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USC Researcher Wins $3.5M NCI RAID Award to Fund Spinout Pivotal Bioscience's Cancer Rx

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By Ben Butkus

University of Southern California researcher Alan Epstein has received an award from the National Cancer Institute that could be worth as much as $3.5 million to support the preclinical development of a modified cancer immunotherapy invented in his lab, USC said last week.

The Rapid Access to Intervention Development, or RAID, award is Epstein's second since 2004, though for a different molecule.

Like the first award, the most recent grant will help USC spinout company Pivotal Biosciences, which Epstein co-founded in 2004, push the immunotherapy through to clinical trials — a task that would otherwise be near impossible for the company due to a dearth of private funding caused by the recent financial meltdown, company officials said this week.

The most recent RAID award will support preclinical development of an interleukin-2 cytokine immunotherapy analog discovered by Epstein, a professor of pathology at the USC Keck School of Medicine.

"Basically this was a way for us to bridge this funding gap," Epstein told BTW last week. "Unfortunately [since] we set up [Pivotal Biosciences] to develop this therapy, the money dried up completely. So it's been sitting with Pivotal, which continues to try and raise money and wait for the markets to turn around."

Epstein's perception of the funding gap, often called the "valley of death," is a lack of funding for early-stage cancer therapies. "The big companies want to pick up products later and later [in their development]," he said. "Eventually that's going to turn around because they're going to run out of products in late stage III to pick up. But to attract a partner before you've got any sort of clinical information is really hard."

Pivotal did receive approximately $1.5 million in private investment when it was founded in 2004, but most of that went toward legal fees and other startup expenses, Epstein said. "I think about $100,000 of that went toward work in my lab," he said. "Most of this work has been funded by grants."

Under the most recent RAID award, Epstein will receive access to drug-development resources at NCI's Developmental Therapeutics Program. These resources could include compound synthesis; in vivo testing; pharmacokinetics; and toxicology — "anything that will move the compound forward toward an investigational new drug application," Richard Camalier, program coordinator for the NCI RAID program, told BTW.

No cash actually changes hands, and Epstein's lab will be held to certain development milestones in order to reap the full benefit of the award, which, if it fulfills all of Epstein's requests, could max out at about $3.5 million, according to Camalier.

NCI provides these resources through in-house capabilities or existing contracts. "Someone's got to spend this money," Dmitri Villard, CEO of Pivotal Biosciences, told BTW. "If we were spending it, we would be contracting with outside companies such as CROs to do what NCI is doing on our behalf."

Epstein said that the toxicology and GMP manufacture are particularly expensive and difficult for a university or small company to afford. "Without those you can't go into patients," he said.

The goal of the project is to demonstrate that Epstein's analog of IL-2 — a cytokine that has successfully been used to treat melanoma and metastatic renal cell carcinoma — is less toxic than previously engineered therapies, the use of which has been limited because they can cause a condition known as capillary leak syndrome.

"We discovered the exact area of the molecule that causes vasopermeability, which is leakiness in vessels that causes toxicity in patients," Epstein said. "We have made a point mutation to the molecule to inhibit that mechanism completely. We're cautiously optimistic that it will still keep its therapeutic value."

Epstein also received a RAID award from NCI in 2004. Though its exact value has not been disclosed, it helped will support non-GMP manufacture, assay development, and early toxicology studies for LEC/NHS76, another immunological reagent developed by Epstein that fuses a human monoclonal antibody targeting necrotic regions of tumors with the human chemokine LEC.

NCI was "a little more cautious with that and decided to go just part of the way with the first grant" Epstein said, adding that his lab plans to resubmit an application for a follow-on RAID award in August "to take this to the next step of toxicology and GMP manufacturing."

NCI's Camalier said that just a handful of investigators have received one or more RAID awards, and that fewer than 140 projects have been approved from some 425 applications since the program was founded in 1988. However, the agency is willing to fund the same researcher more than once if necessary. "We're trying to translate good ideas from academia into Phase I trials," he said.

Pivotal stands to directly reap any benefits that derive from both awards. Though RAID awards must be made to an academic researcher, there are no provisions barring the researcher or his institution from licensing the technology out to a private entity.

To wit, in exchange for the commercial rights to the IL-2 analog and LEC/NHS76, USC took an undisclosed equity stake in the company. As such, the school also stands to benefit if the RAID work proves fruitful.

"The RAID program is a fabulous way of bridging that funding gap," Pivotal's Villard said. "In this instance, Dr. Epstein applied for the program, but Pivotal is the beneficiary of it.

When the work is completed, Villard said, NCI will help the company write an IND application to the US Food and Drug Administration, after which it will be Pivotal's responsibility to fund the Phase I clinical trials. "But by then we'll have all of this great work done; we'll have great material, all the toxicity studies, and the IND," Villard said.

Should the molecule make it to Phase I trials, Pivotal is hoping that investors or larger development partners may be more willing to bet on the therapy, especially considering the fact that it will have been developed using non-dilutive funding.

"I think it's clear that a company that has non-dilutive support like this to advance its programs provides a tremendous amount of incentive to investors," Villard said. "The value that's attributed to this RAID award is directly to the benefit of our company without having to sell one share of stock."

He added that since Epstein received the RAID award, Pivotal has received inquiries from "a few VCs that are interested in what we're doing," Villard said. "Who knows? This may open the door to some additional funding now."

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