Features
| Hythiam's Bold Bet |
| Written by Eben Lasker |
| July 2006 |
 On an airplane one day, Terren Peizer was reading about
addiction and, as he read, becoming more and more interested.
“Realizing how few of the affected were being treated,
I saw a big potential opportunity,” he said. Upon further
research, the Wall Street financier turned entrepreneur was
also struck by something else: uneven treatment outcomes.
It seemed to Peizer that there had to be a way to improve
outcomes in the treatment industry. Given his experience in
the pharmaceuticals business - Peizer is formerly president
of Hollis-Eden Pharmaceuticals and the founder of biotech
concern Clearant Inc. - his interest naturally tended toward
the physiology of the disease.
In the end, Peizer became convinced that addiction is a treatable, chronic ailment whose roots lie in a physiological etiology. He believes that there will always be a need for a strong, even dominant role, for traditional psycho-social approaches, but that the time had come for physiological science to take a far more prominent place in treatment. Toward that end he founded Hythiam Inc., which is among the most financially impressive business startups ever to hit the treatment business. Plying his considerable Wall Street contacts - he used to be a key player on junk bond king Michael Milkin’s controversial, but highly successful team- Peizer raised tens of millions of dollars and in just two years has lifted Hythiam from a reverse-merger Bulletin Board stock play to Nasdaq National Market listed contender. Hythiam has become a ubiquitous presence on the treatment industry conference circuit over the past year. Yet there are many in the industry who wonder exactly what it is that Hythiam does, some mistakenly thinking it is a drug company. Although focused on finding physiological treatments for addiction, Hythiam is not a drug company, nor does its business model ever call for it to become one. Taking Stock of Addiction (HYTM: Nasdaq)Hythiam shares are up over the past year, but off their highs click to view larger image
“Hythiam is a health care services management company,” said Peizer. “We deliver solutions, working with providers to address the physiological and the psychological aspects of the disease.” Probably, the best way to explain what Peizer means by this is to describe Hythiam’s approach with its first treatment offering - the HANDS Protocols - which the company says is “an innovative medical treatment approach” for alcohol, cocaine or methamphetimine dependence. With the HANDS Protocols, which Hythiam scientific personnel say has been proven highly efficacious so far based on anecdotal evidence, Hythiam is providing a total service package by licensing the protocols to health care service providers, providing clincal management support, physician and staff training and marketing support. And Hythiam is spending many millions on clinical studies to back up the anecdotal evidence of the protocols’ effectiveness. “We provide a total support package for our licensees,” said VP West Coast Marketing Scott Sowle, who has helped Hythiam sign up many of its 17 licensees. The company is seeking to sign up dozens more licensees - treatment centers, hospitals and major medicals systems - by the end of the year. The HANDS Protocols involve the administration of pharmaceutical and nutritional supplements over a 2-3 day period in a medical setting, either residential or outpatient. Hythiam requires the signing of a confidentiality agreement before it will reveal the components of the protocols because it is in the midst of applying for patents. And while the company will not talk publicly about protocol ingredients, Hythiam’s 2004 annual report says the HANDS Protocols “involve the off label administration of FDA approved medications.” Hythiam has recruited a highly impressive clinical and medical staff for HANDS, including Chief Medical Officer David Smith, the legendary founder of the Haight Ashbury Free Clinic, and VP Scientific Affairs Dr. Donald Wesson, a noted addiction researcher. These men have been instrumental in Hythiam’s well funded effort to put the HANDS Protocols in front of the addiction treatment field. And both men were especially visible at this spring’s American Society of Addiction Medicine conference in Dallas, lunching and dining with doctors while getting the word out about HANDS. Generally speaking, doctors at the conference were very interested and, after signing confidentiality agreements, thought the science behind the protocols highly plausible. But doctors also told Treatment Magazine that it is too early to come to any conclusions about the efficacy of HANDS. “I am keeping an open mind,” said Tom Brady, recently appointed chief medical officer at CRC Health Group. “But I have told Hythiam that they need to be more free about what’s in the HANDS Protocols and, of course, we need more clinical data on efficacy.” It is natural that Hythiam would be circumspect about the ingredients of the protocols until its investment has been protected by patent, but Peizer has stepped up to the plate big time when it comes to providing the data medical and clinical directors will need for deciding whether the treatment works. Over the next year and a half results of studies Hythiam is funding to the tune of $8 million will start rolling in, studies the company says will prove the efficacy of the HANDS Protocols to significantly reduce or eliminate craving, enhance cognitive function and produce an accelerated recovery process. “I believe the studies may also show that HANDS can do what no other pharmacological treatment has been able to, which is to initiate abstinence,” said Peizer, adding that he bases this belief on evidence Hythiam has gathered from more than 100 patients who have so far been administered the protocols. Hythiam has allied itself with some highly prestigious research institutions, which will do independent evaluations of the HANDS Protocols. In June, Cedars Sinai Medical Center in Los Angeles agreed to do an 80-patient randomized controlled study clinical trial on HANDS for alcohol dependency, while addiction researcher Dr. Harold Urschel will do a 30-patient open label study on the efficacy of HANDS to treat methamphetamine dependence, for which Hythiam scientific personnel say HANDS is particularly efficacious. In the end, though, it may not be so much a lack of data that Hythiam needs to address, but more the “pharmacophobia” many scientists say is pervasive in the treatment industry. “It is understandable that treatment providers are wary of drugs,” said a medical director who wished to remain unidentified, “but it is also becoming increasingly apparent that addiction is as much a brain disease as it is a spiritual malady.” |
