Aurogen tackles side effect of diabetes

Startup company seeks patent, FDA approval, financing

Aurogen Inc.
P.O. Box B, Fort Collins 80522 Incorporated: Colorado, 1992
President: Douglas N. Ishii
Vice president: John F. Mill was senior staff fellow at the National Institutes of Health. A molecular biologist, he has studied genes found in the brain.
Secretary-treasurer: Wendy A. Ishii
Product: Insulin-like Growth Factors as a treatment for diabetic neuropathy and for other neuro-degenerative disorders such as Alzheimer˜s disease.
What˜s new: Aurogen is in discussions with Paul Koivuniemi about the possibility of his joining the corporation˜s board of directors. Koivuniemi is a former patent writer and litigator for Upjohn, and former corporate counsel for Synergen in Boulder. If he joins, he could act as an intermediary between Aurogen and the outside counsel, writing agreements between Aurogen and prospective licensees of its product.Clinical trials of a new treatment for a life-threatening diabetic condition, and major licensing agreements for a Colorado State University startup, may be only months away.
Trials and agreements await a patent on a laboratory-synthesized hormone that the inventor and Aurogen Inc. president Douglas Ishii believes will be an effective treatment for diabetic neuropathy.
"It˜s like having caught a whale on a thin thread," Ishii said of the wait for patent approval.
Diabetic neuropathy causes deterioration of the peripheral nerves, resulting in foot ulcers, loss of bladder control, excruciating pain, weakness, cardiovascular disturbances, sexual impotence and loss of digestive function.Virtually all of the nation˜s 22 million diabetics have some level of neuropathy, said Dr. Aaron Vinik, director of the Diabetes Research Institute of Eastern Virginia Medical School. It can be severe in about 14 percent of patients. In 60,000 people a year, the condition leads to amputation, usually of the leg.
If the patent on using a laboratory-synthesized hormone to treat diabetic neuropathy is approved, the licensing fees and other revenues that follow will be just some of the fruits of fifteen years˜ research by Ishii, a CSU professor of physiology. The hormone has proved to be an effective treatment for diabetic neuropathy in rats. Ishii estimates a market for his product in the realm of $600 million or more for diabetic neuropathy treatment alone.
Revenues from licensing agreements will help finance the clinical trials that Ishii hopes will lead to U.S. Food and Drug Administration approval.
Ishii expects the patent to be approved sometime this fall. If it is, his good fortune may become the good fortune of 22 million others as well. The line on this whale is taut.The money
Grants from the National Institute of Health, the American Paralysis Association, the Colorado Injury Control Research Center and other institutions have sustained Ishii˜s company, his laboratory and its research from the beginning.
One of the most recent was an award of $100,000 from the National Institute of Diabetes and Digestive and Kidney Disorders, an arm of the NIH. The money will support ongoing efforts to develop production of the hormone for clinical trials.
Early on in the commercialization process, which began in 1988 when the university filed for a patent on the use of recombinant human Insulin-like Growth Factors I and II for treating diabetic neuropathy, Ishii could have sought funding from venture-capital companies.
"Venture-capital companies like to get in early," Ishii said. "They want to own 85 percent" in return for the high risk of investing in an unproven proposition, Ishii explained. "(Aurogen˜s) corporate strategy has been, instead of giving up 85 percent of the corporation, to continue the research and to build value in the corporation. This makes us now very attractive to large pharmaceutical companies," he concluded.
Syntex Corp., a medium-sized drug company, showed interest in Aurogen after the 1995 publication of Ishii˜s research findings. However, Ishii said, corporate restructuring at Syntex last year derailed that interest.
Efforts at Aurogen now focus on amassing the small fortune, about $5 million initially, needed to pursue phase I and II clinical trials of IGFs on humans for FDA approval. Phase I will determine the safety of the product for human use. Phase II will determine whether it works to protect against and reverse diabetic neuropathy.
"We˜ve been very positively received by more than one drug company," Ishii said.
Recently, Aurogen˜s board has been in negotiations with one major Midwestern drug company in particular. Although reluctant to name the company, Ishii called it "a very large multinational company known to everyone."
Vinik, too, has added his weight to the effort to persuade the pharmaceutical company to sponsor clinical trials of IGFs.
"I˜m not much of a rat-research man myself," Vinik said. "I˜d like to see human trials."
Because a great deal is already known about the safety of IGFs, Ishii said, "Phase One is pretty much a shoe-in." For this reason, Phases I and II will be combined, hastening the ultimate arrival of the product to market and the presumed bounty resulting from having reeled in the big catch.
A large pharmaceutical company might fund the clinical testing in one of two basic ways. It could take the human testing on as its own internal project, paying Aurogen upfront fees, licensing fees and milestone payments for the privilege of using Aurogen˜s invention. Or it might back the trials financially, reserving for itself the right of first refusal to license the invention should it achieve FDA approval.

The medicine
Ishii˜s discovery is that a hormone that occurs in abnormally low levels in people with diabetes, when supplied to peripheral nerves, protects against neuropathy and even reverses nerve damage in early to intermediate stages of neuropathy.
It was Vinik at the Diabetes Research Institute who discovered that people with diabetes had abnormally low levels of IGFs.
In the big picture of diabetic neuropathy treatment, Ishii˜s discovery was ground-breaking in that he looked beyond the matter of controlling blood-sugar levels to another factor, IGFs, and their importance in nerve health.
Moreover, Vinik added, Ishii is the only researcher who has measured not only the amount of nerve regeneration but also the amount of increased nerve function that occurs with the aid of IGFs.
If the patent goes through sometime this fall as expected, and funding for clinical trials materializes, some people with diabetic neuropathy could likely begin receiving treatment with IGFs in a test situation within a year.
Ishii already has received letters from those suffering from diabetic neuropathy volunteering to be subjects for the trials.
"It˜s really changed my life," Ishii said. "I viewed this as an abstract scientific problem, an intellectual puzzle to solve. I˜ve had students (who had diabetic neuropathy) and watched them deteriorate to the point where they could not stand up from that chair. These were young people. It˜s given me a sense of mission."

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