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Circadian Getting Into Its Rhythm

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Circadian mounted one of the more impressive capital raisings of any Australian biotech late last year, raising $17.4 million, more than twice its then market capitalisation. That more than anything gives an idea of how its IP portfolio is regarded.

Circadian Technologies Limited (CIR) is one of the oldest of Australia’s life sciences companies: it first listed in 1991, as just the second company listed on the old Second Board of the then Australian Stock Exchange. In its almost quarter-century as a listed stock, Circadian has had several different incarnations, but its current set of activities has outgrown the name.

As the name suggests, Circadian started out in sleep science: it was formed to commercialise research at Melbourne’s Monash University into the effect of the hormone melatonin on jetlag and sleep disorders. The melatonin treatment was licensed to pharma giant Eli Lilly & Co. in 1994: NASA adopted the treatment, because it helped astronauts deal with the effects of space travel.

After that, Circadian became a biotech “incubator,” launching companies such as cellular neuroscience specialist Axon Instruments, miniaturised medical microscope developer Optiscan Imaging, metabolic therapies developer Metabolic Pharmaceuticals, drug developer Antisense Therapies and anti-infective medicine company Avexa.

But in 2005, the company returned to the drug development business, focusing on anti-cancer therapy. Circadian bought a comprehensive suite of intellectual property in the anti-angiogenesis field. Angiogenesis is the growth of new blood vessels: tumour growth is caused by stimulation of new blood vessel growth by certain proteins. Blocking these proteins – that is, anti-angiogenesis – curtails blood vessel growth, leading to tumour starvation.

The intellectual property Circadian acquired covered antibodies to the key angiogenic protein targets VEGF-C, VEGF-D and VEGFR-3. These cover Vascular Endothelial Growth Factors (VEGF) C and D, and R3 targets. The IP was originally acquired in a joint venture with the Ludwig Institute for Cancer Research and Licentia (the commercial arm of the University of Helsinki), the original owners of the IP. By 2008, Circadian had moved to full ownership of the IP portfolio, with the Ludwig Institute and Licentia remaining as substantial shareholders.

Circadian’s lead candidate molecule is OPT-302, a soluble form of VEGFR-3 that is used for the treatment of ‘wet’ age-related macular degeneration (wet AMD), an incurable eye disease and the leading cause of blindness in the Western world. (The macula sits at the very centre of the retina, and is responsible for our detailed vision and for the ability to read, distinguish faces, drive a car and any other activities that require fine vision.)

OPT-302 may be used as a stand-alone therapy or in combination with existing VEGF-A inhibitors in patients with wet AMD. Circadian’s strategy is to achieve a more complete blockage of the VEGF family of proteins, and thus more effectively block the abnormal blood vessel growth and vessel leakage that occurs at the back of the eye in people with wet AMD. By inhibiting these processes, the objective is to improve patients' vision.

Circadian is testing OPT-302 as a combination therapy. In July, Circadian started a Phase I study of OPT-302, in conjunction with Novartis’ treatment Lucentis. This follows pre-clinical studies that showed that combining OPT-302 with the Bayer treatment Eylea improved patient outcomes versus using Eylea alone. While sales of Lucentis and Eylea generate billions of dollars in sales each year (Eylea’s sales in 2014 were US$1.7 billion), the drugs need to be injected every four to eight weeks, and more than half of the patients receiving these drugs do not achieve significant vision gain.

There is a huge market for VEGF-A inhibitors such as Lucentis, Eylea and Avastin: the latter, the first targeted anti-angiogenesis therapy to become a drug, achieved the fastest sales growth of any drug, racing to US$10 billion global sales in its first five years, to 2009. But Circadian’s edge is that OPT-302 also inhibits both VEGF-C and VEGF-D, and can thus be put to work with a VEGF-A inhibitor, for a complete blockage. That is what has the biotech grapevine excited: there are no VEGF-C and VEGF-D inhibitors currently on the market.

In recognition of its new ophthalmology focus, Circadian is asking its shareholders at the annual general meeting later this month to change the company’s name to Opthea.

The Phase I trial is using patients with wet AMD who have shown a sub-optimal response to existing VEGF-A therapies, as well as “treatment-naive” patients – which means they have the illness, but have never been treated for it. The benefit of recruiting treatment-naive patients is that a clearer result of the drug treatment can be achieved.

Results from the Phase I study are expected toward the end of the first quarter of 2016. Circadian is currently fully funded to the end of Phase IIb study results, which are expected by the end of 2017. But depending on data flow from the Phase I study, it is likely that the biotech grapevine will bring specialist funds – if not larger companies – to invest in Circadian.

Circadian had also licensed its anti-lymphatic antibody-based drug IMC-3C5, also targeting VEGFR-3, to Eli Lilly, to test in a Phase 1 clinical trial in cancer patients in the US. Last month, the company announced that Lilly would discontinue development of IMC-3C5, and as a result, Lilly would terminate its exclusive licence to Circadian’s intellectual property covering therapeutic use of antibodies to VEGFR-3. While this sounds negative, Circadian says the return of IP rights covering the use of VEGFR-3 antibodies for all fields strengthens Circadian’s intellectual property position, particularly in relation to the OPT-302 program for the treatment of wet AMD.

With Lilly having advanced OPT-302 through a Phase 1 clinical study for cancer patients, Circadian says bringing the IP back in-house provides it with greater flexibility for negotiation of any future IP licences that are more aligned with its revised strategy to focus on ophthalmology indications. But cancer applications of its IP portfolio remain very much live.

Circadian’s non-core assets include VGX-100, a neutralising monoclonal antibody for VEGF-C that recently completed enrolment in a Ph1a/1b clinical study in advanced cancer patients. The company says this Phase II-ready asset is “well-positioned for alternative commercialisation opportunities including out-licensing or acquisition.”VGX-100 is being developed by Circadian’s wholly owned subsidiary Ceres Oncology.

In addition, the company develops CUPGUIDE, a diagnostic test, which is used in the treatment of cancers of unknown primary; and VEGF-D LAM Diagnostic, an ELISA (enzyme-linked immuno-sorbent assay) based diagnostic test to measure circulating levels of VEGF-D; and also offers VEGF-C/VEGF-D reagents under the Vegenics brand name. Further, it develops novel forms of insulin through DiMiTech Platform, which is used for the treatment of diabetes.

Circadian mounted one of the more impressive capital raisings of any Australian biotech late last year, raising $17.4 million, more than twice its then market capitalisation. That more than anything gives an idea of how its IP portfolio is regarded. Now capitalised at $43 million, the soon-to-be Opthea has moved from 14 cents mid-year to 28.5 cents. This is an impressive biotech to put firmly on the radar screen.

View More Articles By James Dunn

James was founding editor of Shares magazine, and oversaw one of the most successful magazine launches in Australia. He has also written for BRW, Personal Investor, The Age and Management Today, and was subsequently personal investment editor at The Australian and editor of financial website, investorweb.com.au



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