Novelos Therapeutics, Inc. (NVLT-OTC: BB)
Interview with:
Harry S. Palmin, President and Acting CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
two promising oxidized glutathione based compounds, NOV-002 and NOV-205, for the treatment of cancer and hepatitis.

 

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Novelos Therapeutics (“NVLT”) is commercializing clinically validated pharmaceuticals for the treatment of cancer and hepatitis – huge markets with vast unmet need

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Healthcare
Biotech/Pharma
(NVLT-OTC: BB)

Novelos Therapeutics, Inc.

One Gateway Center, Suite 504
Newton, MA 02458
Phone: 617-244-1616


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Harry S. Palmin
President and Acting CEO

Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
June 30, 2005

BIO:
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.

Company Profile:

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 year-end.”

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 IND.”

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 August.

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 exciting.”

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 scalable.

Next year we expect to be a late stage, Phase IIb/III, cancer company, with Phase II studies in refractory ovarian cancer and chronic hepatitis C.”

CEOCFO: In closing, what do you expect Wall Street’s 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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“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.” - Harry S. Palmin

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