GroPep changes track from psoriasis drug to asthma

Following poor efficacy in preclinical testing of its T-cell peptide drug candidate in psoriasis models, Adelaide biopharma GroPep (ASX:GRO) will undertake a market feasibility assessment for use of the drug in asthma.

The drug candidate, formerly known as PPO102, is a mimic peptide that disrupts the formation of the T cell receptor so that the inflammatory signalling cascade is blocked. A new name will be chosen for the drug as GroPep ceases its development in psoriasis.

A possible reason for drug's lack of effect in psoriasis is its inability to penetrate the skin.

"Considering that it is working very well in the models on asthma, we're believing that it is simply the penetration through the skin," said GroPep CEO and managing director Bob Finder. "We were worried about that from the beginning and we've always said that we thought the formulation was going to be pretty difficult because it's a fairly large-sized peptide."

Finder said that the change of direction for the drug had put the company back "a few months". However, he said, "80 per cent of the work that has been done on the peptide for the psoriasis will apply to asthma".

First, however, GroPep will commission an outside firm to conduct a commercial marketing study "to look at the market and confirm that it is the correct market," said Finder. This is expected to take between three and six months and an outside scientific opinion is also in progress. Clinical trials in asthma would probably start some time in 2007 if the feasibility study is positive, said Finder.

In December 2004, GroPep was awarded an AusIndustry R&D Start grant for the psoriasis application of the drug. GroPep will be seeking to mutually terminate the grant now but expects to apply for support for the asthma indication under the Commercial Ready program, depending on the results of its feasibility study. "We talked to AusIndustry and they've encouraged us to apply for a Commercial Ready grant," said Finder.

GroPep intends to hold to its model of spending within the range of 15-20 per cent of its revenue on net drug development, and as a result of the termination of the grant will reduce its planned R&D expenditure for the year.

"We'll be able to reduce our R&D expenses for the second half of the year because we won't have so much actively going on now, as we do this feasibility study," said Finder. "Our guidance we gave for our profitability for the year is still holding." In August, GroPep said 2005-06 net profit before tax was projected to grow by around 30 per cent to about $4 million.

Longer patent life

While GroPep obtained exclusive worldwide rights to key patents covering the drug in 2002, through a licence from the Northern Sydney and Central Coast Area Health Service, a new international patent on the use of the drug for the treatment of asthma was filed in May 2005.

"We'll have quite a bit longer patent coverage for the asthma application than for the psoriasis," said Finder.

The patent filed in 2005 was based on work conducted by Prof Alexander Enk, an independent physician at the University of Mainz, Germany, who has used that country's rules for physician-sponsored clinical research to test the concept in a small group of patients.

"We were originally working with him on the psoriasis, then we found out about this work in asthma that had not been patented, so we were able to in license that technology from the University of Mainz," said Finder.

Still confident

"We're very confident still on the science behind this," said Finder. Initial research conducted at the Royal North Shore Hospital in Sydney by Prof Nick Manolios demonstrated that the drug has potential in a rage of autoimmune diseases, GroPep has claimed.

"As we have indicated early when we were working on it, we thought that it was not just psoriasis or even asthma," said Finder. "It could potentially be used for all the autoimmune diseases, such as multiple sclerosis and some forms of arthritis. The work on asthma was promising, that's why we also looked into that."