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lead compound offers a unique clinically proven
proposition in the fight against cancer by potentiating chemotherapy as well as protecting
from its toxicity, with a pivotal Phase 3 trial in lung cancer, other Phase 2s, and a
potential dirty bomb application
Novelos Therapeutics, Inc.
One Gateway Center, Suite 504
Newton, MA 02458
President and CEO
Interview xonducted by:
Lynn Fosse, Senior Editor
July 20, 2006
Harry S. Palmin, President and CEO
Mr. Palmin has been President, CFO and Director of the Company since 1998, and acting CEO
since January 2005. He was elected CEO in October 2005. Prior to joining the Company, Mr.
Palmin was Vice President at Lehman Brothers from 1996 to 1998, responsible for sales,
product and risk management in Private Client Services. He was an Associate at Morgan
Stanley & Co. from 1993 to 1996. Mr. Palmin has a B.A. degree in Economics and
Business, magna cum laude, and an M.A. degree in International Economics and
Finance from the International Business School at Brandeis University. He studied at the
London School of Economics and the Copenhagen Business School. Mr. Palmin is fluent in
Russian and English.
Novelos Therapeutics, Inc. (OTCBB: NVLT) is a biotechnology company commercializing
oxidized glutathione-based compounds for the treatment of cancer and hepatitis. NOV-002,
the lead compound currently in Phase 3 development for lung cancer under a SPA, is
designed to act together with chemotherapy as a chemoprotectant and an immunomodulator.
NOV-002 is in Phase 2 development for chemotherapy-resistant ovarian cancer and is also
being developed for acute radiation injury. NOV-205, a second compound, is designed to act
as a hepatoprotective agent with immunomodulating and anti-inflammatory properties.
Novelos plans to initiate a U.S.-based NOV-205 clinical trial, under an IND, for chronic
hepatitis C mid-2006. Both compounds have completed clinical trials in humans and have
been approved for use in the Russian Federation where they were originally developed.
CEOCFO: Mr. Palmin, will you bring us up to date and tell us
about the company?
Mr. Palmin: A year ago I told you that in 2006 we
expected to be a Phase 3 cancer company, with Phase 2 studies in chemotherapy-resistant
ovarian cancer and chronic hepatitis C well, that is exactly where we are today. At
the time of our interview, Novelos had a lot of positive Russian clinical data in cancer
and hepatitis. Then, in August 2005, we announced positive results from a US Phase 2 lung
cancer trial. Last December, we got the green light from the FDA for Phase 3 development
and now we are getting ready to start a pivotal Phase 3 lung cancer trial under a Special
Protocol Assessment, which we finalized with the FDA in record time. We are also starting
up several Phase 2 studies in chemotherapy-resistant ovarian cancer, and with our second
drug, NOV-205 in chronic hepatitis C. There is also an interesting application in terms of
potential treatment for post effects of a dirty bomb. The US government
is seeking to procure such treatment, as there is currently nothing available. Our
dirty bomb treatment proposal was recently approved by the US government for
round 2 evaluation. Finally, these days we are a well-financed public company.
CEOCFO: What is the
basis of what you are doing?
Mr. Palmin: We have a unique proposition and novel
technology, with NOV-002, our lead Phase 3 cancer product, which is already approved in Russia
for treatment of solid tumors in cancer patients. Chemotherapy is great at killing cancer;
unfortunately, chemotherapy also kills the patient. When patients take our drug NOV-002,
together with the chemotherapy, not only is NOV-002 protecting from typical side-effects
of chemotherapy, but its also potentiating chemotherapy - in that we are getting better
survival outcome as well as better anti-tumor effects. A drug that can do both, safely
with low cost, is a truly unique proposition in the market today.
CEOCFO: Why is it that
they recognized that in Russia but it seems to be taking longer to be approved for use in
the United States?
Mr. Palmin: In Russia, NOV-002 was approved on the
basis of extensive preclinical safety data and Phase 2-type clinical studies in 340 cancer
patients, used in combination with chemotherapy, which demonstrated efficacy and safety.
Since approval, NOV-002 has been administered to more than 5,000 patients in Russia.
For US approval, having completed a US-based Phase 2 lung cancer trial with
positive results, we are now proceeding with a pivotal Phase 3 lung cancer trial. In the US,
they say it takes 15 years to get a drug approved from start to finish. Well, we have been
doing this for over a decade, and are hopefully 2.5-3 years away from positive Phase 3
results and subsequent approval.
CEOCFO: How is what you
have applicability for dirty-bomb treatment?
Mr. Palmin: The oncologists in Russia anecdotally
started using NOV-002 in cancer patients that had been receiving radiation therapy,
because they found that the patients were able to better tolerate radiation therapy better
and achieved better results. Animals treated with NOV-002 (after exposure to radiation)
resulted in a two- to three-fold increase in 30 day survival compared to the irradiated
but untreated control animals.
CEOCFO: What is the
timetable for your Phase 2 and Phase 3 trials?
Mr. Palmin: This quarter, we are expecting to start our
pivotal Phase 3 lung cancer trial and the Phase 2 ovarian cancer trial. Also this quarter,
we are starting a chronic hepatitis C trial with our second drug, NOV-205. In terms of the
timelines going forward, the pivotal Phase 3 trial will take 2.5 to 3 years to complete.
By the end of next year, I expect to have it fully enrolled and at the end of 2008 or
early 2009, I hope to have the positive results, which we would be able to use for FDA
approval under the SPA. In terms of the Phase 2 studies, I expect to see those results the
early to mid next year.
CEOCFO: While the
studies are in progress, what does Novelos do?
Mr. Palmin: We explore other studies and other
indications. We are working partnerships outside the US to defray the cost of our pivotal
Phase 3 program. Additionally, we are looking for in-license opportunities of
complementary technologies and products. For example, we have a unique access to potential
pipeline products through our network and connections in Russia.
CEOCFO: Are you financed
well for this?
Mr. Palmin: Yes. We have monies into the third quarter
of next year. It is nice not have an immediate need to access capital in todays
difficult market environment. We can focus on fundamentals, and wait until early to mid
next year to access the markets, and possibly quite later assuming any of our
collaboration efforts come to fruition.
CEOCFO: What should
potential investors know that does not jump off the page and why is this a good time be
interested in Novelos?
Mr. Palmin: Despite excellent fundamentals, Novelos
only has a $40mil market capitalization, whereas our comparables are trading in the
$300mil range. We have a unique value proposition, safely potentiating chemotherapy as
well as protecting from its toxicity. We accomplish that in a much more cost-effective way
than targeted biologics, which are marginally effective and actually add to the
chemotherapy toxicity. Hence the opportunity.
CEOCFO: Any final
Mr. Palmin: I think Novelos is a unique Phase 3 company
in the biotech sector because not only do we have a terrific fundamental story, with
clinically proven compounds for cancer and hepatitis, but our fundamentals are
disconnected from the current market valuation, which presents the opportunity for
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