Migenix Takes Products From Conceptualization to Commercialization

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By Deanna Natalizio

From conceptualization to commercialization, the process of drug development is pushed along by many helping hands. Migenix, a company specializing in the product development of infectious and degenerative diseases, has a philosophy of taking a collaborative approach to drug development. With Dr. Jim DeMesa, president and CEO, at its helm, Migenix has impressively found itself in the pivotal stages of development for three unmet treatments.

Migenix prides itself on the advancements it has made with MX-3253
(celgosivir), for the treatment of chronic Hepatitis C Virus infection, MX-226 for the prevention of catheter-related infections and MX-594AN (CLS- 001), an antibiotic for the treatment of acne. Products nearest to the commercialization stage are the results of partner-led collaborations. In fact, partner-led collaborations are what much of Migenix’s success has been founded on.

“As most people in this industry know, it takes about a decade to get drugs to development or through the process. Our company has taken a bit longer than that, about 12 years and that is because of the inevitable bumps in the road,” reflects DeMesa.

DeMesa believes the bumps prolonging the emergence of drugs on the market should be smoothed down, but not obliterated. While quicker development speeds are always desired, enabling a more efficient development process does not necessarily begin with cutbacks on time.

“Requirements of the regulatory process are needed for the safety and efficacy of drugs. If you look at other countries even, in the past, that have had a less rigorous regulatory process, they are getting more rigorous. There is something to be said for having that process in place.” Lengthy trial periods recognize the complexity of the human system. Shortened times would only open a gulf for complication to occur.

Without curtailing the regulatory procedures of clinical trials, DeMesa identifies the role economic and human capital plays in bolstering product development. “Having people that really understand the business and can manage it more effectively is important. Increasing the expertise of people in our industry starts with early college types. There are now degrees you can get in biotechnology management. The second way is to continue to have access to adequate capital. Small companies, like ours, continually have to raise money. A senior management team that focuses most of their time on raising money is not focused as much on developing drugs.”

The process of product development is naturally lengthy and the old adage of “time is money” has no better application than in the biotech world. The further along a compound moves in the approval process, the more costly its development becomes. “Big money is needed in the late stages of clinical development. Trials can cost from anything up to 60 million dollars to get through stage three,” notes DeMesa.

The initial acquisition of a compound also forces the company to pay up, “It can be very expensive to in-license products. Many times they require millions of dollars up front and milestone payments. We’ve been creative from a business perspective in using stocks and shares to in-license products. That way we don’t use valuable cash that biotech companies need to continue the development.”

As a company specializing in product development, Migenix is considerably distant from the before and after stages. In-licensing and out-licensing deals are of equal importance to the company as the former moves compounds in for advancement through its pipeline and the latter prepares them for commercialization once late-stage development is near. “In-licensing is critical to our business model. Since we don’t do any discovery work, it’s our only source of new compounds. On the out-licensing side, we partner with larger companies with more resources to finish the development.”

After preliminary efficacy is obtained, DeMesa considers it to be in the company’s best financial interests to out-license their products. “At this point, we usually partner product candidates with larger companies that have access to the kind of capital that is required to continue on. Then we go back and focus on our preclinical, Phase I, Phase II compounds.”

Migenix is a company with a heightened awareness of its scope of responsibility. “If you characterize our company, we are a development company. We are less focused on science research and commercialization.” The closing stage of product development is commercialization, an area the company has yet to incorporate into its framework. “After stage three, because we don’t have a sales force, we have to partner our products with the companies that do have that sales capability.”

Having a clear delineation of the company’s sphere of practice allows Migenix to borrow expertise and resources from areas that fall outside of their strengths, while excelling in those where it has the designation and capacity to do so. The success of Migenix’s product pipeline is largely due to the company’s reticence to overextend itself.

Migenix looks for more than a prolific capital base when merging with a prospective company. If the primary goal of a merger is commercialization, extensive product knowledge increases a potential collaborator’s suitability. “We look for companies that have expertise in that particular compound. We are in the partnering stages for our Hepatitis C drug, and looking at companies that have an interest in Hepatitis C, other products in development for Hepatitis C, or antiviral capabilities.” A proven ability to develop drugs in the desired area enables both companies to agree upon a common strategy of implementation. Adequate financial backing can only move the program along so far.

While collaboration agreements may greatly help or hinder the product development process, there is one element that secures the fate of a development immediately. The selection of a drug compound has prophetic repercussions. DeMesa recounts a few of the questions that are asked of product candidates, “Does it fit with our expertise? Is it something very far out of what our expertise entails? It may have a lot of technical challenges. For example, bringing in a product from the outside that has not shown favourable research indicators will weigh into the decision as well.”

DeMesa rationalizes compound selection by referring to the two factors that impact all stages of development activity. “If you’re willing to spend the time and money, it should result in a viable product that is marketable.”

Canadian biotech has shown potential for innovation and growth, but fails to have a major share of available products on the market. DeMesa compares the achievements of Migenix on a national scale, “I think we are ahead of most biotech companies that have been around for the same amount of time. We know many companies here in Vancouver and from all over Canada that have been around as long and are nowhere near late-stage development.”

Migenix is headquartered in Vancouver, B.C., with operations in San Diego, CA. DeMesa was asked of the significance of having a southern foothold for Canadian biotech companies. Responding that while not necessary, a U.S. sister base cannot help but prove beneficial in some respects. “We have been able to attract a lot of expertise from the market as there is a lot of biotech in the San Diego area.

There is increased access to talent. As much as there is a biotech community in Vancouver, it is not as robust as it is in some places in the U.S. That is where the clinical experts in our company come from.”

The nation’s biotechnology sector is crippled by the unenthusiastic financial support of internal investors. The difference in market conditions between Canada and the U.S. will eventually impact how company activities are consigned. “Most of our activities are in Vancouver. We have a small San Diego office and part of our clinical group is down there. We have not yet evolved to a division of any functional areas or groups, but that is definitely in the plans,” notes DeMesa.

The creation of Migenix’s San Diego base was made as part of their acquisition of San Diego-based Mitokor Inc. Whether they are created strategically or coincidentally, cross-border ties help to secure the investment attention that Canadian companies fail to give wholeheartedly. DeMesa has observed the effects of having hastened access to capital markets. “If you are in the U.S. and have some visibility, including a U.S. stock exchange listing, investors and public companies that have more access to more capital and financing take notice. For any drug that is in development, at least part of the clinical trial needs to be conducted in the U.S. Proximity to that kind of environment is an advantage.”

The proliferation of small start-up companies focused on product development has shed light on Migenix as a model to emulate. Having been witness to its struggles and feats, DeMesa offers his unique perspective on the things start-ups need to embrace and prepare for. “A company needs to understand what is needed to succeed. It takes usually a decade or more to get a drug to market and it takes 10 to hundreds of millions of dollars. Make sure you have both the technology and unmet medical need before you go off on some scientific passion. It has to be financeable for a long time. You need to meet milestones, and have a development plan.”

His most insightful piece of advice; “Plan for clinical failures, they are an inevitable reality. It may even take downsizing or dissolution of the company’s stock.”

As Migenix partners products off and hands them out for development, the company is continually in search of new material to fuel their pipeline. “We are constantly looking for opportunities that fit our criteria. For the past year and a half, we’ve had our plate full. We still have several products in the pre-clinical stage that we intend to get into the clinic and depending on the success of those, will determine how aggressive we are in bringing in other things.”

Migenix is a company that clearly recognizes the value of collaboration, but is always making strides to exert its independence. “We may have in-licensed technology, but we apply our internal expertise to create something new out of its use.”

Migenix hopes to one day replace the company’s chain of helping hands with a strong and skilled pair of its own. The company looks forward to performing more of its necessitated operations independent of outside aid. “As we grow, we look to potentially hold some products to ourselves and go all the way through the development process. Perhaps, at some stage in the future, we may even commercialize the products ourselves.”