The CEO’s Blog — Garo H. Armen
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Antigenics Earnings Call
This morning we announced our second quarter 2008 financial results. Enclosed is my script from the call outlining the company’s recent activities and the progress being made around our core technologies.
In April of this year, Russia approved Oncophage for the treatment of non-metastatic renal cell carcinoma patients at intermediate-risk of disease recurrence. These are patients who have approximately a 40% chance of relapse after the surgical removal of their tumor. This particular patient group that was treated with Oncophage showed nearly a 50% decrease in the return of cancer in comparison to patients who were not treated with Oncophage. This means that intermediate risk patients in Russia – who normally have a significant risk of their cancer coming back in the form of metastatic disease – can now, based on the approval of Oncophage in Russia, expect to lower this risk substantially. As you are aware, once patients progress to metastatic disease, even the newly approved treatments cannot reverse the course of metastatic RCC.
Since the Russian approval, we have focused the bulk of our efforts on the launch of Oncophage in Russia. I can report that significant progress has been made and that we are progressing towards commercialization before the end of the year. In preparation for launch, we are working with a number of prestigious cancer treatment centers in Moscow and other major Russian cities, which have been identified as centers of excellence. These centers will be some of the first to make Oncophage available to patients. As part of these prelaunch activities we are training working groups comprised of surgeons, pathologists, coordinators and uro-oncologists, conducting general marketing activities throughout Russia and working on other logistical issues that are necessary for launch.
We have organized and participated in presentations and symposia at important scientific and medical meetings within Russia that focus on urology and oncology. At these meetings we have presented our data, and conducted focus groups with some of the most prominent key opinion leaders in Russia. One of our goals is to build on the groundswell of support for Oncophage in hopes that doctors will better understand the beneficial impact that Oncophage could have on their patients.
We also continue to work with the FDA on a license for the export of the finished Oncophage product to Russia after its manufacture at our Lexington, Massachusetts facility. So far based on our deliberations, the FDA has not identified any issues regarding the content of our application; however, the bureaucratic workings of the agency remain a challenge and we are working with them to move forward as expeditiously as possible.
While most of our team is focused on the operational and marketing efforts in Russia, our regulatory group is working diligently on our efforts in the European Union, where we are on track to submit a marketing authorization application that will be filed under the centralized review procedure. We have already completed a number of steps in this process and our target filing date is before the end of 2008. As a reminder, our filing will be under the conditional approval pathway, as we believe this mechanism is ideally suited for promising technologies such as Oncophage.
Beyond Russia and Europe, we are reviewing the possibility of making additional regulatory filings in other countries. These countries include additional BRIC countries – Brazil, India and China. Since our Russian approval, big and small companies located in these markets have inquired about the possibility of taking Oncophage to market there. Additionally, we are in the very early stages of contemplating a filing in the United States. We have recently met with a number of very high profile key opinion leaders in the field of oncology here in the US, including at the recent ASCO annual meeting in Chicago. Their feedback has been encouraging, and a consensus has emerged that we should consider a BLA filing with the FDA. While we are not quite ready to pull the trigger on this, we will consider and further evaluate such a step very carefully.
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I will now turn briefly to the rest of our pipeline, once again focusing on recent progress. Our licensees, GSK, Elan and Acambis, are moving forward with a multitude of development programs containing our vaccine adjuvant QS-21. In total, there are 16 clinical stage vaccines currently under evaluation that contain our QS-21 vaccine adjuvant. These vaccines cover a number of indications including melanoma, non-small cell lung cancer, malaria and influenza.
Most recently, GlaxoSmithKline presented Phase 2 data from their MAGE3 antigen specific immunotherapy for metastatic melanoma that contains QS-21. The data they presented indicated that a number of clinical responses and a high proportion of immune responses to the vaccine were seen in this historically very difficult-to-treat patient population. This most recent positive data adds to the abundance of evidence from a number of studies concluded in just the past 12 months regarding the immunostimulatory effects and clinically significant outcomes from various vaccines containing QS-21. This enthusiasm was reflected in comments made just yesterday by the newly appointed CEO of GSK (Andrew Witty) who said “one of [GSK’s] most promising new areas of drug research is therapeutic vaccines.”
Now turning to our Phase 1 programs, we are in the process of wrapping up the initial studies of AG-707 and Aroplatin. We are evaluating blood samples collected from the genital herpes patients who were treated in the AG-707 trial to see if an immune response occurred against the viral antigens contained in this off-the-shelf heat shock protein-based vaccine. We expect to have data from this trial by the end of this year.
In our Aroplatin Phase 1 study, we have reached the maximum tolerated dose of Aroplatin in solid tumors and B cell lymphomas and are reviewing these data so that we may determine the path forward for this compound.
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Oncophage is undoubtedly our primary focus and the consumer of most of our resources and energy at the moment. We believe that Oncophage is an exquisitely attractive asset with meaningful near-term but also significant long-term potential. We are working very diligently and deliberately on unlocking this potential, currently in Russia and subsequently in Europe where the economic opportunity of this product is abundantly apparent. We will also proceed with exploring additional filing and commercial opportunities where we might be able to make Oncophage available to patients in the near term. In addition to these efforts in kidney cancer, we are committed to the expansion of this broadly applicable product into new indications. Development is ongoing in glioma – as the Phase 2 study continues to enroll – and we are investigating a number of additional clinical opportunities. We are also confident that the QS-21 pipeline will continue to mature in the hands of our licensees, and look forward to determining the next steps for our other pipeline products.
In closing, I want to point out that the fundamentals of our company have strengthened since the start of the year and continue to strengthen as we move closer to unlocking the significant value associated with Oncophage, not to mention the low-risk, yet enormous upside potential of the QS-21 asset. I look forward to updating you soon as we make further progress. I hope that this update has been helpful and I will now open up the call to any questions you might have.
This communication contains forward-looking statements, including but not limited to, statements regarding the company’s financial position; the current and future development, regulatory, and commercialization activities and timelines for Oncophage, including our strategies for commercialization in Russia; the decision and timing for filing a marketing application for conditional authorization in Europe; the potential for filing in other territories; and present and future clinical trials and product candidate developments by the company and its licensees, including Antigenics’ QS-21 licensees. These risks and uncertainties include, among others, the risk of the inability of the company to successfully implement a product launch strategy for Oncophage in Russia; the potential failure to operate within the company’s targeted burn rate and identify additional means of cost savings; decisions of regulatory authorities, including the FDA with respect to the export license for Russia, decisions of doctors, patients, and our collaborative partners and licensees; geopolitical developments; unfavorable data; retention of key employees; and the factors described under the Risk Factors Section of our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission for the period ended March 31, 2008. Antigenics cautions investors that we do not expect to generate significant revenue from sales of Oncophage in Russia for several months, if ever. The amount of revenue we generate will depend on, among other things, securing reimbursement mechanisms and physician and patient assessment of the benefits and cost-effectiveness of Oncophage. Antigenics also cautions investors not to place considerable reliance on the forward-looking statements contained in this call. These statements speak only as of the date of this call, and Antigenics undertakes no obligation to update or revise the statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Antigenics’ business is subject to substantial risks and uncertainties, including those identified above. When evaluating Antigenics’ business and securities, investors should give careful consideration to these risks and uncertainties..
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