Vanda seeks OK for ‘personalized’ schizophrenia drug treatment

Rockville biotech eyes $18 billion market

Laboratories worldwide, including Vanda, are chasing a largely unmet medical need to treat schizophrenia effectively and more consistently, with more than 100 drugs now in clinical trials.

Meanwhile, scientists do not fully understand the molecular workings of schizophrenia. The new hope is in personalized treatments, based on the patient’s genetic makeup, an approach called pharmacogenetics.

Since a 2003 landmark paper in the journal Science by researchers from Harvard University and the National Institutes of Health in Bethesda, researchers have leaned toward a personalizing strategy. Some current drugs are effective but carry serious side effects.

Vanda licensed its leading, unnamed candidate — generic name, iloperidone — from Novartis Pharma AG in 2004. The Swiss drugmaker had brought it to final trials in 2002. At that time, Lehman Brothers predicted that Novartis had a 60 percent chance of getting iloperidone to market. Analysts predicted sales of $50 million by 2004 in the United States alone, rising to a possible $400 million by 2011.

But Novartis lost interest in iloperidone after it failed some of its final trials, the latest of a series of setbacks.

The originator of iloperidone, drugmaker Hoechst Marion Roussel, had gotten it to mid-stage clinical trials, but discontinued development in 1996. The company then licensed it to Titan Pharmaceuticals, where it also stagnated. Titan then granted Novartis development, manufacturing and marketing rights, except in Japan, in 1998.

Enter Mihael H. Polymeropoulos, Vanda’s CEO.

As a former Novartis researcher, Polymeropoulos had an insider’s perspective on how to finally develop iloperidone, said Steven A. Shallcross, Vanda’s CFO.

‘‘He felt that he could redesign the trials,” Shallcross said. Novartis had run several clinical trials of multiple doses of iloperidone and some doses did fail, but some did not. Polymeropoulos ‘‘was comfortable with why the trials failed,” Shallcross said.

Instead of dosing patients in outpatient clinics, as in the Novartis trials, Vanda chose to run in-patient trials. The schizophrenia patients were admitted to hospitals for five weeks.

Another major problem with treating schizophrenia is non-compliance. Patients may not take their medications regularly, get frustrated and try another drug.

Shallcross said Vanda’s approach led to better compliance, with fewer patients dropping out of the trial than in the previous Novartis trials.

Shallcross said Vanda has identified genetic markers for whom the drug works better and that indicate proper dosages.

‘‘The practical outcome of this kind of strategy is personalized treatments,” said Dr. Carol A. Tamminga, a former scientist at the University of Maryland.

‘‘Ultimately, psychiatry would like to be able to understand the molecular bases of our illness, identify the genetic underpinnings and treat by genotype,” said Tamminga, now chief of translational neuroscience research in schizophrenia at the University of Texas Southwestern Medical Center. ‘‘But we, as is the case for other areas of medicine, are not there yet.”

In May, Citigroup investment research began coverage of Vanda with a ‘‘hold” rating on its stock.

‘‘We believe Vanda’s lead drug candidate iloperidone, an atypical antipsychotic for schizophrenia, is approvable with the current database,” a Citigroup report said.

However, ‘‘we believe it will become more difficult for newcomers once Risperdal, a top seller, goes off patent at June 2008,” the report continued. ‘‘The key issue is that iloperidone has no clear-cut advantages over other agents in the class, in our opinion, and as Vanda plans to sell the drug by itself, it will have to compete with large pharmaceutical companies and established products for market share.‘‘

Shallcross said Vanda itself plans to market the drug. The domestic market is concentrated in public health centers, he said.

If the drug reaches the market, Titan Pharmaceuticals will receive a royalty of between 8 percent and 10 percent on worldwide sales.

Shares of Vanda traded at more than $14 Thursday, up from $13.30 before the drug application filing last week.