, the Joint Venture is required to pay royalties based upon net sales of the Antibody Products, subject to certain set off rights of the Company under defined circumstances. The ABX Agreement may be terminated, after an opportunity to cure, by Abgenix for cause upon 30 days prior written notice. The Joint Venture has the right to terminate the ABX Agreement upon 30 days prior written notice. If not terminated early, the ABX Agreement continues until the later of the expiration of the XenoMouse Technology patents or a defined period.
AlphaVax Human Vaccines, Inc. In September 2001, the Joint Venture entered into a worldwide exclusive licensing agreement with AlphaVax Human Vaccines, Inc. (the “AVX Agreement”), to use the AlphaVax Replicon Vector (ArV™) system (the “AVRV System”) to create a therapeutic prostate cancer vaccine incorporating the Joint Venture’s proprietary PSMA antigen. In consideration for the license, the Joint Venture paid a nonrefundable, noncreditable license fee and is obligated to pay additional payments upon the occurrence of certain defined milestones associated with the development and commercialization program for products incorporating the AVRV System (the “Products”). In addition, the Joint Venture is required to pay royalties based upon net sales of the Products, subject to certain set off rights of the Joint Venture under defined circumstanc es. The AVX Agreement may be terminated, after an opportunity to cure, by AlphaVax under specified circumstances that include the Joint Venture’s failure to achieve certain milestones; however the consent of AlphaVax to revisions to the due dates for the milestones shall not be unreasonably withheld. The Joint Venture has the right to terminate the AVX Agreement upon 30 days prior written notice. If not terminated early, the AVX Agreement continues until the later of the expiration of the AVRV System patents or defined period.
The licenses to which we of the Joint Ventureare a party impose various milestone, commercialization, sublicensing, royalty and other payment, insurance, indemnification and other obligations on us and are subject to certain reservations of rights. Our or the Joint Venture’s failure to comply with these requirements could result in the termination of the applicable agreement, which would likely cause us to terminate the related development program and cause a complete loss of our investment in that program.
Patents and Proprietary Technology
Our policy is to protect our proprietary technology, and we consider the protection of our rights to be important to our business. In addition to seeking U.S. patent protection for many of our inventions, we generally file patent applications in Canada, Japan, Western European countries and additional foreign countries on a selective basis in order to protect the inventions deemed to be important to the development of our foreign business. Currently our patent portfolio protecting our proprietary technologies in the HIV, cancer and palliative care areas is comprised on a worldwide basis of 90 patents that are issued or allowed and 128 pending patent applications.
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Under a license agreement with UR Labs, Inc., we obtained worldwide exclusive rights to certain technology relating to methylnaltrexone and its use to treat and reverse certain debilitating side effects of opioid pain medications and as therapy for post-operative ileus. This technology is the subject of issued U.S. and European patents and several related U.S. and foreign patent applications relating to certain compositions, formulations and uses of methylnaltrexone filed by the University of Chicago. We have continued to expand the patent coverage relating to methylnaltrexone with the filing of new patent applications.
Under a license agreement with Sloan-Kettering, we obtained worldwide exclusive rights to certain technology relating to ganglioside conjugate vaccines, including GMK and MGV, and their use to treat or prevent cancer. This technology is the subject of a patent application filed by Sloan-Kettering in the United States and 25 foreign countries claiming composition of matter and methods of production and use of certain ganglioside conjugate vaccines for the treatment or prevention of human cancer.
Under a license agreement with Columbia University, we obtained worldwide, exclusive rights to certain technology relating to CD4 and its use to treat or prevent HIV infection. This technology is the subject of issued U.S. and European patents and several related U.S. and foreign patent applications filed by Columbia University. The issued patents and the patent applications claim composition of matter and methods of production and use of certain CD4-based products for the treatment or prevention of HIV infection. We have also filed a number of U.S. and foreign patent applications on our HIV attachment assay technology, our technology directed to PRO 542, our ProVax technology and clinical uses of these technologies. We have also filed a number of U.S. and foreign patent applications, one of which is owned jointly with the Aaron Diamond AIDS Research Center, relating to the discovery of an HIV co-receptor, CCR5.
Under a license agreement with Sloan-Kettering, we obtained worldwide exclusive rights to certain technology relating to dehydroascorbic acid and its use to increase the concentration of vitamin C in tissues, including the brain, for treating neurodegenerative and neurovascular diseases. This technology is the subject of a patent application filed by Sloan-Kettering in the United States and as an international application claiming methods for increasing the vitamin C concentration in the cells of a subject by administering to the subject dehydroascorbic acid.
The research, development and commercialization of a biopharmaceutical often involves alternative development and optimization routes, which are presented at various stages in the development process. The preferred routes cannot be predicted at the outset of a research and development program because they will depend on subsequent discoveries and test results. There are numerous third-party patents in our field, and it is possible that to pursue the preferred development route of one or more of our products we will need to obtain a license to a patent, which would decrease the ultimate profitability of the applicable product. If we cannot negotiate a license, we might have to pursue a less desirable development route or terminate the program altogether.
Government Regulation
Progenics and our products are subject to comprehensive regulation by the Food and Drug Administration in the United States and by comparable authorities in other countries. These national agencies and other federal, state and local entities regulate, among other things, the preclinical and clinical testing, safety, effectiveness, approval, manufacture, labeling, marketing, export, storage, record keeping, advertising and promotion of our products. None of our product candidates has received marketing or other approval from the FDA or any other similar regulatory authority.
FDA approval of our products, including a review of the manufacturing processes and facilities used to produce such products, will be required before such products may be marketed in the United States. The process of obtaining approvals from the FDA can be costly, time consuming and subject to unanticipated delays. We cannot assure you that approvals of our proposed products, processes, or facilities will be granted on a timely basis, or at all. If we experience delays in obtaining, or do not obtain, approvals for our products, commercialization of our products would be slowed or stopped. Moreover, even if we obtain regulatory approval, the approval may include significant limitations on indicated uses for which the product could be marketed or other significant marketing restrictions.
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The process required by the FDA before our products may be approved for marketing in the United States generally involves:
| • | preclinical laboratory and animal tests; |
| • | submission to the FDA of an investigational new drug application, or IND, which must become effective before clinical trials may begin; |
| • | adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for its intended indication; |
| • | submission to the FDA of a marketing application; and |
| • | FDA review of the marketing application in order to determine, among other things, whether the product is safe and effective for its intended uses. |
Preclinical tests include laboratory evaluation of product chemistry and animal studies to gain preliminary information about a product’s pharmacology and toxicology and to identify any safety problems that would preclude testing in humans. Products must generally be manufactured according to current Good Manufacturing Practices, and preclinical safety tests must be conducted by laboratories that comply with FDA regulations regarding good laboratory practices. The results of the preclinical tests are submitted to the FDA as part of an IND (Investigational New Drug) application. An IND is a submission which the sponsor of a clinical trial of an investigational new drug must make to the FDA and which must become effective before clinical trials may commence. The IND submission must include, among other things:
| • | a description of the sponsor’s investigational plan; |
| • | protocols for each planned study; |
| • | chemistry, manufacturing, and control information; |
| • | pharmacology and toxicology information; and |
| • | a summary of previous human experience with the investigational drug. |
Unless the FDA objects to, makes comments or raises questions concerning an IND, the IND will become effective 30 days following its receipt by the FDA, and initial clinical studies may begin, although companies often obtain affirmative FDA approval before beginning such studies. We cannot assure you that submission of an IND will result in FDA authorization to commence clinical trials.
A New Drug Application, or NDA, is an application to the FDA to market a new drug. The NDA must contain, among other things:
| • | information on chemistry, manufacturing, and controls; |
| • | non-clinical pharmacology and toxicology; |
| • | human pharmacokinetics and bioavailability; and |
| • | clinical data. |
The new drug may not be marketed in the United States until the FDA has approved the NDA.
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