Background & Market Opportunity 

Obesity is a substantial contributing factor to a range of diseases that represent the major causes of death and disability in the developed world today. Individuals that are clinically obese have elevated rates of cardiovascular disease, stroke, diabetes, and certain types of cancer. The percentage of individuals who are defined as clinically obese has risen dramatically over the past several decades. According to the United States Centers for Disease Control and Prevention, or CDC, the incidence of obesity in the United States has increased at an epidemic rate during the past 20 years. CDC now estimates that 66% of all Americans are overweight or clinically obese. This increase is not limited to adults. The percentage of young people who are overweight has more than tripled since 1980. Among children and teens aged six to 19 years, 16% (over nine million young people) are considered overweight. There has been a similar dramatic rise in the rate of obesity in Europe and Asia. Furthermore, the cost of this epidemic is significant. The FDA estimates that the total economic cost of obesity is currently about $117 billion per year in the United States, which includes more than $50 billion in avoidable medical costs. Despite the magnitude of this problem, current approaches to clinical obesity are largely ineffective, and there are  relatively few new therapeutic approaches in clinical development.

We are developing compounds designed to treat obesity that act by stimulating a key receptor in the brain that regulates appetite and food intake – the 5HT2c receptor. The role of this receptor in regulating food intake is well understood, and has been extensively studied in both animal models and humans. In 1996, Wyeth Pharmaceuticals launched the anti-obesity drug Redux® (dexfenfluramine), a non-specific serotonin receptor agonist that was used with the stimulant phentermine in a combination commonly known as “fen-phen.” This diet drug combination gained rapid and widespread acceptance in the clinical marketplace, and was shown to be highly effective at regulating appetite, reducing food intake, and causing weight loss. Unfortunately, in addition to stimulating the 5HT2c receptor, fen-phen also stimulated the 5HT2b receptor that is found in the heart. The activation of 5HT2b by fen-phen is believed to have caused significant cardiovascular problems in a number of patients and, as a result, Redux was withdrawn from the market in 1997. In 1996, doctors wrote 18 million monthly prescriptions for drugs constituting the fen/phen combination. In that same year, these drugs generated sales of greater than $400 million, serving as a benchmark for the substantial market opportunity for an effective drug to treat clinical obesity.

Since the withdrawal of Redux from the market, several groups have published research that implicates stimulation of the 5HT2b receptor as the underlying cause of the cardiovascular problems. These findings suggest that highly selective compounds that stimulate the 5HT2c receptor, but that do not appreciably stimulate the 5HT2b receptor, could be developed that maintain the desired appetite suppressive effects without the cardiovascular toxicity. Other approaches to treating obesity are also being explored by various groups.

Our Approach

We initiated a drug development program focused on creating potent and selective compounds that stimulate the 5HT2c receptor, but that avoid the 5HT2b receptor and other receptors, such as 5HT2a. Our specific goal is to develop a once-per-day orally administered pill that reduces appetite by stimulating the 5HT2c receptor, but that does not stimulate the 5HT2b receptor, the 5HT2a receptor, or other receptors that could cause adverse side effects. Based on extensive preclinical studies that we conducted with our most advanced obesity candidate ATHX-105, it has been shown to be a highly potent and selective compound. We believed that the superior selectivity displayed by ATHX-105 for the 5HT2c receptor relative to both the 5HT2b receptor and the 5HT2a receptor could result in a cleaner safety profile in clinical studies, and could allow us to achieve better efficacy, as well as a more convenient dosing schedule than other 5HT2c agonist programs.

Development Progress to Date

We completed several phase I clinical trials for ATHX-105, demonstrating good safety and tolerability, drug exposure levels, as well as good regional absorption (relevant to the development of a formulated product).  In the summer of 2008, we applied to the FDA to initiate a double blind, placebo controlled phase II clinical trial involving ATHX-105. In September 2008, we were notified by the FDA that our proposed phase II clinical trial was being placed on clinical hold, pending discussion with the FDA and resolution of several issues, some of which related to proposed trial design, and one of which related to a preclinical toxicology finding in rodents. While we were able to resolve each of the other issues regarding the clinical hold, we believe we will be unable to practically resolve the issue related to the toxicology finding in rodents, and as a result we have suspended further development of ATHX-105. The potential significance of the toxicology issue to humans remains unclear, but it appears to be a compound-specific effect that is not representative of the class of compounds we are developing. However, given that we would have to complete long-term toxicology studies in rodents and potentially other species in order to resolve the issue, and these studies may not be conclusive, we decided that further development of ATHX-105 may be too risky, expensive and time consuming, and therefore may not serve the best interests of our stockholders.  Accordingly, we have withdrawn our IND application for ATHX-105, and suspended further development of this compound.