Osteologix Inc.

A Copenhagen-based company is taking a unique, dual-action approach to tackling osteoporosis.

A dual-action approach to treating osteoporosis

425 Market Street, Suite 2230

San Francisco, CA 94105

Phone: [phone]

Fax: [phone]

Web Site: www.osteologix.com

Contact: Charles J. Casamento, CEO

Industry Segment: Pharmaceuticals

Founded: 2003

Founder: Nordic Biotech

Employees: 7

Financing to Date: $4 million

Investors: Nordic Biotech

Board of Directors: Charles Casamento; Klaus Eldrup Jorgensen, MD, Chairman; Florian Schonharting; Christian Hansen, PhD; Henrik Nilsson, MD, PhD (Nordic Biotech)

Scientific Advisory Board: Leslie Z. Benet, PhD (University of California, San Francisco); Göran Samsioe, MD, PhD (University of Lund); Olof Johnell MD, PhD (Malmoe University Hospital)

Bone is living tissue. To keep it strong, the body breaks down old bone, a process known as resorption, and replaces it with new bone. As people age, the cycle becomes unbalanced: more bone is broken down than is replaced, leading to increasingly fragile bones and the possibility of a fracture or a break. Current treatments for osteoporosis focus on stopping bone loss or rebuilding bone in order to prevent debilitating fractures.

Osteologix Inc. , formed in 2003 as Nordic Bone AS and headquartered in Copenhagen with newly opened US offices in San Francisco, is taking a unique approach to tackling osteoporosis. Its lead product, NBS 101, is designed to decrease bone resorption and simultaneously increase the formation of new bone—a dual method of action which, according to CEO Charles J. Casamento, sets it aside from any currently existing osteoporosis therapies.

Casamento joined Osteologix in October 2004. It is his fourth start-up. He also co-founded and served as CEO for Interneuron Pharmaceuticals Inc. (now Indevus Pharmaceuticals Inc.), as well as CEO for RiboGene Inc. (now Questcor Pharmaceuticals Inc.), and was responsible for taking both companies public. Prior that that, he held senior positions in Sandoz Inc., Johnson & Johnson, and American Hospital Supply Corp.

Osteologix is focused on the clinical development of a new class of compounds that have proven efficacy in metabolic bone diseases such as osteoporosis, which is considered to be a major public health threat for an estimated 44 million Americans. According to the National Osteoporosis Foundation, 10 million individuals in the US are estimated to already have the disease, and almost 34 million more are estimated to have low bone mass, placing them at increased risk for osteoporosis. Statistically, osteoporosis affects 55% of people 50 years of age and older, 80% in this group are women.

Currently, four classes of compounds exist on the market for treating osteoporosis: bisphosphonates and calcitonin; hormone replacement therapy; selective estrogen receptor modulators (SERMs); and parathyroid hormone (PTH). Therapies that focus on preventing bone resorption, which include estrogen therapy and bisphosphonates, are the most common method of fighting the disease, but Casamento claims the products currently on the market have too many drawbacks to be effective as a long-term solution. Prolonged use of HRT is linked to an increased risk for breast cancer, heart disease, or stroke, whereas severe gastrointestinal side effects have been linked to bisphosphonates. Even so, many physicians rely on bisphosphonates, such as Merck & Co. Inc. 's alendronate (Fosamax) and risedronate (Actonel) from Procter & Gamble Co. and Sanofi-Aventis . Bisphosphonates are non-hormonal medicines that block bone breakdown by binding permanently to the surfaces of the bones and slowing down the osteoclasts (bone-eroding cells). This allows the osteoblasts (bone-building cells) to work more effectively to increase bone mass. Calcitonin, which is generally used by patients who can not tolerate other therapies, inhibits bone resorption by reducing the formation and attachment of osteoclasts to bone. While not linked to any serious side effects, calcitonin is less potent than other treatments, and is only available as a nasal spray or injectable, which make it less convenient for patients.

PTH, a natural human hormone that controls calcium levels in the body, makes up the third category of osteoporosis therapies. The only bone-building agent available for osteoporosis, it is also the newest. The first PTH product to hit the market, Eli Lilly & Co. 's teriparatide (Forteo) is a once-daily injectable that acts like natural PTH to increase bone formation. Forteo, says Casamento, includes a black box warning on its label advising against its use for more than two years due to increased risk for osteosarcoma. Indeed, in animal studies with teriparatide, there was an increase in the number of rats developing osteosarcoma. Although no osteosarcomas were reported in human studies, incidence of the cancer in animal studies led to the FDA warning. "Osteoporosis is a chronic disease," states Casamento. "People will need to be on drugs for the rest of their lives, so while PTH is effective, it is only a short-term, stop-gap measure."

SERMs make up the fourth class of compounds. They work like estrogen by stimulating estrogen receptors in certain tissues that inhibit bone breakdown. Currently available SERMS include raloxifene (Evista), tamoxifen (Nolvadex), and clomiphene (Clomid). Raloxifene and tamoxifen have been shown to prevent postmenopausal bone loss, however, only raloxifene has been approved for prevention and treatment of osteoporosis by the FDA. The advantages with using SERMs include a reduced risk for breast cancer and a demonstrated efficacy in preventing vertebral fractures. Disadvantages include menopausal-like symptoms such as hot flashes and, like estrogen, SERMs may increase the risk of developing blood clots in the legs and pelvis.

"Our product is in a fifth and chemically distinct class of compounds versus anything that is currently on the US market," says Casamento. The compound, a small molecule, orally administered tablet developed by the scientists at Osteologix, is designed to be taken once daily. Reporting on the company's preclinical studies to date, he says, "there are advantages with regard to both side effects and efficacy. For example, [NBS 101] doesn't have the menopausal-like side effects seen with SERMs, nor the GI side effects seen with bisphosphonates. And it doesn't have the potential of causing osteosarcoma." Osteologix recently completed an extensive preclinical program demonstrating the pharmacodynamic effects of NBS 101, as well as documenting its safety and toxicological properties. Currently, NBS 101 is in Phase I clinical trials, which should be completed in August 2005; Phase II trials will commence sometime in December 2005 or January 2006.

Looking ahead, Casamento is enthusiastic about Osteologix's market potential, noting that there is a large, unmet medical need, especially in a population that is getting older and living longer. "Only 20-25% of people with osteoporosis get therapy," says Casamento, who feels that the low figure has more to do with a lack of awareness of available treatments than the concern for possible adverse side effects. "People are getting older, and as they get older they have aches and pains in their back, hips and knees…and they don't get treatment," states Casamento. "It's an underserved market with huge potential."

Casamento is confident that other drugs in Osteologix's pipeline also hold promise, in particular several products which are currently in development that will be offered in combination with NBS 101. Essentially, the proprietary compounds developed by Osteologix will provide the basis for a broad pipeline of clinical applications. The clinical areas all comprise disorders where bone and cartilage metabolism is affected, including not just osteoporosis, but osteoarthritis, metastatic bone disease, hyperparathyroidism-associated bone disease, secondary osteoporosis, and renal disease.

Osteologix has raised nearly $4 million to date, all of it from Nordic Biotech, a leading European venture capital firm, which has committed to financing Osteologix through the first quarter of 2006. "We are looking at doing another round of financing in autumn of 2005, and then I believe we'll look for a partnership with a major pharmaceutical company sometime at the end of 2006," Casamento says, at the point he expects Phase II studies on NBS 101 to wrap. Casamento reveals that several pharmaceutical companies have expressed interest in NBS 101. "But we want to build a little more value into the product approaching them," he says.

As part of his long-term strategy, Casamento might try for an IPO sometime in 2007. He says that he is looking at end of 2005/early 2006 for submission of the NDA for NBS 101, and anticipates a product entering the market by 2010 or early 2011. And, with a competitive intellectual property position—Osteologix has filed over 25 patents applications—the company is seeking to maximize commercial exploitation in a seemingly underserved market. "We want a partner who is going to want to penetrate as much of the market as quickly as possible," says Casamento.—LAR