chief executive officer's review
Summary of chief executive officer's review
- Our strong cash balance and reduced annual expenditure, as a result of the Company restructuring, places Renovo in a good position to develop our pipeline to generate significant shareholder value.
Renovo continues to make significant progress with its pipeline of products for the reduction of scarring and stimulation of tissue regeneration: Juvista, Adaprev, Prevascar, Juvidex and RP57. External recognition of the quality of our programmes is reflected in the publication of our first Juvista clinical trial results in The Lancet and a competitive award to progress RP57 from the Technology Strategy Board's Regenerative Medicine competition.
Overview
Renovo is a biopharmaceutical product company and a leader in the discovery and development of products to improve tissue repair/regeneration and the appearance of scars.
Juvista (INN: Avotermin – an intradermal injectable solution of Transforming Growth Factor Beta 3 (TGFß3)), Renovo’s lead drug for the improvement of scar appearance in the skin, has been generally well tolerated by around 1,500 human subjects and has demonstrated statistically significant efficacy data in eight Phase 2 double-blind, placebo-controlled efficacy trials in patients and volunteers. The first EU Juvista Phase 3 efficacy trial in scar revision surgery is recruiting in ten countries and is on track to report in the first half of 2011.
Renovo announced in June 2007 that it had signed an exclusive licensing agreement with Shire plc to develop and commercialise Juvista, in every country in the world except the European Union, the rights to which have been retained by Renovo. Under the terms of the deal Renovo has already received an initial upfront payment of US$75 million and an equity investment of US$50 million. Contingent on the successful development and commercialisation of Juvista Renovo will be eligible for further milestone payments of up to US$700 million together with escalating royalties on sales.
Adaprev (an injectable solution of Mannose-6‑Phosphate (M-6-P)) is being developed by Renovo as a Class III medical device for the prevention of adhesions (scar tissue) between tendon and tendon sheath, and the improvement of tendon function in patients undergoing surgical repair of flexor tendons in the hand. The first randomised, double-blind, standard care controlled, clinical trial commenced in November 2009 and is due to report in H1 2011. As clinical development programmes for medical devices tend to be simpler compared to pharmaceuticals, with fewer trials and patients, this will provide Renovo with a faster route to market for Adaprev.
Prevascar (an intradermal injectable solution of human recombinant Interleukin 10) previously reported a statistically significant Phase 2 efficacy trial for the reduction of scarring in the skin. Following improvements in the manufacturing of Prevascar drug substance and product, and identification of a clinical cohort who are predicted (on the basis of a non-drug experimental surgery study) to benefit particularly well from Prevascar’s modulating effect on the wound inflammatory response, Renovo plans to initiate a new proof of concept clinical trial in skin incisions and excisions in African Ancestral Group volunteers in Q2 2010.
Juvidex (topical application of Mannose-6‑Phosphate (M-6-P)) reported statistically significant improvements in pre-specified endpoints of skin appearance and acceleration of healing in a proof of concept clinical trial. Renovo intends to partner Juvidex as a cosmetic ingredient, and is actively seeking a suitable partner to ensure its rapid development and commercialisation.
The development towards the clinic of RP57, a promising pre-clinical candidate pharmaceutical (discovered by Renovo), targeting the Wnt pathway for the reduction of scarring and stimulation of tissue regeneration has been greatly assisted by a financial grant from the Technology Strategy Board (TSB) under its recent Regenerative Medicine competition.
Restructuring
The restructuring of Renovo, announced in September 2009, has been completed with a one third reduction in the number of the Company’s employees and a significant reduction in cash expenditure, such that Renovo is projected to have between £25 million and £30 million cash in hand at the time of reporting of the first Juvista EU Phase 3 trial in H1 2011.
Product pipeline
Juvista
Juvista (INN: Avotermin) is a therapeutic application of human recombinant Transforming Growth Factor Beta 3 (TGFß3). Clinical trials have demonstrated that intradermal injection of Juvista to skin wounds created either by surgical incision or excision, at or shortly after the time of surgery, results in improved subsequent scar appearance. Prophylactic improvement of skin scarring is predicted (by Renovo and analysts) to be a multi-billion Dollar/Euro opportunity in the US and EU markets alone.
Juvista is a first in class pharmaceutical product candidate to address these large potential markets of unmet medical need. Market research funded by Renovo and published during 2009 shows a high rate of patient dissatisfaction with scars from recent surgical procedures regardless of age, race or sex and an appreciation of improvements in scar appearance.
Comprehensive Phase 1/2 clinical trial programme provides valuable information and learning for Phase 3
Renovo has pioneered the development of Juvista as a new drug in the new therapeutic field of skin tissue regeneration/improvement of scar appearance. In order to optimise the design of its Phase 3 trials, Renovo conducted a comprehensive Phase 1 and 2 programme and has reported, in approximately 1,500 human subjects dosed to date a favourable safety profile, and positive, statistically significant, results from eight double-blind, placebo‑controlled trials (1002, 1005, 1007, 1011, 0050, 0036, 1009 and 0042) which demonstrated the efficacy of Juvista in improving scar appearance.
This programme confirmed the advantages of using within‑patient comparisons where drug and placebo are given to anatomically matched wounds of similar lengths.
The results from three statistically significant Juvista trials (1002, 1005 and 0036) for the improvement of skin scarring were published in The Lancet on 11 April 2009 (vol. 373, pages 1264–1274). The publication featured on the front cover of The Lancet, was the subject of a podcast by Prof Mark Ferguson available on the The Lancet website, and was widely reported in the lay press. An editorial commentary on the publication was provided in the same issue of The Lancet by Dr Edward Tredget, Professor of Plastic Surgery at the University of Alberta (The Lancet, vol. 373, pages 1226–1228). Quoting from this independent editorial comment:
“Despite decades of investigation, the development of fibrosis in the skin and other parts of the human body remains incompletely understood, whereas the morbidity of hypertrophic scarring and keloids after traumatic and thermal injury, remains very high…Few, if any, accepted anti-fibrotic drugs or treatments are established to assist patients with these fibroproliferative disorders.”
“The investigators are to be congratulated for successful completion of a well designed and carefully controlled study that used a previously validated outcome measure of clinical significance to a broad range of both patients and observers. Although the investigators have acknowledged their commercial interests in TGFß3, adherence to established standards in this translational investigation and the rigorous nature of the statistical analysis in a well powered series of studies provide strong evidence for the benefits of Avotermin (Juvista) in this setting.”
“With these investigations, Ferguson and colleagues provide substantial optimism for new solutions to difficult fibrotic disorders in the future.”
During the year Renovo reported a randomised, double-blind, within-patient, placebo-controlled Phase 2 study to investigate the safety and efficacy of four doses of Juvista (5, 50, 200 and 500ng per 100µL per linear cm of wound margin) given once following bilateral varicose vein surgery in 156 patients. The trial was a multi-centre European study that took place across a total of 22 sites in four countries.
At the highest dose (500ng per 100µL per linear cm of wound margin administered once) the trial met its primary endpoint (p=0.036), which was a photographic evaluation of the upper groin incision by a lay panel over a time period from week six to month seven post surgery using a visual analogue scale (VAS). Juvista treated scars were scored numerically better using the VAS scale at all time points compared to placebo. The lower doses of Juvista (5, 50 and 200ng per 100µL per linear cm of wound margin) did not achieve statistical significance. The results of this trial are consistent with Renovo’s previous findings that 500ng per 100µL per linear cm of wound margin is the most efficacious dose for Juvista.
In this trial Juvista was given once at the time of surgery. However, other clinical trials (particularly 0036 and 0050) have demonstrated that Juvista’s efficacy can be further improved by twice dosing, at the time of surgery and 24 hours later.
Considered in their totality, the data from the different Phase 2 Juvista trials are consistent, and explain why two trials (1008 and 1010) did not meet their primary endpoints. We now know that both of these Phase 2 trials used sub-optimal doses (neither included 500ng), a sub-optimal dosing regime (once only dosing) and in 1008 a sub-optimal trial design involving scars of different lengths and anatomical locations.
Phase 2 is about exploring and learning and in this respect Renovo believes it has incorporated significant learning into the design and execution of its first pivotal EU Phase 3 efficacy trial so as to increase the chances of a positive result.
First Juvista EU Phase 3 efficacy trial in scar revision surgery on schedule to report H1 2011
Renovo’s first EU Phase 3 trial for Juvista (“Revise”) in scar revision surgery is currently recruiting patients. Scar revision is an excisional procedure performed by Plastic Surgeons and Cosmetic Dermatologists for both patients wanting cosmetic improvements and those with serious disfiguring scars. This trial evaluates two doses (which provided the greatest efficacy in Phase 2) of Juvista (200ng and 500ng per 100µl per linear cm of wound margin) given twice (following wound closure and 24 hours later) to a total of 350 patients in approximately 55 centres, in ten countries: United Kingdom, France, Hungary, Germany, Italy, Poland, Spain, Denmark, Latvia and USA. The protocol design, power calculations and trial endpoints were submitted to, and discussed and agreed in principle with the EMEA as part of its written scientific advice to Renovo. The trial protocol was also granted approval by the regulatory authorities and ethical bodies in all ten countries. A dedicated call centre, advertising campaign and website (www.revisestudy.com) is being used to assist patient recruitment in those countries where they are permitted.
The primary efficacy endpoint of the trial is an assessment of standardised photographs of drug and placebo treated scars from the same patient by an independent clinical expert panel, twelve months following surgery. This improvement is to be measured using the Global Scar Comparison Scale which has been developed and validated by Renovo.
Other secondary endpoints include a patient based assessment of scar improvement, and an on the patient assessment by the investigating surgeon.
Renovo is on track to report data from this trial in H1 2011.
EU "Revise" trial sites
Juvista initial positioning: Prophylatic improvement of disfiguring scars in scar revision surgery
- Highest medical need: prestigious launch indication
- Performed by Plastic/Aesthetic surgeons and Dermatologists
- Build and expand the large potential scar revision market
Scar revision occurs at multiple body sites in all races, males and females and a wide age range (approximately 1 million people per annum in the USA and EU)
Scar revision occurs in all "second" surgeries e.g. caesarean, spinal and laparotomy
Surgeon use will generate safety and efficacy data across all body sites
Wound healing/scarring biology similar irrespective of body site
After initial approval and sales, limited Phase 4 trials to broaden the label to include use in all surgeries (approximately 84 million per annum in the USA and EU)
Keloid pilot trials
Prophylactic reduction of keloid scars presents an additional opportunity for Juvista. Keloid scars develop and grow beyond the margins of the original wound and result from an abnormal deposition of collagen and extracellular matrix. They are more common in coloured skin races, and are often triggered by wounding, burns, bites, acne, surgery and body piercing.
Renovo’s keloid trials are double-blind, within-patient, placebo-controlled randomised trials investigating the safety (after three months) of Juvista (50, 200 or 500ng/100µL/linear cm of wound margin) administered twice intradermally to 50 patients immediately following excision of earlobe keloids and 24 hours later.
Time to recurrence and improvement of keloid appearance are also being assessed at twelve months as secondary endpoints. These trials are ongoing in the USA under an Investigational New Drug (IND) Application.
Following the reporting of positive safety data for the 50ng and 200ng dose groups in December 2008, Renovo increased the number of patients in the 500ng dose group from ten originally planned to 30. Renovo is on track to report safety (for the 500ng dose group) and pilot efficacy data (for all doses) in H2 2010.
Paediatric development plan
A paediatric development plan is required under EU legislation and Renovo’s dialogue with the EMEA concerning Juvista is nearing conclusion. Studies in children will start after the adult Phase 3 programme is complete. A new single dose formulation has been developed for children and its performance is being investigated and compared to the existing formulation in clinical trial 1006–0100. This is a double-blind, placebo-controlled, within subject design using matched 1cm surgical wounds on the upper inner arms of 84 healthy adult volunteers. The trial is fully recruited and reports data towards the end of 2010, with an earlier interim analysis (to indicate whether further formulation development might be required).
Adaprev
Adaprev (an injectable solution of Mannose‑6‑Phosphate) is being developed for the prevention and reduction of scarring and adhesions between the tendon and surrounding tissues following tendon repair. It is anticipated that Adaprev will improve function, which is often impaired following surgical repair of lacerated flexor tendons in the hand. This is an attractive market opportunity with over 550,000 procedures to repair severed hand tendons per year in the USA alone and an equivalent number in the EU. Patients developing tendon adhesions suffer from impaired motor function, pain and approximately 30% require subsequent tenolysis surgery to try to release the adhesions. Importantly, plastic, reconstructive and hand surgeons perform most of the flexor digital tendon repairs: the same target prescribers for Adaprev as for Juvista.
The first patient enrolment in Renovo’s trial to evaluate the safety, tolerability and preliminary performance of Adaprev in improving recovery of tendon function in patients undergoing surgical repair of flexor tendons in the hand occurred in November 2009.
The trial is a randomised, double-blind, standard care-controlled study in 44 male and female patients being conducted in ten UK centres and is due to report in the first half of 2011.
Renovo is developing Adaprev as a Class III medical device. As clinical development programmes for medical devices tend to be simpler compared to pharmaceuticals, with fewer trials and numbers of patients required, this classification should provide Renovo with a faster and lower cost route to market for Adaprev, than if it were classified as a pharmaceutical.
Assuming this first trial is successful Renovo anticipates that it will need to undertake one further trial for Adaprev prior to seeking approval to market.
Prevascar
Prevascar (INN: Ilodecakin) is a therapeutic formulation of human recombinant Interleukin 10 (IL–10) and is an important modulator of the inflammatory response.
Renovo has previously reported statistically significant Phase 2 efficacy data for Prevascar in the reduction of scarring in the skin. Following improvements in the manufacturing of Prevascar drug substance and product and identification of a clinical cohort who are predicted (on the basis of a non-drug experimental surgery study) to benefit particularly well from Prevascar’s modulatory effect on the wound inflammatory response, Renovo plans to initiate a new proof of concept clinical trial in skin incisions and excisions in African Ancestral Group volunteers in Q2 2010.
Juvidex
Juvidex is a topical formulation of the sugar Mannose-6-Phosphate (M-6-P).
In March 2009 Renovo reported the results of a double-blind, placebo-controlled, randomised Phase 2 efficacy trial in 195 male and female subjects to investigate the safety and efficacy of two dose levels of Juvidex (300mM and 600mM) via two routes of administration (intradermal and topical in combination and topically alone) in the acceleration of healing of split thickness skin graft donor sites.
This was an exploratory human proof of concept efficacy trial to investigate different dosing regimens and routes of administration for Juvidex to assess the feasibility of developing a topical product targeted for the cosmetic skin peel market.
Although the trial did not meet its primary endpoint, which was demonstration of a statistically significant difference in the time to complete wound closure at the skin graft site as assessed by the investigating physician, it did meet some of the pre‑specified secondary endpoints with statistical significance. These included a comparison between patients using an external panel of clinical experts to assess photographs of the donor sites, where the 300mM Juvidex topical alone application versus standard care showed a statistically significant acceleration of healing (p=0.0146) in favour of Juvidex. In addition objective measures demonstrated that over the healing period wounds treated with topical Juvidex alone had an appearance that more closely resembled normal skin compared to placebo (p<0.05).
Following this positive proof of concept clinical trial Renovo plans to partner Juvidex as a cosmetic ingredient for the improvement of skin appearance and acceleration of healing. Renovo is actively seeking a suitable cosmetic partner to ensure the rapid development and commercialisation of Juvidex.
Board changes
As previously announced, since the last Annual Report, a number of Executive (ED) and Non-executive Directors (NED) have resigned from the Board.
Dr David Feigal (NED) resigned at the last AGM and is VP Global Regulatory Affairs at Amgen Inc.
Mr Andrew Kay (ED) resigned on 31 December 2008 to become CEO of Algeta.
Dr Sharon O’Kane (ED) will resign at the forthcoming AGM to pursue other business interests in starting and building companies and serving as a Non-executive Director.
Dr David Ebsworth (NED) will resign at the forthcoming AGM and has been appointed CEO of Vifor Pharma.
Dr Art Rosenthal (NED) will resign at the forthcoming AGM and has been appointed CEO of Capella Inc.
Mr David Blain was confirmed as Chief Financial Officer on 1 February 2009.
Within a year, the Board has reduced in size from 13 to 8 members and after feedback from investors and in recognition of Renovo’s current market capitalisation, the Board will remain reduced in size. I would like to thank all of the departing Executive and Non‑executive Directors for their considerable advice, help, support and work in building and managing Renovo.
The Renovo Scientific and Clinical Advisory Board held its final meeting in September 2009 and has been disbanded. Going forward, as needs dictate, Renovo will seek ad hoc scientific, clinical, regulatory and commercial advice from a wide group of external experts.
Corporate restructuring
In September 2009, Renovo announced the restructuring of the Company in order to focus its resources on the clinical development of its late stage product portfolio: Juvista, Adaprev and Prevascar. This decision resulted from a full review by the Board of strategic options and consultation with investors and advisors. The Board review commenced prior to the receipt in April 2009 of a preliminary unsolicited approach for the Company and continued during consideration of that approach. The restructuring plan was announced in September 2009 simultaneous with the termination of the preliminary discussions regarding the unsolicited approach. The restructuring of the Company is complete and has concentrated Renovo’s activities on supporting the clinical development programmes, together with managing and partnering Renovo’s products and IP assets. As a consequence of this restructuring the Company’s headcount has been reduced by around a third.
The Executive Directors of Renovo have voluntarily agreed to accept no pay increase this year and to defer any 2009 cash bonus awarded under the current plan until the time of reporting of the first Juvista EU Phase 3 trial (on schedule for H1 2011) and additionally to make the payment of this bonus contingent on a positive outcome of that trial meeting its primary endpoint. This is the second consecutive year where there has been no increase to the basic salaries of the Executive and Non-executive Directors.
The objective of this restructuring was to focus the Company’s efforts on its late stage product portfolio in order to maximise near-term value creation opportunities while minimising cash expenditure going forward. Collectively these measures have reduced internal operating costs by £3 million to £4 million and are projected to result in the Company having between £25 million to £30 million cash in hand at the time of reporting of the first Juvista EU Phase 3 trial in H1 2011.
Outlook
The Group is well funded with £65.3 million in cash and investments as at 30 September 2009 and the restructuring has reduced annual expenditure going forward. This provides Renovo with a firm financial foundation on which to develop its pipeline. Renovo’s main priority is to complete recruitment of the first European Phase 3 trial for Juvista and to follow the scar appearance in those patients for twelve months as described in the protocol. Renovo will prepare for other aspects of Juvista’s Phase 3 development programme, for example agreeing the EU Juvista paediatric development plan with the EMEA.
Renovo will progress the first Adaprev clinical trial for improvement of tendon function following digital flexor tendon injury and repair. Prevascar will commence a proof of concept clinical trial for scar reduction in incisions and excisions in African Ancestral Group volunteers. Juvidex will be partnered as a cosmetic ingredient and Renovo will seek a suitable development and commercialisation partner. Using funds provided by a recently awarded Technology Strategy Board (TSB) Regenerative Medicine grant, RP57, a pre-clinical pharmaceutical product candidate will be advanced towards a future clinical trial.