August 26, 2015 9:11am EDT
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MIAMI--(BUSINESS WIRE)--
OPKO Health, Inc. (NYSE:OPK) today released the following open
letter from Phillip Frost, M.D., its Chairman and Chief Executive
Dear Shareholder,
I want to take the occasion of OPKO’s recently announced acquisition of
Bio-Reference Laboratories (Bio-Reference) to present a general overview
of the company’s present activities. They are many and while, in some
respects, they differ greatly from one another, all share a common
theme. They all deal with products for large markets in which OPKO has
an opportunity to be a leader, and all have potential for long-term
growth. We hope to achieve this growth by providing an ever increasing
spectrum of medicines and tests, some new and novel, others of already
established value, to help physicians provide better care for their
patients.
Diagnostics
The strategy behind the recent Bio-Reference acquisition is twofold.
First, it is a business whose revenues and profits have grown
consistently since its launch by Dr. Marc Grodman in the 1980’s,
primarily through organic growth, to become the third largest full
service reference laboratory in the United States. It has built a
reputation of innovation with recognized franchises in women’s health,
cancer and, more recently, genetics, helping physicians worldwide to
diagnose rare genetic disorders and to identify special features of a
patient’s genetic material to select more effective chemotherapy.
Second, it provides an infrastructure for marketing and sales that
reaches approximately 10 million patients a year.
Reimbursement is an important factor for the success of diagnostic
products and Bio-Reference has a large team of experts who can
complement our efforts to be sure that payors recognize the value of our
tests for reimbursement purposes.
4KScore® Test. Because the PSA test
is associated with frequent false positive results, many men with
elevated PSA values are subjected to unnecessary prostate biopsies and,
if an indolent, non-life threatening form of prostate cancer is
discovered, may be subjected to over treatment. The 4Kscore test is a
blood test used to identify men who are at risk for aggressive prostate
cancer and are most likely to benefit from a prostate biopsy and
treatment, while avoiding prostate biopsies in men who are at low risk
of having aggressive disease. Men determined to be at low risk by the
4Kscore have a 98-99% chance to be metastasis free after 20 years of
long-term follow up while being monitored. The 4Kscore test has been
extensively studied and validated with the results of 12 prospective and
retrospective studies involving over 22,000 patients from both the
United States and Europe published in peer-reviewed journals.
The 4Kscore test is now recommended in the 2015 National Comprehensive
Cancer Network (NCCN) Prostate Cancer Early Detection Guidelines for men
with an elevated PSA and/or abnormal digital rectal examination who
require additional information about their risk for high-grade,
aggressive prostate cancer prior to performing a first prostate biopsy
or a repeat biopsy after a prior negative prostate biopsy.
The reduced costs of eliminating approximately 40% of prostate biopsies
resulting from the use of the 4Kscore test to confirm elevated PSA tests
has been estimated at $1 billion and, if the costs of downstream
treatment interventions are also considered, there could be $2.5 billion
additional annual savings to the U.S. health care system.
The OPKO marketing and sales efforts have so far focused primarily on
urologists. Over 25% of U.S. urologists who evaluate men for prostate
cancer have now ordered the 4Kscore test to help further evaluate a PSA
test prior to prostate biopsy. As the 4Kscore test is intended to be
used in situations in which a PSA result is suspicious for cancer, we
can now, with the much larger Bio-Reference sales force, expand our
marketing efforts to primary care physicians and internists who are
responsible for prostate cancer screening and who order 93% of all PSA
tests. The groundwork for reimbursement for the 4Kscore test has been
put into place. We now have an active CPT code for the test, the test is
included in the NCCN guidelines, and we are billing Medicare and
commercial payors.
Among the many compelling reasons for the acquisition, we believe
Bio-Reference will greatly accelerate the commercial success of the
4Kscore test. Bio-Reference has the capacity to dramatically increase
the number of 4Kscore tests done each day. They provide national
marketing and distribution with a large client services group and a
large dedicated sales force that already have strong relationships with
primary care physicians. Bio-Reference has over 1,200 phlebotomists and
180 blood-draw centers around the country that can facilitate patient
access. Finally, Bio-Reference has robust billing operations and a
seasoned national reimbursement team that participates in almost every
major commercial insurance plan. Bio-Reference has the expertise and
extensive infrastructure to help make the 4Kscore test the new standard
for identifying aggressive prostate cancer in men with a suspicious PSA.
Claros Point-of-Care Systems. We
have been working on perfecting this point-of-care technology prior to
product submission for regulatory approval and the test for PSA is our
most advanced candidate. This test, short term, is most important as it
complements our plans to expand the utilization of the 4Kscore test. The
several hundred man sales force at Bio-Reference who regularly call on
primary care physicians and specialists will sell the PSA test and, when
a PSA result raises suspicion, the physician can then order a 4Kscore
test to help formulate a decision to refer the patient to an urologist.
Following approval of the PSA test, we intend to continue the
development and approval of other important diagnostic panels utilizing
the Claros 1 platform, including panels focused on renal and men’s and
women’s health, to further expand the menu of laboratory tests and
services performed by Bio-Reference.
Renal Disease Products
Rayaldee™ . In late July, we
announced that the U.S. Food and Drug Administration (FDA) had accepted
our New Drug Application (NDA) for Rayaldee™ for full review and set a
Prescription Drug User Fee Act (PDUFA) target date of March 29, 2016. As
previously reported, this NDA is supported by data from two randomized,
double-blind, placebo-controlled studies and one open-label extension
study conducted in the targeted patient population at a total of 105
U.S. sites. These studies met all primary efficacy and safety endpoints.
Rayaldee has been developed for the prevention and treatment of
secondary hyperparathyroidism (SHPT) in patients with stage 3 or 4
chronic kidney disease (CKD) and vitamin D insufficiency. Rayaldee is a
proprietary modified-release prohormone formulation designed to
gradually correct vitamin D insufficiency while avoiding upregulation of
an enzyme which breaks down vitamin D and limits its desired serum
parathyroid hormone lowering effect. Gradual elevation of serum total
25-hydroxyvitamin D is intended to prevent excessive elevation of serum
calcium and related vascular and renal calcification which contributes
heavily to morbidity and mortality in CKD patients. No previous product
has been approved for this indication. CKD afflicts over 26 million
people in the U.S., including more than 20 million patients with
moderate (stages 3 or 4) and severe (stage 5) forms. I believe that
Rayaldee will be warmly welcomed by healthcare professionals who care
for CKD patients.
Fermagate. Patients with chronic
kidney disease also frequently have elevated levels of phosphorus in
their blood as a result of decreased kidney excretion capacity. As
excess blood phosphorus tends to deposit in soft tissues such as blood
vessels, making them more rigid, it is important to normalize blood
phosphorus levels. Phosphorus binders are commonly administered orally
to bind dietary phosphorus in the GI tract to limit absorption, but a
frequent side effect of these “binders” is diarrhea. Our Fermagate is a
new “binder” which has successfully completed Phase 2 clinical trials,
and has demonstrated a lower incidence of diarrhea. We are currently
preparing for Phase 3 trials in the U.S., but are first studying
interesting characteristics of Fermagate which may offer additional
advantages.
Rolapitant is an NK-1
inhibitor developed to treat nausea and vomiting related to
cancer chemotherapy. This was a Phase 3 ready drug obtained from
Schering as part of its merger with Merck. After a year of evaluation,
we licensed the product to Tesaro, Inc., who successfully completed
three Phase 3 studies, meeting all safety and efficacy endpoints, and
then submitted an NDA to the FDA. This is expected to be approved early
in September 2015, triggering milestone and double digit royalty
payments to us. The highly experienced Tesaro team anticipates eventual
annual sales of more than $1 billion.
OPKO Biologics
OPKO Biologics , a biopharmaceutical
company focused on developing long-acting versions of validated and
known therapeutic peptides and proteins, represents the former Prolor
Biologics, acquired by us in 2013. Its platform technology involves a
carboxyl terminal peptide (CTP) added to a peptide or protein to prolong
its biologic half-life.
Human Growth Hormone. The most
advanced CTP product under development is a long-acting version of human
growth hormone, known as hGH-CTP, for the long-term treatment of
children with growth failure due to inadequate secretion of endogenous
growth hormone, and for the treatment of hGH deficient adults.
Presently, sales of the hGH products injected daily are approximately
$3.0 billion worldwide, growing 5% annually.
In December 2014, we entered into an exclusive worldwide agreement with
Pfizer Inc. (“Pfizer”) for the development and commercialization of this
hGH-CTP product. In connection with the collaboration, we received
up-front payments of $295 million and will receive an additional $275
million upon achievement of development-related milestones. In addition,
we will receive initial royalty payments upon the commercialization of
hGH-CTP for adult growth hormone deficiency (GHD). Upon the launch of
hGH-CTP for pediatric GHD, the royalties will transition to gross profit
sharing among all indications for both hGH-CTP and Pfizer's Genotropin®.
We will lead clinical development and will be responsible for funding
the development programs for adult and pediatric GHD and growth failure
in children born small for gestational age (SGA). Pfizer will be
responsible for all development costs for additional indications as well
as all post-marketing studies. In addition, Pfizer will fund the
commercialization activities for all indications and lead the
manufacturing activities covered by the global development plan.
We have completed enrollment in the pivotal Phase 3 study in adults and
Pfizer plans to file a Biological License Application (BLA) and Market
Authorization Application (MAA) as soon as the 12-month treatment period
and data compilation are completed.
All 52 eligible patients in our Phase 2 pediatric study have completed
the 12 month mandatory treatment period, the primary time point for
efficacy to be evaluated. Preliminary efficacy and safety data at
12-months demonstrate favorable dose responses with all three doses of
once weekly injections of hGH-CTP; the safety profile and real time
12-month growth rates are comparable to the active control group given
daily Genotropin® injections. It is worth noting that over 90% of the
patients have elected to continue receiving the treatment of our weekly
hGH-CTP in the open-label phase of the pediatric Phase 2 trial; some for
as long as two years, which we believe is an indication of a high
acceptance rate by patients. This long-term outcome data provides the
basis for the development of a single pivotal Phase 3 study design which
has been presented to the FDA, and are in discussions with the EMA
(Europe) and PMDA (Japan).
Phase 3 pediatric study activities with our partner Pfizer have
commenced and we expect to initiate our Phase 3 pediatric study next
year using drug product manufactured by Pfizer
and a pen injection device selected by Pfizer . Utilizing the
same drug supply and source and same pen device in our Phase 3 trial
that will be used in commercializing our product will provide for
smoother regulatory approval, lower costs of goods, greater quality
control and seamless and rapid launch after completion of our Phase 3
study and receipt of regulatory approval. We cannot stress enough the
advantage of having Pfizer as our partner, not only for commercial
penetration, but also for their experience in bringing growth hormone
products to market with their relationships with pediatric
endocrinologists, given their two decades of sales and marketing of
Genotropin®, a leader in the $3.0 billion daily hGH market.
Factor VIIa-CTP is our novel,
long-acting recombinant Factor VIIa for the treatment of hemophilia
patients. It also utilizes CTP technology to extend its biologic
half-life without the use of polymers, encapsulation techniques, or
nanoparticles, all of which have been reported to cause local injection
site reactions or other challenges. Currently, Factor VIIa therapy is
available only as an intravenous formulation which, due to Factor VIIa’s
short half-life, usually requires multiple injections to treat a
bleeding episode. Pre-clinical studies of intravenous and subcutaneous
injections of Factor VII-CTP in hemophilia animal models demonstrated
its prolonged duration of action and significantly increased survival.
Successful subcutaneous injection in human trials will be important to
permit patients to be treated prophylactically rather than in response
to the bleeding events that cause permanent damage to certain tissues
and organs. In February 2015, our IND application was approved by the
FDA to conduct a Phase 2a study of Factor VII-CTP for the intravenous
treatment of bleeding episodes in hemophilia A or B patients with
inhibitors to Factor VIII or Factor IX. We expect to begin dosing
patients as soon as IRB approvals and external laboratory service
contracts are in place. Our Factor VII-CTP has been granted orphan
status in the U.S. and Europe. This market, now dominated by Novo
Nordisk’s NovoSeven® product, which requires frequent injections, enjoys
a market of approximately $1.2 to 1.6 billion a year.
Oyxntomodulin, a naturally occurring
appetite suppressor, is a peptide hormone secreted by the intestine
following food intake. It then induces a feeling of fullness when it
reaches the satiety center in the brain. Oxyntomodulin also activates
the glucagon-like peptide-1 receptor (GLP1R) and glucagon receptor
(GCGR) in the liver. These two effects have been shown to decrease food
intake and body weight and control blood glucose levels in overweight
human volunteers.
The clinical utility of oxyntomodulin has been limited because of its
short biological half-life. We have been developing a long-acting
oxyntomdulin, which consists of the natural
oxyntomodulin molecule linked to a proprietary hydrolysable linker
and a commonly used substance to prolong biological half-life.
Administration of this proprietary product results in the slow release
of the natural oxyntomodulin which
then targets the satiety center in the brain. Our preclinical studies
have shown that a single weekly injection significantly inhibited food
intake, reduced body weight, and reduced cholesterol and glucose levels
in obese, diabetic animal models. We expect to initiate a Phase 1 trial
of our proprietary compound in early 2016.
Early-Stage Products
AntagoNATS Orphan Drug Project. Our
gene up-regulating technology utilizing proprietary designed
oligonucleotides (AntagoNATS), has been shown in animal models to
enhance the expression of mRNAs responsible for the transcription of
certain specific genes into functional proteins. The most advanced
program is CUR-1916 which has been designed to increase the expression
of endogenous SCN1A (sodium channel protein) for the treatment of Dravet
Syndrome. Over 75% of Dravet patients are reported to have mutations of
SCN1A. Dravet Syndrome is an orphan disease for which, other than
symptomatic management with multiple anti-epileptic drugs, there are no
viable treatments for the daily uncontrollable seizures in patients as
young as 3-6 months old. We have created a Dravet mouse model that
carries a human mutation of the SCN1A sequence. Dravet mice have
symptoms that mirror Dravet patients; high frequency of severe seizures,
low threshold of body temperature elevation to seizure induction, and
early death. We have successfully demonstrated that intrathecal
injection of CUR-1916 significantly reduced seizure frequency and
severity and raised the body temperature threshold to heat induced
seizures in Dravet mice. Once the required toxicity studies in animals
are completed, we will submit an IND application and request for orphan
designation to the FDA.
NK-1 Inhibitor for Pruritus. One of
the assets we acquired from Schering (now Merck), as part of its
divestiture requirements, in addition to Rolapitant, which was
subsequently licensed to Tesaro, was another NK-1 inhibitor molecule
which had completed human safety, Phase 1 and Phase 2 studies. While
Schering’s intention was to develop this drug for other indications, new
data about this specific class of compounds indicate that it is very
likely to be effective to treat pruritus (itching) due to various
causes. Our compound is long acting with possible once weekly oral
dosing and other advantages such as low potential for drug-drug
interactions compared to other drugs in its category. We believe that
this project could result in a product for which there is a great need,
there being no good drug for physicians to use presently. We will be
discussing this project more as plans develop.
JNK Inhibitor. We have been
supporting various projects at The Scripps Research Institute for
several years and one, a JNK inhibitor, has been shown, after studying
hundreds of com
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