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Idera Takes Beating on Loss of Merck KGaA Cancer Collaboration, But Remains Committed to Toll-Like Receptors

Xconomy Boston — 

On July 7, shares of Cambridge, MA-based Idera Pharmaceuticals (NASDAQ: IDRA) plummeted 16% to $1.73 after it announced that Germany’s Merck KGaA had decided to halt development of a cancer drug the two companies had been working on together. When Idera’s drug, called IMO-2055, was given in combination with two commonly used chemo drugs and cetuximab (Erbitux) to treat a type of head and neck cancer, some patients developed side effects such as a dangerous drop in white blood cells. It was enough to prompt Merck KGaA to halt all clinical development of IMO-2055.

A few days later, in a phone interview with Xconomy, Idera CEO Sudhir Agrawal was sober, but undeterred. “It’s disappointing, but also expected with chemo,” he says. “We still believe the future of [cancer treatment] is with targeted agents.”

Idera was founded in 1989 around the idea of targeting toll-like receptors. The body’s cells harbor many types of these receptors, which help rally the immune system to fight disease. Some of Idera’s experimental molecules are “agonists” that turn on toll-like receptors, while others are “antagonists,” which turn them off.

IMO-2055 is a member of the family called toll-like receptor 9 (TLR9) agonists. Idera and Merck KGaA’s scientists initially believed TLR9 agonists could fight many types of cancer, when combined with targeted treatments that were already on the market. The two companies inked a partnership in 2007 that included a $40 million up-front payment to Idera, plus potential milestone payments of up to $381 million.

Merck KGaA’s decision to stop developing IMO-2055 is just the latest in a line of failures over the past few years that have cast doubt on the promise of TLR9 agonists. In 2007, a TLR9 drug being developed by former Idera rival Coley Pharmaceuticals and Pfizer performed poorly in a trial, causing Coley’s shares to tank. Pfizer bought the company later that year for $164 million.

Then, in 2009, Novartis pulled out of a deal with Idera to develop a TLR9 drug to treat respiratory diseases. Idera regained the rights to the drug, but the development program is on hold.

Agrawal refuses to lose hope, though. He points out that no safety concerns were observed in other Idera/Merck KGaA trials, in which IMO-2055 was tested in combination with other targeted treatments, such as erlotinib (Tarceva) and bevacizumab (Avastin). Merck KGaA is completing a Phase 2 trial of IMO-2055 plus cetuximab in head and neck cancer, with the data expected in the middle of next year. At that point, Agrawal says, “We will evaluate our best options for developing it going forward.” In the meantime, he adds, Merck KGaA will continue to investigate other TLR9 agonists that the companies generated under the collaboration.

And Idera is moving ahead with another TLR9 agonist called IMO-2125, which is being tested in hepatitis C patients. The company has completed Phase 1 trials and is waiting for data from early toxicology tests before it starts the next round of trials. Agrawal says Idera will pursue a combination strategy with this drug, as well, and its scientists are now evaluating whether they should consider testing it with newly approved protease inhibitors, such as Vertex’s telaprevir (Incivek).

Idera is also gearing up for Phase 2 tests of its first toll-like receptor antagonist, IMO-3100, which it is examining in autoimmune diseases such as lupus, rheumatoid arthritis, and psoriasis. The company has not yet determined which disease it will pursue, but it has set up a scientific advisory board to help determine the best clinical-development path.

Idera does have another Big Pharma partner on board—Whitehouse Station, NJ-based Merck, which is examining the use of toll-like receptor agonists in vaccines designed to treat cancer, infectious diseases, and Alzheimer’s disease.

Despite the pullback by the other Merck, Agrawal says, Idera has the resources to keep its development plans alive. “We have $28 million in cash on hand, no debt, and multiple assets,” he says. “We’re going to continue to invest our resources in expanding our clinical pipeline.”