Sequella CEO Carol Nacy On Partnering With Pfizer To Solve Multidrug-resistant TB

New drugs in development could help solve a looming global multidrug-resistant TB epidemic and anchor a new treatment regimen.

Sequella Inc. CEO Carol Nacy sees the company’s recent in-licensing deal with Pfizer as a turning point in the long road to developing anti-infectives to treat multidrug-resistant tuberculosis, and is gearing up for pivotal trials in 2014.

Nacy founded Sequella in 1997 to address the looming TB encroachment. Lead drug SQ109 was co-discovered by scientists at Sequella and the National Institute of Allergy and Infectious Diseases at the U.S. National Institutes of Health under a cooperative research and development agreement.

With a mechanism of action distinct from other antibiotics used in TB therapy, SQ109 has activity against both drug-susceptible and multidrug-resistant (MDR) TB bacteria, including extremely drug-resistant (XDR) TB strains.

The company also inked a deal with Pfizer Inc. in July for exclusive worldwide rights to develop and commercialize sutezolid, a Phase II oxazolidinone antibiotic in development for TB. Sequella will be solely responsible for clinical development and commercializing the product globally.

Pfizer retained the ability to conduct non-commercial research and development with the compound. Sequella will continue its Series C financing efforts and finalize a new protocol for a global pivotal trial to begin in 2014.

Sutezolid demonstrated potent antibacterial activity against Mycobacterium tuberculosis in animal models and demonstrated activity in a Phase IIa early bactericidal activity study in TB patients in South Africa.

“We have to check with regulators on next steps for both drugs, and that will happen once the capital is raised,” Nacy said, adding that she is looking at conducting trials in China, India, Brazil, Russia, South Africa and South Korea.

The timing couldn’t be better, because SQ109 is also in Phase II, and Sequella will develop the two drugs in tandem, with each drug on a different study arm and corresponding background regimen, Nacy said.

“I think the way the FDA is looking at this is every drug needs to be tested on its own for safety and efficacy against a known set of drugs, so we wouldn’t be combining them until that is established for both.”

SQ109 is in Phase II trials for drug-sensitive TB in seven sites in Africa and is licensed to Russian company Infectex for TB clinical trials and commercialization in Russia and the Commonwealth of Independent States where it is in Phase III trials for MDR-TB.

Infectex was founded in 2011 with the goal to develop and bring to the Russian market an innovative drug for MDR-TB. Infectex is located at the government-backed Skolkovo Innovation Center and takes part in a national technology platform backed by Maxwell Biotech Venture Fund (Also see "Novartis, AstraZeneca Pledge Support For Russia At St. Petersburg Economic Forum In Latest Big Pharma Move To Go Local" - Scrip, 17 Jun, 2011.).

SQ109 has fast-track status at U.S. FDA and orphan drug status at EMA for TB. It is also being studied for H. pylori gastritis in a Phase II study.

Sutezolid could be included in Sequella’s Russian partnership, Nacy said, noting that it would be a good strategy for solving regulatory and distribution challenges.

“Having both drugs on board gives us a special opportunity: should they both be efficacious and safe, we can pair them together to anchor a whole new regimen for TB, and that would be the ultimate goal.”

“We have to check with regulators on next steps for both drugs, and that will happen once the capital is raised,” Nacy said, adding that she is looking at conducting trials in China, India, Brazil, Russia, South Africa and South Korea.

Companion Drugs Could Change TB Regimen

Both drugs have completely different mechanisms of action and they attack different organ locations as well, Nacy said, noting that both sutezolid and SQ109 kill bacteria inside the cell and when they’re paired together “the killing goes very rapidly.”

“Sutezolid’s active metabolite actually works on extracellular bacteria, so we’ve got drugs that work on free-living bacteria and ones that are parasites’ macrophages, their normal host cells. They work in different compartments of the lung, for example, and they pair very nicely together.

“For TB they both have extraordinarily low resistance rates … which are very important in TB because it’s a very clever bacteria and figures out how to be resistant to most drugs.”

“Both drugs have action on both drug-sensitive and drug-resistant strains of Mycobacterium tuberculosis, but the biggest unmet medical need at the moment is multidrug-resistant TB.

“Having both drugs on board gives us a special opportunity: should they both be efficacious and safe, we can pair them together to anchor a whole new regimen for TB, and that would be the ultimate goal.”

Sequella is planning a global Phase IIb efficacy trial with “sufficient geographic diversity” for SQ109 and sutezolid in MDR-TB to file two NDAs for accelerated approval in the U.S. and EU in 2016/2017.

Challenging Protocol Leaves Some Opting Out

Pfizer decided to throw its resources into prophylaxis of infectious diseases via its Wyeth acquisition and inherited vaccine portfolio, so it curtailed its antibiotic side of its infectious disease program.

In 2011, Pfizer closed its antibacterial R&D facility in Groton, Connecticut, and announced it would open a new R&D center for antibacterials in Shanghai.

The move was seen by analysts as a reaction to higher regulatory hurdles in the U.S. for antibiotic development (Also see "Pfizer Senior VP And Head Of Worldwide PharmaTherapeutics Research Rod MacKenzie On Moving R&D To China: An Interview With PharmAsia News (Part 2 of 2)" - Scrip, 22 Mar, 2011.) and (Also see "Antibiotic Market Snapshot: In Exchange For Higher Prices, More Value" - Pink Sheet, 14 Jan, 2013.).

But Pfizer’s plans to move forward in China were pulled back after China’s efforts to restrict overprescribing of antibiotics, which has had a financial impact on antibiotic developers in China (Also see "Under Industry Pressure, China Blinks On Restricting Use Of Anti-infectives - Or Does It?" - Scrip, 12 Aug, 2011.).

“The current regimen for MDR-TB is not a very good regimen – 50% are not cured with a regimen of four to seven drugs, mostly old, off-patent drugs that are very toxic.”

Nacy said there is a strong hesitancy to enter the anti-infective space because the regulatory hurdles are high for TB.

“You have to identify as so sick that you can’t work,” she said, adding that the problem of eradicating TB isn’t simple. “It’s a hardy bacteria and is passed in the same room by breathing, and it can survive on surface areas for years,” she said, noting that a waxy cell wall protects the mycobacteria.

One of the difficult aspects of running trials for TB, Nacy said, is that a resting period is required after initial treatment because so many reactivate with TB.

“The current regimen for MDR-TB is not a very good regimen – 50% are not cured with a regimen of four to seven drugs, mostly old, off-patent drugs that are very toxic,” Nacy said.

“Many will look like they are cured, but not all bacteria will be cleared from the lung, so you have to wait for 12 months and then re-treat patients who become positive.”

TB, whether drug sensitive or MDR, is always treated with three or more drugs to reduce emergence of drug resistance, Nacy said.

Critical Needs In Developing Countries

In 2011, 8.7 million contracted TB, and 1.4 million died of the disease, according to the World Health Organization. As many as 2 million people may suffer from drug-resistant strains of TB by 2015. MDR-TB, resistant to the two most-effective TB drugs, and XDR-TB, resistant to those drugs plus two additional classes of drugs, were reported in at least 77 countries in 2011, according to WHO estimates.

Totally drug-resistant TB, for which there are no effective treatments at all, was recently reported in both India and Africa.

Roughly 33% of the world population is infected with Mycobacterium tuberculosis, which causes 9 million cases of pulmonary TB annually and 1.5 million deaths, according to Nacy.

In China, roughly 1.3 million new cases of TB are reported annually, 112,000 of which are MDR TB, according to WHO.

Spending on first-line drugs to treat TB was roughly $26 million in 2008 in China, and prices for first-line drugs are about $20-$40 per course and are provided free by the government. However, the government does not pay for MDR-TB treatment, which is tagged at $2,000-$4,000, forcing the burden to patients.

Patients treated in Russia for the MDR-TB trials are resistant to front-line drugs, so they are being treated with an arsenal of five standard of care drugs, and the second group gets the same drugs plus SQ109.

Recent market reports estimate $400-$500 million in global peak sales for a drug to treat MDR-TB, which represents about 5% of TB cases worldwide and is a rising global public health threat.

According to WHO, Russia is among the 22 countries with the highest level of TB disease, with roughly 120,000 new cases of TB and 18,000-24,000 new MDR-TB cases per year.

In some parts of Russia and neighboring countries, TB infection rates are more than three times that which WHO considers epidemic, prompting the Russian government to make TB control a top priority.

The Russian market for anti-tuberculosis drugs is well over $300 million per year, with total TB control costs estimated to be more than $1 billion.

In South Africa, a growing number of people have MDR strains, and most die. In recent years, Nacy said people in South Africa with MDR TB were sent to camps because the disease is passed from person to person and care givers were getting sicker.

Global Epidemic With Little Backing

Recent market reports estimate a drug to treat MDR-TB can generate $400-$500 million in global peak sales. MDR-TB represents about 5% of TB cases worldwide and is a rising global public health threat.

In a Nov. 20 presentation at NIH, Nacy said TB is among the top 10 lethal diseases globally, and 40% of all deaths in middle- and high-income countries are due to infectious diseases.

“Rising antibiotic resistance is a huge global threat,” she said. “Coupled with a dearth of new antibiotics to meet the challenge, we have not paid attention over the years and are now experiencing a crisis both in this country and in Europe, and multidrug-resistant TB is now considered a national security interest and is a problem in every continent.”

TB was the number one killer of U.S. citizens prior to 1950 because antibiotics were not available. After 1950, there has not been a vocal advocacy for new drugs, and WHO talks about it as a disease of the poor, Nacy said.

“Those of you who are as old as I am all have relatives who died of TB,” Nacy said during the NIH forum. “This used to be the impetus for pharma companies to get into drug development. Every time we introduced a drug, in six months it was drug resistant.”

New drug development requires identification of drugs with novel mechanisms of action that will need to be paired with three novel drugs to increase tissue distribution and kill various bacterial forms, Nacy said.

“There are some therapies available that do work over a very long period of time,” Nacy said, “which will be good comparators to show safety and efficacy. The goal is also to reduce regimen toxicity and shorten treatment time, although that is not a regulatory goal and not the basis for approval, but certainly a health compliance goal.”

Several groups are spearheading these efforts. Sequella, with funding from NIH, collaborates with U.S. academic centers and pharma companies like Johnson & Johnson, Pfizer, and Sanofi to understand pharmacokinetics, pharmacodynamics, toxicity, and efficacy of drug combinations containing SQ109 in animal models of TB. Johns Hopkins University, with funding from NIH, evaluates a variety of new and old drugs in combination in mice.

Other Drugs In The Space

Competitors in the space include J&J with Sirturo (bedaquiline), Otsuka Pharmaceutical Co. Ltd.’s delaminid and Sanofi’s Priftin (rifapentine). Of these, only J&J's bedaquiline and Sequella's SQ109 have completely novel mechanisms of action (Also see "Emerging Markets Focused J&J’s Sirturo Approval Tied To Expansive Post-Marketing Study Program" - Scrip, 4 Jan, 2013.).

Bedaquiline was approved in December 2012, and it will be critical to move other drugs through trials and create collaborations to develop new TB drug regimens to treat all forms of TB, Nacy said.

Bedaquiline was the first TB drug FDA had seen in 45 years, “and that’s a lone drug and TB is very good at being resistant to single drugs,” which is why companion drugs are desperately needed, according to Nacy.

“However, when a drug is called a disease of the poor, pharma companies may have a difficult time justifying making a profit. I’ve been pushing the envelope with this but it’s been a slow evolution to get companies to pay attention to global health.”

Most of Sequella’s funding to date has come from NIH and grants from the EU. About half of the funding also came from high net worth investors and hedge funds run by doctors that understand high unmet medical needs.

SQ109 has a long half-life and “works against every microbacteria we’ve compared it against,” she said, noting that it shortened time to treatment in animal models from 25-50% compared to the drug it was paired against. Nacy believes its mechanism of action could help other drugs be more efficient.