By KRYSTLE CHOW
Published in the March 2006 edition (Vol.6, Issue 2) of Ottawa Insight.
March 2006

OTTAWA – Success in the biopharmaceutical industry has always depended on which company comes out first in the frantic dash to get products approved, patented, and on the market.

It’s a high-stakes race, especially in the huge market for drugs which fight heart disease – the number-one killer in North America – and Liponex Inc. of Ottawa is hoping to be the winner in producing one of the first “good cholesterol” increasing drugs in the world.

“There aren’t very many good HDL (high-density lipoprotein or ‘good cholesterol’) drugs on the market,” says Bill Dickie, Liponex’s president and chief executive officer, adding that the focus in past few decades has been more on reducing low-density lipoprotein (LDL) or “bad cholesterol.”

“The market for heart disease drugs is north of $30 billion US, and growing at double digits each year,” says C. Justin Stephenson, senior life sciences analyst at Haywood Securities Inc. in Vancouver, one of the five brokers who underwrote Liponex’s initial public offering (IPO) in August.

Pfizer’s best-selling LDL-reducing drug Lipitor alone reported annual sales of over $10 billion US in 2004, Stephenson adds, and with its patent expiring in 2010, there could be a huge gap to fill in the market.

CLINICAL TRIALS

This is where Liponex hopes to make its mark, especially with the emerging interest in HDL-boosting drugs.

The company’s lead product is called CRD5, a soybean-derived version of a naturally occurring molecule in the body called phosphatidylinositol, or PI.

The compound regulates the body’s LDL, HDL and triglyceride levels, and has been shown in Liponex’s two-week clinical trials with healthy volunteers to rapidly increase HDL levels by 20 per cent with no apparent side-effects, says Haywood Securities’ initiating report for the company.

By comparison, the most popular HDL-increasing treatment on the market, niacin or vitamin B12, showed a more gradual effect over 20 weeks and has many unpleasant side-effects, including a massive “flushing” effect, in which patients turn bright red and have itchy skin after taking their daily niacin dose, Dickie says.

“The industry has been looking at better HDL drugs, and there are a number of people developing them,” he continues. “We’re one of them.”

Founded in August 2000 by the company’s chief scientific officer Dr. Dan Sparks, in partnership with the University of Ottawa Heart Institute, Liponex has since patented its innovative drug and completed three pre-clinical trials of CRD5 in phase one of the drug development process.

After successfully raising a gross of $11.5 million in its IPO, the company is currently preparing for phase two trials with its new formulation of CRD5, which has been designed to be more easily absorbed by the body.

“The drug is a kind of fat that isn’t well-digested, so we’ve added something to make it more easily emulsified,” Dickie explains. “It’s like adding some detergent to the grease in your pan to make it take a liquid form more easily.”

EXPANDING THE TEST GROUP

Liponex has tested the new formula on rats, and is now ready to begin 12 weeks of trials on 50 human patients with cholesterol problems, he says, adding that it’s a “trial in patience.”

The second part of phase two trials will involve a larger test group in Amsterdam with well-known HDL researcher John Kastelein.

Dickie recognizes the drug development process is a long one, and says Liponex is probably about halfway through the 10 to 12 years it takes for a drug to reach the market.

As such, it is unlikely the company will see a profit in the foreseeable future.

“Investors are investing in something that takes time to develop,” says David Croucher, Liponex’s chief financial officer. “But the payoff at the end of the day is enormous.”

Croucher says the company raises as much as it thinks it will need for each stage of the drug development process and then spends it.

“Our quarterly results will always show that we’ve lost money because we have no revenue (at this stage),” Dickie explains. “What we do is we take investors’ money and we spend it to create value in the future.”

Liponex reported net losses of $778,889 in the second quarter which ended on June 30 2005, a 500 per cent increase from the same quarter last year. The company attributes this increase largely to the cost of becoming a public company, as well as to the hiring of new staff and the expense of drug testing.

LOOKING FOR PARTNERS

But Dickie says he is confident CRD5 will be a useful drug, and hopes the results of phase two trials will put the company in a position to raise more money, and prompt a larger pharmaceutical company to show interest in a partnership. Liponex will then be able to co-develop or license the drug to their new partner.

There are several large pharmaceutical companies in the final stages of developing HDL-increasing drugs, notably Pfizer with its cholesterol ester transfer protein (CETP) inhibiting compound, torcetrapib.

However, Dickie notes that Pfizer’s drug uses a very different mechanism from CRD5, since torcetrapib tries to increase good cholesterol levels by blocking the transfer of cholesterol esters from HDL in exchange for LDL. This halts an exchange which decreases HDL in the body, rather than producing more HDL as CRD5 does.

“They will likely be first to market with a new HDL drug, and we think that’s a good thing,” Dickie says. “They’ll be educating physicians and the public about the benefits of HDL therapy.”

While CRD5 is Liponex’s top project, the company isn’t putting all its eggs in one basket. It is also in pre-clinical trials for its infectious disease program, and is working on a drug carrier system which encapsulates drugs in HDL particles.

TOUGH COMPETITION

Most interestingly, this drug carrier system, which Dickie refers to as “stealth technology,” will be able to deliver chemotherapy to cancer patients with a lesser likelihood of being rejected by the body, since HDL is a naturally occurring compound.

As cancer cells need cholesterol to develop, the technology cleverly allows the cancer cells to target the good cholesterol coming into the body and absorb it, along with the drugs carried within it.

At any rate, the competition for the production of new HDL drugs is intense, and Liponex acknowledges it’s in for a tough battle.

“It’s an area of a lot of interest in the pharmaceutical industry, so there are a lot of different programs that are out there to develop HDL drugs,” Dickie says. “So, yeah, I’d say (the competition) is very steep.”