Company Profile: Emmaus Medical

July 1, 2002

To date, there are no proven treatments available for sickle cell disease (SCD), a highly debilitating illness that afflicts 4 million people worldwide. When Dr. Yukata Niihara, who has been studying SCD for most of his medical career, developed and licensed a highly effective oral treatment, he partnered with his patent attorney to form Emmaus Medical, a self-funded (and grant supported) business. The company is now poised for FDA approval, and it plans to provide its product as a medical food by the end of this year. This could position Emmaus as owning the core solution for effectively treating SCD for the first time in the disease's history.

Sickle cell disease strikes only a small fragment of the population, many of which are African American (who have the highest rate of any ethnic group--1 in 500), and increasingly, those of Hispanic, Mediterranean, Middle Eastern, and South East Asian descent. A genetic disease passed down commonly via the sufferer's own parents, sickle cell disease is caused by a genetic defect in the hemoglobin molecule of the red blood cell. Hemoglobin is the protein in red blood cells that carries oxygen throughout the body. What occurs is a 'sickle cell crisis,' which causes the blood to thicken, thus blocking normal flow through the capillaries. The affects of SCD are highly debilitating. It induces localized tissue damage and subsequent organ damage, increasing the chance for infection and strokes, while also inflicting intense pain, forcing many SCD sufferers to become dependent on morphine. Like any illness that affects a considerably small number of people compared to other diseases, there hasn't been a significant amount of activity funded towards drug development. Thus the only current treatments available to SCD sufferers are those of high risk. One is blood transfusion, which is extremely expensive and thus rarely an option for many of those afflicted with SCD. The other competitive treatments are also high risk and are limited to a small number of SCD patients--bone marrow transplants and hydroxuyrea, which increases the risk of cancer.

It was when Niihara was studying sickle red blood cells with his mentor, Dr. Charles Zerez, that he first conceived the idea for L-glutamine therapy, the basis for the Emmaus treatment. "In studying red blood cells, Dr. Zerez noted an alteration in metabolism of an antioxidant molecule called NAD in sickle red blood cells," says Niihara. "As sickle red blood cells are extraordinarily susceptible to oxidation damages, an increase in antioxidant defense level is very important. It became apparent in our laboratory that supplementing the red blood cells with one of the precursors for NAD, L-glutamine, can significantly improve the metabolism of NAD. As we realized that L-glutamine is an amino acid that has essentially no harmful effect if taken orally, we decided to test it right away with our patients."

Niihara was then able to get appropriate approval to conduct the clinical trials, leading to convincing data, test results, and subsequently, more research from the the National Institutes of Health and the Food and Drug Administration. Collaborating with a pharmaceutical corporation to help bring it through the FDA approval process seemed the next step. However, because the number of potential patients could only produce a market size of under $500 million, the large pharmaceutical companies met the idea with disinterest.

Niihara by then had brought on his patent attorney, Dan Kimbell, as Director of Business Development. "Large companies don't want to bother with something that has a potential of something less than a $500 million market, so they didn't want to bother with it," says Kimbell. "Because of the typical high cost of developing a new drug and getting it through the approval process--$500-$800 million per drug--they don't think it's worth the investment."

This forced the company's two co-founders (who are still the only members of the management team) to move forward with self funding and to seek out various grants, including that of the Larta-administered CalTIP and STTR from the National Institute of Health. Also, to help avoid high drug development costs, Emmaus had the advantage that its product fell under the category of an orphan drug, which means that it is a treatment for rare diseases which effect a smaller percentage of the population (creating smaller marktes). To give incentive for more orphan drug development, Congress passed the Orphan Drug Act in 1983 which waived the new drug application fee ($300,000), providing grant money and seven years marketing exclusivity to orphan drugs.

"In our case, a lot of the costs, which are usually as high as I described, we haven't experienced because, early on, we found out that the drugs work. And we've been bootstrapping with very little money to get where we've gone so far, so our total cost has been much, much lower than typical."

Emmaus has been green-lighted for the Phase II stage of the FDA approval process, a strong indicator (statistically) that approval is likely. However, if the FDA approval is delayed, the company plans to sell its product as a medical food. Unlike a pharmaceutical, medical food does not require FDA approval. This will bring the company a near-term revenue stream as it proceeds through the next 2-3 years of FDA trials, new drug application approval costs, and expenses of launching the treatment as a pharmaceutical product.

"I wasn't thinking it would necessarily go this far when I started with the company," says Kimbell. "But we were progressing one step at a time, and before we knew it, we had the license agreement and a $1 million federal grant. This helped make us realize that we had something that was really valuable and we've just been proceeding from there."

by Wendy Hall
Larta Staff Writer