MannKind’s Help Puts CTL Closer to Its Cancer Vaccine Biotech: A Step Toward The Future By CARLOS MARTINEZ Staff Reporter Just three years ago, CTL ImmunoTherapies Inc. was nothing more than a proposal on a piece of paper in John Simard’s small Northridge apartment. Today, the company is bankrolled by Alfred E. Mann, founder of MiniMed Inc., and is developing a vaccine many believe will shrink tumors and eradicate some forms of cancer. “We’re fortunate that we don’t have to struggle to get financing anymore,” said CTL CEO John Simard. “It’s been a long while since I’ve been in that situation.” Unlike dozens of other biotechs in the San Fernando Valley, CTL is well-funded with cash infusions totaling more than $30 million from Mann’s MannKind Corp. since 1998. Housed in a 42,000-square-foot state-of-the-art facility with labs and high-end equipment, including a $250,000 electronic cell sorter, Chatsworth-based CTL is one fortunate biotech. The company is currently conducting clinical trials for some of its vaccines, one of which could battle cancers of the breast, lung and prostate. With pioneering research into T-cells, a kind of white blood cell that attacks body cells that are infected or malignant, CTL is hoping to develop vaccines that could reach the market within two years, leading to potential sales in the billions of dollars over several years, Simard said. “We could be bigger than Amgen. There’s that much potential,” he said. But three years ago, things looked much different. Despite what Simard was convinced was the vaccines’ potential, funding remained hard to come by. “There was always interest out there from investors, but the funding was small only a few hundred thousand dollars,” he said. A researcher working on T-cell immune responses, Simard felt the funding he was looking for would help determine whether the cells (also known as cytotoxic T lymphocytes, or CTL) could help eliminate tumors. Simard said earlier research proved that T-cells, if stimulated by a particular kind of vaccine on an ongoing basis, could prove effective in reducing the size of a tumor. “The trick with these vaccines is that they can’t be delivered in a single shot,” he said. “You’ve got to keep the vaccine around. As long as the vaccine is around, the T-cell is around and working, doing its job.” But the trick was to find a method to deliver a continuous dosage of vaccine long enough to let the T-cells reduce the size of a tumor. Enter Mann’s MiniMed Inc. (now owned by Medtronic Inc.), which had what Simard was looking for: a small, wallet-sized pump that delivers insulin to diabetes patients. When he approached MiniMed in 1998, Mann became interested in CTL and offered to fund the company as long as it met certain goals, so-called “mileposts.” “Part of the deal was that he would buy stock, but we would have to meet a number of milestones and these milestones were very aggressive under a short timeline,” Simard said, referring to the goals outlining levels of progress for vaccines as an incentive to receive further funding. “You’d only have a little bit of money to get you to a certain target, so if you run out of money and you didn’t meet your target and you don’t meet your result, then the story was over,” he said. Bill Robbins, managing director of Convergent Ventures LLC in Los Angeles, said such deals are not unusual. “Investors are cautious and it takes a lot more capital to get off the ground in biotech than in other cases because there’s labs that have to be built and expensive equipment that has to be bought,” he said. Investors are also looking at a myriad of options when it comes to biotech investments, said Myles Greenberg, director of fund management for Arthur M. Pappas & Associates. While CTL is still in the research stage, Simard is looking forward to 2004 when the vaccines are likely to hit the market. Revenue projections for that year amount to $5.5 million, before jumping to $1.6 billion in 2008. “These aren’t academic exercises. We’ve got products here that will work,” he said. “We’re absolutely convinced that we’ll get approval for these products.” Robbins was a bit more cautious about projecting CTL’s future revenues. “It’s still quite early to tell. The market is real in the oncology and hematology area if they can improve survivability for patients,” he said. “But it all depends if the product performs 100 percent as promised.” The mapping of the human genome in 2000 showed investors that there is research potential in a number of areas, he said, referring to potential new drugs and therapies that could target a variety of diseases or conditions. Simard said he understands the risks involved for investors in biotech firms. “That’s why it’s important to deliver on your promises,” he said. “We know we have to perform and get stuff to the market as quickly as humanly possible.” CTL, acquired by MannKind in December, must still meet its mileposts or funding will be in jeopardy, Simard warned. So far, so good. The company has also benefited in other ways from its relationship with Mann as he introduced Simard and his staff to researchers at USC and Stanford University, who are helping the firm conduct its clinical trials. Mann himself had no qualms about CTL’s potential for success. “I fully believe that we’ll find a cure for cancer. I’m committed to finding the cure,” he said. Based on the work of 1996 Swiss Nobel laureate Rolf Zinkernagel, who showed how the human immune system worked, CTL refined his theories and developed a number of patents based on the Zinkernagel discoveries. Zinkernagel, who served as an advisor to the company, showed how T-cells sought out and destroyed cancerous cells to stop the disease from spreading. There are other companies working just as feverishly as CTL to develop vaccines to fight cancer but, Simard said, his company is the only one benefiting from Zinkernagel’s expertise.
