Algeta has had an extraordinary year to date. The biggest headline was the deal the company signed in September with Bayer. Alpharadin is in phase III trials for treating bone metastases, a serious, fatal and almost inevitable consequence of certain major cancers as they progress, and a significant unmet medical need.
In addition, Algeta’s share price had risen nearly 700 % by early October - from NOK 7.9 to NOK 58.5 (USD 1.4 to 10.2) This rise has been driven by a series of positive events throughout the year that have transformed the business. The company also raised USD 44 million in February from existing and new investors, with Abingworth, the specialist life sciences investment group leading the round and increasing its stake in the company from just under 5 % to nearly 20 %. These new funds, along with a significant upfront payment from Bayer of USD 63 million, mean that Algeta enters the final quarter of 2009 with a healthy cash balance of around USD 100 million.
Success in getting Alpharadin through phase III trials and onto the market will see Algeta receive a further USD 250 million in development and manufacturing milestones from Bayer in the next few years, followed by sales milestones and a royalty stream. In addition, Bayer will be taking up the lion’s share of costs for the development of Alpharadin from 2010.
Algeta’s CEO, Andrew Kay, who joined the company in January 2009, is delighted with the deal and what it means for Algeta’s development. He believes that Bayer is a world-class partner that can deliver Alpharadin’s blockbuster commercial potential globally.
Importantly, as part of the deal, Algeta has an option to co-promote and share profits on Alpharadin sales in the USA. The company fully expects to take up this option, and has the experience and financial resources now to build a US commercial organization to support it when the time is right. This will be a key step in the company’s transformation into an oncology focused specialist pharmaceutical company.
Algeta’s success so far can be attributed to the progress of Alpharadin. It is the first in a new class of alpha-emitting pharmaceuticals (‘alpha-pharmaceutical’) and is based on radium-223. Alpharadin is in the final stages of clinical testing (a global phase III trial called ALSYMPCA) as a potential new treatment targeting bone metastases in men with hormone-refractory prostate cancer (HRPC). Results from a phase II clinical trial program in nearly 300 patients have produced strong evidence that Alpharadin treatment can prolong patient survival, improve quality of life and offer a benign safety profile.
Alpharadin is administered as a simple injection. It accumulates specifically in areas of active bone growth associated with bone metastases where it exerts a localized cell-killing effect on tumor cells while minimizing damage to normal surrounding tissues. This mode of action also suggests that Alpharadin may be useful in treating other cancers that commonly spread to bones, such as breast, lung and kidney.
Assuming this excellent profile is confirmed in the ALSYMPCA trial, Algeta predicts peak sales for Alpharadin of as much as USD 1.9 billion. A key objective for the company is to complete this pivotal trial with results expected early in 2012, and the first launch of Alpharadin in 2013.
The company is also expecting to begin new trials of Alpharadin for bone metastases in women with breast cancer, and in combination with Taxotere for bone metastases in men with HRPC.
Beyond Alpharadin, Algeta is also keen to develop its alpha-pharmaceutical pipeline and now has resources available to accelerate development of novel, targeted alpha-pharmaceuticals based on thorium-227. The Company believes targeted alpha-pharmaceuticals based on this isotope can offer highly localized tumor-killing effect with minimal healthy tissue damage by linking it to tumor-targeting molecules, such as antibodies. Earlier this year, the company’s academic research partners presented results of preclinical studies that demonstrate this potential.
Algeta has been a real success story for Norway in 2009 and will certainly be one to watch over the next few years as the promise of alpha-pharmaceuticals, and Alpharadin in particular, becomes a reality.
www.algeta.com