Cash Needed For Phase 3 Celiac Drug Development

By Ben Comer, Chief Editor, Life Science Leader

A Q&A with James Sapirstein, CEO at Entero Therapeutics

James Sapirstein, CEO at Entero Therapeutics and a 40-year biopharmaceutical industry veteran, makes a compelling case for Big Pharma partners and investors to take a chance on a cheap and safe treatment that, if approved, would become the first drug indicated for patients with moderate to severe celiac disease. Celiac disease is an autoimmune condition that causes damage to the small intestine in response to gluten consumption, with symptoms ranging widely from abdominal pain, headache, bloating, and diarrhea to cognitive impairment, depression, nausea, and peripheral neuropathy, among other symptoms. Patients with Celiac disease are also twice as likely to develop coronary artery disease, and four times as likely to develop bowel cancers, according to the Celiac Disease Foundation.

An agreement between the FDA and Entero regarding trial design and endpoint requirements for Phase 3 clinical testing of latiglutenase, Entero’s lead development candidate, bodes well for approval, says Sapirstein. The company is actively looking for partners and investors to help fund two Phase 3 clinical trials beginning in 2025. This conversation has been edited for clarity and concision.    

Entero Therapeutics is the result of several acquisitions and name changes. Can you provide some background on those deals, and reasons for the name changes?

James Sapirstein: AzurRx BioPharma was about five or six years old when I joined them. And as you can tell by the spelling, it's a pretty hard name to pronounce. I've got a lot of years of experience in this business, and a lot of it was in commercial, and one thing that you learn is if people can't pronounce your name, it's a bad name. When we were looking to acquire First Wave Bio, I asked them if we could just take their name. They were a private company, and I thought First Wave was catchy. And then, earlier this year, we acquired ImmunogenX. They didn’t really like the First Wave name, and I also decided that it would make more sense to have a kind of gastro intent to our name. ‘Entero’ means many things, but in Latin it has to do with the gastrointestinal tract, and also means ‘whole.’ People can now look at our name and know what we do, so we are happy with that.

What do you find most interesting about gastrointestinal therapeutic areas and market dynamics, as compared with some of the other disease areas that you've worked in?

JS: I've worked in a lot of different areas, but I spent the bulk of my career in infectious diseases. The first company I started, Tobira Therapeutics, was focused on HIV, and something key came out of one of our sub studies. So we turned it into a NASH company, or MASH as it's referred to now. And we sold the company [to Allergan for $1.7 billion in 2016] really on a gastrointestinal disorder. That's where my interest began in gastrointestinal disorders. With ContraVir Pharmaceuticals, my third company, we focused on Hepatitis B. I became very familiar with GI disease and liver disease, so when I got the call to take over [AzurRx], I found a familiar place, and I knew some of the KOLs. I was excited about the initial asset we had — adrulipase — it reminded me a lot of my early work with Lilly on an insulin product.

If approved, latiglutenase would become the first treatment available for celiac disease patients. Do you have a theory about why celiac disease incidence rates have risen so much since the 1950s?

JS: First of all, diagnosis is getting much better. Celiac disease exists in about 1% to 1.4% of the population in the United States, with similar numbers in Europe. We also know that 40% of all celiac disease cases are not diagnosed. There are a lot more patients out there. There are also different degrees of celiac disease, from light celiac to really severe celiac, it really depends on the patient. And that, quite frankly, is a mystery. It's not very well categorized. In many instances, when people develop celiac disease later in life, it's a very difficult diagnosis to make. People will go a year or two without understanding what their diagnosis is.

I read that diet can affect the accuracy of a celiac test, for example, if someone with celiac disease is already eating a gluten free diet, a diagnostic test for the disease might come back negative. Is there anything new happening in celiac diagnostics?

JS: We have a lab in North Carolina and we're trying to come up with a better celiac diagnostic, a simple urine test, to make the diagnosis more definitive. But it's a hard battle. Jennifer Sealey-Voyksner, who is our scientist in charge of this project, has celiac disease. She's been working on this for about 12 years, trying to find a diagnostic agent.

Entero is based in Boca Raton, Florida, but you have labs in North Carolina as well?

JS:  We're a semi virtual company. I live in Florida, I moved here in 2018. We've got a few staff members here, but we've got two people in North Carolina, and we have four people in California. And my CFO sits in Boston.

I assume you are working with CDMOs for manufacturing and clinical trials.

JS: We are. Our main CDMO for latiglutenase is in Italy. Because we're a public company, I can't talk about our next CDMO, but we are in contract negotiations with a much larger CDMO to get our commercial supply ready. We also work with a Chinese company called Asymchem for three of our other products. So yes, we outsource all of that.

Was latiglutenase discovered internally at ImmunogenX?

JS: No. It was discovered by our board member, Chaitan Khosla. He is a professor at Stanford, and his son has celiac disease. He has made it part of his life's work. Latiglutenase was originally licensed to Alvine Pharmaceuticals, a Bay Area-based biotech company. Alvine had it for about seven or eight years, and brought it from nonclinical development all the way up to Phase 2. When Alvine did their Phase 2 program, the FDA wanted three clinical endpoints. Alvine hit two of them, and then a lot of investors pulled out. This was back in 2011 or 2012, and then the drug reverted back to Chaitan Khosla. Jennifer Sealey-Voyksner, our scientist in North Carolina, used to work in Khosla’s lab, so she knows him pretty well. And she helped secure funding to buy the asset. Jack Syage, who is our chief scientific officer, purchased the asset outright from the Alvine creditors, and he called his company ImmunogenX. They worked to develop it for eight or nine years, and then it came on my radar screen in February 2023. I was already working on a Sanofi licensing deal [for capeserod], so I worked on both in parallel. Some great things happened while we were in negotiations ImmunogenX. They had a great end of Phase 2 meeting with the FDA — actually the most significant thing they did, really — where the FDA agreed to two clinical endpoints for the Phase 3 program, rather than the three endpoints they agreed to previously. And those two clinical endpoints have already been met by all the data produced by Alvine and by ImmunogenX.

When do you plan to commence the Phase 3 trials for latiglutenase, and what are the two key endpoints for that program?

JS: We have to build the clinical trial product supply and that is going to take about a year. We expect to commence the Phase 3 program in the second to third quarter 2025. There are two Phase 3 studies that will take a total of two years to complete. The primary endpoint is symptom relief: abdominal pain, bloating, and nausea. In our intestines, we have these little hairlike follicles called villi and they absorb all the nutrients that are coming through the GI tract after it goes through the stomach. The villi in healthy individuals that don’t have celiac disease are about five millimeters long. If you have celiac disease, they're only two millimeters long or less. Using endoscopy, FDA wants to make sure that patients going on latiglutenase don’t get any worse. The secondary endpoint is histologic non-worsening. Latiglutenase has already done that in three different Phase 2 studies. The endpoint latiglutenase failed initially, with Alvine, was on improvement of the villi. The FDA wanted to see if the villi could grow from two to three to four millimeters. And, you know, that's almost impossible. Latiglutenase is not a cure, we're not reversing the disease. We're managing the disease.

Do you have any plans to test latiglutenase in patients that perhaps have not been diagnosed with celiac disease, but do have gluten-related concerns, like real or suspected gluten allergies or sensitivities?

JS: I’ll give you the Entero answer first, which is no, we're not putting those patients into our study, because it would make the study far too large for us. The other answer I'll give you comes from a couple of strategic partners that we're talking to. There is interest from larger pharmaceutical companies to take over this program, and I believe latiglutenase will become a "lifestyle drug." The initial indication will be to treat moderate to severe celiac disease patients, because that's a highly unmet need. FDA wants us to look at moderate to severe patients. With mild to moderate patients, it becomes very difficult to demonstrate a huge amount of efficacy because sometimes they're sick, sometimes they're not, versus the moderate to severe patients who are very ill. Going back to the second part of the answer, these other large strategic partners, I don't see why they wouldn't do a Phase 4 program to look at gluten allergies, they have the capital to go out and do that. I used to run commercial teams at Roche and Bristol Myers Squibb, and I know what I would do, which is get the initial moderate to severe indication, get the reimbursement that you need for that indication, and then put together a Phase 4 program and start looking at all these other aspects. I'd probably hold on to the product as a prescription drug for about six or seven years, and then flip it to an over-the-counter [OTC] product, because it's very safe. Latiglutenase has been taken by well over 600 people at this point, and there hasn’t been a safety issue because it's not a systemic therapy. It's basically not absorbed into the bloodstream. You take it with your meal, and then it passes through the urine. It's not really metabolized so there's no real safety issue at all.

Is that scenario — receiving an FDA indication in moderate to severe celiac disease patients, and then taking the drug OTC after six or seven years — something that Entero could do on its own?

JS: Look, we're micro-cap company, unfortunately, we used to be a small cap, but now we're a micro-cap. Unless you're in oncology or rare diseases or GLP-1s, it's really hard to get funding. The amount of funding we would need just to launch the product would be impossible for me to raise, so we're looking to partner it out. We're a year away from Phase 3, my market cap is $5 million and change. It's a pretty cheap and inexpensive risk for any large pharma, considering it’s a Phase 3 asset.

So you are open to partnering on Phase 3 development right now, or do you think it’s better strategically to get Phase 3 data first before doing a deal?

JS: It really depends. Some of the private VC firms that we're talking to would rather us develop it ourselves and then sell it once we have Phase 3 data. But that may or may not be a choice for us. I am actively looking for Phase 3 co-development because of our capital needs. I think we'll be very opportunistic. For us right now, it's all about survival. We have really good assets; we just need the runway.

Do you plan to do additional fundraising, or will you need a partner to finance manufacturing and Phase 3 trials for latiglutenase?

JS:  The answer is yes. We're going to have to raise capital to do that. Both Phase 3 trials are in the ballpark of $80 million. It's not money I have right now. We need to raise money for that. Manufacturing is far less, but still several million dollars to build out the clinical supply, because latiglutenase is two enzymes that are put together. Part of the problem for ImmunogenX was that they were not able to move the latiglutenase program forward due to cost. Part of our argument with Congress over the BIOSECURE Act was that just to build these bioreactors is very, very expensive. There are not that many of them in the United States. Most are in Europe or China, and Europe is obviously more expensive than China. We told the senators that we spoke with that if Congress is willing to do something like the CHIPS program in IT, and fund a couple $100 billion to build these bioreactors, we don't care if we give the government part ownership in the process. That's what it's going to take, or a lot of programs will get shut down if we can’t work with China.

The two enzymes in latiglutenase are made in bioreactors?

JS: Yes, they're E. coli based.

You’ve worked in the biopharmaceutical industry, at large and small companies, for forty years. What key leadership qualities or attributes are needed for success in this industry?

JS: I got into management when I was 29 years old and worked with some really good people. I think the key biopharmaceuticals is to hire really good people, people a lot smarter than yourself, help them do their jobs, and then get the heck out of their way. That's what I’ve tried to do my whole career. I'm fortunate to say that over 10 of the people I've hired in my career have gone on to CEO jobs. What I've loved most about my career is mentoring people and helping them develop into executives.