The story behind Millendo Therapeutics is one of numerous twists and turns. Not many thriving companies experience disappointing clinical trial results, jump into an entirely new therapeutic area, and emerge with investor support and renewed hope for an entirely different class of patients. Millendo has done it twice.
"Setbacks and challenges are just part of the business of drug development,” says Julia Owens, founder and CEO of Millendo. “We have had more than our share of challenges, and I think we have handled them very well. I am very proud of that, as the path we traveled has not always been lined with roses.”
HIGH HOPES AND STALLED CLINICAL STUDIES
That path started in 2012 when Owens launched Atterocor, a biopharma that was a spin-out from the University of Michigan, with two cofounders. The company was formed with the intention of developing a new small molecule therapy, nevanimibe (ATR-101) for the treatment of a very rare and fatal endocrine cancer called adrenal cortical carcinoma (ACC). The company operated on money raised via a round of financing from VC firms Frazier Healthcare Partners, 5AM Ventures, and Osage Venture Partners.
“Our goal was to perform toxicology studies, file an IND, and complete a clinical study for patients with ACC that would show our drug could improve their condition,” states Owens. “We completed the toxicology studies and filed the IND. We even made it into clinical trials. Unfortunately, after three years of dose escalations in over 60 patients, we were unable to demonstrate sufficient efficacy to warrant advancing into additional ACC clinical studies.”
According to Owens, the biggest challenge was the pharmacokinetics (PK) of the drug being different in humans than it was in animals, something that could not have been predicted. Ultimately, Atterocor studies did not achieve high enough drug exposures to determine whether the treatment could produce the desired results in patients with ACC. At that point, the company was running low on cash, and Owens began to realize that further efforts would likely be futile.
A PIVOT INTO ENDOCRINE DISEASE
Despite the setback, Owens knew the team she had assembled excelled at drug development and getting to answers, even if the answers were not the desired outcome. At that point, a couple of board members told Owens there will be challenges that even the best teams can’t overcome. Still, having a team that operates well together is of value to investors. For that reason, they were supportive of having the company change direction and focus on a new strategy.
At that same time, AstraZeneca was reviewing its pipeline and divesting molecules that were not core to the company. One of those assets, MLE4901, had shown proof of concept in Phase 2 testing and had already been studied in over 200 patients. AstraZeneca reached out to the VC community to see if there was any interest in spinning it out. In a fortuitous turn of events, one of the firms it contacted was Frazier Healthcare Partners.
“Frazier was obviously aware of us from leading our Series A financing,” says Owens. “They thought the asset was interesting and wanted to put together a company to advance it. For them, the biggest challenge was finding the right team. Luckily, with Atterocor in their portfolio, they already knew of talented researchers with deep experience in endocrine diseases. They contacted me about the opportunity, and shortly thereafter we in-licensed MLE4901 into our pipeline.”
The next thing Owens had to do was quickly raise operating cash. Per the agreement with AstraZeneca, if Owens did not raise $30 million within 90 days of closing the license, the deal would be void. New Enterprise Associates (NEA), a VC and private equity firm, was also interested in investing in the asset. At the end of 2015, a $62 million Series B financing round was completed, led by NEA with participation from a group of investors that included Roche. With this new influx of funding, Owens felt it was also time to rebrand the company to reflect the change in direction. “We needed to move away from our heritage as a rare cancer company and into our future, which was as a company with a broad drug development pipeline in endocrine diseases.”
SUCCESS AND DISAPPOINTMENT
With the changes, better news soon followed. The company name was changed to Millendo Therapeutics, and four Phase 2 clinical studies were soon launched across its two compounds. Nevanimibe, the company’s original asset, would be advanced for the potential treatment of patients with congenital adrenal hyperplasia (CAH). MLE4901 would be targeted at polycystic ovary syndrome (PCOS), a hormonal disorder common in women of reproductive age. MLE4901 also showed encouraging early efficacy signals in reducing hot flashes, or vasomotor symptoms (VMS), in menopausal women. That Phase 2 VMS study resulted in a late-breaking oral presentation at the Endocrine Society’s annual meeting in 2017.
“We were flying high and everything was going great,” notes Owens. “We were ramping up our development efforts and hiring additional personnel, doubling our head count from 12 to 25. Unfortunately, halfway through 2017, liver function tests showed MLE4901 produced liver enzyme elevations, a potential sign of toxicity.”
"We now believe we are on the cusp of what undoubtedly is going to be the next exciting era for our company.” — Julia Owens, founder and CEO, Millendo Therapeutics
Millendo tried to further investigate the findings, running tests to determine whether a reduced dosage administered for longer periods of time would cause the results to improve. Ultimately, the company decided the drug would not generate an acceptable risk-to-benefit ratio in treating patients and made the difficult decision to terminate its clinical development.
“That was another very hard time for the company and our employees,” laments Owens. “We knew we would have to make another difficult pivot, which happened near the end of 2017. We decided to shut down all work on MLE4901. We still had a great team, late-stage drug development expertise, some interesting molecules in our pipeline, and a supportive group of investors. Luckily, we were also able to come up with a creative merger to keep the company going.”
A MERGER BRINGS NEW HOPE
The decision was made to merge with Alizé Pharma, a small company just outside of Lyon, France. The company had a unique compound targeted at Prader-Willi syndrome (PWS), a rare genetic disorder that causes an insatiable appetite in patients, leading to overeating and metabolic issues that are a root cause of co-morbidities and early mortality. Millendo was aware of the company through its ongoing business development efforts and, in fact, was already in early stage conversations with Alizé. Since Alizé was a small European company, it had no U.S. presence, no access to U.S. capital, and most importantly, limited late-stage drug development expertise. Millendo seemed to possess everything the company sought, so the two firms merged and kept the Millendo name. That merger is what led to livoletide, the PWS asset the company is developing in the clinic today.
“We have been working on livoletide for two years; it is now our lead program,” says Owens. “The last two years have marked a new period for the company. We now believe we are on the cusp of what undoubtedly is going to be the next exciting era for our company.”
Endocrine diseases result from hormonal imbalances, and that has been the company’s core competence. Millendo has worked on six different indications over the last eight years, and all are endocrine diseases. Owens notes Millendo’s physician-scientist cofounder, Gary Hammer, is the current president of the Endocrine Society. Millendo also has endocrinologists working in-house and another on its board of directors.
ADVICE FROM A DIFFICULT JOURNEY
Throughout this difficult journey, Owens managed to lead a team in creating a company and completing two mergers (one a reverse merger that went public at the end of 2018), three in-license deals, and five financing rounds (an A, B, and three subsequent efforts). She has learned a lot along the way about overcoming adversity.
“First and foremost, I recommend surrounding yourself with quality people,” she says. “I could not have survived everything we went through without our investors, our board members, and our incredibly skilled employees. All of these individuals have to be committed to performing development to the highest standards while remaining focused on the patients and improving their condition.”
Second, Owens recommends that you avoid letting finances become the only driving factor for key company decisions. “Never focus solely on the potential upside of your investment,” she states. “As a CEO, your focus should be on your people and the work they are doing. If you monitor your people and your research and do right by your patients, the rest will fall into place.”
Finally, she recommends always being intellectually honest with your science. That includes not falling in love with your assets. She notes there were a couple of programs she probably could have kept going for a longer period but which likely would still have been terminated.
“We certainly could have invested more time and money into our oncology asset,” she says. “We could have looked into alternative paths forward as well. However, once you see safety or efficacy issues arise, you really need to stop, take a step back, and ask yourself if you are really being honest with your board and your investors about the future of the product. Terminating a program is always a tough decision to make. Things will go wrong and you need to make sure you are making objective decisions. If your efforts will not make a difference in a patient’s life, it’s time to move on. That is when it pays to have backup plans in place. You never want to be scrambling.”
Owens certainly lives by her advice. When her company shut down research on MLE4901, it was able to close a merger and reposition the company in less than six months. “We were able to do it quickly because we had conversations ongoing and were already actively looking for new programs,” she states. “For that reason, we were prepared to move quickly when it became necessary to do so.”
Owens believes the most exciting part of Millendo’s story is what is still to come. In the first half of 2020, the company looks forward to sharing topline results from the Phase 2b portion of a pivotal Phase 2b/3 trial studying livoletide, the company’s lead compound, in patients with PWS. When those results are announced, the company will also need to be ready to quickly move to an NDA, should the data support this. The goal is to quickly become a company commercializing drugs in the endocrine disease space with a pipeline of investigational products.
“We have already begun building the foundation for our commercial leadership and infrastructure,” adds Owens. “We based our headquarters in Ann Arbor, Michigan, and we have an office outside of Boston where we are going to build our commercial and medical affairs groups. We will not take a break after receiving the trial data. We will be ready to rapidly translate those results into products for our patients.”
A KNOWLEDGEABLE BOARD DRIVES PROGRESS
Keeping the company going throughout this ordeal was difficult, but Owens gives a lot of credit to her investors and board of directors. “You need to have investors and board members with vision who will not panic and want to shut things down when there is a setback. They pushed us when they had to but also gave us the time and space to come up with proposals and alternatives when necessary. It helped that we always had a plan B, C, and D in place.”
Owens recruited the board of directors, which is composed of 50 percent female members and has a female chairman. “That ratio happened just by chance, but I still think it is very compelling.”
Current board members include the chairman, Carol Gallagher, who was the CEO of Calistoga (acquired by Gilead) and is currently a partner at NEA. Habib Dable is the CEO of Acceleron and was the president of U.S. Pharmaceuticals at Bayer. Mary Lynne Hedley is the founder, president, and COO of TESARO, now a subsidiary of GSK.
Putting together this group of industry experts was not easy, and Owens notes it was done in a very thoughtful manner. When the Series A funding was put in place, the board had two representatives from investors; two biopharma executives, including Gallagher; and Owens. Owens met Gallagher through Frazier Healthcare, when they both worked in prior portfolio companies.
“Carol [Gallagher] was excited about joining the board early on and mentoring me as a first-time female CEO,” says Owens.
Getting Hedley was more of a challenge. When Owens told a couple of recruiters that she was going to ask Hedley to be on the board, they literally laughed out loud, noting that everyone was going after her. Owens was not deterred. When she finally got the chance to speak to her, Hedley, who already knew Dr. Gallagher, was intrigued by the company and impressed by Owens and agreed to join the board.
“This experience taught me that once you have a core group of good people on board, along with a focus on high-quality science and drug development, people will want to join your board. They respect your efforts and want to be involved in that journey along with the other board members.”