Immupharma’s specialised treatment for those suffering from the chronic disease Lupus has been cleared by the US FDA to move into Phase 3 of testing, with fast track approval once passed. Dimitri Dimitriou explains the different phases of drug development, the strategic importance of Immupharma’s partnership with the French National Research Institution, and the ongoing challenge for the pharmaceutical industry: patent expiry.

The New Economy: You’ve laid claim to having a unique corporate strategy among your peers. What is your business model?

Dimitri Dimitriou: What makes Immupharma different in this business strategy and has been the same since the foundation of the company is that we avoid early stage research. And we focus on niche therapeutic areas, specialist therapeutic areas. The key thing about avoiding early stage research is that its the first part of the drug development process which takes a long time, it’s very costly, and you need to have many scientists and doctors to keep on making discoveries. So Immupharma struck a very interesting collaboration which has given us a number of our drugs up to now with the CNRS which the French national research institution. The CNRS is the largest fundamental research institution government funded in Europe and they have the budget of about 3.3 billion euros and over 30,000 employees. So this allows so to cherry pick inventions which are discovered there which we believe have a good potential commercially, globally and inhabitable to be in specialist theraputic areas. So with targeting diseases which are not well met at all, where there aren’t many competing drugs available and we avoid having our own labs which means that we manage to keep our entire costs low.

The New Economy: So what drugs do you have in development?

Dimitri Dimitriou: We five lead drugs for the moment. 2 are in clinical trials, the other 3 are at the pre-clinical stage. We have a pipeline also with another 2 platform technologies which we can use to develop further compounds in the future. The most advanced drug is called Lupuzor and that is a very special treatment for patients who are suffering from Lupus. This is a very depilating disease which is chronic so it lasts a lifetime and there aren’t currently any treatments for the disease so people tend to take things like steroids which has symptomatic treatments. Secondly drug is an anti cancer drug which is now just finished phase 1 2a study so this the first time in humans it’s been dosed for about a year and we have seen more than 20% of patients which were previously on other treatments that had failed. With progressive disease and metastasis to stabilise. So Lupozor is much more advanced of course because we finished some time ago now phase 1 and phase 2a and also phase 2b and the greatest thing what makes us really proud of Lupuzor is that it has recently been approved by the US FDA to go into phase 3 in the United States with whats called a special protocol assessment and also fast track approval.

The New Economy: So what are the particular processes that a drug will go through in the development stage?

Dimitri Dimitriou: Drugs take a long time to be discovered so the longest part of the cycle is the pre-clinical discovery and development. So once an invention is created a compound has to go through rigorous testing pre-clinically ie lab testing and some animal tests which we have to do to ensure first of all that its not really toxic and secondly get some proofs of the mechanism of action and also of potential efficacy. So once that is complete you are allowed to test in humans. So the first study is called phase 1 and that is typically in volunteers, although in areas like cancer for example where we are testing a cancer drug, you can test patients. So if phase 1 works and you see no toxicity you go into phase 2. Now phase 2 sometimes is just one study which is just called phase 2 but sometimes you can to a small phase 2 and large phase 2 so if phase 2a in a small number of patients works well, then you go into phase 2b and you prove the concept in a larger setting. Then if they also pass then the final phase where Lupuzor is going to start now is called phase 3 and that typically proves the result which you have seen in phase 2. If that meets the end point then you have approval.

The New Economy: What can you tell us about your research partners and corporate partnerships?

Dimitri Dimitriou: Well we have this very important link and collaboration or research collaboration which we have had now for I think more than ten years. It’s working very well and it allows us to keep our internal costs low by not having our own labs for discovery. If our funds research which takes place at the CNRS obviously our contribution is tiny compared to the overall budget. This allows us access to probably about 50 scientists and medical doctors in distribution which is all over France and the way the collaboration works with the CNRS is that we licence drugs exclusively to Immupharma. So Immupharma has the world wide rights for this drugs exclusively. We progress development with our own funds. We would find a partner unless we get into a stage at the end where we can commercialise ourselves then we would pay the CNRS either royalties and sales if we commercialise alone, or part of the revenues which we would receive out of another partner if we do make a deal.

The New Economy: Generally speaking how is the pharmaceutical industry positioned at the moment, and what are its main challenges?

Dimitri Dimitriou: The pharmaceutical industry right now I guess is probably not the only sector in the market. The world economy is not in a terribly good state at the moment. But the challenges which the pharma industry is facing have been probably the same over a number of years now which is patent expiries. Patent is obviously the reason why a company can capitalise on the years of research and millions of costs which have been spent on discovering and marketing a new compound but at the end the patent expires and when the patent expires anybody around the world is allowed to basically copy the drug and sell it at very very low cost because they haven’t done the research and marketing effort which is why I think there has been a fashion in the recent years that big pharma is really looking for acquiring or licensing new compounds out of other companies typically smaller ones like us.

The New Economy: You have five drugs in development, so what’s next in the next few years for Immupharma?

Dimitri Dimitriou: Well we are at a very exciting stage I think quite close to possibly a very big inflection point with the company. We had a corporate deal which we closed in 2008 and 2009 with a US company called Cephalon. It was initially an option on their part to continue for a worldwide licence with pre-agreed rights where pre-agreed terms, before we had the results of the phase 2 study which Immupharma was running on Lupuzor. So when the results came out they they exercised the option quite quickly, they paid us another $30million so so far we have received out of Cephalon $45million. Then they progressed development at their own cost. They managed to get the drug now approved by the FDA for the final phase 3. Cephalon was acquired by a large company called Teva pharmaceutical industries last year and as part of our original agreement with the contract they didn’t have the rights to assign Lupuzor on to a new entity and there was also a non complete clause which came into place. So effectively we decided, with the agreement of cephalon, that we would take the drug back so it’s great for us because hopefully we can have a second bite at the cherry.