HMPL-004 for Inflammatory Bowel Diseases

HMPL-004 is a botanical product extracted from a herb that occurs naturally in China. The herb has an extensive history of use in TCM for the treatment of upper respiratory tract infections and other inflammatory and infectious diseases. HMPL-004 was developed in-house for the completely new indication of Inflammatory Bowel Disease ("IBD"), as a result of screening known TCM anti-inflammatory medicines.

IBD is considered an auto-immune disease, as are rheumatoid arthritis, psoriasis, multiple sclerosis, and systemic lupus erythematosis. A deregulated immune response plays a major role in the pathogenesis of the disease. Pro-inflammatory cytokines, such as tumour necrosis factor alpha (TNF-α), IL-1β , IL-6, IL-12, IL-15, and IL-18 are the key mediators of inflammatory reactions. Conventional therapeutics for IBD include steroids, anti-inflammatory drugs, antibiotics, immunosuppressive reagents, and cytokine inhibitors.

HMPL-004 acts on multiple cellular targets in the inflammatory signal transduction pathways resulting in suppressed inflammation cytokine expression including TNF-α, IL-1β and IL-6. HMPL-004 was demonstrated to inhibit TNF-α and IL-1β production in cell-based assays. HMPL-004 is also able to inhibit NF-kB activation. NF-kB is a family of transcriptional factors that regulate a wide spectrum of genes critically involved in host defence and inflammation. The mechanism of action of HMPL-004 was further supported in laboratory IBD animal models. Treatment of IBD rats with HMPL-004 caused a significant drop in plasma cytokine concentrations, including TNF-α and IL-1β.

Products extracted from the same herb as HMPL-004 have been widely used as traditional remedies in China and South East Asia to treat upper respiratory tract infections and other inflammatory and infectious diseases. Extracts of the same herb have also been used as dietary supplements in the US for many years. In over sixteen years, among an estimated 129 million users, a total of only fifteen cases of adverse events are documented in China. There have been no reports of adverse events associated with the dietary supplement use of extracts from the same herb source as HMPL-004 in searches of US FDA databases conducted by Mediwatch Ltd. in 2005.

HMPL-004 is our lead drug candidate for treating inflammatory bowel diseases ("IBD") and potentially other auto-immune diseases. It is an innovative oral botanical drug with a unique mechanism of action targeting NF-kB activation, which leads to inhibition of production of multiple pro-inflammatory cytokines. As such, HMPL-004 represents a new approach for the treatment of patients with active IBD. In 2009 it completed two clinical studies - a Phase II trial in the US for Crohn's disease in July and a global Phase IIb trial for UC in November.

The Phase II CD trial was a multi-centre, double-blind, randomized, and placebo-controlled study conducted in 101 CD patients in the United States and Ukraine. The clinical study included 8 weeks treatment with 1,200 mg per day of HMPL-004 or placebo and then 4 weeks of follow up. The primary endpoint of the trial was to assess the efficacy, which is the percentage of subjects with a clinical response -100 (minus 100), defined as a reduction in Crohn's Disease Activity Index (CDAI) by at least 100 points from the baseline. Secondary endpoints including the clinical response -70 (minus 70), defined as CDAI reduction of at least 70 points, and the percentage of subjects attaining remission, defined as CDAI score of 150 or less, were also assessed.

While the trial failed to meet its primary endpoints, the outcomes of completed data analysis were encouraging and demonstrated a clear trend of efficacy for HMPL-004 at the 1,200 mg per day dose level. For the Intent-To-Treat patient population, the clinical response -100 at week 8 was 37% for HMPL-004 vs. 22% for the placebo (p = 0.087). The clinical response -70 at week 8 was 49% for HMPL-004 vs. 32% for the placebo (p = 0.061). The remission rate at week 8 was 29% for HMPL-004 vs. 14% for the placebo (p = 0.069). Furthermore, HMPL-004 demonstrated a good safety profile. There were no treatment-related serious adverse events in the HMPL-004 arm thereby indicating higher dose levels could be considered.

The Phase IIb UC trial was a multi-centre, double-blind, randomized and placebo-controlled study conducted in 223 UC patients in the United States, Canada and Europe. The three-armed clinical trial included 8 weeks treatment of HMPL-004 at two dose levels, 1,200 mg/day or 1,800 mg/day, vs. placebo. The primary efficacy endpoint of the trial was clinical response, defined as the percentage of patients with a decrease in Mayo score from baseline ≥ 3 and ≥ 30% decrease in the Mayo score, along with either a decrease in rectal bleeding score ≥ 1 or absolute rectal bleeding score ≤ 1 at week 8. The secondary endpoints included clinical remission, defined as the percentage of patients with a Mayo score ≤ 2 with no individual score > 1 at week 8; and the mucosal healing rate, defined as the percentage of patients with a decrease from baseline in Mayo endoscopy sub-score ≥ 1 and a Mayo sub-score of ≤ 1 at week 8. The safety profile of the drug was also assessed.

Completed data analysis demonstrated that all primary and key secondary endpoints were achieved. For the Intent-To-Treat patient population, the total clinical response of the two treatment arms at week 8 was 64% for HMPL-004 vs. 44% for placebo (p = 0.006). The clinical remission at week 8 was 43% vs. 28% for HMPL-004 vs. placebo (p = 0.03). The mucosal healing rate at week 8 was 53% vs. 36% for HMPL-004 vs. placebo (p = 0.02). For the higher dose 1,800 mg/day arm, the clinical response at week 8 was 73% for HMPL-004 vs. 44% for placebo (p < 0.001); the clinical remission at week 8 was 45% vs. 28% for HMPL-004 vs. placebo (p = 0.04); and the mucosal healing rate at week 8 was 60% vs. 36% for HMPL-004 vs. placebo (p = 0.007), respectively. In addition, HMPL-004 demonstrated an excellent safety profile at both dose levels. There were no treatment-related serious adverse events in either of the HMPL-004 arms reported by the investigators.

The achievement of meeting all UC trial endpoints, along with the trend of efficacy demonstrated in the earlier CD trial, gives us the confidence to proceed with our development and partnership plans for this drug candidate. To this end we are engaged in licensing and co-development discussions with several global pharmaceutical and specialty pharmaceutical companies with existing gastro-intestinal disease businesses or a strong interest in entering the gastro-intestinal disease arena. All preparation for Phase III development for HMPL-004 is underway and we expect HMPL-004 to enter the global Phase III trial later this year.

HMPL-004 is extracted from a herb. The active ingredient used in the clinical trials was manufactured in a GMP facility in China. The drug is encased in a hard gelatine capsule, produced under GMP in the US.

Sufficient quantities of the clinical supplies have been manufactured with acceptable batch-to-batch reproducibility for use in the Phase II clinical trials.

• HMPL-004 belongs to the same family of inflammatory cytokine inhibitors as Remicade, which has had success in similar indications. However, HMPL-004 does not demonstrate the same degree of adverse events.
• HMPL-004 is an oral agent rather than an injection like most antibody therapies.
• Extracted from a single herb and formulated as a solid dosage form, HMPL-004's cost per therapy is lower than existing antibody therapies.
• A long history of human use of the herb from which it is derived and animal safety studies suggests that the product is well-tolerated.

The following information relating to the market potential of HMPL-004 and the market size for inflammatory disease treatments have been extracted or derived from statistical data and information published by various sources including a report commissioned and paid for by Chi-Med and produced by Cambridge Consultants Limited, an independent research organization, dated 24 February 2006. In collating that information, certain assumptions and qualifications have been made which may affect the interpretation of the information contained herein.

UC and CD are the two most common forms of IBD. The patient population with UC and CD in the US is estimated to be between 250,000-500,000 and 400,000-600,000 respectively. The annual incidences of UC and CD in the US are 2-7 cases per 100,000 population per year and 5-7 cases per 100,000 population per year, respectively.

Between 2001 and 2005 it is estimated that the number of patients with UC in the US increased by approximately 47,000, representing a CAGR of 4 per cent and the number of patients with CD increased by approximately 58,000, a CAGR of 3 per cent.

The products used for the treatment of UC and CD are prescribed according to severity and anatomical location of the disease. The main types of drugs recommended for treatment of the two conditions include 5-aminosalicylates, corticosteroids and antibiotics to control inflammation and immuno-modulators.

The estimated costs per recommended course of treatment per patient of the drugs used for CD are US$663 for the oral 5-ASA drug Pentasa (mild-moderate disease), US$534 for the oral corticosteroid Entocort EC (mild-moderate disease), and US$7,573 for the intravenous immuno-modulator Remicade (moderate to severe disease).

The estimated costs per recommended course of treatment per patient of the drugs used for UC are US$739 for the oral 5-ASA drug Asacol (mild-moderate disease), US$9 for the oral corticosteroid, Deltasone (mild-moderate disease), US$31 for the intravenous corticosteroid Solu-Medrol (moderate-severe disease) and US$7,573 for the intravenous immuno-modulator Remicade (moderate-severe disease).

In 2002, the US market size for CD was estimated to be US$590 million. This is expected to reach US$980 million by 2012, a CAGR of 5 per cent. In 2002, the US market size for UC was estimated to be US$420 million. This is expected to reach US$500 million by 2012, a CAGR of 2 per cent. However, the FDA approval of Remicade for UC in 2005 came after this market analysis was undertaken, and sales of this drug for UC are likely to have increased the overall value of the UC market further.