Artisan of Change

President and CEO Gilles Gagnon directs Aeterna Zentaris in its latest incarnation

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By Amber Lepage-Monette

In 1991, Eric Dupont, PhD decided to start a company to research and advance the anti-angiogenic compound Neovastat®.

Aeterna Laboratories, as the company was then known, was initially created with three divisions: pharmaceutical, cosmeceutical and nutraceutical. The cosmeceutical and nutraceutical divisions funded the pharmaceutical division, and were eventually spun off into Atrium Biotechnologies Inc. (Quebec City, Quebec).

Over the last 14 years, a lot has changed at Aeterna — much more than just the name.

Current president and CEO Gilles Gagnon now heads Aeterna Zentaris Inc. (Quebec City, Quebec), a biopharmaceutical company with two products on the market for three different indications, 10 products in the clinic — including three in Phase III clinical trials — and 10 products in preclinical development.

Wheeling and Dealing

Aeterna now operates three distinct business divisions, including Atrium Biotechnologies, of which Aeterna owns just over 50 per cent, and Echelon Biosciences Inc. (Salt Lake City, UT), which the company wholly owns.

The third division, Zentaris GmbH (Frankfurt, Germany), acquired by Aeterna in 2002, has proven to be an important acquisition, and a big part of Aeterna’s business plan. Not only did the acquisition spur the decision to take the current moniker, but it also provided Aeterna with the bulk of its products.

“Some people will say that we have been lucky to find this company,” Gagnon says of the Zentaris deal. “In fact, we were so well prepared that we were in the position to recognize an extremely good opportunity and jumped on it very, very quickly.”

Zentaris, which was a spinoff of German chemical company Degussa AG (Duesseldorf, Germany), was a very strategic purchase for Aeterna, Gagnon says, in which the number of products, the type of products and the disease area were all part of the decision-making process.

“When we were looking for an acquisition, we had several criteria in mind,” he says.

“At first we said we want to evolve in oncology; we want to find products that will be very solid from a scientific perspective and an intellectual property perspective; we want to find a company with people with experience in drug development; we don’t want to refinance this company . . . and of course it would be better if the compounds would be at the late stage of development and it would be a bonus if the company would already have pharmaceutical partners,” Gagnon explains. “And this is exactly what happened.”

One of the lead compounds acquired along with Zentaris was cetrorelix — which is marketed under the name Cetrotride® for in vitro fertilization, and is also used for the treatment of endometriosis.

Cetrorelix involves a luteinizing hormone-releasing hormone (LHRH) antagonist approach, which suppresses sexual hormones in women. Aeterna is also currently looking at using different doses of cetrorelix to treat benign prostatic hyperplasia (enlarged prostate) and prostate cancer.

“The beauty of LHRH antagonist is the fact that it works in a dose-dependant manner, contrary to the first generation of compounds that are still on the market today, which are LHRH agonist (and) induce rapid increase in the level of sexual hormone followed by . . . major side-effects, which you don’t find with cetrorelix,” Gagnon says.

Aeterna has partnered with Spectrum Pharmaceuticals Inc. (Irvine, CA) for this compound under the new code name D-63153 for prostate cancer indications. Spectrum recently received an IND from the U.S. Food and Drug Administration to commence a Phase I/II clinical trial in hormone-dependant prostate cancer.

“We are conducting Phase II studies on (Spectrum’s) behalf in Europe and they are conducting themselves their Phase II studies in (the) USA,” Gagnon says.

Product Partnering

Partnerships such as the Spectrum deal are very important to Aeterna, Gagnon says, and something that the company actively seeks out.

Cetrorelix is currently partnered with three companies for benign indications: Solvay SA (Brussels, Belgium), Shionogi & Co. Ltd. (Osaka, Japan) and Nippon Kayaku Co. Ltd. (Tokyo, Japan). Solvay currently owns the worldwide rights to cetrorelix, except for in Japan.

Gagnon says the commitment from these three partners represents an investment of more than $100-million Canadian over the next three years in cetrorelix.

“The contribution from our partners is highly significant,” he adds. “Having the validation of a pharmaceutical partner is very good. It is, I would say, almost essential.”
Aeterna’s second therapeutic focus is signal transduction inhibitors for oncology, with perifosine as its lead compound.

Perifosine is currently in Phase II clinical trials, and has shown positive results in soft tissue sarcoma, and has demonstrated stabilization in breast cancer and prostate cancer.

The compound was initially started as miltefosine, which was found to be too toxic for cancer indications, Gagnon says, but is now marketed as a treatment for visceral leishmaniasis, or black fever, and cutaneous leishmaniasis, also known as parasitic skin disease.

Perifosine is also the first compound that Aeterna will develop itself, Gagnon says.

“We hope that perifosine will be the first in-house developed compound that could be in the hands of our newly formed sales force,” he says.

Though Aeterna has yet to create a sales force for its own products, it is something the company hopes to accomplish in the next few years, Gagnon explains. At the same time, the company is always looking to acquire new products.

“While we are actively pushing for the development of our own products, we are actively looking to acquire late stage compounds in oncology, and even marketed compounds in oncology,” he adds.

Though several of the company’s current products are doing well, its first compound, Neovastat, has had a tougher time.

Neovastat made it through a Phase III clinical trial for kidney cancer, but failed to meet the trial end point of improving overall median survival time.

However, Neovastat is currently in clinical trials with the National Cancer Institute in the U.S. for non-small cell lung cancer, the results of which Aeterna is expecting sometime in the next few years, Gagnon says.

Change of Scenery

Gagnon himself has been in the health-care sector for approximately 25 years, having worked as a hospital administrator, and for Sandoz Canada, which later became Novartis Pharmaceuticals Canada Inc. (Dorval, QC).

Just as Aeterna was seeking out a particular type of company when it acquired Zentaris, so too was Gagnon looking for something specific when he joined Aeterna.

“I needed a change for sure,” he says. “What I had in mind was either I start my own company, or I act as a consultant, or I join a company which was pretty well established, where the founders have demonstrated a lot of vision and determination and with a good success track record.”

Gagnon says Aeterna was exactly that company.

“They had all the pieces to complete the puzzle,” he says. “And I guess they needed someone with experience on how to help put the pieces at the right place in the puzzle.”
Gagnon credits those who started Aeterna for creating such an attractive package.

“The founders did an amazing job in founding the company through an innovative business model,” he says. “(They) needed a second generation of manager with different experience to really bring the company to the next step and to bring it as a major player in the biotech sector — not only at the local Canadian level, but at the international level.”

And stepping into that role, challenges and all, has been extremely positive for Gagnon.

“So far it is an amazing experience,” he says.

“Being, yourself, heavily in action managing the business on a daily basis, but at the same time having to be creative all the time and think about what you can bring as a change to your company as well.”

A successful CEO is a role that requires many talents, Gagnon elaborates.

“You are the artisan, if I can say it, of the success — along with your team,” he says.

“And of course, when things don’t go exactly the way you would like (them) to go, you have to look into the mirror. While, when things are going very well, you look through the window and give credit to your people.”