Strategic Shift of Dong-A ST Co. Ltd. in Drug Discovery

Biopharmaceutical Report III


Issue14_July 2017



BY EMILY CUKIER-MEISNER, SENIOR WRITER


Dong-A ST Co. Ltd. has spent the last four years building an R&D organization and using its chemistry chops to begin developing first-in-class drug candidates against genetically validated targets. A December cancer immunotherapy deal with AbbVie Inc. is the first payoff from the work.


AbbVie agreed to pay Dong-A $40 million up front and up to $485 million in milestones for exclusive worldwide rights outside of South Korea to preclinical inhibitors of c-Mer proto-oncogene tyrosine kinase (MERTK), a class of molecules AbbVie also was working on.


The program came out of a strategic shift intended to expand Dong-A beyond its established business, which has included selling imported drugs, generics, botanicals, biosimilars and branded small molecules that are not first in class.


SVP and Head of Global Business Chae Lee said the decision to expand to R&D on novel targets was made about five years ago as the company considered how to globalize. One of the first steps was hiring SVP and Head of Research Taeyoung Yoon. Yoon was previously a senior research investigator at Novartis AG’s Novartis Institutes for BioMedical Research (NIBR) for eight years.


He began with a drug discovery team of about 20 scientists.


Yoon chose not to start with de novo target discovery, but with genetically validated targets that hadn’t been wellstudied due to lack of tool compounds. Going forward, he plans to focus on discoveries in South Korea.


“We would like to take an active role in helping to translate such good science into something that’s druggable, then introducing it to the Western and global markets,” said Lee.


Once it chooses a target, Dong-A makes tool compounds to test therapeutic hypotheses successively at the level of proteins, cells and animals.


According to Yoon, validating MERTK’s role in cancer has been tricky because it is difficult to create an inhibitor that is sufficiently selective.


“WE WOULD LIKE TO TAKE AN ACTIVE ROLE IN HELPING TO TRANSLATE SUCH GOOD SCIENCE INTO SOMETHING THAT’S DRUGGABLE.” CHAE LEE, DONG-A

MERTK is a member of the TAM (TYRO3-AXL-MERTK) receptor family of transmembrane proteins. It sits upstream of BRAF, and is primarily expressed in subtypes of myeloid cells including some macrophages and dendritic cells.


Yoon said MERTK induces immunosuppression when nearby cells undergo apoptosis — a natural form of cell death that in normal circumstances should not trigger the immune system. But when tumor cells die via apoptosis, MERTK may contribute to the immunosuppressive tumor microenvironment.


MERTK is overexpressed or hyperactivated in multiple cancer types including prostate cancer, brain cancer and leukemia.


To improve selectivity of its inhibitors, Yoon said Dong-A added bulky groups to its molecules outside of a flat portion needed to fit within the MERTK active site. Yoon said the group created a selective inhibitor in three years with a 10-person project team.


In a poster presented in November 2015 at the AACR-NCIEORTC International Conference on Molecular Targets and Cancer Therapeutics, Yoon and colleagues reported the design of a lead compound, XL1547, with an IC50 of 1 nM that was over 300 times more selective for MERTK than AXL. A follow-on compound, SA3686, was over 10 times more potent than XL1547 in inhibiting MERTK and was suitable for oral dosing.


SA3686 was efficacious in a tumor allograft model of subcutaneously implanted Ba/F3(CD8:MERTK) cells. Yoon declined to say which animal was tested or how efficacy was measured.


Yoon said AbbVie reached out to Dong-A to discuss the poster, which led to partnering discussions.


“Dong-A has identified potent and selective MERTK inhibitors and brings medicinal and structural chemistry expertise to the collaboration,” said AbbVie VP of Oncology Discovery Steve Davidsen in an email to BioCentury.


Yoon added that selectivity is particularly important because unlike many other tyrosine kinase inhibitors used in oncology, MERTK inhibitors act mainly in healthy cells — which raises the bar for safety.


“When you want to inhibit a host target, you want to be very selective,” he said.


ENGINE FOR GROWTH


Yoon is now expanding Dong-A’s drug discovery group to more than 100 scientists and is drawing on his experience at NIBR to create a culture of science and lower barriers to knowledge sharing.


Previously, Dong-A’s chemists, biologists and ADME specialists were siloed across project-based teams that had little reason to communicate with each other, which gave the specialists few chances to share on-the-job learning.


Yoon said tackling novel targets requires a deeper understanding of the science that uses “all of the connected wisdom available,” so he is grouping the discovery researchers according to function — putting all the chemists, biologists and ADME specialists into their own teams. The new researchers will come from internal teams that had previously been working on follow-on products in metabolic and infectious diseases.


He also hopes to build Dong-A’s clinical experience with first-in-class programs through partnerships that will eventually let it keep programs in-house longer.


As with the AbbVie deal, Yoon said Dong-A hopes to find partners that have studied the same target so that both parties can contribute knowledge, which could increase the odds a project will succeed.


Lee said in addition to offering a competitive bid and a compatible culture, AbbVie’s in-house experience with MERTK gave the pharma realistic expectations about how much information would be available about the compounds’ biologic activity at their early development stage.


The partners will collaborate to select a clinical candidate and perform GLP toxicity studies. They intend to test combinations of MERTK inhibitors with AbbVie’s immuno-oncology programs to treat solid tumors. AbbVie is responsible for clinical development.


Lee declined to give a timeline for the project.


Dong-A did say it expects the first compounds from its target validation projects to reach the market in the mid-2020s. Yoon said he hopes that in two or three years, two-thirds of the company’s pipeline will be first-in-class molecules.


A merger of Pfizer and AstraZeneca would not likely add great value in a combined pipeline

Despite the overly optimistic projections, all experts agreed a merger of Pfizer and AstraZeneca would not likely add great value in a combined pipeline. From an R&D standpoint, AZ and Pfizer are historically two big pharma players infamous for sinking enormous amounts of money into R&D with a low success rate, said the advisor. Pfizer’s major strength areas are CV, immunology, neuroscience, oncology and vaccines, and the biggest value synergies between AZ and Pfizer have been described in oncology, noted the advisor. Yet neither Pfizer nor AstraZeneca are the leaders in oncology, and combining two low-tier players will not leverage a leader in the field like Pfizer is suggesting, he added.


A combined Pfizer-AstraZeneca will never be able to compete with the likes of oncology leaders Roche, Novartis and Celgene (NASDAQ:CELG), the second industry consultant added. In any merger, pipelines suffer with drug development slashes, and no mergers to date have seen the pure addition of pipelines, said the first industry consultant. There is no rationale on potential synergies and how they will improve innovation and cost-effective healthcare, he said. Pfizer also has a bad track record of acquisitions including Warner-Lambert, Pharmacia and Wyeth, where poor strategic decisions were made on which assets to progress and shelve, noted the second industry consultant. Pfizer could handle the merger, but its statements on commitments to innovation are not substantial enough to convince this can be executed correctly for the long term, added the former Pfizer executive and advisor.


AZ’s management has publicly reinforced the fact this merger would cause disruption and distraction to R&D efforts and this is not an exaggeration as mergers of this size can easily cause up to 10 years of R&D disruption, the advisor said. The merger of GlaxoWellcome and SmithKline in 2000 saw a similar disruption that only started to see R&D upside at the latter part of 10 years, the advisor noted. Pfizer has run out of options from a clinical perspective and is making a short-term financial move, all experts agreed.


There is a short-term financial rationale from a shareholder perspective to go ahead with the deal with a few offer bumps as AZ prepares to lose a disproportionate part of its sales between now and 2018 as blockbusters go off patent, the advisor said, adding, whilst a credible leader, Soriot’s execution in driving pipeline assets to the market over the next 10 years becomes a big investment risk. AstraZeneca has a market cap of GBP 59.6bn. Pfizer has a market cap of USD 185bn. now and 2018 as blockbusters go off patent, the advisor said, adding, whilst a credible leader, Soriot’s execution in driving pipeline assets to the market over the next 10 years becomes a big investment risk. AstraZeneca has a market cap of GBP 59.6bn. Pfizer has a market cap of USD 185bn.


COMPANIES AND INSTITUTIONS MENTIONED


AbbVie Inc. (NYSE:ABBV), Chicago, Ill.

Dong-A ST Co. Ltd. (KSE:170900), Seoul, South Korea

Novartis AG (NYSE:NVS; SIX:NOVN), Basel, Switzerland


REFERENCES

Haas, M. “MERTK: upstream from BRAF.” SciBX: Science-Business eXchange (2013)

Yoon, T., et al. “Discovery of exquisitely selective MERTK inhibitors.” Molecular Cancer Therapeutics (2015)


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