Tuesday, February 15, 2011

AIKO Biotechnology steps back to reformulate, seek financing

By Lori Valigra, Mass High Tech correspondent

Aiko Biotechnology Inc., a Portland, Maine, company focused on drug candidates to relieve the side effects from long-term prescription opioid pain reliever use, is taking a step back to reformulate its lead compound from an injectable into a pill.

At the same time, it is seeking both a partner to infuse money and resources and $10 million in private-placement funding to advance its early-stage drug programs, according to CEO Jim New, who joined the company last September as it moved from its scientific founders into a professional management phase.

“The Phase 1 trial of our Aiko-150 product was hugely successful,” he said.  “But we looked at the market for the (current) intravenous version of the product and decided it would be better to go with an oral formulation, so we’re going back to pre-clinical to develop that version and progress it into Phase 1 and 2 trials.”

New said the company is in the term-sheet stage with one possible pharmaceutical partner, which is now in the process of due diligence on Aiko. The company also has written a private placement memorandum and expects to file it within a month, he said. “We’ll need about $10 million from the private placement to get to the early pre-clinical stage and advance the oral drug over the next 36 months to Phase 2,” he said. If the partnership also goes through, that money would add to the pot.

Aiko previously raised $1.2 million in a Series A round in December 2009, in addition to an undisclosed amount in a seed round in 2007 and money from several awards, including a $400,000 development award from the Maine Technology Institute in 2008.

New said Aiko is being helped by the deal announced on Feb. 7 between Progenics Pharmaceuticals Inc. of Tarrytown, N.Y., and Salix Pharmaceuticals Ltd. of Raleigh, N.C., under which Salix licensed rights to Relistor, an injectable drug to treat opioid-induced constipation, to Salix. The transaction includes a $60-million, up-front payment and development milestones totaling $90 million from Salix. “The benefit of this deal is it shows how big this market is,” he said.

And, Nektar Therapeutics of San Francisco, which has an oral Phase 2 drug targeting opioid bowel dysfunction, on Jan. 24 completed an initial public offering with net proceeds of $220.4 million. Nektar’s partner for its drug is Astra Zeneca. 

“This is a 100 percent totally underserved market,” said biotech analyst Jonathan Aschoff of Brean Murray, Carret & Co. in New York. He estimates the market for oral drugs targeting people with complications from opioids at a little more than $1 billion, and said there are no oral formulations approved yet.

Aiko said that of the more than 20 million patients taking opioids for three weeks or longer each year in the United States for cancer and other diseases, as many as 90 percent experience constipation, nausea, vomiting and other bowel side effects. Of those, over-the-counter laxatives work for only 40 percent.

“They have no option but to go off of the painkiller for a while,” New explained. “Constipation affects their quality of life, mobility and sociability.” Patients have cramps, bloating, trouble sleeping and headaches in what New describes as a “dull, unremitting pain.”
 
People using opioids develop a physical dependence on the drugs because they enjoy the pain relief and euphoria. Because opioid receptors become super activated, New said, people need more of the drug over time, and they develop an opioid dependence. “If they are treated at that point with a typical antagonist like naltrexone, that will send them into withdrawal,” New said. Naltrexone affects all the receptors in the brain and the gut.

The difference with Aiko-150 is that it is based on 6-beta naltrexol, which targets only the peripheral receptors in the gastrointestinal tract. However, if Aiko-150 is taken for a long time, it gets into the brain and also can help curb drug dependence, New said.

The company is working on four products, all variations of 6-beta naltrexol. Aiko-150 is the initial intravenous formulation. Aiko-151 is the standalone oral prescription that the company plans to take from pre-clinical to Phase 2 development. Aiko-152 is a combination of Aiko-151 with oxycodone to make it easier for patients to comply with taking one medication for both pain and constipation. And Aiko-153, which is longer into the future, will be a higher dose of Aiko-151 to deter drug dependence.

Another aim for Aiko is to target patients who currently cannot tolerate opioids because they get nausea. An Aiko drug that helps relieve nausea could allow such patients to take opioid painkillers.

For now, Aiko plans to remain a company with just a handful of employees. “It’s all about efficient use of capital,” New said. The company will likely expand and look for more investors after the end of the Phase 2 oral drug trial.