PhytoCeutica, Flux Therapeutics, and Three Rivers Pharmaceuticals have given Kadmon a toehold in drug discovery for cancer and infectious diseases. PhytoCeutica develops traditional Chinese medicine into FDA-approved prescription drugs for cancer. Its platform technology assesses botanical quality control and reproducibility.
PhytoCeutica’s lead product, PHY906, is being studied along with capecitabine in patients with advanced pancreatic cancer at U.S. sites. It was shown in early clinical trials to help control severe diarrhea caused by chemotherapeutic agents. Additionally, in preclinical studies PHY906 with irinotecan in a mouse model of colon cancer resulted in a synergistic reduction in tumor burden, maintenance of body weight, and stem cell regeneration in the intestinal mucosa.
Kadmon’s deal with Exelixis adds another potential cancer drug to its pipeline. XL844 is an inhibitor of Chk 1 and 2, protein kinases that induce cell-cycle arrest in response to a variety of DNA damaging agents. The drug also inhibits two vascular endothelial growth factor receptors known to be involved in tumor angiogenesis.
Three Rivers Pharmaceuticals gives Kadmon a commercial presence in the hepatitis C market with its ribavarin products, Ribasphere® Tablets and Ribasphere RibaPak®, and Infergen®. Interestingly, Three Rivers bought all the rights to Infergen from Valeant Pharmaceuticals for $70.8 million in up-front cash and up to $20.5 million in two noncontingent payments in a deal that closed in 2008.
On November 1, Kadmon snagged Valeant’s remaining HCV interest through an exclusive, worldwide license with the exception of Japan to Valeant’s taribavirin. It is a form of ribavirin that may have fewer side effects. Kadmon is paying $5 million initially, with other payments possible later, to Valeant.
In a second deal Valeant will pay $7.5 million for rights to sell Kadmon’s ribavarin in six central European countries, to be marketed as part of Valeant's branded generics line.
Ontario-based Valeant, known as Biovail before it acquired U.S.-based Valeant this year, has refocused its business on central nervous system disorders and dermatology.
With its Flux Therapeutics acquisition, Kadmon gained access to a drug discovery technology based on a bioinformatics platform that identifies potential drug targets for pathogens using genome-scale flux balance analysis (FBA). FBA is a computational method to analyze reconstructions of biochemical networks for identification of potential drug targets, for example, metabolic pathways in multiple strains of the same bacteria to identify novel antibiotic targets.
Spinning all of this into a formula for potential success, Dr. Waksal said this of Kadmon’s business strategy: “The company is building a new paradigm for bringing pioneering medicines to market more rapidly and cost effectively. This includes the simultaneous execution of a dual strategy, combining an operating commercial business with novel compounds at various stages of clinical development."
According to a Kadmon spokesperson, one interpretation of this strategy is that the company will continue to acquire platform technologies that will allow discovery of new drugs for established markets.
The company believes that Three Rivers, having already established a commercial presence in HCV, provides both an immediate cash cow to fund novel drug development and a ready-made market for novel drugs. Flux’ platform technologies could find complementary or replacement therapeutics as this market matures and new drugs well down the road to approval are introduced.
“Hepatitis treatment is on the verge of major change,” noted Dr. Waksal. “With Three Rivers as a cornerstone, Kadmon will play an important role in the evolution of this global market.” He further said that the acquisition would provide Kadmon “with a strong commercial platform from which to expand our pipeline of novel therapies in oncology, infectious diseases, and immunology."
And current hepatitis interferon-based treatments such as Three Rivers’ versions of alpha interferon and ribavarin are likely to be around for awhile as they will continue to be used with emerging therapies like Telaprevir.
As for Kadmon, in describing the company’s prospects, Dr. Waksal told the New York Times, "You'll see a company that next year will be doing significant revenues in a growth area, with earnings, probably five Phase III programs, and a couple of Phase II products." Whether this optimistic prediction becomes another tale from the biotech crypt or a new, successful company and a significant source of profits for its investors remains to be seen.