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(NVLT) is commercializing clinically validated pharmaceuticals for the
treatment of cancer and hepatitis huge markets with vast unmet need
Novelos Therapeutics, Inc.
One Gateway Center, Suite 504
Newton, MA 02458
Harry S. Palmin
President and Acting CEO
Interview conducted by:
Lynn Fosse, Senior Editor
June 30, 2005
Harry S. Palmin, President and Acting CEO
Mr. Palmin has been President, CFO and Director of the Company since 1998, heading up
Novelos' operations, finance, business development, as well as overseeing clinical
development. 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) was
established in 1996 to commercialize two promising oxidized glutathione based compounds,
NOV-002 and NOV-205, for the treatment of cancer and hepatitis. Both compounds have
completed clinical trials in humans and have been approved for use in the Russian
Federation where they were developed. NOV-002, marketed in Russia by an unrelated
entity under the trade name GLUTOXIM®, has been administered to over 5,000
patients, yielding excellent safety and promising efficacy data. A U.S. Phase I/II
clinical trial of NOV-002 for lung cancer has been completed. The Company plans to file an
IND for NOV-205 as a mono-therapy for hepatitis C and to initiate U.S. clinical trials.
CEOCFO: Mr. Palmin, what
was your vision when you came to Novelos, and how has that developed?
Mr. Palmin: I came to Novelos Therapeutics seven years
ago, with a vision of commercializing clinically validated compounds for cancer and
hepatitis, both huge markets with vast unmet need. Our compounds are approved for use in Russia,
where many thousands of patients have already been treated, safely and effectively. A U.S.
Phase I/II trial in lung cancer has already been completed with our lead compound,
NOV-002, and we expect to move into a pivotal lung cancer study next year. U.S. clinical
trials with NOV-205, our second compound, for hepatitis C are anticipated to commence by
CEOCFO: Does the Russian
approval shorten the US regulatory process or make it more likely to be successful?
Mr. Palmin: Both. The Russian approval means we have
safety, clinical activity in patients and well-established manufacturing process, which
means we are more likely to succeed. The Russian data for NOV-002, our lead compound, was
comprised of extensive preclinical safety data and controlled clinical trials in 340
cancer patients, used in combination with chemotherapy, which demonstrated safety and
clinical activity. We presented this data to the US FDA, and we able to proceed with the
US Phase I/II lung cancer study. We have a similar package for NOV-205, our second
compound for hepatitis, which we plan to submit to the FDA this fall as part of an
CEOCFO: Will you tell us
about the compounds?
Mr. Palmin: Novelos compounds are based on a
novel oxidized glutathione platform. Our lead product is NOV-002, which is a
cytoprotectant and an immuno-modulator. This compound has been on the market in Russia for
more than five years and has been in more than 5,000 patients. Taking NOV-002 in
combination with toxic chemotherapy, patients in Russian clinical studies immediately
began to feel better, their blood and immune indices improved, they were able to take more
cycles of chemotherapy, all of which translated into a survival advantage. In fact, when
used in combination with chemotherapy, NOV-002 increased the one-year lung cancer survival
rate from 17% to 63% in a Russian study. The final results of the US Phase I/II study are
expected in the next few weeks and we expect no surprises. Preliminary US results confirm
the safety demonstrated in Russian trials. Further, patients treated with NOV-002
demonstrated a trend for higher tolerance of chemotherapy versus the control group. We
expect to move into a pivotal Phase IIb/III study next year.
The clear advantages of NOV-002 are that the compound is safe, clinically validated and
manufacturing is simple-inexpensive-scalable. There are currently no good treatments for
late stage solid tumor cancer patients. Chemotherapy or radiation therapy are
poisons, and the hope is that they kill the tumor before killing the patient. Some of the
new biologics that have come on the market are not the answer they are marginally
effective, have safety issues and are very expensive costing as much as fifteen
thousand dollars per month.
In another Russian study, NOV-002 had sensitized
previously resistant ovarian cancers, substantially raising the patient response rate to
chemotherapy treatment. Therefore, we recently filed an orphan drug application with
the U.S. FDA for NOV-002. The application focuses on the investigation of
combination therapy of NOV-002 with standard chemotherapy for treating refractory
(chemotherapy resistant) ovarian cancer. A response from the FDA is expected by mid
Animal models have shown that NOV-002 may provide a
significant survival advantage if administered following catastrophic radiation exposure
from, for example a nuclear weapon, a dirty bomb, or an accident at a nuclear power plant.
Our second compound, NOV-205 is being developed to
treat hepatitis B and C. In Russian clinical studies, when used as mono-therapy for one
month in hepatitis B and for two months in hepatitis C, NOV-205 has been shown to greatly
reduce or eliminate viral loads and to vastly improve liver function relative to existing
drugs on the market. We are most interested in chronic hepatitis C, which is a $2 billion
marketplace currently and slated to grow to $10 billion by 2012. Therefore, we plan
to file an IND with the U.S. FDA for NOV-205 as a mono-therapy for chronic hepatitis C,
and to initiate U.S. clinical trials.
CEOCFO: What do you see
down the road and how do you commercialize your compounds?
Mr. Palmin: The big picture first you know how
they say that it takes fifteen years from start to finish to bring a drug to the market,
well that is true. We have been doing this for more than a decade. The Russian company was
built, the compounds in Russia were commercialized, and recently we completed the U.S.
Phase I/II lung cancer study. The next step is for us to meet with the FDA early next
year, and then commence a pivotal Phase IIb/III lung cancer study, as well as the Phase II
studies in refractory (chemotherapy resistant) ovarian cancer and chronic hepatitis C
(with our second compound, NOV-205). In four years, we hope to have approval in the U.S.
for the non-small cell lung cancer indication in combination with chemotherapy, followed
by a year later with ovarian cancer and chronic hepatitis C.
CEOCFO: Will you tell us
about the financial picture of the company?
Mr. Palmin: Concurrently with going public, we closed
on the first round of a private placement of 2.2 million dollars. We are positioned to
access the capital markets as opportunities present themselves.
CEOCFO: Do you see
partnerships ahead, and what is your strategy there?
Mr. Palmin: Yes. We would like to have a partner by the
time we begin the pivotal Phase IIb/III study in lung cancer. The idea is to defray the
costs of the late stage study through partnerships in Europe as well as Japan.
On the in-licensing front, with a publicly traded
currency in the form of Novelos common shares, we will be able to consider acquiring
additional products or technologies.
CEOCFO: Are cancer and
hepatitis companies in favor?
Mr. Palmin: I certainly think so, since we are dealing
with huge markets with a vast unmet need. Lung cancer is currently a billion-dollar market
place. Adding up the market for all solid tumors, we are talking about a multi
billion-dollar market place. As I previously mentioned, chronic hepatitis C is a growing
problem, and poorly served. The other problem with hepatitis C is that there are no
predictive animal models, which also explains the lack of a drug pipeline. Anytime we have
potential to address such huge patient populations with such great unmet need, that is
CEOCFO: Why should
potential shareholders be interested in Novelos?
Mr. Palmin: Our story is simple, yet powerful. We have
safety and clinical validation from many thousands of Russian patients. Now we are
starting to see data come out of the U.S. We have very strong intellectual property, with
patents issued in the U.S., Europe and Japan. Our manufacturing is simple, inexpensive and
Next year we expect to be a late stage, Phase
IIb/III, cancer company, with Phase II studies in refractory ovarian cancer and chronic
CEOCFO: In closing, what
do you expect Wall Streets reaction will be to your promising new therapies?
Mr. Palmin: We do not know what the stock market is
going to be tomorrow. In the current choppy market, Phase I/II cancer or hepatitis
companies are currently trading at $70 to 100 million market capitalizations. Once the
companies get more developed, with ongoing Phase II or commencing of Phase III studies,
valuations seem to be in the $300 to $400 million. Once companies get into more
established Phase III type studies, they start to flirt with billion-dollar market caps.
On a relative valuation basis, we expect to be commencing a pivotal Phase IIb/III
lung cancer study next year and we expect to have a number of Phase II studies ongoing.
So, please look us up under symbol NVLT.
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