Perhaps the biggest personalized medicine breakthrough of 2011 was the progress of melanoma drug Zelboraf and its companion diagnostic, both of which sped through regulatory approval.

Clinical trials demonstrated that Roche‘s (OTC:RHHBY) Zelboraf was extremely effective in treating skin cancer. But the drug doesn’t work for everyone. Only patients whose tumors express a particular gene mutation respond to the drug. The companion diagnostic also developed by Roche identifies the appropriate patients for Zelboraf. Under priority review by the U.S. Food and Drug Administration, approval of that diagnostic was expected this November. The agency beat that target by nearly three months.

Not all personalized medicine drugs and diagnostics will have such a speedy path through the FDA. But the companies, academics and investors who have a stake in personalized medicine are working to smooth the path for future personalized medicine breakthroughs.

The Personalized Medicine Coalition has released a report “The Case for Personalized Medicine,” choosing Research Triangle Park, North Carolina, where the group has a large cluster of members, to formally announce the document. In addition to supporting personalized medicine education and innovation, the group is also pushing for new legislation that would go further than the Genomics and Personalized Medicine Act of 2007. Among the group’s goals are forging a more predictable regulatory path for personalized medicine products and getting Medicare coverage of personalized medicine diagnostics. PMC President Edward Abrahams discusses some of the group’s legislative goals here.

The coalition hosted a panel discussion at the North Carolina Biotechnology Center on the opportunities and challenges facing personalized medicine. Here are some highlights.

Personalized medicine’s promise: In the last quarter, Burlington, North Carolina laboratory services and diagnostics company LabCorp (NYSE:LH) has released two personalized medicine tests, one of them a companion diagnostic for Zelboraf. The other, an Abbott companion diagnostic for lung cancer patients, predicts patient response to the Pfizer (NYSE:PFE) drug Xalkori. LabCorp CEO David King said that at one time, personalized medicine was thought of primarily in terms of reproductive testing such as pre-natal and neo-natal testing. But the technology today has come far and it promises to go even further.

Dr. Amy Abernethy, director of the Duke Cancer Care Research Program, sees many of those tools in the clinic. The kinds of tests that are available for her to use to make diagnostic and treatment decisions are vast and they grow each year. “The way we’ve practiced medicine in the clinic has rocketed forward in the last decade,” Abernethy said.

The challenges: While Abernethy embraces the new diagnostic tools, she said she’s not sure when a new test will show up in an electronic system with a reimbursement code. Jonathan Roy, director of commercial diagnostics for GlaxoSmithKline Biologicals (NYSE:GSK), offered a different perspective on reimbursement. In the United States, a company might get reimbursed, but not at a level they’d like. “In the European market, you might not get reimbursed at all,” he said. Roy said the global regulatory environment is wildly inconsistent from one market to another. But in finding partners for companion diagnostics, GSK must think globally because its goal is to make a test and a treatment available to the largest number of people. LabCorp’s King also sees regulatory as well as cost challenges for companion diagnostics. But as these tests become more common, he also sees challenges for clinicians. Personalized medicine will mean the generation of an enormous amount of data and it will be a challenge to process it and manage it. King likened the challenge to standing on the beach staring at an approaching 60 foot tidal wave. “And there will be one every minute,” he said.

Solutions. There is no shortage of companies angling for financial backing of new therapies and diagnostics in personalized medicine. Durham venture capital firm Pappas Ventures, which focuses on life science investments exclusively, receives more than 1,000 proposals a year. The firm has made several investments in companies developing personalized medicine products. One of them, California biotechnology company Plexxikon, developed the drug that is now Zelboraf. Plexxikon was acquired by Japanese pharma company Daiichi Sankyo earlier this year in a deal valued at more than $935 million. Pappas Ventures saw a return greater than 10 times its original investment in the firm.

Pappas Ventures Managing Partner Eric Linsley said he’s an optimist who believes in personalized medicine. But he added that he’s paid by the firm’s limited partners to be a skeptic. Linsley said he believes solutions will come from innovation. But for that to happen, the FDA must encourage that innovation and payers must modernize how they reimburse new technologies.

ScienceDaily (Nov. 13, 2011) — Clinical benefit from use of a novel histone deacetylase inhibitor drug may be determined by examining blood cells days after a patient receives treatment. The drug, entinostat, is the first histone deacetylase inhibitor successfully tested in a randomized, placebo-controlled study in metastatic breast cancer -- and is the first to show that clinical outcome can be predicted shortly after administration.

The findings, reported at the AACR-NCI-EORTC International Conference: Molecular Targets and Cancer Therapeutics, held Nov. 12-16, 2011, represent an advance in the goal to offer patients only those therapies that will help treat cancer effectively, the researchers said.

"The ability to have a marker of benefit within the first several weeks of using this drug represents an exciting advance in personalized medicine," said lead researcher Peter Ordentlich, Ph.D., executive director of translational science and a founder of Syndax Pharmaceuticals Inc. in Waltham, Mass. Syndax Pharmaceuticals developed entinostat, an oral small-molecule drug that inhibits enzymes that alter the packaging of DNA inside the nucleus, which controls gene expression.

"The goal of entinostat in breast cancer is to extend the benefit of hormone therapy and delay the time that patients will need to use chemotherapy," said Ordentlich. More than 160,000 women are diagnosed each year with estrogen receptor (ER)-positive invasive breast cancer, and many are treated with agents that block the hormone. But most women become resistant to these therapies, and entinostat, combined with antihormone agents, is meant to extend their benefit, he said.

To test that strategy in ER-positive metastatic breast cancer, Syndax Pharmaceuticals conducted ENCORE-301, a randomized, placebo-controlled, phase 2 study (n=130) testing the use of exemestane, an aromatase inhibitor, with either entinostat or placebo.

Results of the clinical trial, released in September, showed that the combination therapy delayed cancer progression by 27 percent (4.3 vs. 2.3 months) compared with exemestane treatment alone. At a median follow-up of 18 months, overall survival was also significantly longer with exemestane plus entinostat than with exemestane plus placebo (26.9 vs. 20.3 months).

In this subset analysis, researchers examined blood samples from 49 patients (27 received combination therapy) to evaluate whether changes in circulating blood cells that reflected the activity of the histone deacetylase (HDAC) inhibitor could be detected. Researchers measured protein lysine acetylation, a biological marker of entinostat activity, in B cells, T cells and monocytes in blood samples taken at pretreatment and one, eight and 15 days after therapy with entinostat, which is taken once a week.

While levels of lysine acetylation after one day were not linked to clinical benefit, levels measured eight and 15 days after therapy were related to clinical benefit, Ordentlich said. Researchers found that patients with elevated levels of protein lysine acetylation had a 68 percent reduced risk for disease progression compared with those patients who did not have sustained elevated levels.

Researchers found that hyperacetylation was also associated with longer median progression-free survival across cell lines: B cells, 8.5 vs. 1.9 months; T cells, 6.6 vs. 1.8 months; and monocytes, 6.2 vs. 1.9 months. "Those patients who were able to maintain acetylation did well," Ordentlich said.

He added that entinostat's long half-life and unique pharmacology allow researchers to quickly gauge the agent's activity. In this way, "we gain insight into how to use HDAC inhibitors, as a class of cancer drugs, in a variety of solid tumors," he said.

The study was funded by Syndax Pharmaceuticals. Co-authors include investigators from the National Cancer Institute, who developed the assay used to test protein lysine acetylation in patient blood samples.

• Therapy extended median survival to 6.4 months.
• Two patients are alive four years after start of epigenetic treatment.

PHILADELPHIA — Patients with recurrent metastatic non-small cell lung cancer have a morbid prognosis, but a new epigenetic therapy may have potential for this population, according to data published in Cancer Discovery, a journal of the American Association for Cancer Research.

A research team at Johns Hopkins University tested a combination epigenetic therapy of azacitidine and entinostat among 45 patients with recurrent metastatic non-small cell lung cancer who had been heavily pretreated with other therapies but showed no response. Each patient received azacitidine on nine days and entinostat on two days per month. The trial had an “open-label” design, in which all patients received the treatment and there was no control group receiving a placebo.

Researchers found a median survival of 6.4 months with treatment, where the typical survival for this patient population is four months. Patients who showed signs of gene methylation reversal in at least two of four key genes had better survival than the rest, and two patients experienced dramatic tumor shrinkages.

Four of the 19 patients who received subsequent anticancer therapies had a major objective response to immediate subsequent treatment with other agents. Seven patients remain alive, including two who began treatment approximately four years ago.

“We are starting to show traction for epigenetic therapy for one of the most difficult-to-treat tumors,” said Stephen A. Baylin, M.D., professor and deputy director of the Kimmel Cancer Center at Johns Hopkins University and leader of the Stand Up To Cancer (SU2C) Epigenetics Dream Team. “This study appears to show the first durable successes in solid tumors with epigenetic therapy.”

This drug combination has previously shown efficacy among patients with leukemia.

“We hope these results lead to a larger, more definitive clinical trial of this drug combination,” said Charles Rudin, M.D., Ph.D., professor of oncology and director of the Upper Aerodigestive Cancer Program at Hopkins’ Kimmel Cancer Center. Rudin led the team of physicians and cancer biologists who conducted the study.

This research is funded in part by SU2C, a Specialized Programs of Research Excellence (SPORE) grant from the National Cancer Institute (NCI) and the Flight Attendant Medical Research Institute.

“This research would not have been possible, especially at this accelerated pace, without Stand Up To Cancer,” said Baylin. “Our SU2C Dream Team has benefitted enormously from the initiative’s vision and visibility. The funding helps leverage other support mechanisms, like our SPORE grant from the NCI, which could never separately fund a trial of this magnitude and scope. It has enabled incredibly fruitful collaborations and allowed us, most importantly, to make a real difference in peoples’ lives.”

Portions of this release have been provided by Johns Hopkins

Eric will join a panel discussion on the challenges facing personalized medicine at a featured Personalized Medicine Coalition event at the North Carolina Biotechnology Center on November 16.

Scott Weiner will participate on the panel “Can the Rest of the World Save the Private US Medical Device Industry?” at Medtech 2011 in Chapel Hill, NC on November 1.

Barry Myers will be speaking on a panel discussing trends in Biomedical Engineering at Medtech 2011 in Chapel Hill, NC on November 2.

Zelboraf, the most-recent Pappas Ventures-backed product to be approved by the FDA, has attracted worldwide media interest. Click here to see the ABC News report on how the melanoma drug, pioneered by Plexxikon, is providing new hope for patients who have this deadly disease.

The IPO market might be looking a little frosty, but the M&A market so far this year has been positive enough to warm VCs’ hearts.

The median selling price through September was nearly $71 million – four times the median amount invested prior to liquidity, according to Dow Jones VentureSource. That kind of multiple hasn’t been seen since 2000.

Because M&A is affected by the stock market, the pace is likely to fall in the fourth quarter, but the total raised is sure to exceed last year. VentureSource pegs the amount raised in the first nine months at $37.3 billion, only slightly behind the $39.42 billion for all of 2010, which was the best year since 2007. (VentureSource is owned by Dow Jones & Co., the publisher of this blog.)

So far this year, six acquisitions of U.S.-based venture-backed companies have closed at $700 million or more. The biggest was Plexxikon, which Daiichi Sankyo bought for $805 million. The company, which is developing a treatment for melanoma, raised $67 million from investors including Advanced Technology Ventures, Alta Partners, Astellas Venture Capital, Pappas Ventures and Walden International. The deal includes an additional $130 million in potential milestone payments

Second place goes to another health-care company, medical device maker Ardian, which sold to Medtronic for $800 million after raising more than $66 million. Advanced Technology Ventures was an investor in that company, too, along with Emergent Medical Partners, Morgenthaler Ventures and Split Rock Partners. Medtronic also was a backer.

Those deals closed in the first half of the year. The action lately has been more on the tech side. The third-largest deal of the year – and largest of the third quarter – was the $750 million sale of PopCap Games to Electronic Arts. The price could climb by another $550 million if certain performance goals are met. PopCap raised a single round of $22.5 million led by Meritech Capital Partners.

Paul Madera, a Meritech managing director said that during the last two years, the late-stage venture investor has seen its best run of liquidity since its start in 1999. But with stock market volatility crimping IPOs, he expects corporate acquirers to become more cautious. “There isn’t as much urgency to get things done,” Madera said.

Still, large tech companies are sitting on piles of cash and competition is fierce. The most active acquirer through September was Google, which bought nine companies, three of them in the third quarter. Dell and Zynga each have made four acquisitions, tied for second on the list.