Six months into his tenure as CEO of Cellectar Biosciences, Jim Caruso’s plan for retooling the business is taking shape.
Having shelved its cancer diagnostics business, the Madison, WI-based biotech is going all-in on drugs and has found its first partner. Cellectar on Wednesday announced it will work with French drug company Pierre Fabre to develop cancer treatments that combine “cytotoxics”—cancer-killing agents—produced by Pierre Fabre and Cellectar’s drug delivery technology.
“We believe this is clear validation of the potential of our delivery vehicle,” Caruso told Xconomy.
That potential still has to be proven, of course. But the deal pairs a struggling Cellectar (NASDAQ: CLRB)—its stock has sunk more than 66 percent over the past six months, to 88 cents per share at market close on Wednesday—with one of France’s largest pharmaceutical laboratories. Pierre Fabre’s approved drugs include vinorelbine (Navelbine), a common chemotherapy.
Cytotoxic drugs such as chemotherapy can have success killing tumors, but the drawback is they also destroy healthy tissue in the process. In recent years, an entire field has sprung up around efforts to kill tumors more precisely without the collateral damage. One branch of development marries cytotoxic agents with monoclonal antibodies, which act as a homing device to tumor cells. Two of these antibody-drug conjugates are now on the market: brentuximab vedotin (Adcetris), developed by Seattle Genetics (NASDAQ: SGEN), and ado-trastuzumab emtansine (Kadcyla), from Roche’s Genentech group.
Cellectar is working with a different way of delivering cancer-killing drugs into tumor cells while minimizing damage to healthy cells. With the Pierre Fabre partnership, Cellectar is developing compounds called phospholipid ethers that the firm says have worked so far in small clinical studies with a variety of payloads. Cellectar has only recently started testing them in combination with chemotherapeutics.
Terms of the Pierre Fabre deal weren’t disclosed, and Caruso declined to say how many drugs might be developed through the collaboration. Cellectar will be in charge of drug discovery activities through the pre-clinical stage, but its partner would likely fund clinical trials, Caruso said.
If the partnership yields any approved therapies, Pierre Fabre would have the option to license the products. Cellectar would own the intellectual property, according to a press release.
Caruso announced in August that some of Cellectar’s drug development programs would remain in-house, but that the company would begin exploring collaborations. The Pierre Fabre deal marks Cellectar’s first such partnership, but Caruso envisions more to come. “The concept is that as we continue to learn more about our delivery vehicle in conjugation with cytotoxics, that we will have more and more companies interested in collaborating with us,” he said in the interview.
The approach makes sense for a small company with limited resources. Cellectar ended the third quarter with $2.5 million in cash in the bank, and it then tacked on another $2.9 million through a stock sale. But that money is only enough to fund operations into the second quarter of 2016, Cellectar said in November. The Pierre Fabre deal comes at the right time for Cellectar, although it’s hard to say how much impact it will have on the company’s fortunes.
Caruso took over for former CEO Simon Pedder in June, who retired for personal family reasons after two years at the helm, the company said.
Caruso, a seasoned drug and device industry executive, quickly opted to make Cellectar leaner and to adjust its strategy. In the first two months of his tenure, he restructured the 13-year-old company and made cuts that will reduce costs by about $2 million over the following 18 months, he said in an August conference call with investors. In Wednesday’s interview, Caruso declined to share if, and how many, job cuts were made.
Caruso also shook up Cellectar’s product pipeline. The company has halted development programs for cancer imaging agents CLR 124 and CLR 1502. The former was in the midst of a slow-going phase 2 clinical trial, and the latter hadn’t entered clinical trials. Cellectar will continue developing CLR 131, a radioisotope-based cancer therapeutic, which is in a phase 1 orphan drug trial for treating relapsed or refractory multiple myeloma.
“As we get healthier financially and we begin to grow the company, we could revisit diagnostic and imaging agents,” Caruso says. “They’re interesting. They’re good assets. But for us, where we’re sitting right now, it’s a therapeutic play.”
Caruso sees potential in teaming up Cellectar’s phospholipid ether technology with a host of cytotoxic agents, including those already on the market and others that failed to gain approval because their side effects were deemed too harmful. An enormous number of such drugs are “sitting on the shelves of companies in New Jersey and around the world” that could be resurrected if they could be delivered more safely and effectively to their targets, according to Caruso.
Beyond the antibody-drug combinations on the market, other companies are developing special nanoparticles that help drugs find their way to their targets more precisely. Bind Therapeutics (NASDAQ: BIND) and Cerulean Pharma (NASDAQ: CERU) have reached phase 2 clinical trials with their leading drug candidates. Perhaps the most successful example in the field is Abraxis BioScience, which was acquired by Celgene (NASDAQ: CELG) in 2010 for nearly $3 billion for its new formulation of old cancer drug paclitaxel, branded as Abraxane.
Cellectar could have a high bar, then, to prove that drugs delivered to tumors via its phospholipid ether analogs are more effective and safer for patients than the original version of those drugs. It could also be competing against other types of cancer drug delivery technology.
If Cellectar’s R&D partnerships with Pierre Fabre and others go well, the plan is to become a platform technology company. That means drug developers would license Cellectar’s phospholipid ether technology, combine it with their own therapeutics, and fund clinical trials. In this scenario, Cellectar would receive an up-front fee, milestone payments as the drugs make their way through trials, and royalties if the treatments get approved, Caruso said.
“Ultimately, we want to turn into a collaboration machine where there’s minimal risk” to Cellectar shareholders, Caruso said.