Better Incentives Needed For Worsening Fungal Infection Threat

The increasing threat of treatment-resistant Candida auris fungal infections suggests the need for greater development incentives, CEOs of three antifungal drug developers told the recent BIO annual meeting.

As companies seek new ways to address the rising threat of treatment-resistant Candida auris infections, they are calling for additional development incentives, such as R&D tax credits, that can spur investment in the space.

During a panel at the 2017 BIO International Convention, Tom Chiller, associate director for epidemiologic science at the Centers for Disease Control & Intervention, reported that Candida auris pathogens are a leading cause of blood infections worldwide and are on the rise in the US. This is reason for concern because Candida auris can develop resistance to all three existing classes of antifungal agents, and fungal infections, if not treated promptly, present high mortality rates.

The GAIN provisions have not had the same impact with antifungals as with antibiotics.

Data presented at the Interscience Conference on Antimicrobial Agents and Chemotherapy in 2015 showed that candidiasis infections reaching the patient's bloodstream pose an estimated 40% mortality rate. (Also see "Pipeline Update: New Antifungals Sprout In Warmer Regulatory Climate" - Pink Sheet, 28 Sep, 2015.)

Cidara Therapeutics Inc. CEO Jeff Stein noted during the BIO panel that candida infections kill roughly 67,500 people globally each year, an issue exacerbated by the reality that fungal infections are difficult to diagnose, yet a 24-hour delay in treatment can increase an infection's likelihood of mortality thirtyfold. (Also see "BIO Notebook, Day 3: Lilly Expands R&D Site, Sigilon Raises Cash And CytomX Talks Deal Strategy" - Scrip, 22 Jun, 2017.)

But despite the rising unmet need, the GAIN (Generating Antibiotic Incentives Now) Act provisions adopted as part of the FDA Safety and Innovation Act in 2012 have not led to the same resurgence in antifungal development as in antibiotics. Antifungal drugs are tougher to develop because of genetic similarities between fungi and human tissue; there are only three classes of approved antifungal drugs at present.

Stein heads up the Antimicrobial Working Group – an advocacy group comprising 13 companies that make anti-infective drugs, including four in the antifungal space – which seeks to educate US policymakers on the need for additional incentives beyond those provided under GAIN. (Also see "GAIN Begins (Part 1): FDA Completes Turnaround On Antibiotic R&D" - Pink Sheet, 20 Feb, 2013.) Two other CEOs on the BIO panel – Robert Schotzinger of Viamet Pharmaceuticals Holdings LLC and Marco Taglietti of Scynexis Inc. – also participate in the working group.

Schotzinger said the GAIN provisions – such as the Qualified Infectious Disease Product (QIDP) designation, which provides sponsors with increased interaction with FDA and five extra years of data exclusivity if a product reaches the market – are well-intentioned but have proven not terribly effective in generating investor enthusiasm, at least within the antifungal space.

"I think in general, if you have a strong intellectual property position, which we do, the incremental five years that the GAIN Act offers is not helpful," Schotzinger explained in an interview. "It's not as if you can just tack it onto the end of any IP. There has to be a certain sort of suboptimal IP situation."

Fast track development status is encouraging to investors, he added, giving them confidence that a drug advancing to the filing of an NDA will benefit from a priority review. Although neither QIDP nor fast track status guarantees a priority review, Schotzinger asserted that "in general people trust that FDA will honor the six-month review even if it's not mandated by the GAIN Act."

A small handful of antifungals have cleared the US FDA in the past few years, but none for the severe Candida auris indications. Astellas Pharma Inc./Basilea Pharmaceutica Ltd.'s Cresemba (isavuconazole) was approved in 2015 for invasive aspergillosis and mucormycosis, both with QIDP designations. Two antifungals were approved for onychomycosis (fungal toenail infections) – which affect roughly 35m Americans annually – in 2014, Anacor Pharmaceuticals Inc.’s Kerydin (tavaborole) and Valeant Pharmaceuticals International Inc.’s Jublia (efinaconazole). Both drugs had big launches with direct-to-consumer advertising, but Valeant reported declining sales for Jublia in 2016 and Pfizer Inc., which acquired Anacor in May 2016, did not disclose Kerydin sales for 2016.

R&D Tax Credit Would Attract More Investment Than QIDP

Schotzinger added that new incentives under discussion, such as a tax credit that would enable companies to write off R&D costs, might prove more effective, considering the value such a credit might offer to a larger company if it were transferrable. "If you really could get an R&D tax credit at the end that would be transferrable, I think that would help offset the development costs such that you really take that risk off the table or significantly decrease the hurdle for fundraising," he said. "We'll see if that develops this year."

Scynexis' Taglietti said GAIN did spur an uptick of investment in anti-infective companies, at least in the shorter term, but thinks new incentives are needed now, such as ones that might guarantee usage of new agents.

Scynexis CEO Marco Taglietti

Source: Scynexis

"Since the GAIN Act came in, there's truly been a renaissance for antibiotics," he told Scrip. "When it arrived in 2012, investors were excited and money came into the biotech infective business. It's amazing to me that in three years, we got six new [anti-infectives] approved – some antibacterial, some antifungal. There were more products in that three years than in the previous 10 years."

But sales for some of those agents have disappointed, resulting in dissipated interest from investors in the space, Taglietti said. Drugs such as Orbactiv (oritavancin), Dalvance (dalbavancin) and Sivextro (tedizolid) are bringing in less than $50m, he noted. The Medicines Co. did not provide specific 2016 sales for Orbactiv, reporting Feb. 28 that it was among a group of drugs that yielded $46m in total sales for the year. Allergan PLC reported Feb. 8 that Dalvance brought in $39.3m in 2016. Merck & Co. Inc. has not included specific sales totals for Sivextro in its two most recently quarterly earnings reports.

Disappointing sales for resistance-aimed antibiotics "made investors say 'wait a minute,'" Taglietti said. "One thing that changed from 2012 to early 2015, was that if a company got QIDP [designation], its stock soared by 15%, 20%, 30% up and stayed up. Now, nothing [happens], because investors don't care anymore. They don't care because while they see five years of additional exclusivity … if you're selling $10m a year of product, five extra years doesn't really change the picture."

In addition to incentives to guarantee usage of new anti-infectives, Taglietti also would like to see a priority review voucher program for antifungals, similar to those currently provided for new pediatric rare disease drugs or for drugs indicated for rare tropical diseases.

Scynexis has QIDP, fast track and orphan drug status for SCY-078, its first-in-class triterpenoid antifungal currently being studied in a pair of Phase IIb trials for treating Candida auris infections, which it hopes will be a game-changer. The New Jersey biotech is developing the agent in both intravenous and oral formulations so that it can be administered in the hospital setting with an option for oral step-down therapy as a patient's health improves, Taglietti said.

On June 15, Scynexis revealed that SCY-078 demonstrated potent in vitro activity against a range of candida species, including some that have demonstrated resistance to the echinocandin class of antifungal drugs. SCY-078 offers fungicidal activity and has shown five-to-10 times the concentration in blood of other antifungal agents, suggesting that it can achieve high concentrations in infected tissues, the CEO said.

Scynexis' Safety Concerns

One blip on the radar, however, is that the oral formulation currently is under an FDA clinical hold while Scynexis works to determine the highest concentration at which SCY-078 can be dosed without causing injection-site reactions. In trials, the drug has resulted in thrombophlebitis or other clotting issues in two or three patients due to injection-site reactions, Taglietti explained, calling the FDA hold "a speed bump."

"It's a very manageable issue," Taglietti said. "Many drugs, if you go by the labeling, have a clearly stated highest concentration at which they can be administered. For example, vancomycin cannot be administered at a concentration higher than 5 mg/mL, otherwise you will have severe injection-site reactions." He noted that Scynexis had already picked a dose to move forward with that probably will come in below the maximum concentration at which injection-site reactions occur.

Viamet, whose drug candidates target metalloenzymes, recently presented Phase II data for lead candidate VT-1161 for the treatment of recurrent vulvovaginal candidiasis (RVVC). The drug, which targets fungal CYP51, also has completed Phase II for onychomycosis.

Viamet completed a Series E financing after pulling out of a planned initial public offering last year but probably will need additional funding to cover Phase III development of VT-1161. [See Deal] In addition, it is developing earlier-stage candidates for cryptococcal meningitis (VT-1129) and invasive fungal infections (VT-1598).

Schotzinger spoke of strong partnering interest in VT-1161, primarily from dermatology or women's health companies. Viamet is considering whether it wants to seek a partner to take on both Phase III programs, or keep one in-house to develop itself. While onychomycosis and RVVC are not the most serious fungal infections compared to Candida auris, each indication offers blockbuster sales opportunities, the exec said, because current therapies are less than ideal for both efficacy and safety.

Cidara, meanwhile, has CD101, an echinocandin in Phase II for candidemia and invasive candidiasis. Stein said it should offer improved efficacy and safety, as well as a longer half-life, compared to other echinocandins. The San Diego-based company hopes CD101 will get an indication for broad use in early therapy, providing a first level of defense against hard-to-diagnose Candida auris infections.