Northwest Biotherapeutics sees promise in a new drug designed for brain cancer patients, but needs capital to continue developing it.

BOTHELL – A drug developed by one of the region’s smallest biotechnology firms could be the key to survival for brain cancer patients.

Research on the drug may not advance, however, since Northwest Biotherapeutics lacks the money to continue clinical trials.

It’s a familiar frustration for the Bothell company, which has been operating with four employees after dipping in and out of dire financial straits since 2002.

For the time being, the Food and Drug Administration has allowed UCLA’s Jonsson Cancer Center to continue giving DCVax-Brain to cancer patients, who are living longer after taking the drug.

“These patients are ecstatic,” said Alton Boynton, Northwest Biotherapeutics’ president and chief operating officer.

“It does seem like something is happening at this early stage,” said Linda Liau, an associated professor of neurosurgery at the UCLA cancer center who has led the drug’s phase 1 tests.

“We have a group of patients with a survival rate of more than 20 months who have a disease with a median survival rate of nine to 12 months.”

She added that DCVax-Brain has been tested only in a small group and not in a large double-blind study, which could produce more conclusive results. But she’s hopeful.

At present, the only two FDA-approved treatments for gliobastoma multiforme, the most aggressive form of brain cancer, usually extend a patient’s life by about two months, Liau said.

In comparison, eight of 10 patients who took DCVax-Brain are still alive, with a median survival rate of more than 1 1/2 years. A few have made it past the three-year mark.

Those statistics prompted the FDA to allow the clinical trial participants to keep receiving shots of the drug.

The injected DCVax-Brain is a personalized vaccine made up of the patient’s own dendritic cells – rare white blood cells that stimulate the immune system and can be enhanced to recognize and kill cancer cells.

In addition to the DCVax-Brain trials, Boynton’s company has focused lately on a new antibody that targets the CXCR4 gene, which is found in more than 75 percent of all cancers.

Doing more work on either of the potential treatments, however, will take more money. The company has survived since 2004 solely because of funding from Maryland-based Toucan Capital Fund II and Toucan Partners.

Whether Northwest Biotherapeutics can attract the money it needs from outside investors is still up in the air. But the glimmer of hope provided by its study results has powered the longtime penny stock from 9 cents in mid-February to more than 60 cents earlier this week. It closed Thursday at 59 cents a share.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.

Biotechs’ fortunes rise, fall

* Nastech Pharmaceutical shares tumble, and a partnership ends after a study shows the Nastech’s anti-obesity drug may not work.

By Eric Fetters

Herald Writer

Excitement over Nastech Pharmaceutical’s possible nasal spray treatment for obesity came to a screeching halt on Thursday after a study suggested that the drug doesn’t work.

That news and the decision by pharmaceutical giant Merck &Co. to end its involvement in the nasal spray’s development sent Nastech’s stock into a steep dive.

When trading ended on the Nasdaq market Thursday, Nastech shares had lost $8.59 – 37 percent of their value. The stock closed at $14.43 a share.

Merck said its preliminary “proof of concept” study concluded that the nasal spray form of PYY3-36 (Peptide YY3-36) was not effective. Based on that result, it terminated its partnership on the drug as of Wednesday.

Nastech, however, still sees potential in the drug.

“We’re committed to further advancement of the PYY drug,” said Ed Bell, the Bothell company’s senior investment relations manager. “We looked at the clinical results and think they justify moving the program forward.”

Steven Quay, Nastech’s chairman and chief executive officer, said the Merck data that the company has reviewed indicates the nasal spray could deliver the active ingredient safely, although “there can be no assurance.”

“Nastech has both the human and the financial resources to drive the rapid development of PYY for obesity, and to also advance its other ongoing programs,” Quay said in a statement.

Assuming the drug proves effective in future studies, Nastech would seek a new pharmaceutical partner, he added.

Nastech began testing PYY in 2003. The naturally produced hormone helps create the full feeling most people experience after eating. Studies have shown that obese people may produce less of the hormone than slender people.

The company’s initial tests on both animals and people showed PYY might help reduce calorie intake by up to 30 percent.

Based on those early tests, Merck came on board in fall 2004, signing an agreement that could have produced more than $340 million for Nastech.

That agreement is void now, although Nastech said it will receive about $3.7 million in revenue due to the agreement’s termination.

Paul Keough, biotech analyst with Susquehanna Financial Group in Chicago, said he’s eager to hear more details about the future of Nastech’s PYY program in a conference call scheduled for this morning. His initial feeling, however, is that investors overreacted to the news.

“This isn’t necessarily all bad news. (Nastech) doesn’t intend to end the program,” he said.

Keough, who doesn’t personally own shares in Nastech, added that he’s still positive about the stock.

In fact, before it plunged, the company’s stock price had been at nearly a record high, based on a string of good developments. In February, Nastech announced it was teaming with Procter &Gamble to create a nasal spray to combat the bone-loss disease osteoporosis. If the drug eventually wins approval from the Food and Drug Administration, the biotech firm stands to gain more than $500 million.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.