Dear Shareholders,
In 2007, Idera was productive in both scientific and business terms. We advanced our second drug candidate, IMO-2125, into clinical development for infectious diseases,
entered into a collaboration with Merck KGaA for use of IMO-2055 and certain other compounds in oncology, and strengthened our financial position. We continue to expand potential clinical applications of our compounds, which are designed to modulate Tolllike
Receptors (TLRs). TLRs are fundamental receptors for directing immune responses and are recognized as an important target for drug discovery. Drug candidates targeting TLRs have potential applications for the treatment of a wide range of diseases, including infectious, autoimmune and respiratory diseases, as well as cancer. Developing new drug candidates with novel mechanisms of action takes many years and requires extensive experience and resources. Our business model for drug development involves advancing selected programs through our own efforts and simultaneously entering into collaborations with pharmaceutical companies for other programs.
IDERA’S DRUG CANDIDATES: TARGETING MULTIPLE DISEASES
Our chemistry-based drug discovery approach for designing TLR-targeted compounds allows us to create many drug candidates with different types of immunological activity. Our two novel TLR9 agonists in clinical development, IMO-2055 and IMO-2125, were designed to have distinct immunological profiles. We are developing IMO-2055 for cancer treatment, now in collaboration with Merck KGaA. We are developing IMO-2125 for the treatment of infectious disease, and in September 2007, we initiated a phase 1 clinical trial in patients with chronic hepatitis C virus infection. We also are creating agonists of TLR7 and TLR8. Recently, we presented results that showed inhibition of tumor growth in preclinical tumor model studies evaluating a TLR7 and TLR8 agonist. In 2008, we plan to outline a development strategy for our TLR7 and TLR8 agonists in cancer treatment. Another application of TLR-targeted candidates comes from an expanding body of scientific literature that has shown that TLR function becomes unregulated in some autoimmune diseases. We are creating TLR antagonist candidates that in preclinical models block immune responses that are directed through TLRs. We have observed that our TLR antagonist candidates mitigate disease progression in preclinical models of autoimmune diseases including lupus, rheumatoid arthritis and multiple sclerosis. Since there are many autoimmune diseases in which our TLR antagonist compounds have potential application, we have established an Autoimmune Disease Scientific Advisory Board of leading researchers and clinicians to assist us in defining clinical development strategy. During 2008, we plan to initiate preclinical development activities with a lead TLR antagonist candidate.
IDERA’S COLLABORATIONS: ACCESS TO DRUG DEVELOPMENT EXPERTISE
As part of our business strategy, we actively seek opportunities to form collaborations that can provide drug development expertise and resources to selected programs. At present, we have three active collaborations. In 2007, we entered into a collaboration with Merck KGaA of Germany for the development of our TLR9 agonists, including our oncology lead candidate, IMO-2055, for cancer treatment, exclusive of cancer vaccines. Merck KGaA has shown commitment to developing innovative approaches to cancer treatment and has proven drug development capabilities. This collaboration provided us with $40 million in an upfront license fee, and we have the potential to receive up to €264 million in milestone payments. We are also entitled to receive royalties on any products commercialized under the agreement. We entered into collaboration with Merck & Co. in December 2006 for the use of our TLR7, 8, and 9 agonists as adjuvants for therapeutic and prophylactic vaccines in oncology, infectious diseases and Alzheimer’s disease. We have made good progress under this collaboration throughout 2007. Recently, researchers from Merck & Co. made a presentation entitled “TLR9 agonists enhance the efficacy of cancer vaccines” at the American Association of Cancer Research 2008 annual meeting. Our collaboration with Novartis for the development of TLR9 agonists in asthma and allergies, which we entered into in May 2005, was recently extended to December 31, 2008. The extension is anticipated to allow for the advancement of QAX935, a novel TLR9 agonist, into human clinical trials.
IDERA’S FOUNDATION: CHEMISTRY-BASED DRUG DISCOVERY APPROACH
We believe Idera’s foundation is our expertise in the use of DNA and RNA chemistry for innovative approaches to drug therapies. We employ our extensive chemistry experience to creating compounds targeted to TLRs. Our approach allows us to identify distinct lead drug candidates for our own programs and for our collaborations. The capability to create new compounds is key to our business strategy. Consistent with our business strategy, we have an expanding portfolio of drug candidates derived from our TLR-targeted research. Moving forward, our objectives are to continue clinical evaluation of IMO-2125 in hepatitis C virus infection, outline and implement development strategies for TLR7 and TLR8 agonists in cancer treatment and for TLR antagonists in autoimmune disease, and to work closely with our collaborators in support of our partnered programs. My colleagues join me in thanking you for your continued support. We remain committed to building Idera, the leading company engaged in the development of TLRtargeted therapies for human diseases.
Sincerely,
Sudhir Agrawal, D. Phil.
Chief Executive Officer and Chief Scientific Officer
