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of our investment thesis is Chimerix, a Durham, N.C. company developing CMX001, a broad spectrum antiviral to treat cytomegalovirus, BK virus and other double stranded DNA viruses in transplant recipients. Canaan has market estimates for this drug that exceed $700 million worldwide, and the compound has the potential to become a standard of care for double stranded DNA viruses in immuno-compromised patients.
In animals, CMX001 is 50 to 100 times more potent against double strand DNA viruses than the FDA approved generic cidofovir and similarly promising results are expected in humans. Equally important, the Chimerix compound is expected to be a once to twice a week oral tablet, while cidofovir must be given intravenously, and CMX001 does not have the dose limiting kidney toxicity associated with cidofovir. CMX001 also does not seem to lower the white blood cell count as seen with a number of other highly active antivirals.
“Currently doctors may be faced with the choice of watching a patient die from a virus or killing the patient’s kidneys with a toxic drug,” said Randall Lanier, Chimerix Director of Virology.
CMX001 is currently in a Phase 2 trial for CMV, the biggest market in this virus category. It is expected to be in Phase 3 trials in 2011. Chimerix is also initiating a trial for adenovirus, a much smaller market, but one that may earn the compound a fast-track regulatory status and push it to approval faster. Ultimately Chimerix would like CMX001 to be the clinician’s choice for the entire bundle of double strand DNA viruses.
Another factor that made Chimerix attractive to Canaan was that CMX001 was eligible for federal grant money as a potential treatment for smallpox, a virus and potential bioterrorism agent for which the government wants to stockpile drugs. Of the $90 million investment dollars Chimerix has raised, over one-third has been non-dilutive government grants.
Viral diseases are not the only significant health care problem in the infectious disease world. Canaan invested in New York-based Durata Therapeutics. The investor syndicate has committed funds to bring the company’s lead product, dalbavancin, an intravenous antibiotic for MRSA and other gram-positive bacteria, through the full development cycle.
“There’s a real crisis at the moment with regard to bacterial infections,” said Dr. George H. Talbot, an infectious disease expert. In the hospital setting there are some bacteria resistant to all approved antibiotics, leaving them and their physicians with the option of treatment with an experimental combination of drugs.
Furthermore, some gram- positive bacteria, including MRSA, are proving to be difficult for the standard treatment, vancomycin, which is toxic and not that effective. “There is a real need for better efficacy and less toxic intravenous medications for MRSA, which is where Durata comes in,” said Talbot, who has consulted with the company.
Canaan’s infectious disease portfolio also includes Seattle-based Theraclone Sciences, which has a platform to develop novel therapeutic antibodies. Canaan’s initial interest in Theraclone was centered on its powerful antibody drug discovery platform. What then quickly came to light was that it was a remarkable platform to discover broadly neutralizing antibodies in infectious disease.
Theraclone’s lead program is a monoclonal antibody being developed for pandemic and serious flu indications, targeting the protein M2, a protein on all flu viruses that is highly conserved. “That means the same genetic sequence is present in over 90 percent of all flu – different strains of seasonal and pandemic – so it could be broadly active as a flu therapeutic,” said Dr. Kristen Hege, the company’s acting chief medical officer.
Theraclone anticipates the federal government would be a major part of the program’s market since it would stockpile an effective product that targets pandemic and seasonal flu, which changes and poses the risk of resistance. The Japanese company Zenyaku Kogyo has seen the value in the flu program, and has licensed the rights to the flu program in Japan.
While monoclonal antibodies have been approved as cancer and inflammation treatments, using them for infectious disease is new. It is technically challenging to find antibodies that are broadly active and potent against flu in the body’s natural immune system, but Theraclone’s platform allowed the company to find what it thinks is the needle in the biological haystack.
“The antibody is the immune system’s bullet against infectious disease,” Hege said. “Once you know what you’re dealing with, you can infuse a targeted antibody as a treatment and immediately trigger an immune response against the infection. Vaccines, on the other hand, can take several weeks to activate the immune system,” she said.
“When you start to do the cost benefit analysis of shortening intensive care unit stays by one to four days, you can justify a pretty expensive medication that is targeting the seriously ill patient,” Hege added.
Canaan is comfortable being one of the few investors in this infectious disease market. The firm’s strategy is to diversify its portfolio across antiviral, small molecules, antibodies, and platforms that have the potential to create more than just incremental change for a health care system and patients in dire need of new treatments.
While we continue to be interested in promising technology that could save hundreds of thousands of lives each year, that asset must continue to fulfill our investment thesis of filling an unmet clinical need in a more effective and safer pathway.
[Editor’s Note: Wende Hutton, a general partner at Canaan Partners, also contributed to this article.]
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