Allozyne, After a Stealthy Year on a Slim Budget, Re-Emerges with MS Drug and Fat Pipeline

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be more treatable if a targeted drugs could hit two targets instead of just one. I wrote an in-depth profile about Biogen’s program to do this back in December.

Allozyne, it turns out, figured it would have something really valuable if it could hit two specific inflammatory proteins that are part of the Th17 inflammatory pathway, Chhabra says. A number of Big Pharma companies—and Cambridge, MA-based startup Lycera—are in hot pursuit of drugs that work through this pathway. Allozyne has shown in a series of tests that it can modify protein fragments to hit both of these targets, and that the drug can be made soluble, scalable, and in a reproducible way, Chhabra says. This experimental drug, AZ-17, is currently in animal testing which could go a long way toward determining how useful this new two-pronged drug really is, and what sort of shot it will have in human beings. The animal data will be available in the second half of 2010, Chhabra says. The drug is initially being tested as a treatment for Crohn’s disease, an inflammation of the intestines.

Even before the animal data comes out, Chhabra says that a half-dozen Big Pharma partners have come calling, itching to strike deals to co-develop such a drug for a hot target like Th17. She said she’s resisted doing a deal at such an early stage, preferring to wait until the animal data arrives to strengthen her bargaining position, and get better terms. It’s possible Allozyne could strike a partnership before the end of 2010, she says.

The third big thing Allozyne has done is show that its technology can cross over and be used in not just one, but two major platforms for manufacturing biotech drugs. The first two drugs are incubated in fermenters filled with E. coli bacteria, which is a relatively cheap and commonly used way to make fragments of protein drugs. But since many of biotech’s biggest selling drugs are made in mammalian cells, and are relatively much bigger Y-shaped antibody proteins, it has sought to show its technology can really work at that major-league level.

That’s what Allozyne has now done with yet another drug candidate, AZ-21. This drug is a genetically engineered copy of the fibroblast growth factor family, known as FGF-21. The growth factor is thought to have potential as a future key to treatment of Type 2 diabetes, because animal studies have shown it can lower blood sugar and increase susceptibility to insulin. But the effect requires repeated dosing, which is the sort of thing Allozyne believes it can do with a less-frequently injected product. Allozyne has shown it can make this drug candidate in both E. coli and mammalian cells, which gives it different options for future manufacturing, and opens the door to potential production of antibody drugs in mammalian cells, Chhabra says. Animal data for that drug should also be available by the end of the year.

If you sense a lot of things are coming to a head for Allozyne at the end of 2010, that would be correct. Data from all three big drug programs is expected soon. Allozyne has received “commitments” for another round of financing from its existing venture backers, and is seeking to track down one or two outside investors to participate as well, although none of the firms have written checks yet, Chhabra says. Allozyne could strike its second Big Pharma partnership. And it is even in talks to acquire an oral drug candidate for multiple sclerosis that could beef up its pipeline with two MS drug candidates with potential to enter clinical trials within 24 months, Chhabra says.

This is all leading toward what Chhabra calls her “yellow brick road.” It involves raising less than $100 million in total capital to build a company with two convenient drugs for multiple sclerosis in the final stage of clinical trials, and a pipeline with opportunities to generate many more enhanced protein drugs. If Allozyne can do all that, it will certainly be operating on a much more visible plane, maybe even in the public markets, Chhabra says.

If the market appetite for biotech has really returned, Allozyne plans to be ready to pounce. “And by then we will be a company that’s T-minus 24 months from having two assets in Phase III clinical trials for MS, bispecific antibodies that take us beyond pegylation, a platform that can work in E.coli and mammalian cells.”

She added: “We can do it if we spend our money wisely.”

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