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Out
of the gate . . . . . off and running
Healthcare
Biotechnology
OTC:
GMXX
GeneMax Corp.
1681 Chestnut
Street
Suite 400
Vancouver BC Canada V6J 4M6
Phone: 604-331-0400
Ronald L. Handford
President & Chief Executive Officer
Interview conducted by:
Diane Reynolds, Co Publisher
CEOCFOinterviews.com
August 2002
Bio
of President/Chief Executive Officer
Ronald L. Handford
Ronald
L. Handford, B.A.Sc., M.B.A. is the President/Chief Executive Officer and a director of
the company and of GeneMax Pharmaceuticals. Mr.
Handford has over 28 years of international experience in business, finance and leading
public and private companies. Mr. Handford
was president and the chief executive officer of Ouro Brasil Ltd., which was taken public
in 1998, and Oro Argentina, a private company, from 1996-1999. Mr. Handford is an engineering graduate from the
University of British Columbia with an MBA from the University of Western Ontario. From 1993-1996, he was investment officer at the
International Finance Corporation, the private sector arm of the World Bank, in Washington
D.C. Before that he was a vice president with Barclays Bank in Toronto, responsible for
their structured finance activities in Canada. He
is experienced in capital raising, as well as in building and administering public and
private companies.
CEOCFOinterviews: Please explain to my readers what this company is
all about?
Mr. Handford:
GeneMax has just come
out of the gate as a public company having completed a reverse take over of the OTC
bulletin board company. GeneMax itself has
been in development for the last couple of years having licensed two very exciting
technologies from the University of British Columbia.
Both of which have US patents now. The
primary focus of the company and our initial product development effort is in the area of
cancer therapy. This cancer therapy is aimed
at fixing a problem at the cellular level that allows cancer cells to evade the immune
system. The cancer types that can be
addressed by our technology include the major groups such as lung cancer, breast cancer,
prostate cancer, melanoma and several of the smaller groups of cancer. So it is really a far ranging application and we
have developed the technology to the pre-clinical stage.
We have animal data now and we expect to be commencing human clinical trials
in about eighteen months.
CEOCFOinterviews: You mentioned in the beginning this is part of a
take over. How has this changed the
company’s overall positioning?
Mr. Handford:
It certainly has given
us a greater access to capital. While we were
a private company, before we announced the RTO, we were limited in terms of the number of
investors who were willing to invest in a private company in this stage of development. We are very encouraged by the response we have had
to the merger with the public company. We are
going to be pursuing institutional investors in Europe and North America as well as
continuing to bring in high net worth individual investors in the private placement we are
currently working on.
CEOCFOinterviews: The product is TAP
Mr. Handford:
Yes, TAP and that is an
acronym for Transporters Associated with Antigen Processing.
CEOCFOinterviews: Is this the only product that you are working on?
Are there others that you are working on? How
does this TAP work?
Mr. Handford:
We do have a pipeline of
products coming together, but TAP is the lead product we are taking into the clinical
trials and we are expending in manpower and our budget about 80% of our resources on
moving TAP into the clinic. We will have
other products under development which will include other applications of TAP and other
immune-modulating products which address autoimmune diseases, graph vs. host disease, i.e.
transplant surgery and viral and other cancer targeting products. It’s going to be a broad pipeline but
all focused on modulating the immune system. So,
we will have a common thread with everything we are doing.
One of the tools we have to build this pipeline is our patented Peptide
Transfer Assay, which we have licensed in from the University of British Columbia. Basically this allows us to screen through
hundreds of different compounds whether they are from natural product libraries, man-made
chemical libraries, genes or antisense compounds. By
this we can find compounds which modulate the immune system and this will give us
potential drug candidates for autoimmune disease, graph vs. host disease, viral or cancer
applications.
CEOCFOinterviews: This is being called a cancer vaccine. Is this to prevent cancer? Is it to treat cancer? Which way is it most effective?
Mr. Handford:
We call it a vaccine
because the TAP gene is delivered with a viral vector, so the gene is carried into the
cancer cells by the virus and restores the TAP protein that is not functioning; I will get
into more detail on that in a moment. It is
not a preventative vaccine like you may receive for smallpox, rather it is a
restorative/curative vaccine and it delivers the gene, which corrects an existing problem. The mechanism of action is that within every cell
in your body there are various components to a pathway, which results in a certain
information being presented on the cell’s surface.
Now, if you can consider, that this information is presented as flags which
can be recognized by the immune system, then the immune system can tell if any cell in
your body is either self or non-self. For
example, if it is a normal cell it will be considered a self-cell and if somehow it has
turned into a cancer cell or if it’s infected with a virus, the immune system can
detect this by the flag, actually known as an antigen, presented on the cell’s
surface. The nature of the cancer is that
within that cell a certain part of the pathway, which presents these antigens on the
cell’s surface, or these flags, has somehow gone awry. There is a protein acting as a
pump which is called the transporter associated with antigen processing, our TAP, and that
is not functioning in the majority of cancer cells. So,
our technology involves delivering the gene to the cancer cells, restoring the TAP
protein, getting the pump working, getting the antigen presentation back on the cell
surface so the immune system can recognize this as a cancer cell and do it’s normal
job of killing the cell.
CEOCFOinterviews: I was reading your information here; it is more
effective for late stage disease. Now, I know
in the cancer cell, during the late stages, the cancer cells actually look like normal
cells and that is why when they use the normal treatments for it they wind up killing all
the good cells with the bad because the cancer cells have now started to camouflage
itself.
Mr. Handford:
Exactly. There are two major problems for conventional
therapies, there is the proximity to healthy cells, so when you are targeting with
radiation for example, you are going to get everything within the vicinity. Therefore, you are going to take out some of the
healthy cells with some of the cancer cells. In
the case of chemotherapy which may be targeting fast growing cells, it kills the fast
growing cells no matter where they are that is why the hair often falls out. With GeneMax’s technology, we are delivering
a gene that restores the TAP protein, which then allows the body’s immune system to
recognize and kill the cancer cells. There is
an interesting statistic regarding the deficiency in the TAP protein. In the early stage of the cancer disease perhaps
40 to 60% of the cancer cells are somehow deficient in the TAP protein, but as you get
into the later stages of cancer almost 100% of the cancer cells are TAP-deficient.
Therefore, we believe TAP could be a therapy for late stage cancers where the alternatives
of surgery, radiation and chemotherapy are normally beyond hope of success.
CEOCFOinterviews: Now, would this be used in combination with
normal treatments?
Mr. Handford:
While we expect TAP
could be used in combination with conventional therapies, we also expect it could be used
as a stand-alone therapy. Something else to
consider is that other biotechnology approaches are coming at the problem in the immune
system response from outside of the cell. They
may be trying to boost the immune system through hormones, or cytokines, or they are
trying to cut off the blood supply of the tumor. There
are many approaches working from outside of the tumor cell.
I believe some of these other clinical trials will find a limitation to
their system because of the lack of antigen presentation on the cancer cells, due to
problems with the TAP function. We are coming
at the problem of immune recognition from the inside of the tumor cell. So, actually if you put the two together there is
a chance for a combination therapy with some of these other biotech approaches. We expect we will function as a stand-alone
therapy but if we can solve the antigen presentation problem for these other companies and
actually enhance their approaches then ultimately we could deliver a cocktail of
therapies, which would be very good for the patient and of course very good for GeneMax
and our potential industrial partners as well.
CEOCFOinterviews: GeneMax does the actual manufacturing of the
product or is it outsourced?
Mr. Handford:
Right now of course we
have been doing it on a bench scale method rather than on a production scale. We’ve manufactured enough vaccine in the labs
to have the animal trials which to date have been done on mice. We’ve gone after small cell lung cancer in
mice and we’ve had a paper on our results published in Nature Biotechnology in May of
2000, which is a very prestigious journal. Subsequently
we’ve done work with melanoma, prostate and breast cancer cell lines and have
achieved very strong results in those as well.
CEOCFOinterviews: When can the public actually see some revenues
coming from TAP?
Mr. Handford: The process for getting through clinical trials is a
minimum of four years. Right now we are at the pre-clinical stage and we expect to
begin clinical stage in about eighteen months. The first phase of clinical trials
will be generally testing the safety of the drug and will last about a year. Then
Phase Two involves many more patients; perhaps up to 30 to 50 patients and that could last
up to another year. By the time you get to Phase Three, that will probably involve
several clinical trials sites, hundreds of patients and at least two years. So, the
fastest we are going to get from here to actually selling a drug approved by the FDA will
be about five and a half years and that would be an absolute fast track. The
important thing here for investors to note is as we progress through the milestones, as we
go from pre-clinical to phase one and phase two and so on, each one of those bench marks
creates a value level for the company. You can look at other companies in the cancer
therapy area that are publicly listed and see where they are in their timeline and get
some kind of idea of the values that are possible. So, before we sell those first
drugs a lot of value can be created for investors.
CEOCFOinterviews: Because it is in the early stages of a company,
does the company have the financial resources available to survive?
Mr. Handford: We don’t have to raise six years worth of
capital right now. Typically we are trying to build up a treasury that will carry us
out through the next two to three years. Certainly the finance ability of the
company progresses as it progress through its milestones. Clearly, some companies get into
trouble if they don’t meet their milestones, but we are very optimisitic with the
quality of the company’s science and the results of the work that has gone on to date
on the animals can be brought forward to humans with the same results. So, we
believe the company will be financially able to certainly get into Phase Two clinical
trials. The cost for Phase Three is very high and that is why typically if you have
had success in the first two clinical trials, you will probably be of interest to the
large pharmaceutical or large biotechnology companies as they need to replenish their
pipeline of new products as well. Typically money isn’t an issue with them but
they don’t want to risk resources without some evidence of effectiveness in humans.
So, by the time we have some data showing that TAP works in humans we believe we will have
the potential for multiple partnerships, both from the large companies that want to build
out their pipeline and biotech companies who want to in-license technology that could
improve their technology. So, we see those new opportunity sources of income from
licensing fees, etc as we progress.
CEOCFOinterviews: You are only doing this in North America or are
you doing some of this research overseas?
Mr. Handford: Likely we will be doing the first phases in North
America but sometimes there are incentives to carry the work elsewhere. We will also
be looking at Europe and Japan. I believe in Japan a company needs to carry out
clinical trials there in order to have local distribution after the trials are finished.
So, we do need to plan around that, but certainly in the early stages it will be in
North America.
CEOCFOinterviews: When did you join the company?
Mr. Handford: I helped create the company in 1999, and I was the
founding CEO. The business and science partners that put the company together
include Dr. Wilfred Jefferies, who is a professor in the University of British Columbia.
He trained at Oxford and is one of the world leading cellular immunologists, having
discovered this technology. He had another successful UBC spin-off company called
Synapse Technologies. Another business founder of the company was James Davidson of
Alexandria, Virginia who is a partner in Agora Publishing, and the author of many books
including the Great Reckoning, The Sovereign Individual. Another founder was Alan Lindsay,
who is CEO of a medical device manufacturing company here in Vancouver. He has many
years of experience in running an AMEX company. So, that was the founding group and
later the board was expanded with Dr. Julia Levy who recently retired as CEO of QLT Inc.
and she brings a tremendous resource to the board in terms of management in terms of the
oversight of the biotech business. She had taken QLT all the way from the
pre-clinical stage where we are today all the way to the marketing of the drug for Macular
Degeneration.
CEOCFOinterviews: What would you say to a potential investor who
asked you “why this company?”
Mr. Handford: Well, we think we have the key to the door in terms
of cancer therapy immune recognition. We can address all of the major groups of
cancer so the potential market for this is huge. Many of this other biotech
companies are going after a specific type of cancer, for example, prostrate cancer, breast
cancer or melanoma, whereas our technology should apply to all of the major groups of
cancer. We are not restricted by individual genetics, as we have a common TAP gene
for all humans. The TAP vaccine can be a globally delivered vaccine in that we don’t
need a high-tech setting. The vaccine can be freeze-dried, delivered around the
world in low-tech clinics. We have a very strong technical team, a tremendous board,
a very capable management who is very savvy in the both the biotech business as well as
the financial markets and we have a very strong Scientific Advisory Board that is on the
cutting edge of cancer therapies and viral delivery of genes. So, I think there is a
lot of blue sky in the company because of the breadth of the cancer markets we can
address, there is a very experienced team with us and we believe we are building what is
going to be a home run for investors.
CEOCFOinterviews: If another company were to approach you because
they are working on something similar, or can be a compliment to what you are doing, would
you consider either a joint venture or acquisition?
Mr. Handford: We are not actively looking for partners at this
point. Clearly there is more value created by us going further down the pike and
into clinical trials, so, we would want to be in at least Phase Two before we negotiate
any significant licensing deals with any pharmaceutical companies. That is not to
say we wouldn’t consider any type of limited application deals sooner with companies
that have complementary technologies or where our technology would enhance theirs. I
would say we are open to limited collaborative opportunities in the near term, other than
that we would need to build more value in the company before we sit down and talk to the
big players in the industry.
CEOCFOinterviews: Is there anything that I have missed or
overlooked about the company in general?
Mr. Handford: Well, I think that the ability for us to build a
pipeline is important, both from the technologies already in hand and the applications of
TAP and the Assay, which can identify the compounds to build out the pipeline. We
have a good relationship with the University of British Columbia and continue to see
opportunities to in-license technologies that complement the ones that we already have.
Also, we are building a reputation in the industry that will continue to bring
other licensing opportunities to us. I think one of things that is in every
investor’s minds these days is the quality of corporate governance. I believe
the quality of people that we have already put on board is a guarantee of that and these
senior industry individuals wouldn’t have come on our board if they really
didn’t believe in the potential of our science and the integrity of our
intentions. They understand immunology and oncology and they know that this thing is
a very exciting technology. Secondly, these are some of the senior people in the
biotech industry in North America and they provide excellent insight and oversight into
our activities. We will have all of the appropriate corporate governance safeguards
in place and plan on building a world-class company. We plan on doing it right from
the start and assure investors on that front.
CEOCFOinterviews: It is very exciting; especially anything that has
to do with cancers, coming out with a different solution is always exciting.
Mr. Handford: It touches every investor because everyone has either
suffered cancer personally or knows of a family member or an associate who has been
stricken. It is becoming the leading cause of death in North America overtaking
heart disease.
CEOCFOinterviews: Are there any closing statements that you would
like to leave with my readers?
Mr. Handford:
Well, just that it has been very exciting being associated with this technology and the
quality of people we have here. We certainly
would like to share that excitement with investors. I
think that beyond the potential investment returns it is an investment that everyone can
feel is helping to move forward a technology which should alleviate a lot of suffering
around the world.
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