SLE is the most heterogeneous autoimmune disease and is characterized by a waxing and waning course that can involve multiple organs. While recent improvements in healthcare have substantially improved survival in SLE patients, more effective therapeutic options remain elusive. Current treatments in SLE typically involve corticosteroids and/or immunosuppressive agents that are not only associated with significant toxicity, but do not adequately control the disease with the majority of patients still progressing to end-stage organ disease.

The protean nature of SLE and the varied organ involvement has made the discovery of new drug treatments difficult. Indeed, there is no drug that is specifically approved only for SLE. All current SLE therapies have been approved for other diseases and are used in SLE to shut down the immune system.

Recent advances in the understanding of the pathogenesis of SLE have led to a slew of new drugs in clinical development for this difficult-to-treat disease. The majority of these are targeted at B cells. These include Rituxan, LymphoCide, LymphoStat-B, AMG 623 and TACI-Ig. Rituxan and LymphoCide act by depleting B cells while LymphoStat-B, AMG 623 and TACI-Ig are directed at the B Lymphocyte Stimulator (BLyS, also known as B cell Activating Factor or BAFF) that is thought to be involved in B cell activation and survival. Of these B cell therapies, we believe that Rituxan and LymphoCide are the most likely to receive approval. We speculate that Rituxan will be the antibody of choice for the initial B cell depletion and for LymphoCide to be used for subsequent B cell depletions. The drugs targeting BLyS may have a more difficult road to FDA approval. While animal studies have been very compelling for the role of BLyS in SLE, data in human SLE trials have not been very promising.

Other drugs in clinical development include the immunosuppressive agent CellCept, the oligonucleotide mixture Riquent, and the T cell costimulation blocker Orencia. Both CellCept and Orencia have already been approved, for the prevention of organ transplant rejection and rheumatoid arthritis, respectively. CellCept is already being used off-label to control lupus nephritis in SLE patients and we expect the drug to have little difficulty in obtaining FDA approval for the treatment of this manifestation of SLE. However, CellCept is an immunosuppressant and while it is likely to supplant older immunosuppressives due to its better safety profile, its use will still be limited to those patients who require immunosuppression (such as those with nephritis).

Orencia is a promising drug that blocks T cells (via the CTLA4 pathway), and although B cells have been the main focus of SLE research, T cells have been shown to be critical in regulating the proliferation and maturation of B cells as well as the production of autoantibodies by B cells. Animal studies with the murine equivalent of Orencia have been compelling, however human data is too immature to decipher the drug’s efficacy in SLE patients. Nevertheless, the drug offers a novel mechanism of action for the control of SLE. Riquent has had a troublesome clinical development and given the drug’s inconsistent efficacy data, we do not believe the drug holds much promise.

While several of these drugs offer novel ways to combat SLE, we caution that SLE is an extremely difficult disease in which to show broad efficacy and many drugs have already failed in clinical evaluation for this indication. As such, the likelihood of approval for these drugs is likely to be lower for SLE than for other diseases. Despite the negative outlook, this is actually an exciting time for SLE, with an increasing understanding of the disease leading to more specific therapies that may revolutionize the management of the disease.

BACKGROUND

Systemic Lupus Erythematosus (SLE or commonly referred to as Lupus) is the archetypal autoimmune disease. The disease has a variable and unpredictable course and is characterized by periods of flares, or exacerbations, interspersed with periods of improvement or remission. A flare is an increase in disease activity that can be either an increase in physical manifestations and/or an increase in abnormal laboratory values.

SLE is highly variable with some patients experiencing a relatively benign disease with little medical intervention while others can have a serious and aggressive disease that can lead to significant and potentially life-threatening damage to organs such as the kidneys, brain, heart and lungs. SLE is often called “the great imitator” since symptoms experienced in SLE often mimic other diseases and indeed, all the clinical features of SLE are found in other diseases.

Also, diagnostic tests for SLE show crossover to other autoimmune diseases. The cause of SLE is unknown and disease pathogenesis is likely to be multifactorial with genetic, hormonal and environmental factors likely to play a role. There is a lack of definitive epidemiology information on lupus, and consequently, the prevalence of the disease is not known. The Center for Disease Control (CDC) conservatively estimates that 239,000 people are afflicted with the disease in the U.S., while the Lupus Foundation of America estimates that approximately 1,500,000 Americans have a form of lupus. There are no definitive tests for SLE and as such, SLE is likely to be under-diagnosed. Physicians may mistake the symptoms for other diseases and patients may not seek medical attention when symptoms of the disease disappear during the remission phase of the disease.

SLE predominantly affects women, particularly those of childbearing age (15-40 years). In children, females are 3 times more likely to develop SLE than males. In the 15-40 age group, women are 9 times more likely to develop the disease than males. African-American and Hispanic people are three times more susceptible to the disease than Caucasians (although it is not clear whether this is primarily due to genetics or socioeconomic factors). Asians are also at higher risks of developing the disease and indeed, in China, it is estimated that more people have SLE than rheumatoid arthritis.

In the past, the outlook for SLE patients was poor with most patients surviving less than 5 years due to internal organ involvement or to toxic effects of drug therapy. With the general advancements in healthcare and improved specialized care for SLE patients, the prognosis for SLE has vastly improved with 80-90% of patients now surviving at least 10 years. Better education, earlier detection and improvements in medicine such as better management of hypertension, infections, and end-organ damage have all contributed to the reduced morbidity and mortality from SLE. Death due to the disease itself (such as from lupus nephritis) occurs at a higher rate within the first 5 years of the onset of symptoms, however mortality in patients with long-standing disease is usually associated with infections due to the use of immunosuppressive agents.

Diagnosis and clinical presentation of SLE

There is no single test that is specific for SLE and being that all the symptoms experienced in SLE are also seen in other diseases, the disease has been difficult to diagnose. The American College of Rheumatology (ACR) has developed a classification system to identify patients with SLE. The criteria include: malar rash, discord rash, photosensitivity, oral ulcers, arthritis, serositis (pleuritis or pericarditis), renal disorder (persistent proteinuria or cellular casts), neurologic disorder (seizures or psychosis), hematologic disorder (anemia, leukopenia, thrombocytopenia), immunologic disorder (positive LE cell preparation, abnormal anti-DNA or anti-Sm values, false-positive VDRL syphilis test), and antinuclear (ANA) antibodies. A diagnosis of SLE is made when at least 4 of the 11 criteria are present, serially or simultaneously, during any interval of observation.

The most common symptoms of SLE are fatigue, muscle pain (myalgia), joint pain (arthralgia) or joint inflammation (arthritis) and skin rashes. Arthritis and arthralgias is highly prevalent with over 90% of patients afflicted at some point in their disease. They are usually seen early in the disease and typically involve the small joints of the hand and wrists. SLE arthritis is different than rheumatoid arthritis in that it does not usually involve morning stiffness and synovial hyperplasia and it rarely leads to joint destruction.

Cutaneous manifestations (symptoms affecting the skin) are typical of SLE, occurring in approximately 90% of SLE patients. These can manifest as skin rashes including the malar (or butterfly) rash that occurs in approximately 30% of patients, discoid lupus erythematosus, or alopecia (hair loss). SLE patients become photosensitive and exposure to UV radiation may lead to rashes. Oral ulcers are also common in SLE, occuring in up to 40% of patients.

Common serious manifestations include osteoporosis, neurological impairement, hematological abnormalities and cardiovascular disease. Osteoporosis is estimated to occur in over 60% of SLE patients and is most often a consequence of long-term corticosteroid use. Neurological manifestations can also occur in up to 60% of patients and include seizures, psychosis, cognitive function abnormalities, mood disorders, and fibromyalgia. Fibromyalgia is characterized by generalized pain and fatigue and can occur in up to 30% of patients. Hematologic abnormalities can include anemia (low red blood cell counts), leukopenia (low white blood cell counts) and thrombocytopenia (low platelet counts). These hematological manifestations may be due to the disease itself or to drug treatments used to control other manifestations.

SLE is associated with cardiovascular complications such as thrombosis and atherosclerosis. Approximately half of SLE patients produce antiphospholipid antibodies, such as anticardiolipin antibodies, that can lead to a hypercoagulated state that in turn, can lead to thrombosis. SLE patients can also present with premature or accelerated atherosclerosis. This complication is thought to occur in up to 10% of patients and is an important cause of morbidity and death in the later years. The cause of this premature atherosclerosis is not fully understood and is likely to be multifactorial and may be due to a combination of the disease itself and the drugs being used to treat the disease. Patients with SLE have been shown to have higher levels of homocysteine, a known risk factor to atherosclerosis while corticosteroids can increase serum cholesterol, weight and blood pressure, all risk factors for heart disease and atherosclerosis.

One of the most serious manifestations of SLE is renal impairment, which is the major cause of morbidity and mortality in patients with SLE. The autoantibodies in SLE (see below) can form immune complexes that can be deposited in organs such as the kidneys. This leads to inflammation of the kidneys, known as lupus nephritis or glomerulonephritis, and can progress to end-stage renal disease and renal failure. Histologically, the majority of SLE patients show renal involvement early on in the disease (usually within the first few years of disease onset); however, they are not treated until the disease becomes symptomatic. It is estimated that approximately 50% of SLE patients have lupus nephritis (although published studies have shown the numbers to vary between 30-90% of patients).

Pathogenesis of SLE

No single biological mechanism accounts for the varied manifestations in SLE, however, the production of autoantibodies, the hallmark feature of SLE, is thought to be important in the pathogenesis of the disease. Antibodies are products of B cells that are designed to protect against foreign pathogens or microbes, however, in the case of autoantibodies, they attack a person’s own cells. Over 100 autoantibody specificities have been described in SLE patients and these autoantibodies are directed at a variety of antigens including RNP, Ro, La and Smith. Antibodies directed at nuclear targets such as double stranded DNA (dsDNA), nucleosomes and histones appear to be important in the disease. Indeed, anti-dsDNA autoantibodies have been proposed as a biomarker of disease activity as levels are often elevated prior to a flare. Moreover, higher anti-dsDNA levels appears to correlate with higher disease activity and are thought to contribute to renal impairement. However, the predictive value of these autoantibody levels and the precise role they play in the disease pathogenesis remain unclear.

While the precise mechanism of disease development and progression is not well characterized, SLE progresses through 4 stages: the production of autoantibodies, the deposition of autoantibodies and immune complexes in tissues, tissue inflammation due to autoantibody and immune complexes, and tissue damage and fibrosis.

Role of B cells in SLE

The adaptive immune system, consisting of T cells and B cells, is highly dysregulated in patients with SLE. A growing body of evidence has implicated B cells in the pathogenesis of SLE. The hallmark of SLE is the production of autoantibodies against self-antigens by mature B cells called plasma cells. Furthermore, B cells are involved in numerous functions of the immune system including the processing and presentation of antigens to T cells and the regulation of T cell activation. While B cells appear to play a critical role in disease pathogenesis, at least in in vitro and animal studies, their role in human disease is still unclear. Some disease manifestations appear to be B cell and antibody-mediated such as hemolytic anemia and kidney inflammation. Other manifestations, however, do not appear to be antibody- or B-cell mediated.

B Lymphocyte Stimulator (BLyS)

Several members of the tumor necrosis factor (TNF) ligand superfamily have emerged as important contributors to the pathogenesis of SLE including B Lymphocyte Stimulator (BLyS), which is also known as B cell Activating Factor (BAFF) and is produced by cells of the myeloid lineage (monocytes, macrophages, and dendritic cells). BLyS is a soluble protein that exerts its effects by binding to its receptors on B cells. There are three receptors BLyS can bind: TACI, BCMA, and BAFF-R (also called BR3). The precise role of each receptor has yet to be fully elucidated. BLyS is thought to be involved in B cell activation, maturation and survival.

A role of BLyS in the pathogenesis of SLE has been supported by animal studies. Mice overexpressing BLyS have increased B cell numbers and produce autoantibodies including anti-DNA antibodies. These animals develop an autoimmune disease similar to human SLE including antibody deposition in the kidneys and nephritis and have a shortened lifespan. Moreover, the benefits of BLyS inhibition has been demonstrated in animal models with the administration of antibodies against the TACI or BAFF receptors slowing disease progression, reducing proteinuria and nephritis, and improving survival in these animals.

Clinically, BLyS is elevated in patients with autoimmune diseases including SLE and rheumatoid arthritis. Cross sectional longitudinal studies have documented elevated BLyS levels in over 50% of SLE patients. BLyS levels fluctuate during the course of SLE and appears to correlate with disease activity. Indeed, BLyS has been proposed to be a biomarker for SLE disease activity.

Animal models showing an excess production of BLyS can induce an autoimmune disease similar to SLE, and the high levels of BLyS seen in SLE patients makes BLyS is an attractive target for therapeutic intervention. There are several drugs in early clinical development that are targeting the BLyS pathway: LymphoStat-B, AMG 623 and TACI-Ig.

TREATMENT OF SLE

There is no cure for SLE, but disease symptoms can be managed fairly well managed by a number of different drugs. The challenge for managing SLE is to treat the symptoms while minimizing side effects and potential long term damage from these treatments (this is particularly true with corticosteroid treatment). Given the heterogeneous and unpredictable nature of the disease, treatment varies with symptoms experienced. These can include the use of sun block to provide protection from UV radiation that can exacerbate skin rashes, topical steroids for skin rashes, and antibiotics for infections. There are five main groups of drugs that are typically used to control SLE:

• Non-steroidal anti-inflammatory drugs (NSAIDs) such as aspirin, ibuprofen, naproxen, and Celebrex. NSAIDs reduce inflammation and can also relieve pain, fever, and arthritis associated with SLE. NSAIDs can cause gastric bleeding and cannot be tolerated in some patients.
• Antimalarials such as hydroxyquinolone and hydroxychloroquine. These drugs are useful in controlling arthritis-like symptoms such as joint pain and swelling. They can also relieve skin rashes and fatigue.
• Corticosteroids such as prednisolone. These are synthetic hormones that mimic the action of cortisone, a naturally occurring hormone produced by the adrenal glands. Steroids are powerful anti-inflammatory drugs that can dampen the immune system and are the drugs of choice in treating serious complication such as those affecting the heart, lung and brain. However, steroids are also associated with serious side effects that can be debilitating such as swollen face, weight gain, increased risk of infections, osteoporosis, high blood pressure and diabetes.
• Immunosuppressants such as aziathropine, methotrexate, cyclosporine A, and tacrolimus. These drugs are used to suppress the immune system in patients and are often only used in serious complications where steroids are inadequate. These drugs are highly toxic and their use must be monitored carefully as it can lead to increased susceptibility of infections.
• Cytotoxic chemotherapies such as cyclophosphamide. These potent drugs are drugs of last resort and are only used when a patient’s SLE cannot be adequately controlled by other drugs (such as for lupus nephritis). These drugs are also considered immunosuppressive since they can prevent cell proliferation (and hence the proliferation of immune cells) in order to dampen the immune system. However, these drugs also suppress bone marrow activity and can lead to low blood counts and susceptibility to infections.

Overall, the majority of these drugs are used to depress the overactive immune system and they can induce remission in the majority of patients. However, an estimated 27% - 66% of patients will flare despite treatment. Disease flares are of concern due to the cumulative damage to the kidneys from the flare and this problem can be compounded by the use of immunosuppressives for flare control.

DRUGS IN DEVELOPMENT

Unfortunately, while the management of SLE has dramatically improved in the last few decades, it remains inadequate. Despite these treatments, many patients have incompletely controlled disease which can still progress to organ damage. Furthermore, the use of corticosteroids, immunosuppressive and cytotoxic drugs are associated with serious side effects that are not only debilitating, but can also lead to death as evidenced by the high rate of death in the later years of disease due to serious infections (which are most often due to the use of immunosuppressives). Clearly, better drug therapy is needed.

The major impediment to drug discovery in SLE is the heterogeneity of the disease. It has been suggested that SLE may be a collection of diseases that have similar clinical features yet with different mechanisms of pathogenesis and this may explain some of the difficulties encountered with new drug development. Moreover, the unpredictable manner in which SLE targets different organs at varying intensities makes the optimization of drug administration and the measurement of drug effectiveness difficult. For example, studies that are designed to measure disease flares may miss flares in between assessment periods. Since disease manifestations can vary within an individual patient at different points in time, determining drug efficacy at specific trial assessment periods may give rise to trial data that is not truly reflective of the drug’s efficacy.

Given the protean nature of SLE, several indices have been developed to more accurately assess disease activity to allow the comparison of disease activity and treatment effectiveness in different patients. These indices typically score disease manifestations using predefined criteria based on the presence or absence of different aspects of the disease. These indices include the SLE Disease Activity Index (SLEDAI), the SLE Activity Measure (SLAM), and the European Consensus Lupus Activity Measure (ECLAM). The SLEDAI is the most frequently used disease activity index which measures certain symptoms or disease manifestations with the total score representing the severity or magnitude of disease activity. The SLEDAI increases by an average of 3 points during a flare. Another index routinely used is the British Isles Lupus Assessment Group (BILAG) score which is designed to measure the need for changes in medications as determined by the physician’s intention to treat eight organ-based systems. All these indices have been shown in cohort studies to be sensitive to change in disease activity and can be used in clinical trials for disease assessment.

Drug development in SLE has not been a fruitful experience with the majority of drugs previously evaluated in this disease failing to show a clinical benefit. However the improved understanding of the disease has led to a number of disease mechanisms that may show a benefit when manipulated. A number of novel drugs are currently being investigated for the treatment of SLE with the majority of these directed at B cells, cells thought to play a central role in the pathogenesis of SLE.

Drugs targeting B cells

Rituxan (Rituximab; Biogen Idec and Genentech)

Rituxan is the first monoclonal antibody to receive FDA approval for the treatment of cancer. Rituxan is a chimeric human/mouse antibody directed at the CD20 antigen found on B cells (both normal and malignant B cells). CD20 is a receptor that is exclusively expressed on all cells of the B lymphocyte lineage except in the earliest and the latest (antibody-producing plasma cells). The function of CD20 is unknown since CD20 knockout mice have no obvious B cell deficiencies.

The binding of Rituxan to the CD20 receptor on B cells leads to the destruction of these cells. The mechanism by which Rituxan induces B cell death is unclear although in vitro studies have shown Rituxan to induce lysis (bursting) of these cells. In the oncology setting, four weekly doses of Rituxan led to an almost complete depletion of B cells from peripheral blood in the majority of patients. This depletion of B cells can persist for 6 months or longer after Rituxan treatment in these patients.

The role of B cells in SLE makes Rituxan an attractive candidate for therapy. Since the use of Rituxan is likely to lead to the depletion of all CD20-positive B cells, it is thought that Rituxan could potentially eliminate the generation or expansion of autoreactive B cells (B cells that go on to become plasma cells that produce autoantibodies). This theoretically can result in the removal of autoreactive B cells from the B cell pool to allow the bone marrow to repopulate with more normal B cells.

Until recently, Rituxan has only been evaluated in small investigator-initiated studies in patients with SLE. These studies have produced encouraging results showing that patients who experienced a complete B cell depletion with Rituxan treatment achieved clinical improvements. In contrast, patients who did not experience complete B cell depletion did not show much improvement. In patients who responded to Rituxan, the B cell number is usually lowest 1-3 months after the initial dose and the depletion can last 3-12 months. In these small studies, Rituxan was shown to improve skin rashes, fatigue, neurologic symptoms, arthralgias/arthritis and lupus nephritis.

Based on these positive small studies, Genentech initiated phase III studies of Rituxan in SLE in 2005. However, these studies were very small and the optimal dose and duration of Rituxan treatment in SLE patients is not known. Also, it is not known whether Rituxan can be given repeatedly, after B cells recover from the depletion. Presumably if Rituxan can be given repeatedly, patients may only need to be given the four doses of Rituxan once or twice a year to control their symptoms. The production of anti-Rituxan neutralizing antibodies may make this scenario unlikely in some patients. In one small study, a third of SLE patients treated with Rituxan produced anti-Rituxan antibodies (known as human anti-chimeric antibodies or HACA). Production of HACA in these patients was associated with incomplete B cell depletion and lower serum Rituxan levels at 2 months after initial infusion. Therefore, the production of HACA needs to be monitored carefully in the ongoing phase III studies to understand the effects of these neutralizing antibodies on the efficacy and safety of the drug in these patients.

The increasing evidence pointing to a critical role for B cells in SLE and the positive results from numerous small patient studies leads us to believe that Rituxan is a very good candidate for the management of SLE. Data from the patient studies is of prime importance since results from animal studies do not always translate into human studies and as such, we are very optimistic of Rituxan’s potential. While the full effect of Rituxan in SLE is not known, even if Rituxan can show a benefit in a single disease manifestation, such as renal disease, or even if the use of Rituxan allows for the reduction in steroid or cytotoxic drug dose, we believe that the drug will have proven sufficient benefit for FDA approval.

LymphoCide (Epratuzumab; Immunomedics)

Lymphocide is a humanized antibody directed at CD22. CD22 is a receptor that is only expressed on B cells during the more mature stages of B cell differentiation, however, like CD20, CD22 expression is lost during the terminal differentiation of B cells into plasma cells. Although the function of CD22 is not well understood, it is thought to play a role in B cell activation (mainly as a negative regulator). Transgenic mice deficient in CD22 (mice that were bred not to express CD22) exhibit reduced mature B cell numbers, higher levels of autoantibodies and a shortened life span. Therefore, CD22 is likely to be important in B cell development, function and survival.

LymphoCide is currently in phase III development for both non-Hodgkin’s lymphoma (NHL) and SLE, and received fast-track status for SLE in January 2005. Two phase III studies in patients with SLE (ALLEVIATE A and B) were initiated in 2005 with one in patients experiencing severe flares and the other in patients with moderately active SLE. Data thus far for LymphoCide in SLE is limited to a small open-label study. In this open-label study in 14 patients with active SLE, LymphoCide administration resulted in the depletion of B cells (approximately 60% at week 4 and 12). LymphoCide improved clinical outcomes in these patients, with BILAG global disease activity scores reduced in all patients and a greater than 50% reduction in BILAG scores in three-quarters of the patients. The improvements were durable, continuing well after the completion of LymphoCide therapy (4 months after the first LymphoCide dose). LymphoCide was well tolerated with little safety signals.

While the study was small, the results are very encouraging. It is still too early to determine whether Rituxan or LymphoCide is more effective in SLE patients. However, Rituxan has been available since 1997 and given physicians’ familiarity with the drug, we believe that Rituxan will be the preferred B cell depletion therapy over LymphoCide. While Rituxan is likely to be the first choice, we see LymphoCide being used in patients who have already experienced B cell depletion with Rituxan and whose B cell levels have returned, particularly in patients with HACA to Rituxan. Given the humanized nature of the LymphoCide antibody, HACA may likely be less of an issue, making LymphoCide the likely candidate for maintenance therapy. Interestingly, LymphoCide has been evaluated in combination with Rituxan in patients with NHL and the combination of these two drugs resulted in improved clinical activity compared to either agent given alone. This suggests a potential for the two drugs to be used together in SLE patients.

Riquent (Abetimus sodium; La Jolla Pharmaceuticals)

Riquent is La Jolla Pharmaceutical’s lead product in clinical development. It is a mixture of four oligonucleotides that are analogs of the double stranded DNA. Therefore, Riquent is designed to promote B cell tolerance to double-stranded DNA and thus halt the production of anti-dsDNA antibodies.

The clinical development of Riquent has been long and tortuous. A phase III study of Riquent in SLE patients was completed in 2002 and La Jolla Pharmaceuticals filed an NDA with the FDA in 2003 based on this data. This phase III study showed that while Riquent administration was associated with a statistically significant reduction in the level of anti-dsDNA antibodies, it did not meet the study endpoints of significantly reducing the time to renal flares or the number of renal flares. Riquent also did not significantly reduce the number of SLE flares.

In 2004, the FDA deemed Riquent approvable contingent on an additional phase III study that shows a clear clinical benefit of Riquent. This phase III study received a SPA and was initiated in August 2004 prior to the company receiving the FDA approvable letter. This phase III study is designed to evaluate whether Riquent can prolong the time to renal flares. This study is expected to be twice as large as the initial phase III study and will also evaluate higher doses of Riquent. The study, however, has already seen problems – in March 2005, the company halted study enrollment to conserve financial resources, and the company projected enrollment to take at least one year from the time enrollment is reactivated. Currently this study appears to be still on hold. In the meantime, the company has initiated a new study to investigate higher doses of Riquent (doses proposed in the phase III SPA study). Despite Riquent obtaining fast-track status and a SPA, the lack of a clear clinical benefit with the drug, coupled with the changes to the study protocols, we remain pessimistic of this drug’s potential.

Drugs targeting BLyS

LymphoStat-B (Belimumab; Human Genome Sciences)

LymphoStat-B is a human monoclonal antibody that specifically targets BLyS to neutralize its effects. In a phase I safety and dose-finding study, LymphoStat-B was shown to reduce the level of CD20-positive B cells and the level of anti-dsDNA autoantibodies in some patients.

A phase II study evaluating LymphoStat-B in SLE patients was initiated in 2003. This phase II study was a double-blind, placebo-controlled, dose-finding study that enrolled 449 patients with active SLE. Patients were randomized to receive 1, 4, or 10 mg/kg of LymphoStat-B or placebo (dosed monthly after the initial 3 doses in the first month). Disease activity was measured by the SELENA SLEDAI score. The SELENA SLEDAI is a refined version of the SLEDAI index that was developed by the Safety of Estrogen in Lupus Erythematosus National Assessment study. The score can range between 0 to 105 with higher scores representing increased disease activity and scores of 4 or less representing inactive disease.

Results from the phase II study were presented in late 2005, showing that LymphoStat-B did not meet the study endpoints of reducing the SELENA SLEDAI score at week 24 or increasing the time to first flare over 52 weeks (as defined by the SLE flare index). In a retrospective subset analysis, LymphoStat-B was shown to improve the signs and symptoms of SLE in a subset of patients, the seropositive patients (patients with autoantibodies). These patients showed significantly improved disease activity as measured by the SELENA SLEDAI and the physician’s global assessment score at week 52 compared to placebo controls. While a trend of improvement was seen in this patient subset at week 24, this did not reach statistical significance until week 52.

While the study did not meet its primary endpoints, the subset analysis is encouraging. HGSI has indicated that it will pursue a phase III study in seropositive patients, with the likely dose of LymphoStat-B of 1 mg/kg since a dose-response was not seen in the phase II study (the 1 mg/kg dose showed similar benefits to the higher doses tested but with reduced side effects). Of concern for this phase III study is the retrospective nature of the subset analyses in the phase II study. Seropositive patients were not prespecified in the phase II study and therefore it is not known if serology was balanced between the placebo and treatment groups. Moreover, while the majority of SLE patients are seropositive, autoantibodies can come and go in an individual patient, which can make the definition of seropositivity difficult. Given these concerns we are cautious of LymphoStat-B’s potential despite the compelling preclinical data for the role of BLyS in SLE.

AMG 623 (Amgen) and TACI-Ig (ZymoGenetics)

Amgen is developing an inhibitor to BLyS that is currently in phase I studies. AMG 623 is a novel conjugated peptide that neutralizes BAFF or BLyS. ZymoGenetics also has a BlyS inhibitor in phase I studies called TACI-Ig. TACI-Ig is a soluble receptor that binds to BLyS and APRIL (another member of the TNF superfamily involved in B cell function) thus preventing the binding of these ligands to their receptors. Animal studies have demonstrated that TACI-Ig can reduce the nephritis, proteinuria and improve survival in mice with an SLE-like disease. Data from the phase I TACI-Ig study is expected in mid 2006.

It is far too early to determine whether AMG 623 and TACI-Ig can be of benefit in human SLE. Animal studies and scientific studies have been compelling for the role of BLyS in SLE and makes BLyS and its receptors attractive targets for inhibition. However, given the modest benefit seen in the phase II study with LymphoStat-B, we remain cautious of drugs targeting this pathway.

Drugs targeting T cells

Orencia (Abatacept; Bristol-Myers Squibb)

Orencia is a first-in class inhibitor that inhibits T cell function. While much focus has been placed on B cells in the pathogenesis of SLE, T cells are also likely to be important since they are involved in the regulation of B cells. T cells are required for the generation of autoantibodies by B cells (antibodies undergo class-switching and affinity maturation, both T cell dependent events). T cells are also required for B cell proliferation and maturation.

Orencia is a CTLA4Ig fusion protein consisting of the human CTLA molecule bound to the heavy-chain constant region of IgG1. It inhibits the CD28/B7 costimulatory pathway necessary for the activation and differentiation of T cells. T cells require two signals for activation, one through the T cell receptor and the other through the CD28 co-receptor. CTLA4 is a naturally occurring receptor that competes with CD28 and acts as a negative signal to T cells by competing for the ligands that bind to CD28, thus blocking the positive costimulation pathway necessary for T cell activation. CTLA4 is produced by T cells after its activation as a way to shut off the activation signal.

The important role of CTLA4 in SLE has been supported by animal studies. In separate studies, the inhibition of CTLA4 (by the administration of murine CTLA4Ig or the administration of an adenovirus expressing murine CTLA4-Ig) inhibited the development of lupus in mice bred to spontaneously develop an SLE-like disease. Moreover, CTLA4Ig administration inhibited the production of anti-dsDNA antibodies and decreased lupus nephritis in these lupus-prone mice. In addition, studies have shown that the administration of CTLA4Ig in combination with cyclophosphamide significantly reduces proteinuria and improved survival in mice with advanced lupus nephritis.

Orencia has already received FDA approval for the treatment of rheumatoid arthritis and is currently being investigated for its potential in the treatment of SLE. Phase II studies were initiated in 2005 to determine if Orencia (given in combination with the corticosteroid prednisolone) can treat and prevent flares in patients with active SLE. While it is too early to evaluate the effects of Orencia in SLE patients, preclinical animal data have been very compelling. Interestingly, the animal data thus far suggests that CTLA4 inhibition is likely to have little effect on established disease when given as a monotherapy (CTLA4 inhibition was only seen in the prevention or delay of onset of lupus). However, when CTLA4Ig is given in combination with the immunosuppressive agent cyclophosphamide, lupus nephritis is improved. This suggests that Orencia is likely to be used in combination with other immunosuppressive agents. However, animal data does not always translate to human disease and as such, we remain cautiously optimistic for Orencia in SLE.

Immunosuppressive drugs

CellCept (Mycophenolate mofetil; Roche)

CellCept is an immunosuppressive agent approved for the prevention of organ transplant rejection. CellCept inhibits an important enzyme required for purine synthesis. Purines are important building blocks of DNA and RNA, and thus CellCept inhibits DNA and RNA synthesis which in turn, prevents cell proliferation.

CellCept is currently in phase III studies for the treatment of SLE. However, the drug has been used extensively off-label in SLE patients for the treatment of lupus nephritis due to a number of small investigator-initiated studies that have shown CellCept to be as effective, if not more effective, than currently available treatments (such as cyclophosphamide and azathioprine) for lupus nephritis but with fewer side effects. These studies have shown that CellCept can be used as an induction and maintenance therapy for patients with SLE nephritis when given in combination with a corticosteroid (prednisolone). CellCept appears to be better tolerated than cyclophosphamide with patients given CellCept experiencing fewer serious infections and hospitalizations than those receiving cyclophosphamide. Based on these promising results, a phase III pivotal study received a Special Protocol Assessment to evaluate the use of CellCept in inducing and maintaining remission in patients with SLE nephritis. Top-line data from this study is expected by the end of 2006. Based on the overwhelmingly positive results from these small studies, we are highly positive on CellCept’s likelihood of approval and expect the drug to become the standard of care as an induction and maintenance therapy for patients with lupus nephritis.

REVENUE MODELS

We have update the revenue model for Rituxan and added models for CellCept, LymphoCide, LymphoStat-B, AMG 623, TACI-Ig, Orencia and Riquent.

CellCept - Roche (RHHBY) and Aspreva (ASPV)

CellCept is a new generation immunosuppressive drug that has been approved for organ transplant rejection since 1995. It is currently being used off label in patients with SLE nephritis and we expect this use to expand once the drug receives FDA approval for the treatment of lupus nephritis. We expect peak revenue of $426 million in the U.S. in 2010 and peak worldwide revenue of $744 million in 2012.

Rituxan - Biogen Idec (BIIB) and Genentech (DNA)

Rituxan is currently being investigated in patients with moderate to severe SLE. The drug can potentially be used to deplete B cells to provide prolonged control of disease activity. We expect Rituxan to do well in this setting as the agent of first-choice for B cell depletion. We project peak revenue of $828 million in the U.S. and $1.4 billion worldwide in 2012.

LymphoCide - Immunomedics (IMMU)

LymphoCide can also potentially deplete B cells although it is likely to also possess mechanisms of action distinct to Rituxan. Given the potential for the development of neutralizing antibodies in patients taking Rituxan, we see a role for LymphoCide as the second B cell depletion agent to be used by these patients. We also speculate that LymphoCide can be used repeatedly since it is less likely to suffer from neutralizing antibody formation. We project peak U.S. revenue of $736 million in 2012 and peak worldwide revenue of $1.25 billion in 2013.

LymphoStat-B - Human Genome Sciences (HGSI)

LymphoStat-B is the first agent to target the BLyS/BAFF pathway. The modest benefit seen with LymphoStat-B in phase II studies in the overall SLE patient population leads us to believe that the drug has a limited utility in SLE. We project peak revenue of $317 million in the U.S. and $549 million worldwide by 2016.

AMG 623 - Amgen (AMGN)

AMG 623 also targets the BLyS/BAFF pathway and while it is still in early clinical development, given the modest benefit seen with LymphoStat-B, we see project a limited uptake of AMG 623. We project peak U.S. revenue of $222 million and worldwide peak revenue of $337 million in 2016.

TACI-Ig - ZymoGenetics (ZGEN) and Serono (SRA)

TACI-Ig also inhibits BLyS, however it also inhibits another member of the TNF superfamily, APRIL. As with other drugs inhibiting the BLyS pathway, we expect a limited potential for this drug. Similar to AMG 623, we expect peak U.S. revenue of $222 million and $337 million worldwide in 2016.

Orencia - Bristol Myers Squibb (BMY)

Orencia is a novel T cell costimulation blocker that recently received FDA approval for the treatment of rheumatoid arthritis. While data is immature for this drug, we speculate that the drug may be used in combination of another immunosuppressive agent to control SLE disease activity, particularly SLE nephritis. We project peak revenue of $453 million in the U.S. and $760 million worldwide in 2016.

Riquent - La Jolla Pharmaceuticals (LJPC)

Riquent is being developed for the treatment and prevention of renal flares. The drug has shown inconsistent data in clinical studies and with the current pivotal phase III study being on hold for financial purposes, we do not expect Riquent to make much of an impact in SLE. We project peak revenue of $102 million in the U.S. and $176 million worldwide in 2015.

Drugs targeting B cells

Rituxan (Rituximab; Biogen Idec and Genentech)

Rituxan is the first monoclonal antibody to receive FDA approval for the treatment of cancer. Rituxan is a chimeric human/mouse antibody directed at the CD20 antigen found on B cells (both normal and malignant B cells). CD20 is a receptor that is exclusively expressed on all cells of the B lymphocyte lineage except in the earliest and the latest (antibody-producing plasma cells). The function of CD20 is unknown since CD20 knockout mice have no obvious B cell deficiencies.

The binding of Rituxan to the CD20 receptor on B cells leads to the destruction of these cells. The mechanism by which Rituxan induces B cell death is unclear although in vitro studies have shown Rituxan to induce lysis (bursting) of these cells. In the oncology setting, four weekly doses of Rituxan led to an almost complete depletion of B cells from peripheral blood in the majority of patients. This depletion of B cells can persist for 6 months or longer after Rituxan treatment in these patients.

The role of B cells in SLE makes Rituxan an attractive candidate for therapy. Since the use of Rituxan is likely to lead to the depletion of all CD20-positive B cells, it is thought that Rituxan could potentially eliminate the generation or expansion of autoreactive B cells (B cells that go on to become plasma cells that produce autoantibodies). This theoretically can result in the removal of autoreactive B cells from the B cell pool to allow the bone marrow to repopulate with more normal B cells.

Until recently, Rituxan has only been evaluated in small investigator-initiated studies in patients with SLE. These studies have produced encouraging results showing that patients who experienced a complete B cell depletion with Rituxan treatment achieved clinical improvements. In contrast, patients who did not experience complete B cell depletion did not show much improvement. In patients who responded to Rituxan, the B cell number is usually lowest 1-3 months after the initial dose and the depletion can last 3-12 months. In these small studies, Rituxan was shown to improve skin rashes, fatigue, neurologic symptoms, arthralgias/arthritis and lupus nephritis.

Based on these positive small studies, Genentech initiated phase III studies of Rituxan in SLE in 2005. However, these studies were very small and the optimal dose and duration of Rituxan treatment in SLE patients is not known. Also, it is not known whether Rituxan can be given repeatedly, after B cells recover from the depletion. Presumably if Rituxan can be given repeatedly, patients may only need to be given the four doses of Rituxan once or twice a year to control their symptoms. The production of anti-Rituxan neutralizing antibodies may make this scenario unlikely in some patients. In one small study, a third of SLE patients treated with Rituxan produced anti-Rituxan antibodies (known as human anti-chimeric antibodies or HACA). Production of HACA in these patients was associated with incomplete B cell depletion and lower serum Rituxan levels at 2 months after initial infusion. Therefore, the production of HACA needs to be monitored carefully in the ongoing phase III studies to understand the effects of these neutralizing antibodies on the efficacy and safety of the drug in these patients.

The increasing evidence pointing to a critical role for B cells in SLE and the positive results from numerous small patient studies leads us to believe that Rituxan is a very good candidate for the management of SLE. Data from the patient studies is of prime importance since results from animal studies do not always translate into human studies and as such, we are very optimistic of Rituxan’s potential. While the full effect of Rituxan in SLE is not known, even if Rituxan can show a benefit in a single disease manifestation, such as renal disease, or even if the use of Rituxan allows for the reduction in steroid or cytotoxic drug dose, we believe that the drug will have proven sufficient benefit for FDA approval.

LymphoCide (Epratuzumab; Immunomedics)

Lymphocide is a humanized antibody directed at CD22. CD22 is a receptor that is only expressed on B cells during the more mature stages of B cell differentiation, however, like CD20, CD22 expression is lost during the terminal differentiation of B cells into plasma cells. Although the function of CD22 is not well understood, it is thought to play a role in B cell activation (mainly as a negative regulator). Transgenic mice deficient in CD22 (mice that were bred not to express CD22) exhibit reduced mature B cell numbers, higher levels of autoantibodies and a shortened life span. Therefore, CD22 is likely to be important in B cell development, function and survival.

LymphoCide is currently in phase III development for both non-Hodgkin’s lymphoma (NHL) and SLE, and received fast-track status for SLE in January 2005. Two phase III studies in patients with SLE (ALLEVIATE A and B) were initiated in 2005 with one in patients experiencing severe flares and the other in patients with moderately active SLE. Data thus far for LymphoCide in SLE is limited to a small open-label study. In this open-label study in 14 patients with active SLE, LymphoCide administration resulted in the depletion of B cells (approximately 60% at week 4 and 12). LymphoCide improved clinical outcomes in these patients, with BILAG global disease activity scores reduced in all patients and a greater than 50% reduction in BILAG scores in three-quarters of the patients. The improvements were durable, continuing well after the completion of LymphoCide therapy (4 months after the first LymphoCide dose). LymphoCide was well tolerated with little safety signals.

While the study was small, the results are very encouraging. It is still too early to determine whether Rituxan or LymphoCide is more effective in SLE patients. However, Rituxan has been available since 1997 and given physicians’ familiarity with the drug, we believe that Rituxan will be the preferred B cell depletion therapy over LymphoCide. While Rituxan is likely to be the first choice, we see LymphoCide being used in patients who have already experienced B cell depletion with Rituxan and whose B cell levels have returned, particularly in patients with HACA to Rituxan. Given the humanized nature of the LymphoCide antibody, HACA may likely be less of an issue, making LymphoCide the likely candidate for maintenance therapy. Interestingly, LymphoCide has been evaluated in combination with Rituxan in patients with NHL and the combination of these two drugs resulted in improved clinical activity compared to either agent given alone. This suggests a potential for the two drugs to be used together in SLE patients.

Riquent (Abetimus sodium; La Jolla Pharmaceuticals)

Riquent is La Jolla Pharmaceutical’s lead product in clinical development. It is a mixture of four oligonucleotides that are analogs of the double stranded DNA. Therefore, Riquent is designed to promote B cell tolerance to double-stranded DNA and thus halt the production of anti-dsDNA antibodies.

The clinical development of Riquent has been long and tortuous. A phase III study of Riquent in SLE patients was completed in 2002 and La Jolla Pharmaceuticals filed an NDA with the FDA in 2003 based on this data. This phase III study showed that while Riquent administration was associated with a statistically significant reduction in the level of anti-dsDNA antibodies, it did not meet the study endpoints of significantly reducing the time to renal flares or the number of renal flares. Riquent also did not significantly reduce the number of SLE flares.

In 2004, the FDA deemed Riquent approvable contingent on an additional phase III study that shows a clear clinical benefit of Riquent. This phase III study received a SPA and was initiated in August 2004 prior to the company receiving the FDA approvable letter. This phase III study is designed to evaluate whether Riquent can prolong the time to renal flares. This study is expected to be twice as large as the initial phase III study and will also evaluate higher doses of Riquent. The study, however, has already seen problems – in March 2005, the company halted study enrollment to conserve financial resources, and the company projected enrollment to take at least one year from the time enrollment is reactivated. Currently this study appears to be still on hold. In the meantime, the company has initiated a new study to investigate higher doses of Riquent (doses proposed in the phase III SPA study). Despite Riquent obtaining fast-track status and a SPA, the lack of a clear clinical benefit with the drug, coupled with the changes to the study protocols, we remain pessimistic of this drug’s potential.

Drugs targeting BLyS

LymphoStat-B (Belimumab; Human Genome Sciences)

LymphoStat-B is a human monoclonal antibody that specifically targets BLyS to neutralize its effects. In a phase I safety and dose-finding study, LymphoStat-B was shown to reduce the level of CD20-positive B cells and the level of anti-dsDNA autoantibodies in some patients.

A phase II study evaluating LymphoStat-B in SLE patients was initiated in 2003. This phase II study was a double-blind, placebo-controlled, dose-finding study that enrolled 449 patients with active SLE. Patients were randomized to receive 1, 4, or 10 mg/kg of LymphoStat-B or placebo (dosed monthly after the initial 3 doses in the first month). Disease activity was measured by the SELENA SLEDAI score. The SELENA SLEDAI is a refined version of the SLEDAI index that was developed by the Safety of Estrogen in Lupus Erythematosus National Assessment study. The score can range between 0 to 105 with higher scores representing increased disease activity and scores of 4 or less representing inactive disease.

Results from the phase II study were presented in late 2005, showing that LymphoStat-B did not meet the study endpoints of reducing the SELENA SLEDAI score at week 24 or increasing the time to first flare over 52 weeks (as defined by the SLE flare index). In a retrospective subset analysis, LymphoStat-B was shown to improve the signs and symptoms of SLE in a subset of patients, the seropositive patients (patients with autoantibodies). These patients showed significantly improved disease activity as measured by the SELENA SLEDAI and the physician’s global assessment score at week 52 compared to placebo controls. While a trend of improvement was seen in this patient subset at week 24, this did not reach statistical significance until week 52.

While the study did not meet its primary endpoints, the subset analysis is encouraging. HGSI has indicated that it will pursue a phase III study in seropositive patients, with the likely dose of LymphoStat-B of 1 mg/kg since a dose-response was not seen in the phase II study (the 1 mg/kg dose showed similar benefits to the higher doses tested but with reduced side effects). Of concern for this phase III study is the retrospective nature of the subset analyses in the phase II study. Seropositive patients were not prespecified in the phase II study and therefore it is not known if serology was balanced between the placebo and treatment groups. Moreover, while the majority of SLE patients are seropositive, autoantibodies can come and go in an individual patient, which can make the definition of seropositivity difficult. Given these concerns we are cautious of LymphoStat-B’s potential despite the compelling preclinical data for the role of BLyS in SLE.

AMG 623 (Amgen) and TACI-Ig (ZymoGenetics)

Amgen is developing an inhibitor to BLyS that is currently in phase I studies. AMG 623 is a novel conjugated peptide that neutralizes BAFF or BLyS. ZymoGenetics also has a BlyS inhibitor in phase I studies called TACI-Ig. TACI-Ig is a soluble receptor that binds to BLyS and APRIL (another member of the TNF superfamily involved in B cell function) thus preventing the binding of these ligands to their receptors. Animal studies have demonstrated that TACI-Ig can reduce the nephritis, proteinuria and improve survival in mice with an SLE-like disease. Data from the phase I TACI-Ig study is expected in mid 2006.

It is far too early to determine whether AMG 623 and TACI-Ig can be of benefit in human SLE. Animal studies and scientific studies have been compelling for the role of BLyS in SLE and makes BLyS and its receptors attractive targets for inhibition. However, given the modest benefit seen in the phase II study with LymphoStat-B, we remain cautious of drugs targeting this pathway.

Drugs targeting T cells

Orencia (Abatacept; Bristol-Myers Squibb)

Orencia is a first-in class inhibitor that inhibits T cell function. While much focus has been placed on B cells in the pathogenesis of SLE, T cells are also likely to be important since they are involved in the regulation of B cells. T cells are required for the generation of autoantibodies by B cells (antibodies undergo class-switching and affinity maturation, both T cell dependent events). T cells are also required for B cell proliferation and maturation.

Orencia is a CTLA4Ig fusion protein consisting of the human CTLA molecule bound to the heavy-chain constant region of IgG1. It inhibits the CD28/B7 costimulatory pathway necessary for the activation and differentiation of T cells. T cells require two signals for activation, one through the T cell receptor and the other through the CD28 co-receptor. CTLA4 is a naturally occurring receptor that competes with CD28 and acts as a negative signal to T cells by competing for the ligands that bind to CD28, thus blocking the positive costimulation pathway necessary for T cell activation. CTLA4 is produced by T cells after its activation as a way to shut off the activation signal.

The important role of CTLA4 in SLE has been supported by animal studies. In separate studies, the inhibition of CTLA4 (by the administration of murine CTLA4Ig or the administration of an adenovirus expressing murine CTLA4-Ig) inhibited the development of lupus in mice bred to spontaneously develop an SLE-like disease. Moreover, CTLA4Ig administration inhibited the production of anti-dsDNA antibodies and decreased lupus nephritis in these lupus-prone mice. In addition, studies have shown that the administration of CTLA4Ig in combination with cyclophosphamide significantly reduces proteinuria and improved survival in mice with advanced lupus nephritis.

Orencia has already received FDA approval for the treatment of rheumatoid arthritis and is currently being investigated for its potential in the treatment of SLE. Phase II studies were initiated in 2005 to determine if Orencia (given in combination with the corticosteroid prednisolone) can treat and prevent flares in patients with active SLE. While it is too early to evaluate the effects of Orencia in SLE patients, preclinical animal data have been very compelling. Interestingly, the animal data thus far suggests that CTLA4 inhibition is likely to have little effect on established disease when given as a monotherapy (CTLA4 inhibition was only seen in the prevention or delay of onset of lupus). However, when CTLA4Ig is given in combination with the immunosuppressive agent cyclophosphamide, lupus nephritis is improved. This suggests that Orencia is likely to be used in combination with other immunosuppressive agents. However, animal data does not always translate to human disease and as such, we remain cautiously optimistic for Orencia in SLE.

Immunosuppressive drugs

CellCept (Mycophenolate mofetil; Roche)

CellCept is an immunosuppressive agent approved for the prevention of organ transplant rejection. CellCept inhibits an important enzyme required for purine synthesis. Purines are important building blocks of DNA and RNA, and thus CellCept inhibits DNA and RNA synthesis which in turn, prevents cell proliferation.

CellCept is currently in phase III studies for the treatment of SLE. However, the drug has been used extensively off-label in SLE patients for the treatment of lupus nephritis due to a number of small investigator-initiated studies that have shown CellCept to be as effective, if not more effective, than currently available treatments (such as cyclophosphamide and azathioprine) for lupus nephritis but with fewer side effects. These studies have shown that CellCept can be used as an induction and maintenance therapy for patients with SLE nephritis when given in combination with a corticosteroid (prednisolone). CellCept appears to be better tolerated than cyclophosphamide with patients given CellCept experiencing fewer serious infections and hospitalizations than those receiving cyclophosphamide. Based on these promising results, a phase III pivotal study received a Special Protocol Assessment to evaluate the use of CellCept in inducing and maintaining remission in patients with SLE nephritis. Top-line data from this study is expected by the end of 2006. Based on the overwhelmingly positive results from these small studies, we are highly positive on CellCept’s likelihood of approval and expect the drug to become the standard of care as an induction and maintenance therapy for patients with lupus nephritis.

REVENUE MODELS

We have update the revenue model for Rituxan and added models for CellCept, LymphoCide, LymphoStat-B, AMG 623, TACI-Ig, Orencia and Riquent.

CellCept - Roche (RHHBY) and Aspreva (ASPV)

CellCept is a new generation immunosuppressive drug that has been approved for organ transplant rejection since 1995. It is currently being used off label in patients with SLE nephritis and we expect this use to expand once the drug receives FDA approval for the treatment of lupus nephritis. We expect peak revenue of $426 million in the U.S. in 2010 and peak worldwide revenue of $744 million in 2012.

Rituxan - Biogen Idec (BIIB) and Genentech (DNA)

Rituxan is currently being investigated in patients with moderate to severe SLE. The drug can potentially be used to deplete B cells to provide prolonged control of disease activity. We expect Rituxan to do well in this setting as the agent of first-choice for B cell depletion. We project peak revenue of $828 million in the U.S. and $1.4 billion worldwide in 2012.

LymphoCide - Immunomedics (IMMU)

LymphoCide can also potentially deplete B cells although it is likely to also possess mechanisms of action distinct to Rituxan. Given the potential for the development of neutralizing antibodies in patients taking Rituxan, we see a role for LymphoCide as the second B cell depletion agent to be used by these patients. We also speculate that LymphoCide can be used repeatedly since it is less likely to suffer from neutralizing antibody formation. We project peak U.S. revenue of $736 million in 2012 and peak worldwide revenue of $1.25 billion in 2013.

LymphoStat-B - Human Genome Sciences (HGSI)

LymphoStat-B is the first agent to target the BLyS/BAFF pathway. The modest benefit seen with LymphoStat-B in phase II studies in the overall SLE patient population leads us to believe that the drug has a limited utility in SLE. We project peak revenue of $317 million in the U.S. and $549 million worldwide by 2016.

AMG 623 - Amgen (AMGN)

AMG 623 also targets the BLyS/BAFF pathway and while it is still in early clinical development, given the modest benefit seen with LymphoStat-B, we see project a limited uptake of AMG 623. We project peak U.S. revenue of $222 million and worldwide peak revenue of $337 million in 2016.

TACI-Ig - ZymoGenetics (ZGEN) and Serono (SRA)

TACI-Ig also inhibits BLyS, however it also inhibits another member of the TNF superfamily, APRIL. As with other drugs inhibiting the BLyS pathway, we expect a limited potential for this drug. Similar to AMG 623, we expect peak U.S. revenue of $222 million and $337 million worldwide in 2016.

Orencia - Bristol Myers Squibb (BMY)

Orencia is a novel T cell costimulation blocker that recently received FDA approval for the treatment of rheumatoid arthritis. While data is immature for this drug, we speculate that the drug may be used in combination of another immunosuppressive agent to control SLE disease activity, particularly SLE nephritis. We project peak revenue of $453 million in the U.S. and $760 million worldwide in 2016.

Riquent - La Jolla Pharmaceuticals (LJPC)

Riquent is being developed for the treatment and prevention of renal flares. The drug has shown inconsistent data in clinical studies and with the current pivotal phase III study being on hold for financial purposes, we do not expect Riquent to make much of an impact in SLE. We project peak revenue of $102 million in the U.S. and $176 million worldwide in 2015.