Message From The CEO
June 12, 2008
Dear Stockholders:
I would like to review the major accomplishments of the past year and provide some insight into our strategy going forward. Last year I stated that we would continue with our plans to transform Alseres into a leading nerve repair company. Our 2007 results reflect our continued progress towards realizing commercial value from our new product pipeline.
- Alseres' Cethrin is the world's leading clinical stage nerve repair product. Cethrin Phase I/IIa interim results demonstrated promising neurological recovery in the first 37 enrolled patients. In January 2008, enrollment in the Phase I/IIa trial concluded with a total of 48 patients. Based on interim results, Alseres intends to move forward with its Cethrin Phase IIb trial in the second half of 2008. After discussions with regulatory authorities and expert advisors we were able to reduce the planned size of the IIb trial from 200 patients to a maximum of 100. This significantly reduced the time and funding required to complete the Phase IIb trial. We plan to initiate the Phase IIb trial at up to 80 sites in the United States, Canada, Europe and other selected countries.
- Cethrin works by inhibiting the action of Rho, a key enzyme that prevents axon (nerve) regeneration. Rho potentially plays an important role in a wide range of indications, including acute spinal cord injury, stroke, bone regeneration, cardiomyopathy and oncology. Alseres has ongoing, sponsored-research for approaches to activate pro-regenerative pathways that stimulate axon regeneration and for approaches to deactivate anti-regenerative pathways that inhibit axon regeneration. We believe that our Rho inhibitor technology is a fertile and potentially valuable platform for continued new product research and development.
- Altropane®, the company's lead molecular imaging product candidate, is in Phase III clinical trials for the diagnosis of Parkinson's Disease in patients with tremor. After a series of discussions with the FDA and our expert advisors, we designed a two-part Phase III program, termed POET-2. The first part of the program is presently enrolling patients, as planned, in a 7-center clinical study to generate an image training set. These images will be used to train the expert readers in the study, as is customary for clinical trials of molecular imaging agents. The second part of the program involves two concurrent, replicate Phase III trials which are planned to be initiated as soon as final agreement with FDA is reached. In addition, by the end of the year, we plan to begin Phase II trials of Altropane, in a new indication to aid in the diagnosis of Dementia with Lewy Bodies "DLB".
- We entered into an option agreement whereby Alseres can exercise an option to amend certain terms of its Cethrin license with BioAxone Therapeutic, Inc. in exchange for a $7 million fee payable on or before October 27, 2008. If Alseres exercises this option, the pre-commercial milestone payments in the amended license agreement will be reduced from $25 million to $7 million and payable on or before December 31, 2009. In addition, the sales-based royalties in the amended license agreement will be reduced from 10-12% to 4% for spinal cord injury and 1% for all other indications.
- In March, Alseres entered into an agreement that provides for the Company to borrow $5 million from Robert L. Gipson, an existing lender. The agreement further provides that the Company may borrow up to an additional $5 million from any existing lender under the agreement on the same terms and conditions.
We are pursuing a growing number of confidential partnering discussions with leading companies regarding our molecular imaging, our nerve repair and our regenerative therapy programs and assets. Our recent agreement to improve the terms of the Cethrin license may represent a major step forward for Alseres in realizing the full value of our Cethrin spinal cord program and our Rho inhibitor technology platform and, most importantly, may open up key partnering opportunities.
Our primary objective is to bring our promising lead products to market efficiently. Our ability to accomplish our commercialization objective is enabled by an organization that has developed credible relationships with regulatory authorities, world experts and potential partners. In that regard, I am pleased to acknowledge that MIT Professor Robert Langer, a member of our Board and Chairman of our Science and Technology Committee, has been awarded the 2008 Millennium Technology Prize for intelligent drug delivery. The Prize, which is the world's largest for technology innovation, is given by the Technology Academy Finland. Professor Robert Langer's innovations have had a significant impact on fighting cancer, heart disease, and numerous other diseases. Known as the father of controlled drug delivery and tissue engineering, Professor Langer has been cited as "one of history's most prolific inventors in medicine". Professor Langer's research laboratory at MIT is the largest biomedical engineering laboratory in the world.
In the months ahead, we will make additional announcements regarding the progress of our product, technology and business development programs. My fellow directors, officers, advisors and employees join me in thanking you for your interest and encouragement. We remain committed to creating sustainable, long term value for all of our stockholders.
Peter G. Savas
Chairman & Chief Executive Officer