Why An Investment Banker Returned To Drug Development

By Cathy Yarbrough, Contributing Editor
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Sandesh Seth was not considering leaving his position as head of healthcare investment banking at Laidlaw & Co. U.K. Ltd, when the board of small-cap biotech Actinium Pharmaceuticals asked him last year to serve as the company’s executive chairman.

Nor was Seth thinking about returning to the biopharmaceutical industry. Early in his career, after obtaining a master’s degree in pharmaceutical sciences, Seth worked for 10 years in product and business development, strategic planning, and R&D project management at SmithKline, Warner-Lambert, and Pfizer.

As a member of New York-based Actinium’s board since 2011 and its board chairman since 2013, Seth understood why he was being asked to take a more hands-on role at the company. “Actinium needed additional resources, and I believed that I could add a lot of value from a biopharmaceutical executive perspective at a very important time in the development of Iomab-B,” he said.

Iomab-B, Actinium’s lead asset, is a first-of-its-kind radiotherapeutic agent. Actinium licensed the drug in 2012 from the Fred Hutchinson Cancer Research Center in Seattle. Physicians at the Hutch developed Iomab-B to enable a greater number of older patients with relapsed or refractory acute myeloid leukemia (AML) to take advantage of bone marrow transplantation (BMT), currently the only curative therapy for this deadliest form of leukemia.

Soon after licensing Iomab-B, Actinium began planning a Phase 3 clinical trial and compiling an IND (investigational new drug application) for submission to the FDA. Actinium’s board recruited Kaushik Dave, MBA, Ph.D., who is experienced in radiopharmaceutical monoclonal antibody product development, to serve as president and CEO and manage Iomab-B’s development through FDA approval.

Dave and his team soon encountered a major obstacle in the technology transfer of Iomab-B and scaling the manufacturing process to commercial and cGMP quality levels. Iomab-B is a monoclonal antibody linked to a radioisotope, which is regarded as not easy to manufacture. FDA-approved radiopharmaceutical products have been manufactured on a commercial scale by only three biopharmaceutical companies: Bayer, GSK, and Spectrum Pharmaceuticals. None of these products was designed to treat AML.

To become the fourth company to manufacture a commercial grade radiopharmaceutical drug, Actinium first had to adapt the Hutchinson Center’s manufacturing process for Iomab-B. Because the cancer center needed a relatively small supply of Iomab-B for its clinical studies, the drug was manufactured at a small scale in a 50-liter bioreactor. However, for commercial-scale manufacturing of Iomab-B, a 500-liter bioreactor had to be used.

Determining the best recipe for manufacturing Iomab-B in a 500-liter bioreactor was a difficult trial-and-error process, said Seth. Each test batch took three months to manufacture and two months to evaluate. “Something would go wrong in the batch phase or the testing phase, requiring Dave and his team to start over,” said Seth.

Because adjusting the Hutchinson Center’s recipe for commercial-scale manufacturing of Iomab-B was timeconsuming, Actinium had to delay the submission of its IND to the FDA. As a result, the company’s pivotal Phase 3 clinical trial was not launched in the first half of 2015 as planned. “The market reacted negatively to this news, and our share price dropped significantly in value,” said Seth.

UNEXPECTED BENEFIT
Developing a validated manufacturing process to produce commercial-grade Iomab-B “was a very big undertaking,” said Seth. Actinium’s board asked Dave to set aside his other responsibilities as president and CEO to focus only on perfecting Iomab-B’s manufacturing process. As a result, “We had a real need for someone with complementary skills to handle finance, strategic planning, business development, and investor relations for the company,” said Seth, who left his investment banking job in 2015 to work full-time at Actinium as executive chairman. He had worked in investment banking and equity research for 20 years.

“It was certainly a challenging time for the company,” recalled Seth. “But we were confident the manufacturing problems were solvable with expertise, time, and money.” The manufacturing problems had an unexpected benefit — the company was able to identify areas where it could generate intellectual property related to manufacturing processes.

Meanwhile, Actinium continued to build its staff for the anticipated FDA approval of the IND for Iomab-B. In August 2015, Felix Garzon, M.D., Ph.D., who has a background in hematology and oncology drug development, joined Actinium as senior VP and head of clinical development. The following month, Actinium hired two more industry veterans. J.C. Simeon, the new executive director of quality assurance, supervises and manages Actinium’s CMO relationships. Karen Louw, a clinical research nurse, trains clinical trial site staff and serves as a clinical expert for patient monitoring and safety.

Once Dave and his team solved the manufacturing problems, Actinium was able to submit the IND to the FDA in October 2015. It was approved by the agency two months later. In March 2016, Actinium received the FDA’s orphan drug designation for Iomab-B. In June 2016, the company announced the launch of its pivotal Phase 3 clinical trial of Iomab-B in 150 relapsed or refractory AML patients over the age of 55. The primary endpoint of the Study of Iomab-B in Elderly Relapsed or Refractory AML (SIERRA) trial is durable complete remission lasting at least six months. The secondary endpoint is overall survival at one year.

When he was an investment banker, Seth spent most of his time in raising money for multiple companies, including Actinium. He raised capital for the company’s Series E financing round in 2011 and its IPO in 2012. As executive chairman of Actinium, he said, “I spend most of my time working with the management team on things such as strategy, business development, and strengthening our operational competencies — all of which are more appealing to me than investment banking.”

Seth is an atypical biotech leader. Obviously, having knowledge and experience in the financial and capital markets helped him when he was raising capital, but that expertise was also important in his daily interactions with investors. “Being able to clearly communicate our value proposition to the investment community is vital to our success as a public company, and it is a skill I was able to develop from my time in equity research and investment banking. Also, the network I have curated from my time in finance has helped identify consultants and employees who have helped Actinium.”

Today, it’s not unusual for Seth to be asked how a small-cap biotech company without a track record in drug commercialization succeeded in licensing Iomab-B before a global biopharmaceutical company had a chance to acquire the drug.

“I think a lot of it can be attributed to luck and being in the right place at the right time,” said Seth, who learned about Iomab-B from a member of Actinium’s clinical advisory board. Actinium’s pipeline then included one drug, Actimab-A, now under evaluation in a Phase 2 clinical trial for the treatment of newly diagnosed AML patients who are over the age of 60. Like Iomab-B, Actimab-A is a radioimmunotherapy. It is based on technology that Actinium licensed from Memorial Sloan Kettering Cancer Center in New York City.

“The fact that we had this expertise in radioimmunotherapy with Actimab-A and experience working with radioisotopes certainly helped us when we approached the Hutchinson Center about Iomab-B,” said Seth.

LICENSING IOMAB-B A NO-BRAINER
“Licensing Iomab-B was a no-brainer,” Seth said. The Hutchinson Center’s Phase 1 and 2 clinical studies of the drug in older patients with relapsed or refractory AML generated “compelling data” showing that Iomab-B is less toxic and more effective than high-dose chemotherapy in preparing patients for BMT.

“There are numerous biopharmaceutical companies developing therapies for older AML patients, both those who are newly diagnosed and those who are relapsed or refractory,” he said. “We believe Iomab-B is the only therapy in development that is intended to be an induction and conditioning agent in one, meaning it ablates the patient’s bone marrow as well as addresses the patient’s active leukemia to prepare the patient for BMT.”

Before receiving a BMT, AML patients must undergo chemotherapy and whole-body radiation, referred to as myeloablative conditioning therapy, to wipe out leukemia cells in their bone marrow. Because the side-effects of intense chemotherapy can be severe, many older patients with refractory or relapsed AML cannot undergo or complete the therapy. As a result, only 1 percent of older patients with relapsed or refractory AML are treated with BMT, said Seth. Without BMT, most of these patients live only a few months.

Almost all of the patients in the clinical studies at the Hutchinson Center were able to tolerate Iomab-B as an induction and conditioning therapy and thus undergo BMT. One year after their BMT, 30 percent of these patients were alive. The survival rate at one year was 10 percent when chemotherapy was used as the conditioning regimen, according to a retrospective analysis of MD Anderson Cancer Center data on older AML patients with relapsed or refractory disease. In the Hutchinson Center clinical studies, 30 percent of the Iomab-B patients survived to one year, and 20 percent survived to two years post-BMT. “Two-year survival is a landmark that is widely regarded as a proxy for being considered cured,” Seth said. According to MD Anderson patient data, the two-year survival rate is zero percent for patients treated with chemotherapy to prepare for BMT./P>

The FDA has not approved a new drug for older refractory or relapsed AML patients in about 40 years. If Iomab-B is approved by the FDA, it could become the standard of care for this patient population. It also might benefit patients with other forms of leukemia. Several physician-sponsored clinical studies at the Hutchinson Center suggest that Iomab-B may be safe and effective as a conditioning regimen prior to BMT in various forms of leukemia.

Actinium is not actively seeking a commercialization partner for Iomab-B. In the U.S., AML patients undergo BMTs at only 150 medical centers, 30 of which are responsible for 50 percent of the procedures. Actinium’s Phase 3 clinical trial is being conducted at many of these centers. “We believe this is a market we can adequately address and commercialize ourselves,” Seth said.

Actinium will seek a commercialization partner for Actimab-A, because the potential market for this drug is much larger than the market for Iomab-B. Actimab-A is designed as a first-line therapy for older newly diagnosed AML patients. This relatively large population of patients is treated at community and outpatient clinics, which total several hundred in the U.S. alone.

“This was a transformative year for Actinium because we changed from being an early-clinical-stage to a later-clinical-stage company with two drugs in trials,” Seth concluded.