Robert Klupacs, CEO of Circadian Technologies (ASX: CIR) told the Annual General Meeting that a transformation had been made by Circadian from a “biotechnology investor and incubator of early stage technologies” - to focused developer of biological cancer therapies.
With transformation, comes opportunity.
Business strategy objectives that were set, had been met:
- Extend and strengthen core intellectual property covering VEGF-based therapeutics
- Advance drug development pipeline toward human clinical trials
- Add to list of partnerships for the commercialisation of our intellectual property
- Further strengthen and add skill-sets to management team
The product pipeline had been advanced:
– VGX-100: manufacturing of antibody (AB) drug underway
– VGX-200: humanisation of AB’s completed
– VGX-300: manufacturing milestone achieved
– Animal studies in cancer models underway for above programs
– Licensee ImClone designated human AB IMC-3C5 as preclinical development candidate
New partnerships have been struck. Healthscope – to develop and to commercialise cancer diagnostic, and Perkin-Elmer was granted a license – research products market.
Cash position: Circadian had $38.8m in cash at end of June 2009 ($35.5m previously). This represented Cash & Listed assets per share value of $0.97.
Which is more than the current share price of $0.73.
Robert Klupacs said developing antibody therapies to treat cancer was a major global opportunity. Using biologics was a break through technology based on tumour starvation and inhibition of spread.
Circadian had partnered programs with existing and increasing royalty streams with leading international biotechs.
The strategy to exploit value in the development pipeline was to secure pre-clinical partnerships for one or more of therapeutic programs. To retain development of one selected therapeutic to proof of efficacy in humans – partner thereafter. And to selectively exploit / commercialise other aspects of portfolio: therapeutics outside oncology area and clinical diagnostics and reagents for early revenues.
Antibodies had witnessed many large high value pre-clinical deals, which were a win for companies involved in this segment. Deal values (including exclusive licenses) ranged from US$150-200m to US$1.4b.
The Antibodies market is one of the most valuable sectors of the market:
– 21 antibody drugs on the market
– Mostly in cancer and inflammation
– Current sales of top ten antibodies > $US20B pa
– Total sales growing by >30% annually
– Greater competitive barrier to entry
– Targeted profiles = cost vs health economic advantage
By 2014 it is expected that 4 of the top 6 best-selling drugs will be antibodies & the top 10 selling drugs will come from biotech, according to EvaluatePharma.
Circadian’s technology works by inhibiting tumour growth and the spread by VEGF blockade.
The company's technology is centred on two members of the VEGF family of proteins: VEGF-C & VEGF-D and their activation on VEGF receptors VEGFR-2 and VEGFR-3. These proteins promote blood and lymphatic vessel development. Targeting this process has major potential to limit tumour growth and spread. It also has applications in other diseases such as eye
Leading to a major commercial opportunity for Circadian, as Avastin® was effective but not across the board. Not all patients respond to therapy (30-50% response rate) and 25-50% of responders become “resistant” within 12 to 18 months.
Circadian builds upon the Avastin application.
Robert Klupacs said the company had a strong pipeline, milestone dates and news flow over the next 12 months:
VGX-100 cancer drug development program
11 different animal studies were ongoing with more planned.
– Animal tumour model evaluation: H1 2010
– FDA pre-IND review: H1 2010
– Toxicology completion: H2 2010
– IND Filing: H1 2011
IND filing: IMC-3C5 for cancer: H2 2010
(ImClone/Eli Lilly partner)
CUP molecular diagnostic: H2 2010
– Market launch
ANP (listed investment) milestone: Q1 2010
Resolution of unlicensed gene therapy: H2 2010
Circadian was "an investment with significant upside", said Robert Klupacs. Supported by the company's major focus of big pharma - with high value early stage deal opportunities and M&A opportunities. A deep diverse product pipeline, with a diagnostic product in late stage development. Potential for multi-million dollar royalties and royalty flows were possible <12 months.
Angiogenesis represented a significant product opportunity validated. The company had a dominant and protected IP position, world-class drug development expertise and management and a strong financial position.
US Investment bank Merriman Curhan Ford published analyst opinion 5 November 2009 said, “ We believe the current valuation of Circadian represents an attractive entry point for investors based on the potential of its product candidates.”