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DARA BioSciences Paves Foundation for Growth

For most early stage biopharmaceutical companies, the road to successfully bringing a drug to market is usually a long one, paved with uncertainty. High research and development costs and the

For most early stage biopharmaceutical companies, the road to successfully bringing a drug to market is usually a long one, paved with uncertainty. High research and development costs and the competitive nature of the industry itself makes the traditional business model for many of these companies, and thus value proposition to shareholders, very difficult to stomach.

Yet, in just a few months time, DARA BioSciences, Inc. (DARA) has managed to completely transform the company's strategic outlook as a development-stage business to a revenue-generating one with near-term goals for profitability, and a long-term focus on developing a potential blockbuster in its pipeline. The company develops and commercializes oncology treatment and supportive care products.

Within a matter of days, DARA expects to bring its first drug to market in Bionect®, a hyaluronic acid-based topical cream to treat skin complications that result from cancer treatments, such as burns from radiation therapy. In addition, the company expects to launch a second product called Soltamox, an oral liquid tamoxifen used to treat breast cancer, some time later in 2012.

In its pipeline, DARA is also in Phase 2 development of KRN5500, a treatment of neuropathic pain for patients with cancer. The drug candidate has received the Fast Track Designation by the Food and Drug Administration, and a recent external data analysis of an earlier study on KRN5500 yielded promising findings for efficacy. Given that there are no products approved by the FDA to effectively treat cancer-related neuropathic pain, combined with the potential for the drug to expand as a treatment for other causes of neuropathic pain, the company does see a huge potential for KRN5500.

The evolution of DARA has happened in a rather short period of time. David Drutz, the company's CEO, took the reigns in December 2011 and spearheaded the its strategic reformation. Drutz has a proven track record in the industry, serving as CEO and in other upper management roles for various public and private biopharmaceutical companies. He also has a background in venture capital as well.

It didn't take long for Drutz to make a splash as CEO. In January, DARA acquired Oncogenerix, Inc. and redefined the company's outlook and identity.

"DARA has emerged in an approximately four-month time frame as an oncology and oncology support-focused company heading for profitability in the nearer term," Drutz says. "Most of my career has been in drug discovery and drug development. It's a wonderful area; it's exciting and it's thrilling, but it constantly burns money, and it may take years before you can get to a point where, as a shareholder, you see any benefit coming back to you. So as company that is targeted on profitability, it is much more likely for us to command attention."

DARA Enters Oncology Market with Commercial Drugs

In March, DARA obtained the exclusive rights from Innocutis Holdings, LLC to co-promote Bionect in the U.S. for the radiation and oncology markets. The advantage for DARA is that Bionect a proven product for the dermatology market. The company identified the opportunity to market the drug to treat radiation dermatitis, which is a common side effect of radiation and chemotherapy treatments.

In addition to generating revenue, the commercialization of Bionect, and soon Soltamox, provides DARA with the opportunity to establish relationships and sales channels in the oncology and radiology industry.

"The launch of Bionect and Soltamox really us into the oncology space," says Chris Clement, Chief Operating Officer of DARA. "That's going to pave the road for us from the perspectives of both further development of KRN5500, as well as additional partnerships."

Prior to joining DARA, Clement was the co-founder and CEO of Oncogenerix, and brings with him a wealth of experience in the industry. He was also the former president and CEO of Savient Pharmaceuticals (SVNT) as well as Epicyte Pharma, which was acquired by Biolex in 2004.

"We have a really nice balance in our portfolio of what we're doing right now," Clement says. "That's going to really bode well as we then roll into the KRN5500 drug and advance in clinical studies. These oncologists that we will be working with are going to hear more about KRN500 and its development. They're going to see that DARA is already in the market place with products in the cancer and cancer support area, and it's going to put a spotlight on DARA."

The other product planned for strategic rollout in 2012 is Soltamox, which is unique in that it is a liquid formulation of tamoxifen to address dysphagia. The company has an exclusive license from U.K.-based Rosemont Pharmaceuticals, LTD. "Chris has a very close working relationship with Rosemont," Drutz says, "We’re hopeful to get other oral liquid products from Rosemont in the future."

Also DARA's pipeline is a sterile generic injectable chemotherapeutic drug licensed from Quebec-based Uman Pharma, Inc. The drug is widely prescribed as a first-line therapy for ovarian, breast, lung, and pancreatic cancers. The company intends to file an Abbreviated New Drug Application with the FDA in the coming months.

Blockbuster Potential of KRN5500

Critical for DARA was the recent decision to continue development of KRN5500, a drug designed to treat causes of neuropathic pain. In October 2011, findings for KRN5500 was published in the Journal of Pain and Symptom Management, which reported positive results for efficacy.

"If KRN is a successful drug in our field, I think it's going to have a very meaningful place in the pain treatment toolbox," says Amy Abernethy, Director of the Duke Cancer Care Research Program (DCCRP) and a coauthor on the original published paper. "It is important to note also that right now they're looking at KRN5500 for people who have far advanced relentless pain, but ideally, it would be used for people who have even earlier forms of neuropathic pain. It is being developed for a fairly narrow market, but if it is efficacious for that narrow market, then it has the ability to expand to a much larger market."

While the original study focused on clinical data of patients reporting pain on a weekly basis, the second analysis examined patients' own self-reported pain recorded daily diaries. Both Drutz and Clement felt the need for additional analysis of the data and enlisted the services of a team of external biostatistician with extensive FDA experience.

Given that the company's efforts were focused on bringing two drugs to market, DARA's management team understandably needed to confirm KRN5500's potential for efficacy to decide whether or not to pursue further development.

"Chris and I were aware of the KRN data that had been published, but we were also aware that it was a small clinical study," Drutz says. "I am an MD and have done a lot of clinical development myself, and there's always a problem when you're looking at a very small clinical study to know if it is real or not. We wanted to be sure KRN was real. We came away from that feeling quite reassured that there's a real signal. That prompted us to decide to reformulate the drug, and to announce that we believe the data is sufficient for the company to move forward."

In addition to the Fast Track designation from the FDA, DARA has also received validation for the potential of KRN5500 in the form of a planned phase 2 trial in conjunction with the National Cancer Institute. Going forward, DARA intends to expand the clinical trial and obtain a partner to help further develop, and eventually market the drug.

"There currently is no drug approved for the treatment of chemotherapy induced neuropathic pain," Drutz says. "The FDA is interested in helping young companies that are working in areas where there is a pioneering therapeutic opportunity. The NCI is similarly interested in therapeutics in the caner support space that relieve the side effects of chemotherapy. We believe we have been externally validated by working with these two external federal agencies."

Spotlight on the new DARA BioSciences

In just a matter of months, DARA has aggressively undergone major changes both in the management team and growth trajectory of the company. The company has assembled a sales force ready for the Bionect launch, and the subsequent Soltamox rollout. In addition, the company is well positioned to execute on its strategy going forward after successfully raising over $10 million from a recent public offering in April.

"I think that the earlier story of DARA as a struggling, young development company did not appeal to the large institutional investors," Drutz says. "We feel that with the target being becoming a profitable company and being able to deliver to the marketplace, we're now much more likely to be able to excite the interest of the investment community and analyst coverage by institutions."

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