Reprinted with Permission from “The Pink Sheet.” Please see Copyright Notice on the end page

Founded 1939

P R E S C R I P T I O N P H A R M A C E U T I C A L S A N D B I O T E C H N O L O G Y

Elsevier Business Intelligence

July 16, 2012

T he pipeline at MedImmune LLC, the biologics arm of AstraZeneca PLC, is ready to end its productivity drought with a flow of differentiated candidates and a

growing appetite for co-development and collaboration.

When AstraZeneca acquired MedImmune five years ago, 7% of its portfolio was in biologics, mainly thanks to the 2006 take-over of Cambridge Antibody Technology. With MedImmune, that percentage rose to 27%, and today large molecule therapeu-tics – some with “CAT” still in their name – make up over 40% of the company’s pipeline (“AstraZeneca Accelerates Biologics Strategy With Acquisition Of MedImmune” — “The Pink Sheet” DAILY, Apr. 23, 2007). The stated goal is to file one new biologics license application ev-ery year beginning in 2016.

At AstraZeneca, the departure June 1 of CEO David Brennan added an executive shake-up to a list of trials that already includes generic challenges to mature blockbusters, patent cliffs, the slow launch of car-diology drug Brilinta (ticagrelor), sluggish growth in devel-oping markets and three restructuring schemes since 2007 (“Brennan’s Departure Not Expected To Disrupt Current Business Development Strategy At AstraZeneca” — “The Pink Sheet,” Apr. 30, 2012).

Still, the intrepid pharma has not fallen off of its plan to en-rich its pipeline through partnering and small acquisitions. And Brennan’s 2007 decision to spend roughly $16 billion on the Gaithersburg, Md., biotech, while the company has been criticized for its failure to create immediate shareholder value, may ultimately be the play that rights the company and vindicates his tenure at its helm.

“The MedImmune pipeline is now 44% of the total AstraZeneca pipeline, so it’s a big deal,” Edward Bradley, vice president of clinical development for oncology, said during an interview on the eve of the June 1-5 American Society of Clinical Oncology annual meeting in Chicago. “We’re a big part of what AstraZeneca does.”

Opening Up To Create A Productive EnvironmentWin or lose, responsibility for Medimmune research & de-velopment falls to Bahija Jallal, executive vice president of R&D, who joined the company just before the AstraZeneca acquisition and has maintained a long-term vision of the company’s potential. Jallal is credited with growing the bio-tech’s pipeline from 40 to more than 140 candidates.

“I think there is really no secret,” Jallal said in an interview at the Biotechnology Industry Organization meeting in Boston later in June. “There are only two things: you have to follow

the science and have the right people, the right talent, and provide the environment for the two to flourish.”

Like AstraZeneca, MedImmune reworked its pipeline strategy in 2010, creating Innovative Medicines (iMED) units that take a whole-portfolio, incep-

tion-to-market view of R&D. The set-up created more “line of sight accountability,” Jallal said. And, most importantly, the system recognizes that “the science doesn’t stop. There is no throwing over the wall, and one stops here and the other one continues,” she emphasized. “It’s about testing hypoth-eses into the clinic” and gaining an early understanding of such things as whether there is a biomarker that’s going to go along with the asset and what population is more likely to respond.

Another innovation driver is the advent of cooperative de-velopment deals between MedImmune and other pharmas. The company’s April deal with Amgen Inc. for co-develop-ment of five compounds “is for me the most exciting new way of doing deals in the industry because … it really draws on the strength of both organizations,” Jallal said. “I look at it as risk sharing and other things, but also just bringing the science from both organizations to advance the molecules is fantastic.”

The deal provides for co-development and co-commercializa-tion of five potential anti-inflammatory medicines discovered and advanced into clinical development by Amgen (“Amgen

MedImmune Pipeline Primed To ProduceShirley haley S.haley@elSevier.com

With 44% of the total pipeline, “we’re a big part of what AstraZeneca does,”

said MedImmune oncology iMED chief Edward Bradley.

www.ElsevierBI.com/publications/The-Pink-Sheet

Gets Cost-Sharing, MedImmune A Pipeline Boost In Five-Antibody Collaboration” — “The Pink Sheet” DAILY, Apr. 3, 2012).

“Hopefully, that kind of co-development deal is going to be the way of the future,” Jallal said. “Drug development is long, costly, and diseases are more complicated than ever, and we need to bring more differentiated drugs,” she said. “Science has always been about collaboration anyway … and I think … drug discovery is even more amenable to that because of the time it takes and the success rate.”

When it comes to two companies each contributing a drug to an experimental combination, Jallal observed that, while

oncology has paved the way, the model can “absolutely” work in other settings. “Diseases are never just about one single target, and I think some areas are more amenable to [co-de-veloped drugs] than others, oncology being one … but if you ask me today, it’s going to be the same as we move into other therapeutic areas.”

“Even the regulators are interested in finding a path for the novel/novel [combinations], and the diseases are telling us that this is what we need to be looking at for sure,” Jallal said, pointing to a novel/novel development collaboration between AstraZeneca and Merck & Co. Inc. to combine their respective

The long-view pipeline strategy adopt-ed by AstraZeneca PLC and its biolog-ics arm MedImmune LLC as a way of

revitalizing productivity is starting to pay off, as MedImmune prepares to move a number of candidates into late-stage studies – including out of its oncology in-novative medicines unit.

The iMED philosophy, the result of a 2010 R&D reorganization, is focused on an inception-to-market strategy that aims to produce differentiated candidates that can hold their own in the increasingly personalized medical world.

The greatest area of growth in MedIm-mune’s oncology iMED unit is immune-modulated therapies, Edward Bradley, vice president of clinical development for oncology, said during an interview ahead of the American Society of Clinical Oncol-ogy annual meeting in early June (“Med-Immune Pipeline Primed To Produce” — “The Pink Sheet,” Jul. 16, 2012). But the company is working on a number of other oncology candidates, both homegrown and acquired, with unique mechanisms of action, and it is testing a few of them early in head-to-head studies with standard of care biologics.

The most advanced candidate in the oncology iMED’s pipeline is moxetu-momab pasudotox (CAT-8015), a fusion protein that combines an anti-CD22 antibody and a truncated form of Pseu-domonas exotoxin. CD22, a lineage an-tigen that appears on almost all early-stage B-lymphocytes, is very quickly internalized when anything binds to it, making it perfect for the antibody drug conjugate approach and perfect for B-cell blood cancers, said Bradley. Once inside the cancer cell, the Pseu-domonas exotoxin is incorporated into the cell’s normal metabolic lysozymes,

which break down foreign proteins, re-leasing its toxin during the process and killing the cell.

The therapy is eliciting extremely high complete response rates, particularly in patients with hairy cell leukemia. And in pediatric leukemia, about a third of the patients – who had had multiple re-lapses from chemotherapy, many with failed bone marrow transplants – had a significant response, many durable enough to allow them to undergo a sec-ond bone marrow procedure, Bradley said. A fairly substantial number of sub-jects with both pediatric leukemia and hairy cell leukemia have been treated at the optimal dose, so it’s “more similar to a Phase II or a Phase I/II expansion trial, and the follow-on trials could lead to registration,” he said.

In fact, because MedImmune is seeing substantial clinical activity with a well-tolerated dose, the National Cancer Institute, through the Cancer Therapy Evaluation Program, is discussing do-ing a Phase III trial in hairy cell leukemia compared to standard of care.

A second leukemia/lymphoma candi-date, MEDI-551, also targets a lineage receptor, CD19, expressed in most B-cell malignancies. The beauty of lin-eage antigens is that they are a part of early-stage B-lymphocytes, and the cancer “can’t get rid of them” once the cells become leukemic, Bradley said. “They’re a perfect target for antibody-based therapy.”

The 551 antibody is engineered to boost its cell-killing capacity with the possibil-ity of lower doses and better efficacy than Roche’s Rituxan (rituximab). It is in Phase II head-to-head trials comparing it to Rituxan-based therapies in second-line treatment of patients with chronic

lymphocytic leukemia and in patients with diffuse large B-cell lymphoma.

MEDI-575 does not attack the tumors directly but binds to platelet-derived growth factor receptor alpha (PDGFrα), which is produced by tumor-associated fibroblasts in the tumor environment. The antibody is being tested with carbotaxol (carboplatin and paclitaxel) against car-botaxol alone in first-line treatment of patients with refractory disease. An ef-ficacy read-out from the Phase II trial is expected later this year, Bradley said.

MEDI-3617, an anti-angiogenesis anti-body in line to be tested with MedIm-mune’s cancer immunotherapeutics, “attacks a completely different function of tumor vessel formation from tradi-tional VEGF inhibitors,” Bradley said. The fact the antibody acts on a different stage of blood vessel development may account for the candidate’s improved side-effect profile compared to existing anti-VEGF therapies, such as Roche’s Avastin (bevacizumab), he noted, add-ing that “we have to wait to see [if it also has] a reasonable degree of anti-tumor response.” The antibody is still in dose escalation testing.

One possibility is to combine MEDI-575, an angiopoietin factor 2 inhibitor, with oth-er anti-angiogenic drugs to block tumor formation at multiple stages, Bradley said. In fact, MedImmune just started a Phase Ib trial testing the combination, he said. “We’ll be able to see next year whether it’s safe to use those in combination.”

Finally, MedImmune is conducting a Phase II trial comparing MEDI-573, a dual targeting antibody, in combination with aromatase inhibitors against aro-matase inhibitors alone in patients with estrogen receptor-positive breast cancer.

It’s Differentiate Or Perish At MedImmune’s Oncology iMED

www.ElsevierBI.com/publications/The-Pink-Sheet

small-molecule candidates into one therapy for solid tumors. Looking ahead, one of the strengths of having both large and small molecules at AstraZeneca and MedImmune is “we can also look at the two platforms and how we can do more com-binations there,” she said.

Meanwhile, at least 40% to 50% of the MedImmune pipeline derives from external partnerships, and that includes any-thing from a general target to drugs at any stage of devel-opment, said Jallal. The key to developing meaningful drugs that really attack the disease is through good science and innovation, “and the only way you can keep scientists innova-tive and not have ‘invented here syndrome’ is to be collabo-rating with the outside. … That is absolutely important.”

Another important source of innovation is academic collabo-rations, Jallal said. The way drug development is done now, with the emphasis on understanding pathways, on develop-ing a more translational approach, it becomes very important to understand the disease even more, she said. “It all comes back to mechanism, it all comes back to the depth of under-standing these diseases. We have collaborations at every level with academics, and we need the science and we need the research that they do.”

Candidates With Dx Companions Verge On Phase IIIMedImmune has one iMED in oncology, one covering inflam-mation, respiratory and autoimmunity (IRA) diseases and one in infectious diseases, plus a virtual iMED in neuroscience (“AstraZeneca Goes Virtual In Neuroscience R&D As Part Of Workforce Reduction” — “The Pink Sheet” DAILY, Feb. 2, 2012). Right now, the most advanced and largest portfolio is in IRA, Jallal reports.

Benralizumab (MEDI-563), an anti-interleukin-5 receptor al-pha antibody, has finished enrollment in a Phase IIb study of patients with inadequately controlled, severe refractory eo-sinophilic asthma. The antibody targets the IL-5 receptor, de-pleting eosinophils and basophils – immune cells associated with asthma and allergies – through apoptosis. The antibody also is being studied in a Phase IIa trial against eosinophilic chronic obstructive pulmonary disorder.

Because 40% to 60% of the multi-billion dollar global asth-ma market represents eosinophilic asthmatics, MedImmune started out early on to develop a personalized approach to benralizumab development, Jallal explained. Early trials dem-onstrated that the drug depleted eosinophils not only in the blood but also in the lung, and the company now is co-devel-oping it with a proprietary eosinophil-measuring diagnostic. Data from the IIb trial should be available in the next 12-18 months for a Phase III “investment decision,” she said.

Sifalimumab (MEDI-0545), an anti-IL alpha antibody, is in Phase IIb development for systemic lupus erythematous pa-tients. MedImmune has developed a proprietary assay to determine whether patients are high, moderate or low for expressing a specific genomic signature the company discov-ered in its efforts to better understand the disease. In Phase I, the firm demonstrated that using the genomic signature as

a pharmacodynamics marker could be linked with a positive effect on skin lesions. An ongoing Phase II trial is testing the predictive value of the diagnostic, as well as the usual dosing, efficacy and safety issues, Jallal said. Data anticipated in the next 18-24 months will show whether the diagnostic is useful, she said. “We’re testing it in positive and negative” popula-tions, which should give a clear picture of its utility.

Headed into Phase III, possibly during the third quarter, is bro-dalumab, an anti-interleukin-17 receptor antibody in develop-ment for psoriasis that is the lead compound in the Amgen collaboration. Amgen recently published positive Phase II data on the antibody in the New England Journal of Medicine (“Brodalumab, Ixekizumab Rapidly Improve Psoriasis” — Health News Daily, Mar. 29, 2012).

Beyond those candidates, Jallal highlighted tralokinumab (CAT-354), an anti-IL-13 antibody that just started a Phase IIb trial in adult patients with severe, persistent, uncontrolled asthma despite standard of care therapy. The data were encouraging in Phase IIa, and the company will also be test-ing the candidate in moderate to severe asthma, she said. Additionally, a Phase II proof of principle trial in ulcerative colitis has begun enrollment.

And mavrilimumab (CAM-3001), an antibody that targets the alpha subunit of the granulocyte-macrophage colony stimulating factor receptor (GM-CSFRα), a pro-inflammatory cytokine, has had success in Phase IIa against rheumatoid arthritis. It is headed into a Phase IIb trial for moderate to se-verely active RA. The antibody came to MedImmune through a 2001 arrangement between CAT, which now is MedImmune’s Cambridge, U.K., facility, and a company that is now owned by CSL Ltd.

Three Cancer Immunotherapies In The Clinic This YearThough IRA may have the most advanced projects, oncol-ogy represents about a third of the pipeline activity within MedImmune, Bradley said. The company is working on a broad and differentiated group of candidates, including one, a fusion protein, that may be headed into a National Cancer Institute-sponsored Phase III trial against hairy cell leukemia

Still, despite more advanced oncology candidates in the port-folio, the oncology iMED chief is most enthusiastic about the strength he believes his unit is building in cancer immuno-therapies. “We are heavily investing in pushing our portfolio for [immune modulated therapies] ahead,” Bradley said, add-ing that the new emphasis is probably the greatest area of growth since the oncology iMED was created (“MedImmune’s Restructured Oncology Unit Displays Its Fruits At AACR” — “The Pink Sheet,” Apr. 18, 2011).

“By the end of this year we will have three in the clinic”: an anti-CTLA-4, an anti-OX40 and an anti-B7-H1 (anti-PDL1). And, “we’re planning to add two more in the near future,” he added, though he declined to elucidate further because “there are a limited number of opportunities in the check point space.”

The so-called “check point” immunotherapies have gained traction of late because of their ability to overcome a cancer’s

www.ElsevierBI.com/publications/The-Pink-Sheet

© 2012 F-D-C Reports, Inc.; An Elsevier Company; All Rights Reserved.Reproduction, photocopying, storage or transmission by magnetic or electronic means is strictly prohibited by law. Authorization to photocopy items for internal or personal use is granted by F-D-C Reports, Inc., when the fee of $25.00 per copy of each page is paid directly to Copyright Clearance Center, 222 Rosewood Dr., Danvers, MA 01923, (978) 750-8400. The Transaction Reporting Service fee code is: 1530-6240/12 $0.00 + $25.00. Violation of copyright will result in legal action, including civil and/or criminal penal-

ties, and suspension of service. For more information, contact custcare@elsevier.com.

www.ElsevierBI.com/publications/The-Pink-Sheet

ability to dial down the body’s immune response to can-cer cells and thus “re-arm” the immune system to attack the cancer (“Cancer Vaccines Headed For Mainstream” — Pharmaceutical Approvals Monthly, May 2012).

Tremelimumab, the anti-CLA-4 antibody, was acquired in a late 2011 licensing deal with Pfizer Inc. after a Phase III fail-ure in melanoma for that company. It works via the same mechanism as Bristol-Myers Squibb Co.’s breakthrough mel-anoma therapy Yervoy (ipilimumab) to block a pathway that shields tumor cells from activated T-cells that would attack them. MedImmune is now taking tremelimumab into Phase II testing for solid tumors.

MedImmune entered a platform licensing deal with privately held Oregon start-up AgonOx in the fall of 2011 to develop agonists using the company’s proprietary OX40 platform. OX40 is a protein that appears on the surface of T-cells after they are activated by immune-stimulating antigens, includ-ing tumor antigens. Binding the protein with an anti-OX40 antibody has been shown clinically to inhibit apoptosis in those T-cells, resulting in T-cell proliferation and subsequent attack of cancer cells. The OX40 is in Phase Ib testing.

The third agent works against the ligand that binds PD-1, or programmed death-1, an antigen expressed on the sur-face of T-cells. The ligand, PDL-1, appears on the surface of cancer cells. When the T-cells expressing PD-1 approach cancer cells expressing PDL-1 the ligand joins with the antigen and ties it up, effectively keeping the T-cell from attacking cancer cells. Bristol introduced early data for

its anti-PD-1 antibody to much acclaim at ASCO (“Bristol Expands Immunotherapy Footprint With Anti-PD-1” — “The Pink Sheet” DAILY, Jun. 3, 2012).

The Medimmune drug, which is aimed at the ligand and not the T-cells, has the potential for fewer toxic side effects be-cause it attacks the tumor cell, not the immune cell, Bradley said. The drug enters Phase I this year.

Importantly, the real potential for each of the immune check point modulators lies in its use in combinations, Bradley said. “We’re looking not only at development of these as single agents but also looking at the possibility of combina-tions, either with themselves, which will enhance the ability of the immune system to turn back on, or in combination with things that hit other mechanistic approaches to cancer. We’re thinking particularly in terms of molecules that hit the angiogenesis process; probably we’ll use it in combination with our own anti-ANG-2 antibody [MEDI-3617],” he said.

“Theoretically any malignancy should be susceptible to im-mune attack, and by identifying each of the check points that the tumor is able to switch off, we’re able to switch them back on,” said Bradley.

In addition to “our own internal discovery that is advancing several more targets … we’re always in conversations with people on the outside to look for more,” he said. “Our in-tention is to have within our own portfolio a critical mass of molecules that block the significant check points of the immune system.”