Issue:January 2013

EXECUTIVE INTERVIEW – Ariel Pharmaceuticals, Inc: Reducing Shareholder Risk Through Expedited Clinical Development

Ariel Pharmaceuticals, Inc. is a private, specialty pharmaceutical company focused on the development and commercialization of drugs that improve quality of life for patients with acute neurological disorders. Ariel’s first product is intended to address unmet needs in acute migraine. Ariel’s strategy is to in-license drugs in development for CNS in which there are hard clinical endpoints that can be demonstrated in clinical trials of relatively short duration. Specialty Pharma recently interviewed Steve Orndorff, President and CEO of Ariel, to discuss the company’s drugs in development and plans for the future.

Q: Can you provide our readers with an overview of Ariel’s lead program in development?

A: We in-licensed our lead product, AP-1531, from BTG International Ltd. in September 2011. This compound is a first-in-class, orally available, potent, and selective EP4 receptor agonist intended for the treatment of acute migraine. It has a unique dual mechanism-of-action that works locally to suppress the release of CGRP neuropeptide and inhibit cerebrovascular dilation. AP-1531 specifically targets PGE2 – EP4 signaling, which is believed to provide a superior safety profile compared to triptans and non-steroidal anti-inflammatory drugs (NSAIDs), the most commonly prescribed treatments for this condition. In six Phase I clinical trials, AP-1531 has been shown to be well tolerated at doses that provide analgesic effects. AP-1531 is protected by 65 issued US patents and their foreign equivalents in the major world markets that extend through 2024 and relate to composition-of-matter, use of EP4 receptor antagonists, and screening tools.

Q: What role does PGE2 – EP4 signaling play in migraine?

A: Despite decades of research, the cause of migraines is not well understood. Migraines appear to involve activation of the trigeminovascular system in the brain stem, with release of inflammatory neuropeptides and dilation of cranial blood vessels. Prostaglandin PGE2 interacting with the EP4 receptor has been shown to cause vasodilation and the release of inflammatory neuropeptides, particularly CGRP and Substance P. EP4 receptors are concentrated in the cerebral vasculature and are scarce in coronary and pulmonary vasculature, so EP4 receptors are an excellent target for directing a therapeutic to the source of migraines and minimizing disruptive impacts on other critical organs. AP-1531 has been shown to be a highly specific EP4 receptor antagonist that effectively blocks PGE2 – EP4 signaling. We believe that because of this specificity for EP4 and EP4’s localization in cerebral vessels, AP-1531 will have a much better safety profile than current migraine therapeutics.

Q: What is your development plan for AP-1531?

A: We plan to initiate Phase II studies in patients with migraine headaches in 2012, with study completion expected in approximately 1 year. We strongly believe AP-1531 has the potential to effectively treat patients who are non-responsive to triptans or are at risk due to the cardiovascular side effects of triptans. Ariel may also eventually explore additional indications, including acute pain and cancer in which EP4 signalling plays a role in these diseases.

Q: What’s the market for acute migraine products and what makes AP-1531 superior to other currently available treatments?

A: According to the World Health Organization (WHO), episodic migraine headaches affect 11% of the world population and are among the top four disabling neurological conditions. Migraine headaches account for an estimated 30 million days of lost productivity at a cost of up to $17 billion per year in the US, and approximately half of migraine patients suffer severe pain and require bed rest. Currently, the most common migraine therapies are NSAIDs and triptans; however, shortcomings of currently available drugs include slow speed of activity (up to 90 minutes for market leader Imitrex), recurrence of pain, and debilitating side effects, including cardiovascular and gastrointestinal toxicity. We believe that given the dual mode of action, selectivity and fast onset of AP-1531, we will be able to provide patients with faster relief with less side effects than the currently available treatments.

Q: Does Ariel have other products in its pipeline?

A: The EP4 receptor has been shown to play a significant role in a number of diseases where prostaglandin E2 is involved. These range from orphan diseases like Familial Adenomatous Polyposis (FAP) to neurodegenerative diseases like Multiple Sclerosis and to major diseases involving pain and/or inflammation. We are developing AP-1531 and a related library of EP4 ligands as a therapeutic platform and our first therapeutic applications are osteoarthritis pain and colorectal cancer.

Q: Could you provide us with an overview of Ariel’s business and funding strategies?

A: Ariel’s goal is to reduce shareholder risk and accelerate time-tovalue inflection. Our strategy is in-licensing drugs that are already in human testing for clinical indications that have short development timelines, well-defined endpoints for efficacy with limited or no Competition, and established mechanism-of-action to ensure predictability and cost efficiency. We are currently raising a Series A financing that we anticipate will take our product development through completion of Phase II trials. Our plan is for a shareholder exit in less than 5 years.

Q: Can you tell us more about yourself and how you started Ariel?

A: Ariel was founded in January 2011 and is structured to inlicense clinic-ready drugs in acute care clinical indications that have no or limited competition. We strongly believe our licensed products are first-in-class, revolutionary therapeutic approaches with clinical indications that have great market opportunity and limited competition. I’ve been in the biotechnology industry for more than 30 years and have been the founder of three biotech companies in Colorado throughout the past 15 years. Before founding Ariel, I launched Accera, Inc., where I oversaw research, development, and the commercial launch of Axona®, a prescription-only medical food intended for the clinical dietary management of mild-to-moderate Alzheimer’s disease. I also founded Univera Pharmaceuticals, Inc., a drug discovery company focused on diseases of inflammation and the immune response. Throughout my career, I’ve had responsibilities in a wide range of disciplines, including basic research, manufacturing, product development, and business development at various biotechnology companies.