Q&A: Alan Auerbach on Small and Speedy Biotechs

The founder of Cougar Biotechnology focuses on licensing drugs and bringing them forward

“When we started Cougar in May of 2003, the whole company was basically just me, a rented office, a laptop, a phone, and a very small amount of seed capital,” recalls Alan H. Auerbach, former CEO of Cougar Biotechnology. “And I went out looking for drugs.”

Auerbach zeroed in on abiraterone (Zytiga), originally discovered by the Cancer Research UK Centre for Cancer Therapeutics at the Institute of Cancer Research. Six years later, after Cougar ran 2 successful phase III clinical trials in treating metastatic prostate cancer with the drug, Johnson & Johnson bought the 65-employee startup for about $1 billion in cash. Abiraterone received U.S. Food and Drug Administration (FDA) approval in April 2011.

Later that year, Auerbach's second biopharmaceutical venture, Puma Biotechnology in Los Angeles, raised $60 million and bought worldwide commercial rights to the tyrosine kinase inhibitor neratinib from Pfizer.

Auerbach, who received a master's degree in biomedical engineering from the University of Southern California, worked in diagnostic clinical research before becoming a Wall Street analyst focusing on small biopharmaceutical companies—and then became a serial entrepreneur. He discussed drug development with Cancer Discovery's Eric Bender.

How did Cougar begin?

In late 2002, I was approached with the idea, which was to go out and find drugs that were already in clinical testing, license them, and then take them into development. A lot of drugs were in clinical trials but weren't getting the attention they deserved. Sometimes the company developing them didn't have the resources, sometimes there was a strategic shift, and sometimes it was small companies that only had limited capital, and they couldn't develop certain assets.

Why did you choose abiraterone?

When I was an analyst I covered Celgene, and I knew some doctors on the East Coast who had been working with thalidomide in prostate cancer. When I started Cougar, I called them and I told them I was looking for novel drugs with scientifically validated and well-understood pathways, and data in humans. They described the concept of inhibiting adrenal androgens. A lot of work had been done to identify a drug that could specifically target the p450 enzymes involved in adrenal androgen production—the CYP17 enzymes—and leave the rest of the p450 enzymes alone. After 12 or 13 phone calls, I found abiraterone.

Where was abiraterone in development?

At the time we bought abiraterone in 2003, the drug basically had been in single-dose testing in 20 patients and 6 patients were treated with it for 10 days. A tremendous amount of work had to be done: We needed to create a manufacturing process for the drug and perform the studies that would allow us to file the Investigational New Drug Application, the Clinical Trial Applications, and so on.

How did you raise capital?

We created a public company. Because of my background as a Wall Street analyst, I felt that the best opportunity to raise capital was to leverage my existing relationships with public institutional investors in order to raise capital.

What was Cougar's history of clinical trials?

The clinical development was very expedited. A small company often has the benefit of speed. We moved, we hustled. When your employees only have one asset to develop, they can focus 100% of their time on it.

We started phase I trials in late 2005 and early 2006. Due to the speed of our development we were able to rapidly advance into 2 phase III trials; one was started in May 2008 and the second in April 2009. The first one treated patients who had metastatic prostate cancer that had not responded to chemotherapy and enrolled approximately 1,200 patients. The second one treated patients who were chemotherapy-naïve and enrolled approximately 1,000 patients. We were very happy to work with some great contract research organizations to get the phase III trials enrolled rapidly and, as a result, each trial was fully enrolled within about 1 year.

Then, from the regulatory point of view, we obtained special protocol assessments (SPA) from the FDA for both of those phase III trials. At Cougar, we had a very positive and productive relationship with the FDA.

What led you to launch Puma?

It's a really great experience to first, develop a drug in oncology that helps patients; second, build a company from scratch; and third, see the excitement over the drug among employees, investigators, and patients. I can't say it's like anything else I've ever experienced. I clearly wanted to do that again. So I went to Cougar's investors and said, “Listen, I'd like to do this again, guys.”

When you licensed neratinib for Puma, you also altered some of the targets for its clinical trials.

With neratinib, we clearly have an opportunity to develop the drug to treat HER2-positive breast cancer, and we also have opportunities to develop the drug for other tumors as well; there are a wide number of potential indications and potential tumor types. What's most important is to get this drug to the market to help cancer patients. That is always first and foremost on our minds.

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