Financial losses, layoffs, administrative departures and underperforming clinical results would dampen the enthusiasm of most biopharmaceutical companies, but GTx, the only freestanding biopharmaceutical company in Memphis, said it expects to rise from the ashes created by the recent firestorm of negative news.

Marc Hanover, interim CEO and president and COO of GTx, based the optimism on a new dosage and application of one of the company’s drugs to be unveiled at the American Society of Clinical Oncology (ASOC) this month. Enobosarm (Ostarine®), previously tested in 3 mg doses for muscle wasting in non-small cell lung cancer patients, will have data presented for its application in a 9 mg dose for the treatment of androgen receptor and estrogen receptor positive metastatic breast cancer at the ASOC meeting.

Other anticipated news will come in the form of study results in first quarter 2015 on GTx’s prostate cancer drug Capesaris®, a selective estrogen receptor (ER) alpha agonist for the treatment of men with advanced prostate cancer.

Enobosarm 3 mg did not meet expectations of a fast track development agreement between GTx and the U.S. Food and Drug Administration in August of last year.

“Obviously this was a major letdown for the company,”  Hanover said, “and we had to adjust our expenses to advance our late-stage programs. Discovery, benchwork and preclinical is not where value is created in biopharmaceuticals, and we couldn’t afford to keep paying that cost structure.”

By October, company administrators took pay cuts and laid off 60 percent of their 88-person workforce. All efforts were turned to studying potential for enobosarm in Europe.

“On the whole, the studies did not meet primary endpoints as required by study protocols and the FDA,” he said. “For European authorities, one of the studies potentially qualified, so we are pursuing that with the European Medicines Agency (EMA) — the equivalent of our FDA in Europe. We feel we need additional studies to try to get approved in the U.S. at this time, and we can pursue that later.”

In April, Mitchell Steiner, MD, the co-founder of GTx, resigned as CEO. In a statement, he said, “After more than 15 years as CEO, it’s a good time for me to leave my position so that I can spend more time with my family and pursue different opportunities.” 

Less than two weeks after the April 4 announcement about Dr. Steiner, James Dalton, PhD, the company’s vice president and chief scientific officer, announced his resignation, effective the end of August. He is leaving to become dean of the University of Michigan College of Pharmacy.

“Dr. Dalton is primarily a preclinical PhD, and we are not doing much of the preclinical activities right now. That is the reason for his departure,” Hanover said.

He explained that GTx has a wealth of clinical and regulatory expertise in their key officers and that they have enlisted the help of several clinical and industry-experienced MDs in the wake of Steiner's resignation. Hanover described the past 10 months as “challenging” and extoled a “very patient and understanding shareholder base.”

The largest stockholder of GTx is J.R. “Pitt” Hyde, whose personal journey with cancer helped launch the firm in 1997. He is still an investor and chairman of the board, currently serving as a member of the compensation committee and the nominating and corporate governance committees. A bio on the company’s website describes him as “primary advisor to senior management on all matters of strategic importance.”

“Dr. Steiner took care of Mr. Hyde during his prostate cancer treatment, as he was head of the University of Tennessee Urology Department back then,” Hanover said. “Some of the research Dr. Steiner was working on then was transferred to GTx via a tech transfer from his lab to us, so we were basically partnering together. Mr. Hyde was our sole financier shortly after the inception of the business.”

GTx was a privately held company and gradually attracted other healthcare funds and venture groups. It went public in February 2004.

Hanover spoke of the future of the biopharmaceutical industry and lauded American investors for being so devoted, as the research has come to a point where the long years of waiting are about to be rewarded.

“The U.S. is a wonderful place for biotech companies to get funded because there is dedicated capital to it. It is now paying off,” he said. “Cancer treatments and rare diseases have drugs coming to the end of their development. Applications are being submitted to the FDA, and it is obviously doing a good job of coordinating with the biopharma space in order to get drugs approved.”

Locally, Steve Bares, PhD, MBA, executive director of Memphis Bioworks Foundation, believes there is a great deal of technology and research to support more biopharmaceutical efforts and companies. The foundation is a nonprofit that assists in creating  companies, jobs and investments in bioscience by investing in entrepreneurs and building labs/facilities.

“There is the ecosystem to support it,” he said. “There is so much opportunity here. There is collaboration in research, with the government, across borders. I’m bullish on it.

“What happens if all the current drugs in research stages work and created thousands of jobs in Memphis?” he asked. “And at the endpoint, you are helping somebody.”