Creating a Product Portfolio from the Ground Up

Flexion Therapeutics was founded in late 2007 with the idea of rapidly progressing compounds in the clinic to meaningful proof of concept. Today, the company, based in Woburn, Massachusetts, has a full range of therapies for osteoarthritis and, in particular, therapies that are injected within the joint (i.e., intra-articular treatments). Here, CEO Mike Clayman talks about Flexion's business model and how focusing on one therapeutic class is making the biotech company a leader in its class.

Mike Clayman is CEO of Flexion Therapeutics, Woburn, MA.

BioPharm: How did Flexion decide on osteoarthritis as a therapeutic target?

Clayman: Osteoarthritis affects over 100 million people worldwide in terms of symptomatic disease, 27 million of which are in the US. Flexion's goal is to treat patients with osteoarthritis of the knee, which is the most commonly injected joint (over 10 million patients have knee osteoarthritis in the US). The prevalence of knee osteoarthritis is actually growing in light of an aging population and an increasingly obese population; it is also driven by sports injuries. If you tear your anterior cruciate ligament as a young athlete, you have a 60% chance of developing osteoarthritis within 10 to 15 years.

What drew us to this field was the recognition that the current osteoarthritis treatments are inadequate. Oral therapies provide limited pain relief and are associated with serious organ toxicities. Current intra-articular therapies (e.g., steroids and hyaluronic acids), either provide pain relief of inadequate duration or inadequate magnitude. Yet, intra-articular therapies generate well over $1.5 billion per year worldwide in sales. And in the US, successful commercialization of these therapies entail sales forces of fewer than 100. When we put this scenario together, we said to ourselves, 'This is a space that is ripe for innovation with a substantial and growing unmet medical need. Flexion could make a real difference by advancing to launch and commercialization—at least in the US—important new medicines.' We came to believe that our sustained-release intra-articular approach had the potential to provide real and meaningful benefits for patients with limited options.

BioPharm: Flexion has been successful by focusing not only on the intra-articular treatment for osteoarthritis but also by targeting a full range of treatments for the condition. Can you talk about why the company took that particular approach and how it's been working to date?

Clayman: If we were going to be in this space, we needed to have a critical mass of product opportunities. We in-licensed a sustained release p38 inhibitor from AstraZeneca as one of our initial products and that became our nucleating asset, if you will, for a portfolio that now includes a sustained-release steroid, triamcinolone acetonide, and a sustained-release TrkA antagonist (TrkA is the receptor for nerve growth factor).

What we like about this portfolio is that, assuming we generate the data that we hope to in terms of efficacy and safety, it can address a range of patient needs. The sustained-release steroid is naturally positioned as a near frontline therapy—while the sustained-release p38 inhibitor is intended for patients who progress to needing something beyond steroids, and the sustained-released TrkA antagonist is focused on patients with end-stage disease who have pain refractory to any other analgesic approaches. So our portfolio has the potential to address the spectrum of disease on osteoarthritis in terms of pain relief. We also plan to pursue the potential for these therapies to be disease modifying, which is an enormous unmet medical need in osteoarthritis because the natural history of this disease is for many patients to require joint replacement.

BioPharm: What key challenges has Flexion faced while developing a pipeline of drugs for the full-range treatment of this disease?

Clayman: We did have to make a transition in our strategy. The original idea for Flexion was to in-license attractive assets from large pharmaceutical companies that were not being adequately progressed by the sponsors and to progress them ourselves to meaningful proof of concept. We would then partner or sell those assets and repeat the process of bringing in other assets to do the same thing.

But we began to wonder about the validity of a strategy that aimed to monetize assets at proof of concept. We had become increasingly aware that large pharma was engaging in more option-based deals with modest upfront payments and a lot of downstream milestones and royalties. Alternatively, a large pharma might come to us and say, 'Very interesting proof of concept data. Why don't you generate the Phase IIb dose ranging study data and get back to us.' These are not great scenarios for a small venture-backed company like Flexion. So we took a step back and decided that we needed a compelling strategy that would reduce our dependence on large pharma. We had already in-licensed five assets by this point and one was the p38 inhibitor for osteoarthritis. We saw the potential to go it alone in the intra-articular-for-osteoarthritis space using the p38 inhibitor as our initial asset. Essentially, we shifted to a focus on osteoarthritis and, particularly, intra-articular therapies for osteoarthritis.

Once we made that switch, we had a clear direction and were fortunate enough to originate the sustained-release steroid ourselves and build strong IP around that. Then we were able to in-license the TrkA antagonist from AstraZeneca. It's important to point out that both of the in-license assets from AstraZeneca are Flexion's to commercialize without restriction. So now, we have a critical mass of high quality assets in the portfolio.

BioPharm: Other small companies may be trying to take a similar strategic approach within a different therapeutic area. Can you offer any best practices for companies starting down that path?

Clayman: I don't know about being able to offer best practices, but I can say that I'm glad we re-evaluted our original strategy, and that we've refined it to focus on intra-articular therapies for osteoarthritis. I feel very good about where we are headed.

BioPharm: You definitely have a very specific approach, and I imagine, at least on the management side, that being open and flexible is important.

Clayman: Absolutely. And I think it's also true that we're pretty good at knowing what we don't know. We're open to learning and accessing the best expertise in the world to help us be as effective as we need to be.

Having said that, we have purposefully kept ourselves small. We've hired what I think is an outstanding development team at Flexion. The entire employee base is 10, and we will grow judiciously in the face of positive data.

BioPharm: In what direction is Flexion now headed in terms of strategy?

Clayman: Our strategy is to go it alone to commercialization at least in the US, and to consider partnering elsewher. We'll have definparing clinical data for our p38 inhibitor soon, and shortly thereafter, our sustained-release steroid will be entering the clinic. So we're moving things along and confident that we're designing the right clinical trials that will generate the data that will clearly define the opportunity for these assets.

We are in active discussions with partners around the world regarding specific assets and the portfolio. The coming months have the potential to create a number of partnerships. We are currently well financed, and we will pursue additional financing as appropriate and necessary to allow us to continue to implement the strategy.

Listen to the full interview with Flexion Therapeutic's Mike Clayman online, at BioPharmInternational.com and click on "Basic Training."