Calistoga Builds Cancer Drug Strategy, Hires First CEO, Carol Gallagher

Xconomy Seattle — 

Calistoga Pharmaceuticals is growing up. The Seattle biotech company, which raised its founding $21 million round in March 2007, is announcing today it has hired its first CEO, Carol Gallagher, an executive who led the Rituxan oncology team at Biogen Idec when it crossed the $1 billion mark in sales.

I stopped by Calistoga’s offices in Belltown to interview Gallagher and the company’s president and founder, Michael Gallatin. My goals were to find out what kind of situation Gallagher is entering at Calistoga, who she is, and how she plans to steer this company so it can someday come up with another hit drug like Rituxan for non-Hodgkin’s lymphoma.

“We’re at a real inflection point, and we need to make sure we have someone who can take us in the right direction,” says Gallatin, the former chief scientific officer of Icos. “She’s a fantastic addition to the team. She’s got a lot of energy—not that I don’t—but there’s a lot of vitality there.”

Gallagher, 44, is a newcomer to Seattle. She has a doctorate in pharmacy from the University of Kentucky, and a resume with commercial experience at Big Pharma (Pfizer), Big Biotech (Biogen Idec) and small biotechs, most recently as CEO of Metastatix, an Atlanta, GA-based cancer drug developer.

Calistoga got its start in 2006, when Gallatin obtained a license to technology that his former employer, Icos, had left on the shelf while it put its resources into marketing the erectile dysfunction drug Cialis. Gallatin left Icos in 2005 to join Seattle-based Frazier Healthcare Ventures as a venture partner, a job he still holds. It wasn’t too long before Calistoga scored financing from Frazier, Alta Partners, Three Arch Partners, and Amgen Ventures.

The goal here is to develop conventional small-molecule drugs that block a specific marker inside cells called the PI3 kinase pathway. This pathway’s job is to stimulate a bunch of cell processes like proliferation, growth, migration, metabolism, and cell survival. Research has shown that when they are switched into an overactive mode, they can play a key role in diseases like blood cancers and autoimmune diseases like asthma and rheumatoid arthritis. The tricky part is that these same functions can be essential for healthy, normal cells—so a drug that completely knocks out all varieties of this pathway could have serious side effects.

Calistoga thinks its secret sauce is biology that says if you block a specific type of PI3 kinase, called the delta isoform (which only appears on certain blood cells), then you can have the therapeutic benefit without potential for side effects from drugs that block a broader spectrum of PI3 kinase types.

The PI3 kinase pathway is a hot topic in the biotech industry, because of the role it appears to play in many cancers, and has generated interest from a number of companies. The list includes Swiss drug giant Novartis, South San Francisco-based Exelixis, and San Diego-based Intellikine, Gallatin says.

What makes Calistoga different is its specific focus on the delta form of PI3 kinase, and that it is the first group to take such a targeted drug into clinical trials, he says.

Hiring someone like Gallagher now is important at this moment for Calistoga, because it has its first clinical trials ongoing in Phase I for B-cell cancers like chronic lymphocytic leukemia and non-Hodgkin’s lymphoma, and it needs someone to lead its clinical trial and commercial strategy, Gallatin says.

The strategy is already taking shape. Because the safety profile of its lead compound, CAL-101, was so mild in animal tests, Calistoga was able to perform its first clinical trial in healthy volunteers back in March. “That’s unusual for a cancer drug,” Gallagher says, because usually they are too toxic to be given to healthy people just to measure things like how well it distributes in the body, how long it lasts, and what side effects it causes. The data showed no serious side effects, Gallatin says.

That body of evidence helps Calistoga with its early clinical trial strategy, because its first test in actual cancer patients can now use doses that are in the ballpark for actual therapeutic use, instead of the usual start-low-go-slow dose escalation approach, which can discourage doctors from enrolling patients quickly in a trial, Gallatin says.

Even so, getting the data will take time. Calistoga expects to have results from a 60-patient Phase I study of its lead drug candidate, CAL-101, in mid-to-late 2009, Gallagher says. The company expects to take a second prospect into a trial of healthy volunteers before the end of this year, which may have better properties for inflammatory diseases like asthma or rheumatoid arthritis, in which drugs need to be given chronically, sometimes for years, she says.

Gallagher says she enjoys digging into the science of the company, and that she was attracted to work with a management team full of people who have the experience of taking a drug through trials all the way to the market. As opposed to other marketing types she’s worked with, who are cautious about anything other than me-too products, she says she relishes the risk of navigating clinical trials with a drug that’s first in its class. Her main job will be to think strategically about finding the right patient population, the right partner to co-develop the drug, and strategies to make sure that doctors will be motivated to use it.

Gallagher sure sounded fired up about the job, and Seattle, during our conversation. “It’s wonderful,” she says with a laugh, while looking out her 19th floor window at the Space Needle and Queen Anne Hill, on a sunny fall afternoon. “My husband and I are sailors, and there’s plenty of water here. The nature here is breathtaking.”