EpiCept Corp., a Tarrytown-based specialty pharmaceutical company, is seeking to win approval from the federal government to sell in the U.S. a drug capable of maintaining remission and preventing relapses in people with acute myeloid leukemia.
Upon winning approval of Ceplene from the U.S. Food and Drug Administration, the company anticipates doubling its staff to 30 and expanding its manufacturing operations.
“Then there would be additional folks that would be hired to help sell Ceplene and promote Ceplene across the U.S.,” said Jack Talley, EpiCept president and CEO.
The NASDAQ-traded company employs about 15 people at Landmark at Eastview, where it leases about 10,000 square feet at 777 Old Saw Mill River Road.
The additional employees, Talley said, would fill marketing, sales, manufacturing quality, and regulatory positions to be created as EpiCept expands. EpiCept took one step in that direction on July 6 when it announced the hiring of Rita Kelley as senior director of marketing, a newly created position.
The company wants to market Ceplene, which it envisions doctors administering along with low-dose interleukin-2 to treat AML, the most common and most deadly form of leukemia in adults.
To date, EpiCept has produced unlabeled vials of Ceplene that could be used for clinical research but were designed for the initial commercial launch of the drug. The vials were manufactured by an outside manufacturer or contract research organization in Ohio. Talley said EpiCept anticipates contracting with a second CRO “outside of Chicago” for additional supplies of Ceplene.
EpiCept, which does no manufacturing at Landmark, insists on making Ceplene on its own in the U.S. rather than partner with another company.
In addition to Ceplene”™s potential return to shareholders, the company notes that the top 200 hospitals in the nation account for almost 95 percent of the market potential for the drug. That creates a concentrated market that can be served efficiently without a manufacturing partner or large sales force, he said.
LOSSES POSTED
Founded in 1993 and based at Landmark since 2006, EpiCept develops and commercializes drugs for cancer and pain. During the first quarter, it narrowed its net loss year-to-year to $4.5 million from almost $22.5 million a year earlier. Revenues rose to $167,000 from $115,000 in the first quarter of 2009.
EpiCept finished 2009 by widening its net loss over the previous year to $38.8 million from $25.4 million in 2008, while revenues rose from $265,000 to $414,000. While startup drug companies typically lose money for years while developing products, “the company”™s recurring losses from operations and stockholders”™ deficit raise substantial doubt about its ability to continue as a going concern,” auditor Deloitte & Touche LLP wrote in a letter accompanying EpiCept”™s 2009 annual report.
In that report, the company acknowledged: “We will need to generate significant revenue from the sale of Ceplene or raise additional capital to continue to operate as a going concern.”
Last month EpiCept sought to address its immediate capital needs through a public offering of 6.1 million stock shares at $1.10 a share ”“ about 30 percent below its pre-offering share price ”“ as well as one-year and five-year warrants to buy 6.1 million and 4.6 million additional shares, respectively, at $1.57 a share, exercisable starting Dec. 30. The offering is expected to raise net proceeds of $6.2 million for the company.
“Net proceeds from the offering will be used to meet working capital needs and for general corporate purposes. The proceeds of this offering together with existing cash are expected to be sufficient to fund most of the balance of the company’s anticipated cash expenditures for 2010,” EpiCept said in its June 28 statement announcing the sale.
$200 MILLION DRUG
Talley said the development of Ceplene has cost more than $200 million. The drug was originally part of the portfolio of Maxim Pharmaceuticals, a San Diego company that merged with EpiCept in January 2006. At the time, Maxim had given up on Ceplene, Talley said, following shareholder dissatisfaction with Maxim management and disappointing results following trials of the drug for several diseases.
Ceplene showed only mixed results when used to treat melanoma, showed little effect on hepatic disease, then offered a bit of promise for kidney cancer before being shifted to AML; not to induce remission, but to prevent against a relapse of cancer.
“What we”™ve come to learn is that Ceplene is not meant to be a first-line therapy when patients are in the full-blown stages of their cancer. What Ceplene does exquisitely well is, after standard chemotherapy has been given to a patient, to work in conjunction with other therapies to mop up, for lack of a more sophisticated term, residual cancer cells in the body,” Talley said.
According to the Leukemia and Lymphoma Society, about 12,810 Americans ”“ most of them older adults ”“ were diagnosed with AML in 2009, with the disease expected to result in 9,000 deaths in the nation this year.
Ceplene is available in the United Kingdom, Germany and Austria, and is expected within a year to be available in most European Union countries. Canadian authorities are reviewing the company”™s drug application to market Ceplene for AML in their country, which was submitted last November. “I do expect a regulatory decision at some point this year,” Talley said.
In the U.S., EpiCept has requested a priority review, which is supposed to be decided on within 45 days. An FDA decision on the application itself is expected in late December.
“I would say within three to four months of approval, it should be on the market in the United States,” Talley said.
From the date of an FDA approval, the company would enjoy seven years marketing exclusivity since Ceplene would be designated an “orphan” drug, developed for diseases deemed rare in the U.S.
In addition to Ceplene, EpiCept”™s development pipeline includes Crolibulin, a drug designed to treat solid cancer tumors; Azixa, a brain cancer treatment; and EpiCept NP-1, a prescription analgesic cream designed to provide long-term relief for neuropathic pain resulting from damage to the peripheral or central nervous system.
