It is set to be a frenetically busy year for ChemioCare as the privately held biotech looks to make its public debut in the fall.
If it all goes to plan, a pair of listings on the Nasdaq and the TSX Venture Exchange will widen ChemioCare’s audience of investors and add to the whirl of publicity surrounding its transdermal patches.
At the core of ChemioCare’s business, which is just under two years old, is its transdermal technology, which uses adhesive patches to deliver generic medicines via the skin.
Japan sparks CEO’s interest
“In Japan, there is a strong preference for transdermal patches. And there are about 10 times more patches registered and used successfully,” says Lichtinger. “So I was able to see what they can do for the patient.”
Lichtinger met, through a long-time friend Charlie Perperidis, Dr. Fotios Plakogiannis, the former head of transdermal delivery at Long Island University, who now runs Transdermal Research Pharm Laboratories, an independent lab in Queens. The three of them co-founded ChemioCare and later, Plakogiannis took up a position on ChemioCare’s board and his lab was enlisted to handle the company’s contract work.
“When I spoke with Fotios, I was blown away by the advancements in technology in what one can do today with transdermal delivery,” he says. “There are new enhancers. There are new polymers. They had ideas of how to do what was not feasible before.”
Transdermal patches provide key advantages
The patches offer advantages over oral or intravenous forms of medicines when put in a judging contest. In particular, the patches achieve the same or better effect as oral medicines, but with lower doses and stable and sustained protection.
“When you take a pill, it immediately goes into your blood at a very high level and then over the next 12 hours, the level gradually comes down. It’s like a staircase up and down. What we do is avoid the up and the down,” explains Lichtinger, who spoke to Proactive Investors at the yearly Biotech Showcase industry conference in San Francisco.
Unlike patches that must be replaced every six to eight hours, ChemioCare’s products release drugs in a controlled and sustained way over the course of five to seven days.
“We offer the first transdermal patches that have, in the same patch, the ability to deliver fast protection as well as sustained protection for multiple days,” says Lichtinger.
Generic medicines in focus
ChemioCare has kickstarted the development phase of four patches by focusing on generic medicines. The company is hoping to get its drugs to market quickly by exploring approval from the FDA via the 505 b2 pathway. This rule permits drug companies to submit their product for regulatory review in the US by including data collected by another manufacturer. All of the patches will be treating conditions for which the current generic drug is not indicated, bringing new improvements to patient outcomes.
ChemioCare’s first patch, which is backed by the drug ondansetron, curbs nausea experienced by people undergoing chemotherapy in a segment of the population where patients continue to suffer after being given several medicines. It will be the only medicine of its class approved for this use.
Its second patch is infused with olanzapine, which treats schizophrenia at higher doses. ChemioCare is developing olanzapine to be the first product approved for nausea and vomiting caused by PARP inhibitors, a new class of oncology drugs.
Its third offering is an adhesive patch with the steroid dexamethasone, which looks to target the swelling and inflammation that comes with brain cancer. After about three to four months, some brain cancer patients acquire steroid-induced diabetes, one of multiple serious side-effects that ChemioCare scientists hope to postpone.
“We believe that by using this transdermal patch technology, we will expose the patient to less steroids, but with the same level of efficacy,” explains Lichtinger. “If we are able to postpone the onset of steroid-induced diabetes, that would be very exciting and a major breakthrough,” he adds.
Brain cancer treatment on agenda
Since brain cancer has few treatments, Lichtinger expects the patch will get the green light from the FDA. “This is the first of many potential applications for steroids in a transdermal setting that are going to be focused on major unmet medical needs,” he says.
Also in ChemioCare’s repertoire is a reformulated version of its ondansetron patch, which has been adapted for children. “It represents a major advance for children,” says Lichtinger. “There are 19,000 children who get cancer every year in the US and there is no drug indicated or recommended to help them deal with the nausea and vomiting in an effective way.”
The company’s management is brainstorming about its future. Recently, the biotech retained the services of McKinsey Consulting to help analyze the thousands of potential market opportunities, and its executive team is now focused on what it deems the most important 35. By the time of its IPO in the fall, Lichtinger expects one or two additional drug products will be in exploratory development in his labs.
“It’s mindboggling how many applications transdermal delivery could have. What we want is the most impactful,” he says. “That’s why we engaged McKinsey to analyze 7,000 opportunities.”
ChemioCare’s staff is tight-knit at seven, but the company boasts an experienced bench.
This is the third biotech Lichtinger has co-founded and he previously worked at Pfizer for 16 years, including as president of the drug giant’s European operations. The company’s new chief medical officer, Dr Jamie Oliver, meanwhile, was the chief scientific officer at Accelovance Inc, an oncology contract research organization. “He has experience in many, many clinical settings,” says Lichtinger. “He is basically an ideal match for what we need.”
And chief manufacturing officer Andy Rensink is the former president and chief operating officer of Tapemark, a top manufacturer of transdermal patches.
Few financial worries
It may still be private, but ChemioCare enjoys blockbuster success wooing investors. With the money comes new trials. And on top of the $6.8 million raised upfront, a series A fundraising bringing in $4.2 million last year is set to wedge the door open for ChemioCare to bring its first ondansetron patch to a stage where it’s ready for a Phase 3 clinical program in the summer of this year.
Another private capital raising is on the calendar for the close of February, which could reap as much as $20 million. “For the first time, we’re making outreach efforts to institutional investors,” says Lichtinger. “We want to get the company funded and develop support for its projected IPO in the fall.”
Patch one (ondansetron) and patch two (olanzapine) are both closing in on Phase 3 trials and much of the fresh money raised will be put toward the work required to get these two drugs from the lab to the public. And while the other patches are in earlier stages of development, their future – which still requires clinical tests in animals as well as human trials – looks equally rosy.
“All of the patches with the exception of the pediatric patch have the potential to earn $500 million in peak revenues or more,” says Lichtinger.
The US market on front-burner
The fact that Lichtinger used to be Pfizer’s president of Europe makes him keenly aware of the complex nature of entering the European market. So aware, in fact, that he says ChemioCare will first pursue the US market aggressively and later look to strategic alliances to deliver its drugs in Europe and Asia.
“We have not looked at Europe because it’s a fragmented market with very high-cost barriers for a small company,” he reports. “As a result of that, we will be looking for a partner in both Europe and Asia.”
With the company’s IPO around the corner, Lichtinger is looking ahead to what comes next for ChemioCare. He notes that two of four comparable companies that also specialize in the reformulation of medicines and recently held IPOs, with valuations between $133 million to $390 million, have been acquired.
Lichtinger expects a similar path for the New York-based biotech. “We believe we will be in the offer range of valuations for these other IPOs. We will have two ready products,” he concludes. “We believe we are likely to engage either in an alliance or to be acquired.”
Contact Ellen Kelleher at [email protected]