Aratana Therapeutics Inc (fka PETX)

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https://www.agra-net.com/agra/animal-pharm/interviews/innovation-is-finally-emerging-from-companies-both-new-and-old-says-expert-525439.htm

"Innovation is finally emerging from companies both new and old, says expert
By Joseph Harvey
Published: 31 August 2016 02:46 PM


For years, the veterinary medicines sector struggled to maintain a quality pipeline of product innovation and attract investment lifeblood. However, the last couple of years have seen a dramatic sea change. Animal Pharm editor Joseph Harvey spoke to industry expert Dr Linda Rhodes about the innovation climate in 2016 and prospects for future novel products.

Animal health innovation "has got better but is still slim" over the last few years, according to someone who has had a large hand in some of the industry's most recent game-changing products.

Dr Linda Rhodes was previously a co-founder of two notable US animal health firms – contract research organization and consultancy business AlcheraBio, as well as companion animal biotechnology pioneer Aratana Therapeutics.

Dr Rhodes said the US FDA has approved eight new chemical entities in the pet therapeutic space (excluding drugs for fleas and ticks, and treatments that had been used in human health) since 2011, including three in 2016 (capromorelin, grapiprant and deoxycorticosterone). She said this is "significantly more than the previous 10 years".

When co-founding AlcheraBio in 2001, the thrust of innovation in veterinary medicine focused on combination of flea and tick products, as well as formulation improvements.

"There was not a lot of difference in therapeutic areas," she said. "There were parasiticides, antibiotics and pain drugs and not many really new things happening. Since then, there have been some big breakthroughs in allergies, appetite and pain. There are new molecules for flea and tick treatment, and there are monoclonal antibodies to treat cancer, pain and allergy."

Knocking on the doors of biotechs
As one of the co-founders of AlcheraBio 15 years ago, Dr Rhodes tried selling the concept of animal health to biotechnology businesses rooted in the human health sector. She was met by a wall of indifference.

"There were a lot of good drugs and cutting edge science at the biotech companies," Dr Rhodes explained. "We went knocking on the doors of the companies that had molecules that clearly had animal applications and told them they could apply their drugs to dogs and cats – we showed them the business opportunity.

"Most companies weren't interested at all. They thought we were out of our minds."

Dr Rhodes said there were four main barriers to the acceptance of animal health as a viable revenue-earning possibility for human biotechs.

Firstly, she said many companies simply did not understand the potential market for drugs in the animal health space, as well as the regulating system governing veterinary medicines. Secondly, biotechs were dubious of the risks posed by taking their human drug candidates through safety and clinical studies in animals – as working on veterinary applications was a distraction to their core work but more importantly, because they were fearful that any adverse effects seen in animal studies might negatively impact their human drug development.

The third drawback in AlcheraBio's eyes was a lack of knowledge in the biotech industry of the pricing model in animal health.

The final hurdle in the way of the human-to-animal crossover was a stigma on the side of the biotechs when working in veterinary medicine.

"Companies told us that if they took their drug to the vet space then they were deemed a failure for human health applications," Dr Rhodes said. "They were afraid to be seen as scraping the bottom of the barrel."

Despite this resistance, AlcheaBio was able to broker its firs deal. In 2004, it helped Massachusetts firm TransForm Pharmaceuticals exclusively license its proprietary formulation of an anesthetic for veterinary use to Fort Dodge Animal Health. This was a precursor to similar transactions that would fuel the discovery of new chemical entities for the animal health sector some 10 years later.

However, this deal was an island in a sea of refusals.

"The whole idea just didn't work," said Dr Rhodes, who also noted a harsh scarcity of venture capital firms interested in animal health at the time – there was little capital available with Bay City Capital one of the only sources of funding for the industry. So AlcheraBio began morphing from a consultancy and business development entity into a contract research organization running large-scale clinical trials for animal health companies.

Enter Aratana
Then several years down the line, Aratana Therapeutics entered the picture with a strategy very similar to AlcheraBio's plan from the previous decade. Dr Rhodes began her career at Aratana as founding chief executive.

She said: "The time was right. Investors were interested in animal health and the biotech industry was doing poorly in terms of return on investment at the time. Aratana shifted everything. Suddenly, animal health became a legitimate opportunity and the boards of directors at biotech companies began to look at what Aratana did with RaQualia – a licensing deal for two new chemical entities to be developed for dog and cat applications – as a potential source of additional revenue to fuel their expensive human drug development programs.

"Aratana opened the floodgates – people saw the value that was there. There was a great deal of initial skepticism but Aratana delivered on its promise to investors. As far as I know, no company has ever got three US approvals in one year for new chemical entities in pet therapeutics before Aratana. There were sceptics but you have to remember Aratana was the first real start-up in animal health with new drugs from human biotech and a large enough budget to develop them. There just wasn't many people who had tried this before and I understand the skepticism."

"Some of the big companies have R&D teams with more than 150 people. That's what people thought it took to bring new chemical entities to market through the FDA, but you don't, you need an 'A' team who know what they're doing and is willing to take risks. That's what we did at Aratana."

Dr Rhodes said a balanced and knowledgeable management team is vital to the success of any young firm. Although she warned that putting together a team of star people is no easy task.

"There is a dearth of talented animal health people willing to leave Big Pharma to join start-up companies," she said. "It was hard to put the Aratana team together but now people will hopefully see the risk of leaving a job at Big Pharma paid off."

Dr Rhodes said she felt it is easier to innovate at smaller companies – she believes there will be more start-ups arriving in the animal health space who want to emulate the success from firms such as Aratana.

However, it is not just the smaller firms contributing to animal health's new wave of innovation. In 2015, industry leader Zoetis bagged a conditional license for its canine atopic dermatitis immunotherapeutic – its first license from the USDA for a monoclonal antibody.

Dr Rhodes commented: "Hopefully, companies will say to themselves 'If Zoetis did it and Aratana did it, why can't we do it?'

"But bringing innovation to animal health is like turning the Titanic. Some of these innovations are high-risk and there definitely is a fear of failure at some companies, so most make the easy choice and say no to innovation. There is much less risk in life cycle management of existing products. That's one of the barriers to innovation we're facing."

Where next for innovation?
Dr Rhodes said the recent stand-out new products in animal health have been three exciting new chemical entities: Zoetis' Apoquel canine dermatological treatment and Aratana's Entyce appetite stimulant for dogs and Galliprant for osteoarthritis pain and inflammation for dogs. She said all three of these products introduced new mechanisms of action to animal health and treated severe unmet or underserved problems amongst dogs.

But what of future innovation?

"There are exciting new chemical entities being developed for human uses, and a long list of therapeutic areas for cats and dogs that are underserved compared to human medicine," she said.

"Such areas as anemia, diabetes, and of course, cancer where extensive research is ongoing for humans, will be fertile territories for new products for pet therapeutics. Biotech companies should have more confidence in licensing their molecules to animal health, given the clear proof that this can create value for them, both from the licensing revenue, but also for validation of the clinical value of their compounds, not in animal models, but in clinical veterinary medicine."

Dr Rhodes said a key area that is calling out for innovation from animal health companies is non-surgical contraception.

"Suprelorin, the innovative 6-12-month contraceptive implant developed by Peptech Animal Health, and acquired by Virbac, is reportedly selling very well in the EU, Australia and New Zealand.

"Non-surgical contraception could be the next really big thing," she stated. "It's similar to the flea and tick market – almost every dog and cat is a candidate for treatment. If a gene therapy can be used to deliver a contraceptive lasting a lifetime, then that could be a gamechanger. It would revolutionize the animal health industry in the way ivermectin or fipronil changed pet ownership and made companion animals part of the family."

In addition, she commented on what a valuable tool a long acting non-surgical contraceptive would be for world-wide population control of dogs and cats.

According to the Alliance for Contraception in Cats and Dogs, 78% and 88% of dogs and cats are neutered in the US respectively – the annual cost of performing surgical sterilization procedures in the country is $2.9 billion."