Zentrx

Zentrx has gathered together three different drug delivery technologies--buccal, liposomal, and site-specific to the GI, plus a large company development/manufacturing partner, as it looks to partner with smaller drug companies with various drug delivery challenges.

The drug delivery middleman

• 183 Calle Magdalena

• Suite 101

• Encinitas, CA 92024

• Phone: [phone]

• Fax: [phone]

• Website: www.zentrx.com

• Contacts: David E. Morgan, Chairman and CEO; Peter C. Taylor, Executive Vice President

• Business: Drug delivery systems

• Founded: May, 1997

• Founders: David E. Morgan; Peter Taylor

• Employees: 3

• Financing to date: $1.0 million

• Scientific Advisory Board: Jean-Marc Aiache, PhD (University of Auvergne); William A. Cochrane, MD (MDS Health Ventures and Vasogen Inc.); William E. Hahn, PhD (TransChem, LLC); Thomas P. Johnston, PhD (University of Missouri); Alex McPherson, MD, PhD (Biomira Corp.); William J. Cady, PhD (Quality Research Services); Romano Deghenghi, PhD (Europeptides); Vincenzo Olgiati, PhD (Polichem)

Zentrx was conceived as a virtual company to function as a middleman between small drug companies seeking the most efficient means to deliver a new drug, and a powerful pharmaceutical company with an infrastructure broad enough to assist with any stage of drug development.

Prior to founding Zentrx, David Morgan, chairman and CEO, and Peter Taylor, EVP, spent three years searching for innovative drug delivery technologies. Their goal was to "assemble a range of technologies with wide applicability," says Morgan. They settled on three to serve as the initial delivery systems their company would offer.

One major battle in drug delivery is increasing a drug's bioavailability: the amount of drug and the rate at which a drug becomes available to the site of physiological activity. When the average drug is taken orally, almost 14% is lost through excretion, and another 59% is metabolized jointly by the cells lining the gut and the liver. Only 27% of the administered drug reaches the circulation.

The three patented technologies acquired by Zentrx are designed to bypass the digestive route and enter the circulatory system directly.

Zentransis an adhesive tablet designed to deliver drugs through mucous membranes but works best when applied to the gums. The drug is combined with milk proteins and other common excipients such as hydroxypropyl methylcellulose, cornstarch, magnesium stearate, talc, and lactose, which are altered to control the rate of release. This eliminates the need for frequent applications. The biggest advantage of Zentrans technology, according to Morgan, is that "it avoids the hepatic first pass." The drugs pass through the highly vascular mucosa of the mouth, entering the lingual and internal jugular vein, which leads straight to the heart. The drug therefore goes through one round of body circulation before going to the liver.

The second technology, called Chronotopic, is designed for temporal and site-specific delivery of drugs to the gastrointestinal tract. This is achieved by using a pill which has three layers. The core of the pill is the drug. This is surrounded by an inner polymeric coat whose thickness and density control the time of release. The outer layer protects the pill from the acidic and enzymatic actions of stomach juices. By the time the pill leaves the stomach, the outer layer has been eroded, triggering the degradation of the inner layer. The rate of degradation determines how quickly the drug will be released, anywhere from 2-18 hours. "The key advantage of this technology is we avoid metabolism of the drug in the liver which means that a lower dose of the drug can be given, which reduces the side effects," claims Taylor. The local delivery also minimizes the effects to the rest of the body. Chronotopiccan deliver a range of drug types—hormones, proteins, peptides, NSAIDs—to any site in the colon. Chronotopic may be particularly useful for treating inflammatory bowel disorders like Crohn's disease and ulcerative collitis.

The third technology, called Lipo-SYS, relies on liposomes—a spherical bilayer of lipid molecules resembling the cell membrane—for delivery of drugs through the skin or though mucosal membranes.

Zentrx will acquire exclusive worldwide licenses to two other delivery technologies, Zengel 2and Chronozen, within the next month. Chronozen is an improvement on Zentrans and Zengel 2 can be used to deliver drugs via topical solutions, injection and subcutaneous implants.

Zentrx only acquires patented drug delivery systems that are in advanced development stages and have been tested in humans. The amount of processing is also taken into consideration. "Our drug delivery systems do not require equipment or processing which is exotic or esoteric," said Morgan. The drugs should be manufactured with standard pharmaceutical equipment and the delivery system should not materially increase the manufacturing cost of the drug.

There is already an approved product on the market in France which uses the Lipo-SYSmechanism of delivery. The Chronotopic system, which was designed for the delivery of mesalazine—a drug for ulcerative colitis and Crohn's disease—has completed Phase II trials and is scheduled to begin Phase III trials in Germany this year. Zentrans is also in a Phase III study in Europe for the delivery of morphine.

Though Zentrx has no corporate partnerships yet, the company is engaged with two proof of concept studies; peptide delivery using Zentransfor a German pharmaceutical company, and delivery of estradiol to the transverse and descending colon for an American pharmaceutical company.

Zentrx holds the exclusive North American, and non-exclusive worldwide, rights to all three technologies. Zentranswas licensed from Jean-Marc Aiache, chairman of the Biopharmaceutics Department of the University of Auvergne , France [See Deal]. The deals with Poli require that all proof of concept studies are done using Poli’s facilities and personnel to formulate compounds into delivery systems. The Italian firm receives milestone payments and royalties based on sales.

The short-term goals for the company include finalizing agreements with a public US pharmaceutical company. The drug firm will provide Zentrx a line of credit to pay the drug firm to formulate and manufacture the products, to which the drug firm, however, will not have marketing rights. Zentrx will thus be able to offer small drug companies a "cafeteria-style menu of services," says Taylor, including formulation of a delivery system and testing in humans, pharmacological analysis and stability testing, clinical batch manufacture, and clinical trial management.

By 2000, Morgan hopes that Zentrx will have a product in Phase I clinical trials and four technologies in proof of concept studies. But before this can proceed, the company needs to raise $6 million this spring to continue its studies and acquire the rights to other technologies. Indeed, part of its business model is to add at least four proof-of-concept studies for new drug delivery technologies each year to keep a full pipeline.

David Morgan is chairman and CEO of Janus Biomedical Inc. , a holding company which is the majority shareholder of Zentrx. Peter Taylor is president of both Janus and Clonital SRL , a wholly owned medical device subsidiary of Janus.—BT

To the Editor:

Re: your February 1999 article, "Can Heat Shock Proteins Improve Immunotherapy?"

In this otherwise accurate article, you make two factual errors. In the table, you describe Antigenics' lead product, HSPPC-96, as "Autologous vaccine/(tumor cells plus gp96)." HSPPC-96 consists of gp96-peptide complexes that are purified from individual patient's tumors (in the case of our cancer program) or gp96-peptide complexes that are purified from pathogen-infected cells (in the case of our infectious diseases program). There is no whole cell component to any of our products. The fact that our products consist of purified proteins, not whole cells, carries many advantages related to manufacturing and logistics that the reader cannot appreciate in the article's presentation.

Secondly, our infectious diseases product is not autologous—instead, it will be manufactured in bulk from a generic human cell line that is infected with the pathogen of interest (in the current case, herpes simplex virus type-2) and administered to all patients that are infected with that pathogen.

Daniel Levey

Manager of Scientific Affairs, Antigenics LLC

Daniel Levey is correct. Our shorthand description of HSPPC-96 in the table accompanying the story suggests, wrongly, a whole cell component. Within the text of the article, the product is accurately described.