Tercica Inc. filed a new drug application for Increlex, its recombinant human insulin-like growth factor-1. If approved, it would be the first product in more than 30 years to treat children with short stature.

Growth hormone has been the sole product to treat prepubescent children who are two or more standard deviations below average height as compared to their peers, but Tercica's product specifically targets children who are resistant to that growth hormone therapy, said John Scarlett, president and CEO of Tercica.

"The purpose of developing Increlex was for those patients who were resistant to the effects of growth hormone," he said, adding that IGF-1 deficiency is one and a half times more common than growth hormone deficiency.

Growth hormone makes IGF-1, but there are children who are resistant to the hormone due to problems with growth hormone receptors or other post-receptor signaling issues. They do not produce adequate amounts of IGF-1, Scarlett added, so "by providing the recombinantly made human IGF-1 to those children, they can bypass that resistance and produce the means to grow."

The product, which was in-licensed from South San Francisco-based Genentech Inc., attacks primary IGF-1 deficiency and is designed to work by stimulating bond and cartilage growth. Results of a Phase III trial in severe IGF-1 deficiency showed that the drug produced a statistically significant increase in growth rate over an eight-year period. Compared to growth patterns before treatment, children gained an average of one additional inch per year for each year of therapy.

Scarlett said the company estimates a U.S. market of about 30,000 children who are diagnosed with short stature, but who have normal or elevated growth hormone levels. Of that 30,000, Tercica said about 6,000 have a severe form of primary IGF-1 deficiency, characterized by more than three standard deviations in height and IGF-1 levels, as compared to other children their age.

The NDA is for severe primary IGF-1 deficiency, and Tercica is seeking a priority review from the FDA. Meanwhile, the company has an ongoing Phase IIIb study to evaluate Increlex in children with the less-severe deficiency, Scarlett said, making up the remaining 26,000 cases in the U.S.

Tercica also is developing its strategy for seeking European regulatory approval, which could double the potential market size for Increlex in short-stature indications.

In addition to treating children, Tercica hopes Increlex will be able to treat IGF-1 deficiency in adults, which is associated with metabolic abnormalities, such as obesity and the body's inability to properly mineralize bones, Scarlett said.

"Even though your bones stop growing after puberty, you can still feel the effects of IGF-1 deficiency," he said, "so we'll be looking at clinical studies to demonstrate the appropriateness of IGF-1 replacement therapy in adults."

The NDA filing also marks a "watershed moment" for the South San Francisco-based company, as it prepares to launch its first product and "make the transition from a developmental organization to a commercial organization," Scarlett told BioWorld Today.

Pending FDA approval, Tercica is preparing to launch Increlex on the market in January. But, before then, the company will have to build a sales force and develop an internal infrastructure.

"Our real emphasis and long-term focus is in improving endocrine health, and building a franchise in short stature and associated metabolic disease," Scarlett said. "This NDA really marks a moment in time when we've taken a constructive step toward building that franchise."

Tercica completed a public offering last month, selling 6.9 million shares at $8 per share, raising gross proceeds of $55.2 million after overallotments. That financing gave the company about $90 million in cash. The company's fourth-quarter earnings showed a net loss of $11.2 million for the period ending Dec. 31, compared to a loss of $8.9 million reported during the fourth quarter one year ago. The net loss for the year totaled about $41 million, up from $25.4 million in 2003, due largely to increasing research and development costs related to clinical and manufacturing activities for Increlex. (See BioWorld Today, Feb. 9, 2005.)

Shares of Tercica (NASDAQ:TRCA) dropped 47 cents Monday to close at $9.99.