Andromeda gets positive report on diabetes study

If Diapep277 passes, Teva could beat two large competitors to market.

Clal Biotechnology Industries Ltd. (TASE: CBI) portfolio company Andromeda Biotech Ltd. has obtained positive interim results in the Phase III clinical trial of Diapep277 for the treatment of type 1 diabetes (juvenile-onset diabetes) from an independent committee.

Andromeda stated that an international independent expert committee notified it that Diapep277 was safe for use and improved the condition of patients treated. The committee recommends pursuing the trial as planned.

An earlier report from the committee, in June, had recommended increasing the size of the trial, while the current report said that the size of the trial was sufficient to provide statistically significant results.

The current report also recommended analyzing results in sub-groups in the study, such as analysis by age or insulin need.

The letter from the expert committee implied that patients who took the drug showed improvement compared with the control group, who were given a placebo. The committee wrote that based on its calculations, if similar results are seen among other patients recruited for the trial, all results will be statistically significant. Recruitment of patients is expected to be completed within six months, and they will have to be monitored over two years.

The report is good news for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), which has an agreement to make milestone investments in Andromeda. In August, Teva exercised an option to invest $10 million in Andromeda for a 10% stake, at a company value of $90 million, before money. Teva has options to invest up to $100 million in the company, for up to a stake of 30%, provided that it meets the stipulated milestones, including marketing approval for Diapep277.

If Diapep277 passes the clinical trial and is approved for marketing, it will be a pioneer treatment for type 1 diabetes, which is a very large market. Teva could beat Eli Lily & Co. (NYSE: LLY) and GlaxoSmithKline plc (NYSE; LSE: GSK) to market. Both companies have signed separate contracts to develop drugs to slow the progression of type 1 diabetes. Their drugs are undergoing Phase II clinical trials, and if Andromeda's timeline for Diapep277 goes as planned, it could beat the competition to market by three or four years.

Andromeda CEO Shlomo Dagan said that Diapep277 had advantages over competing treatments. "Our drug acts on the immune system in a more targeted way, which is why it has few side effects, as the trial showed. The competing drugs more sweepingly suppress the immune system, which makes them less safe. Out delivery method is also easier, one subcutaneous injection every three months, instead of intravenous delivery."

CBI is the biotech arm of Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH), held through Clal Industries and Investments Ltd. (TASE: CII).

Published by Globes [online], Israel business news - - on December 24, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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