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Pharm Exec sits down with Anthony Marucci, co-founder and CEO of Celldex, a stealth player in the immunotherapy field.
Williams Looney speaks to Anthony Marucci, co-founder and CEO of Celldex, a stealth player in the immunotherapy field.
When a therapy area gets hot, the candle burns brightest among big Pharma players with the reach and resources to ride the tailwinds of investor interest to market success. A prime example is immunotherapy. Most of the biopharma top 10 revenue leaders are currently pursuing novel drug targets under this emerging platform for cancer and other hard to treat diseases. The record shows, however, that breakthroughs in medicine are rarely, if ever, assignable to a single source or segment of the business. That’s why it’s prudent to seek out what we call the “stealth pharma’s:” smaller companies with promising pipelines that sit below the horizon line in attracting attention from investors, the media and other stakeholders.
New Jersey-based Celldex Therapeutics is one such stealth player, with a pipeline of development stage assets covering multiple indications in the cancer immunotherapy space, ranging from metastatic melanoma to triple-negative breast cancer and renal cell carcinoma. It is also gauging the potential of antibody drug conjugates in combination with immunologic therapies as a safer, less toxic alternative to the standard poisoned chalice of cancer chemotherapy.
Such diversity of exposures is considered by scientists to be an advantage in untangling the complexities of immunologic drugs for controlling cancer in the human population. Celldex also scores high among peers in the research community for the two extensive partnering deals it has signed with BMS and Roche, the industry pace-setters on cancer immunotherapy. Celldex believes it is approaching these deals from a position of strength, with a focus on creating that niche in combination therapies to ensure ownership and control of its own compounds going forward.
Despite a recent setback in tests of its most advanced immunotherapy candidate, the company is still poised to make the move from development start-up to a fully integrated commercial enterprise – with 2019 touted as the target date. In a recent interview with Pharm Exec, Celldex co-founder and CEO Anthony Marucci said “I am in this business because I am an optimist. With good data, proper studies and the lead time to invest in doing what’s right for the patient, Celldex can have a future as bright as any Amgen, Celgene or Regeneron.”
Deep dance card
Marucci, 54, has spent virtually every waking moment of the last decade building scientific platforms to address conditions where the standard of care is a blank page. A finance graduate with an MBA from Columbia University, Marucci spent his early career at Medarex, a specialty pharma company known for its work on monoclonal antibodies that enhance the cancer-fighting properties of T cells, the workhorse of the human immune system. Medarex developed the technology for the first monoclonal antibody based on immunotherapy, which led Bristol-Myers Squibb [BMS] to purchase the company in 2009, introducing the blockbuster drug Yervoy in 2011 for an indication against melanoma.
As Treasurer of Medarex, Marucci was responsible for finance, accounting and business development. “I found I had a solid skill set with the contacts and access to capital that would permit me to continue the Medarex culture of innovative discovery through a smaller entrepreneurial venture,” he told Pharm Exec. Marucci left Medarex in 2005 to do just that. With immunologist Tibor Keler as co-founder and chief scientist, Celldex Therapeutics began as a privately-held enterprise with a HQ in New Jersey, not far from Medarex. Marucci and team then initiated a complex set of acquisitions and reverse mergers with two New England biotechs, Curagen and Avant Immunotherapeutics, which resulted in Celldex becoming, in 2008, a publicly-traded company listed on NASDAQ.
The deals positioned Celldex for the long haul with access to a window of $600 million in capital leveraged from its acquired assets that could be applied to mid- to late-stage immunotherapy candidate programs to fight cancer, as well as other potential applications in areas like infectious disease. A key acquired asset was the immuno-oncology drug Rintega, then in Phase II(b) testing for suppression of glioblastoma multiforme, an aggressive and usually fatal cancer of the brain for which there is today still no approved treatment to extend survival.
...and deeper bench strengths
Marucci and Keler point to a deliberate research model that differentiates Celldex from other companies in the cancer biologics space. In addition to a focus on single agent immunotherapy drugs, Celldex is working on related antibody-conjugate and other protein-based approaches that it believes will accelerate the effectiveness of combination products in extending survival rates for a wide variety of cancers.
Simply put, it’s a multifaceted arsenal designed to stimulate and expand immune activation in ways that surmount the limitations of conventional therapies. It is also highly targeted, which increases the potential for diagnostic drugs that can pinpoint those patients most likely to benefit. “We want to take cancer research in a direction that will create more options for providers and patients,” Marucci said.
However, the company encountered a major setback in March, when it was forced to shut down a critical Phase III test of Rintega involving 745 patients. Management acted after the ACT IV study’s independent review board found in a mid-phase analysis there was no statistical benefit between the drug and placebo.
According to Marucci, abrupt discontinuation of work on what investors saw as the company’s flagship asset was a learning experience – but enough groundwork had been done to make it survivable. “What helped is the commitment, dating back to when we were founded, to make communications with investment firms and other stakeholders fully transparent. We always kept in touch, and through those contacts we were also able to keep raising the capital we needed, at discount rates. I think the external community really understood our business narrative, which meant we had reserves of credibility to draw on. That image proved an emotional counterweight to the collapse of one-half of our market cap the day we pulled Rintega out of Phase III.” The company has paid close attention to its reputational image too, making a public pledge to continue to offer the drug on a compassionate use basis to past and current patient participating in the ACT IV study.
Marucci stressed that Celldex remains financially strong. While the stock price has fallen fivefold since the March 7 announcement, the company has another two years of cash on hand, a little more than $220 million, enough to get through all the inflection points in its current mid- and late- stage pipeline. Management is confident that it will not have to abandon the pledge to maintain full control of its own pipeline.
Although the prospect for any resumption of work on Rintega is low, data from the ACT IV trial is being scrubbed for clues on what went wrong. Flaws in the trial’s design have been discounted, but there is a chance the review might open some options for further study. A definitive announcement will be made at the November 2016 annual meeting of the Society of Neuro-Oncology in Phoenix.
A second wave?
In the meantime, Celldex is emphasizing the potential of the rest of its pipeline. There are two standouts: glembatumumab vedotin, an antibody drug conjugate currently in Phase II clinical trials for breast cancer, metastatic and uveal melanoma and osteosarcoma; and varilumab, a monoclonal antibody which is under investigation in early stage studies for seven cancer indications, in partnership with Roche and BMS. BMS is also helping Celldex to fund this work. Varilumab is being studied as a combination with the BMS blockbuster Opdivo, Pfizer’s Sutent and Roche/Genentech’s Tecentriq – the latter was approved by the FDA in May for bladder cancer – in multiple tumor types.
Although the amount of data being generated from this work has led to a resurgence of interest in Celldex among investors, results from the studies are not due until the end of 2017, at the earliest. As is the case with any development-phase compound, there are no guarantees.
At a still earlier level of investigation are three Phase I candidates that attack cancers with immune modulating antibodies, proteins and vaccines. Conditions being targeted include B-cell lymphoma, metastatic melanoma, renal cell carcinoma, cancers of the ovary and fallopian tube, and kidney/peritoneal cancer. Moving these candidates into new investigator-sponsored trials – particularly CDX-301 for B-cell lymphoma, CDX-1401 for melanoma, and CDX-014 for renal cell carcinoma – are a priority this year.
Each of these research targets have potential as niche products to fill the gap for patients whose cancers have relapsed or progressed and have few other options. “They act on a broad spectrum of tumor types that will give us more choices down the road,” said Marucci.
Celldex also intends to expand a technology application licensing agreement it has signed with Seattle Genetics Inc. on CDX-104 for renal cell carcinoma, to other oncology indications. Marucci adds that the company will be looking at similar strategic partnerships with other companies to augment its base of novel platform technologies in oncology and in other therapeutic areas that make sense. Despite the depth from what Celldex already has in play, expanding the pipeline remains a key growth objective.
Faith in the “Triple Aim”
While any marketed product from the pipeline lies several years away, Marucci has a clear view of how he intends to approach regulators, customers and patients. “I am a firm believer in the ‘triple aim’ in health care, where the focus is on quality, cost and access. As the market for medicines evolves, these three elements will become the centerpiece of a high performance culture. Commitment to the ‘triple aim” is the way we intend to ensure the successful launch of our products in an increasingly competitive marketplace.”
Marucci dove deep into the “triple aim” philosophy, recently returning to academia on a part-time basis to earn a second advanced degree as one of the first students in Brown University’s Executive Masters in Healthcare Leadership [EMHL] program. Marucci was attracted to the EMHL program’s real world, multi-disciplinary approach. “Brown’s EMHL introduced me to the 95 per cent of the health care system that, as a lifelong biopharma deal-maker, I was not familiar with. I needed to understand how payers and providers make decisions using medicines in the day-to-day clinical setting. No matter how good Celldex might be on the science, we won’t have a market unless we understand what motivates them on the cost and access fronts. So I went back to school to find out.”
Marucci made his company’s odyssey toward a fully integrated commercial enterprise the theme of the “Critical Challenge Project” required to obtain the EMHL degree, gaining in the process unsolicited support from many other experts in the Brown University community. “I got through to that 95 per cent,” he says.
Truth is in the data
As to the future, Marucci adheres to a simple precept to minimize the risk inherent in being a company without the predictable revenue stream that accompanies a marketed product. “Everything flows from the data. It will tell you what you need to prevail – if you frame it right and relate the data to the perspective of the stakeholders you need to persuade. And if the data is good, you will find the partners and resources to overcome the temporary disadvantages of lacking size and scale.” Celldex has reinforced that bet with the creation of a new position of Chief Product Development Officer. Elizabeth Crowley, a 25-year veteran in prepping oncology compounds for launch, was promoted to the space and will be responsible for turning those late-stage pipeline assets into revenue producing therapies.
The start-up culture of mutual ownership also counts. “One thing I value about Celldex is that me and the other 200 colleagues who work here live and breathe on every decision we make.” It makes us adept at focus and allocating our human and capital resources toward what we went into this business to do – innovate. In the end, the science has to speak for itself. As I see it, it’s a message that doesn’t require a lot of spin or translation. And I think our investors and stakeholders trust us for that.”
Still, time is of the essence if Celldex is to break through to market success. It’s getting harder to find a biopharma player who is not in the business of cancer immunotherapy - those who aren’t ahead of the curve risk being left behind.