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Ocera Therapeutics, Pursuing New Drug for Liver, Hopes to Help People Stay Mentally Sharp

Xconomy San Diego — 

The liver is hot in the biotech world. Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX) has made headlines this year with an antiviral drug that it hopes will do for hepatitis C—a chronic liver-damaging condition affecting millions of people—what a previous generation of treatments did for HIV.

But away from the spotlight, a small San Diego biotech company called Ocera Therapeutics says it has built up some preliminary evidence that it may have an interesting new drug to treat hepatic encephalopathy, a common complication among people with cirrhosis of the liver. The company has raised $62 million in three rounds of financing from a group of prominent venture capitalists—including Domain Associates, Sofinnova Ventures, InterWest Partners, and Thomas, McNerney & Partners.

The lead drug candidate at Ocera is designed to treat a condition that sometimes afflicts people with damaged livers and that causes them to lose the ability to fully break down toxins like ammonia. This means that ammonia levels build up in the bloodstream, and eventually penetrate into the brain, causing cognitive defects like a lack of concentration and slow reaction times, says Ocera CEO Laurent Fischer. Estimates vary widely on how many people really suffer from hepatic encephalopathy, partly because it’s hard to diagnose. But the figure is somewhere between 30 and 80 percent of the 1 million people in the U.S. with cirrhosis, Fischer says. If Ocera is on the right track, its drug will get rid of some of that ammonia circulating through the bloodstream, and this will help people with liver damage to stay mentally sharp.

“People with mild hepatic encephalopathy have more car accidents, they’re more likely to lose their job, suffer falls, and have a poor quality of life,” Fischer says.

Laurent Fischer

Laurent Fischer

Ocera is still very much in the early stages of building a medical case, so it’s too early to say that the drug is really effective. But the company did present some data last month at the American Association for the Study of Liver Disease in Boston—known as The Liver Meeting—so I figured it was worth catching up on its story.

The company was started in January 2005 by Fischer and Eckard Weber, a partner with Domain Associates in San Diego. The idea was to take a product that was being marketed in Japan by Kureha as a treatment for kidney dialysis patients. The drug (AST-120) is an oral pill that’s designed to stay in the gut, without being absorbed into the bloodstream, which makes it less likely to have a surprising side effect. The drug is what’s called an adsorbent, loaded with carbon microspheres that are made to bind efficiently with toxins like ammonia and other metabolic byproducts in the gut, while avoiding common digestive enzymes or vitamins, Fisher says.

“It acts like a sponge in the gastrointestinal tract,” he says.

Ocera sees lots of potential opportunities for a drug that works this way, especially for diseases that affect millions of people, like irritable bowel syndrome and inflammatory bowel disease. But since Ocera’s most recent data presentation was about hepatic encephalopathy, that’s what I wanted to ask Fischer about the most.

At the Liver Meeting, the company reported on a study of 47 patients with mild hepatic encephalopathy. Patients were randomly assigned to get AST-120 or lactulose, the gold standard treatment for the disease. Researchers found that patients on the Ocera drug had a statistically significant decrease in pruritis (itching) and bile acids in the blood—two of the telltale signs of hepatic encephalopathy. Patients on the Ocera drug had a lower rate of diarrhea than those on the standard lactulose—29 percent compared to 52 percent, respectively.

Unlike Vertex, which is facing a horde of 40 some drugs chasing its lead in hepatitis C, Ocera faces little competition in the field of mild hepatic encephalopathy, Fischer says. Lactulose is used in severe patients, he says. Raleigh, NC-based Salix Pharmaceuticals (NASDAQ: SLXP) filed an application for FDA approval to sell rifaximin (Xifaxan) for patients with hepatic encephalopathy, and has said it expects the FDA to hold an advisory committee meeting on the drug in February.

Salix has been doing some of the hard work of raising awareness among physicians of the new treatment options, and Fischer sent along a report from Scott Henry of Roth Capital Partners that found that 49 percent of doctors would choose to treat a mild form of the disease with the Salix drug, compared with 37 percent who would stick with lactulose.

Ocera is still a long way from marketing its candidate. It has about 15 employees focusing on the clinical development of AST-120. It is recruiting about 150 patients into a mid-stage clinical trial that is scheduled to produce results by June, Fischer says. This study is designed to show a cognitive improvement after two months of taking the Ocera drug.

The company has enough cash in the bank to operate “into 2011,” Fischer says, so if the data are positive, it shouldn’t run low on cash.

Vertex and others will probably still dominate the headlines at conventions like The Liver Meeting, because hepatitis C affects 3.2 million people in the U.S. alone and millions more worldwide. But Ocera says it is content with following the path less traveled.

“Most companies are focusing on hepatitis C, not the long-term consequences of hepatitis C, which is cirrhosis,” Fischer says. “It’s still an unmet need.”