How to Play the Superbug Hysteria to Make Super Pr
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Posted On: 10/01/2015 7:17:23 PM
How to Play the Superbug Hysteria to Make Super Profits
By Patrick Cox | January 23, 2014 |
We’re all doomed. Bacteria are developing resistances to antibiotics, and scientists are incapable of dealing with this apocalyptic threat. On top of that, experts report that the sky is falling. That’s the clear message you’ll get if you do a simple Google News search on “antibiotic resistance.” Fortunately, it’s not true.
Despite the “end of the world” headlines that the infotainment industry is so good at, the media line about antibiotic resistance is the biotech equivalent of “peak oil.” We’re not, in fact, running out of effective antibiotics any more than we are running out of fossil fuels. On the contrary, there is an entire new generation of antibiotics able to beat resistant strains of bacteria—as well as fungal and parasitic diseases. These new drugs will not only kill the scariest “superbugs,” they will solve the problem of bacterial resistance permanently.
I’m not saying, by the way, that there are not terrible bacteria developing immunities to our best approved antibiotics. There are even new bacteria resistant to dactomycin, the leading therapy for drug-resistant antibiotics. What I am saying is that the first of these next-generation antibiotics is on the verge of Phase 2b clinical trials right now. It is called brilacidin, and it was recently acquired by Cellceutix Corporation (OTCQB:CTIX) from the company that licensed the platform from the University of Pennsylvania.
I realize that this development flies in the face of the media’s fear-mongering and ignorance of the actual state of scientific progress. This, however, is great news for the transformational investor. When “everybody” believes something that is not true, opportunities for profit exist. Antibiotic-resistant bacteria should not inspire panic. Rather, they should inspire you to invest. By doing so, you will not only help deliver the solution to one of humanity’s most dangerous problems, you will put yourself in the position to make life-changing profits.
Why We Aren’t Dead Already
Existing antibacterials do two things to fight bacterial infections. First, they identify some molecule on the microorganism’s surface and bind to it. Once attached, they transport a drug into the bacterium to interfere with some critical part of its biological processes.
Bacteria, in turn, develop resistances by evolving the molecules being targeted by antibiotics so that the drugs can’t recognize or bind to their targets. They can also evolve their “efflux pumps” to expel the antibiotic drugs.
Due to these abilities, bacteria are frequently portrayed by the uninformed as nearly invincible—the inevitable winners in the war between humans and disease-causing organisms. The obvious problem with this view is that we live in a world filled with bacteria. Simply in terms of total biomass, bacteria are the Earth’s dominant life form. Your body is home to far more bacterial than (strictly) human cells, and many of them are necessary for life. Also, however, many disease-causing bacteria are on you and in you right now.
So the question we should be asking is, why aren’t we all suffering from massive infections? How do we swim through this ocean of bacteria, many seemingly intent on killing us, without succumbing? If you understand the answer, you will grasp the clue that led University of Pennsylvania scientists to create a whole new type of antibiotic based on the antimicrobial defenses we are born with.
Found throughout the animal kingdom, including in insects, these natural biological antibiotics are called “defensins.” Structurally, defensins are peptides, short amino acid chains with an electrostatic charge. (Larger amino acid chains, by the way, are called proteins.)
Defensins attach themselves electrostatically to bacteria and other microorganisms, including fungi and some viruses. For targeted microbes, this attachment is the hug of death. Defensins lock onto bacteria and other microorganisms and effectively perforate their outer membranes. The resultant “leaks” disrupt the microorganisms’ vital functions.
This is one of the reason why bacteria don’t develop resistance to defensins. Whereas conventional antibiotics must penetrate bacterial cell walls, defensins act directly on the surface membrane. To escape the defensins, bacteria would have to evolve entirely new outer membrane characteristics, which is nearly inconceivable for these simple organisms.
Defensins are found in and on many human body parts, including the skin, tongue, cornea, salivary glands, kidneys, esophagus, and lungs. They form the protective barrier that prevents infection by ubiquitous bacteria. Only when this barrier is broken can infections occur.
You’ve probably heard, for example, of the so-called flesh-eating bacteria. Various common bacteria are responsible for these infections, called necrotizing fasciitis. One culprit in this ugly disease is Bacteroides fragilis, which naturally and harmlessly thrives in the human colon. When the defensin barrier is intact, we are protected from the various bacteria responsible for necrotizing fasciitis, even if we are covered in the bacteria. But if the bacteria can bypass the defensin barrier, they can cause terrible problems—especially in individuals with compromised immune systems. This usually happens via some sort of break in the skin, such as a scratch or insect bite.
Throughout the course of our evolution, our defensins have been protecting us by killing harmful bacteria. Therefore, given what we know about the ability of bacteria to adapt to and survive antibiotics, it is enlightening to realize that they have never developed resistances to our defensins. This is the clue that led University of Pennsylvania to investigate these natural antimicrobials.
Much is known about defensins, including their structure. Initially, U Penn scientists tried to duplicate entire defensin molecules. These large molecules are created by natural biological processes. As biologics, they are extremely difficult and expensive to make. Moreover, these complex defensin molecules include components that are recognized by the immune system if they are not produced by the host itself. If they are recognized as foreign, they are rapidly removed. Even worse, they can provoke a dangerous immune response. A better solution was needed.
Moore’s Law and Drug Discovery
University of Pennsylvania scientists set their sights on creating a small-molecule drug consisting of only the critical parts of defensins. Such a simplified molecule would, they predicted, be tolerated by the immune system and be much easier to manufacture and deliver to patients with infections.
There are, however, many different types of defensins and nearly unlimited ways of putting together simplified versions. Rather than go through the slow, expensive process of making and testing new defensin imitators, known as defensin mimetics, they turned to computer-simulation technology.
A company was formed in 2002 to further develop the three-dimensional molecular modeling programs created at the University of Pennsylvania. With increasingly sophisticated computers and software at their service, Polymedix performed in silico experiments on a vast number of possible defensin-based molecules.
Many promising molecules were found, and the lead compound got all the way to a Phase 2a study. Perhaps the most meaningful sign of the designers’ success is that these simplified defensin molecules do not only kill bacteria on contact, they exhibit other beneficial immune-system characteristics typical of natural defensins. Moreover, these synthetic defensins, like natural defensins, interact only with the outer membrane of bacteria. Consequently, the chances that resistance can develop are radically if not completely reduced.
Polymedix Throws in the Towel
Despite the fact that a well-known investment banking firm had rated the company “outperform” only a few years earlier, Polymedix declared bankrupty on April Fool’s Day last year. The timing was inexplicable, coming just before remarkable results from the Phase 2a study were to be previewed at an important scientific conference in Germany in the spring of 2013.
Personally, I was upset because I had recommended the company. I was also mystified, because the situation was not unsalvageable, in my opinion. This is the reason, by the way, why transformational investors need to diversify the portion of their portfolio put into high-risk/high-potential companies. While I believe that these volatile world-changing technologies will, as a group, outperform every other sector, any single stock is vulnerable.
I haven’t talked to any of the principals at Polymedix since the bankruptcy, but they may have overreacted to rare adverse events in the Phase 2a study. It certainly wouldn’t have been the first time. In that study, the patients all had complicated skin infections caused by staph aureus, including methicillin-resistant forms. Two out of 215 patients in Russia and Ukraine saw increases in blood pressure, and one experienced an increase in platelets. More generally, some test patients experienced a tingling of toes and fingers (paresthesia), but this is not an unusual side effect of approved antibiotics.
Generally, I considered the trial a roaring success. There were no deaths and, most meaningfully, the efficacy of the drug was rated comparable to that of daptomycin. Moreover, the study yielded important information about dosing, which is exactly what Phase 2s are supposed to do.
The Dapto Market
So let’s look at daptomycin, which now owns the market that brilacidin addresses. “Dapto,” as it’s often called, is a blockbuster drug used as a last line of defense for serious bacterial infections, especially those caused by drug-resistant bacteria. It is used only rarely, in less than 10 percent of severe bacterial infections, but the drug’s premium is high, and so it accounts for over 80 percent of antibiotic revenues. Total revenues are approaching a billion dollars annually for Cubist Pharmaceuticals, which, ironically, acquired the drug from Eli Lilly.
In a move that probably still haunts Lilly executives, the company ceased development of dapto due to adverse events revealed in trials. Cubist scientists believed, however, that Lilly’s daptomycin trials had effectively overdosed patients. When Cubist reduced doses of dapto, adverse events were significantly reduced but efficacy remained high, and the FDA approved the drug, which is now sold as Cubicin.
Leo Ehrlich and his team at Cellceutix suspected that Polymedix had made the same mistake with its simplified defensin drug that Lilly made with daptomycin. Their view was based on expert analysis of available information, including data made public at the German conference after the bankruptcy. Also, the FDA had already approved a reduced dosing regimen for the Phase 2b trials, tacitly indicating their view that the dose could have been too high.
Others, however, apparently missed these critical pieces of information. As a result, Cellceutix was able to acquire the assets of Polymedix at auction, paying only $2.1 million in cash and 1.4 million shares of Cellceutix stock for technologies that had been valued at $227.4 million a few years earlier. Cellceutix assumed none of Polymedix’s debt. This is an amazing deal.
Cellceutix also retained key talent from Polymedix, including Dr. Dan R. Jorgensen, whom I spoke to along with Leo Ehrlich. Jorgensen is uniquely equipped to take brilacidin through the regulatory process because of his lead role in Pfizer’s Zmax single-dose azithromycin clinical development program. Cellceutix’s planned Phase 2b study will also include single-dose regimens, and Jorgensen’s experience in this area could be invaluable.
Jorgensen, by the way, is board certified in three medical areas: pediatrics, infectious diseases, and preventive medicine. He was VP of Clinical Research at AMAG Pharmaceuticals, where he oversaw 10 global clinical trials in multiple fields. He also worked at Aventis Pasteur, at the Centers for Disease Control and Prevention (CDC) as an Epidemic Intelligence Service Officer, and as Montana’s State Medical Officer.
Leo Ehrlich, CEO and CFO, is also an extremely impressive individual. He is a former founder, director, and CFO of one of my favorite companies, NanoViricides, Inc. (NNVC). Given his history with other publicly traded companies, I have confidence that he will see this new class of antibiotic through to market. Also at Cellceutix is President and CSO Krishna Menon, a brilliant scientist whose contract research organization contributed to NanoViricides’ scientific progress. He also played key roles in the development of Eli Lilly’s blockbuster cancer drugs Gemzar and Alimta.
Brilacidin Phase 2b Studies and the Single-Dose Grail
Cellceutix is very close to initiating Phase 2b studies focused on complicated skin infections. The following graphic sets forth a succinct overview of the protocol. ABSSSI, by the way, is the acronym for “acute bacterial skin and skin structure infections.”
The key aspect of this study protocol is that it will include a low single-dose regimen as well as a slightly higher single-dose regimen and a three-day regimen. All three regimens will be compared to daptomycin.
Every field of drug discovery seems to have its own so-called holy grail. In the world of antibiotics, the grail is an effective single-dose antibacterial therapy. Existing drugs like dapto need to be taken for multiple days. That is less than optimal, for several important reasons.
First of all, it’s costly, because multiple doses raise the cost of treatment. The raw cost of the drug is significant, but treatment also demands the scarce resources of institutions and medical personnel that must administer each IV-infused dose. An effective single-dose antibiotic would have huge pharmaco-economic implications, reducing institutional overhead meaningfully. In the current confused medical environment, anything that lowers clinic and hospital costs without sacrificing healthcare quality will be welcomed enthusiastically.
The Compliance Problem
There is also the issue of patient compliance due to the ever-present threat of antibiotic resistance. When a patient fails to finish a complete regimen of antibiotic therapy, it often allows the strongest bacteria to survive. Given the massive number of bacteria involved in an infection and the high frequency of mutation, noncompliance can quickly create highly resistant and lethal strains.
In fact, scientists duplicate this process purposely to test bacteria’s ability to develop resistance. When performed purposely in the lab, it’s called a “serial passage study.” While other important antibiotics rapidly evolve resistant mutations in serial passage studies, Dr. Jorgensen tells me that Cellceutix has completed 40 passages of brilacidin using Staphylococcus aureus with no sign of developing resistance. This is where you cue the trumpets.
Much of the media’s panic about the bacterial apocalypse is the result of the emergence of strains resistant to daptomycin, caused by noncompliant dosing. While I’m convinced that brilacidin’s defensin-based mechanism of action makes resistance unlikely if not impossible, a single-dose therapy would remove the possibility of noncompliance. Though I consider this a redundant benefit scientifically, the truth is that it will be an enormous marketing advantage, because the medical industry is conditioned to avoid noncompliance.
Moreover, Cubist hopes to replace daptomycin with one of the many variants it is developing. This would solve, at least temporarily, the dapto resistance problem as well as the company’s complicated patent issues. Though Cubist’s likely variants would also be multi-dose drugs, the company’s powerful and practiced antibiotic marketing network gives it a natural advantage over competitors, even if they have a more effective multi-dose therapy. For a newcomer to the field like Cellceutix to get fast traction, a single-dose therapeutic would confer a strong competitive advantage.
For all these reasons, a single-dose antibiotic would be a game changer, and a lot of people in the industry know it. If Cellceutix’s Phase 2b study validates the single-dose regimen, as I believe it will, the implications will be huge.
If Phase 2b is successful, the company will move into Phase 3 with its selected dose for complicated skin infections. Given the enormous size of the antibiotic market, we would expect a successful Phase 3 to make a lot of people very wealthy. It would not, however, be the end of the story.
The Enormous Brilacidin Pipeline
If brilacidin is approved by the FDA, the path is smoothed for other forms of the drug, aimed at diverse indications. Because basic safety issues will have been at least partially addressed, it should be easier to get approval for other types of infections. These include respiratory, blood, bone and joint, diabetic ulcer, and STD problems.
I’ve already told you that these synthetic defensins promote immune functions. To emphasize that point, I’ll address briefly oral mucositis.
I’ll spare you pictures of this terrible disorder, just as I’ve not inflicted on you photos of bacterial skin infections. Oral mucositis is not caused by bacteria. Rather, it is the ulceration and inflammation of the mouth and tongue that afflicts about 40 percent of those who receive chemotherapy. The rate doubles among those treated with both chemo and radiation for head or neck cancer.
The stresses of chemo and radiation are particularly hard on the fragile protective barrier cells in the mouth. Oral mucositis increases the risk of septicemia by a factor of four and can prevent talking, eating, or drinking. It is so painful that significant numbers of cancer patients reject treatment altogether. The only approved therapy, Kepivance, costs almost $10,000 per cycle but is rarely used because of its very narrowly defined label. Total additional costs for treating severe oral mucositis, however, are probably well in excess of $20,000 per patient, including extended hospitalization.
Cellceutix has a topical-rinse version of brilacidin diluted in saline solution, called Brilacidin-OM. According to Dr. Stephen T. Sonis, the Harvard authority on oral mucositis, Brilacidin-OM’s ability “to mitigate ulcerative mucositis in pre-clinical studies is significant and exciting.” In animal tests, the incidence of oral mucositis was cut from 42.7% to 2-4%. Treated animals experienced a 90% reduction in the length of the condition.
Simply rinsing the mouth three times a day with Brilacidin-OM should, I believe, effectively treat oral mucositis in humans, though we’ll need clinical trials to prove it. Very little of the drug would be expected to enter the system, so side effects would be minimal or nonexistent. It may even be possible to piggyback Brilacidin- OM on brilacidin’s safety data, allowing the company to go straight to Phase 2 trials.
Other barrier function disorders that might be treated with some version of brilacidin include IBD, IBS, proctitis, periodontitis, atopic dermatitis, diabetic ulcers, acne, and keratitis of the eye. Cellceutix has engaged a major pharmaceutical company to help create a formulation that will penetrate the epithelial cell barrier of the eye. Ehrlich believes this will be accomplished within six months.
Further investigation is required, but brilacidin could be useful in the treatment of cystic fibrosis, asthma, chronic bronchitis, otitis, and sinusitis. Given what we know about the natural effects of defensins on microorganisms, brilacidin is an extremely promising treatment for fungal, viral, and even parasitic diseases such as malaria. And Cellceutix has various other defensin compounds that may be even more useful in these areas.
The Rest of the Cellceutix Pipeline
Remarkably, Cellceutix’s defensin mimetics are not the only disruptive, breakthrough drug candidates in its pipeline. The company already had an extremely exciting and novel cancer drug in a Phase 1 trial. Known as Kevetrin, it activates the P53 gene pathway, which is always deactivated in cancers.
P53 is often called the “guardian angel gene.” More formerly known as TP53, this gene encodes the transcription factor p53, which is a cancer-suppressing transcription factor. Its discovery was a major scientific event, and the journal Science named p53 “Molecule of the Year” in 1993.
P53 activates gene-repair processes when a cell’s DNA is damaged. If the genetic damage is too great to repair, p53 triggers cell suicide—apoptosis. When functioning, p53 stops the mutations that can transform normal cells into cancer cells. P53 can fix nearly every gene but one—itself. This is why we find that cancers shut down or block p53 activity.
Discovered by Cellceutix cofounder Dr. Krishna Menon, Kevetrin is a pharmaceutical-grade salt of a molecule belonging to a class of chemicals known as thioureal compounds. Commonly used in industrial chemical processes, this class of compounds had never been investigated as potential drugs. Big Pharma has engaged in an expensive search for p53 activators in more likely places, but the search has been plagued with unexpected toxicities.
Currently, Kevetrin is in Phase 1 trial, with data expected by the end of the first quarter this year. Studies using Kevetrin are taking place at Dana-Farber Cancer Institute and Beth Israel Deaconess, both Harvard Cancer Centers. Due to the length of this issue, I’m going to save an extended analysis of Kevetrin for another time. Moreover, it is the defensin mimetic, brilacidin, that will first impact the company’s stock prices.
Cellceutix also has an extremely promising PRINS reduction psoriasis drug in Phase 1. Known as Prurisol, it is an ester of an approved drug, Ziagen, which has been used in humans millions of times. Cellceutix changed the way it metabolizes in the body and changed the dosing. Animal testing demonstrated remarkable efficacy. We’ll investigate this compound further in future issues.
Cellceutix has tremendous potential with brilacidin alone. With numerous backup drug candidates to reduce downside risk, the company is a compelling investment, with outstanding upside.
By Patrick Cox | January 23, 2014 |
We’re all doomed. Bacteria are developing resistances to antibiotics, and scientists are incapable of dealing with this apocalyptic threat. On top of that, experts report that the sky is falling. That’s the clear message you’ll get if you do a simple Google News search on “antibiotic resistance.” Fortunately, it’s not true.
Despite the “end of the world” headlines that the infotainment industry is so good at, the media line about antibiotic resistance is the biotech equivalent of “peak oil.” We’re not, in fact, running out of effective antibiotics any more than we are running out of fossil fuels. On the contrary, there is an entire new generation of antibiotics able to beat resistant strains of bacteria—as well as fungal and parasitic diseases. These new drugs will not only kill the scariest “superbugs,” they will solve the problem of bacterial resistance permanently.
I’m not saying, by the way, that there are not terrible bacteria developing immunities to our best approved antibiotics. There are even new bacteria resistant to dactomycin, the leading therapy for drug-resistant antibiotics. What I am saying is that the first of these next-generation antibiotics is on the verge of Phase 2b clinical trials right now. It is called brilacidin, and it was recently acquired by Cellceutix Corporation (OTCQB:CTIX) from the company that licensed the platform from the University of Pennsylvania.
I realize that this development flies in the face of the media’s fear-mongering and ignorance of the actual state of scientific progress. This, however, is great news for the transformational investor. When “everybody” believes something that is not true, opportunities for profit exist. Antibiotic-resistant bacteria should not inspire panic. Rather, they should inspire you to invest. By doing so, you will not only help deliver the solution to one of humanity’s most dangerous problems, you will put yourself in the position to make life-changing profits.
Why We Aren’t Dead Already
Existing antibacterials do two things to fight bacterial infections. First, they identify some molecule on the microorganism’s surface and bind to it. Once attached, they transport a drug into the bacterium to interfere with some critical part of its biological processes.
Bacteria, in turn, develop resistances by evolving the molecules being targeted by antibiotics so that the drugs can’t recognize or bind to their targets. They can also evolve their “efflux pumps” to expel the antibiotic drugs.
Due to these abilities, bacteria are frequently portrayed by the uninformed as nearly invincible—the inevitable winners in the war between humans and disease-causing organisms. The obvious problem with this view is that we live in a world filled with bacteria. Simply in terms of total biomass, bacteria are the Earth’s dominant life form. Your body is home to far more bacterial than (strictly) human cells, and many of them are necessary for life. Also, however, many disease-causing bacteria are on you and in you right now.
So the question we should be asking is, why aren’t we all suffering from massive infections? How do we swim through this ocean of bacteria, many seemingly intent on killing us, without succumbing? If you understand the answer, you will grasp the clue that led University of Pennsylvania scientists to create a whole new type of antibiotic based on the antimicrobial defenses we are born with.
Found throughout the animal kingdom, including in insects, these natural biological antibiotics are called “defensins.” Structurally, defensins are peptides, short amino acid chains with an electrostatic charge. (Larger amino acid chains, by the way, are called proteins.)
Defensins attach themselves electrostatically to bacteria and other microorganisms, including fungi and some viruses. For targeted microbes, this attachment is the hug of death. Defensins lock onto bacteria and other microorganisms and effectively perforate their outer membranes. The resultant “leaks” disrupt the microorganisms’ vital functions.
This is one of the reason why bacteria don’t develop resistance to defensins. Whereas conventional antibiotics must penetrate bacterial cell walls, defensins act directly on the surface membrane. To escape the defensins, bacteria would have to evolve entirely new outer membrane characteristics, which is nearly inconceivable for these simple organisms.
Defensins are found in and on many human body parts, including the skin, tongue, cornea, salivary glands, kidneys, esophagus, and lungs. They form the protective barrier that prevents infection by ubiquitous bacteria. Only when this barrier is broken can infections occur.
You’ve probably heard, for example, of the so-called flesh-eating bacteria. Various common bacteria are responsible for these infections, called necrotizing fasciitis. One culprit in this ugly disease is Bacteroides fragilis, which naturally and harmlessly thrives in the human colon. When the defensin barrier is intact, we are protected from the various bacteria responsible for necrotizing fasciitis, even if we are covered in the bacteria. But if the bacteria can bypass the defensin barrier, they can cause terrible problems—especially in individuals with compromised immune systems. This usually happens via some sort of break in the skin, such as a scratch or insect bite.
Throughout the course of our evolution, our defensins have been protecting us by killing harmful bacteria. Therefore, given what we know about the ability of bacteria to adapt to and survive antibiotics, it is enlightening to realize that they have never developed resistances to our defensins. This is the clue that led University of Pennsylvania to investigate these natural antimicrobials.
Much is known about defensins, including their structure. Initially, U Penn scientists tried to duplicate entire defensin molecules. These large molecules are created by natural biological processes. As biologics, they are extremely difficult and expensive to make. Moreover, these complex defensin molecules include components that are recognized by the immune system if they are not produced by the host itself. If they are recognized as foreign, they are rapidly removed. Even worse, they can provoke a dangerous immune response. A better solution was needed.
Moore’s Law and Drug Discovery
University of Pennsylvania scientists set their sights on creating a small-molecule drug consisting of only the critical parts of defensins. Such a simplified molecule would, they predicted, be tolerated by the immune system and be much easier to manufacture and deliver to patients with infections.
There are, however, many different types of defensins and nearly unlimited ways of putting together simplified versions. Rather than go through the slow, expensive process of making and testing new defensin imitators, known as defensin mimetics, they turned to computer-simulation technology.
A company was formed in 2002 to further develop the three-dimensional molecular modeling programs created at the University of Pennsylvania. With increasingly sophisticated computers and software at their service, Polymedix performed in silico experiments on a vast number of possible defensin-based molecules.
Many promising molecules were found, and the lead compound got all the way to a Phase 2a study. Perhaps the most meaningful sign of the designers’ success is that these simplified defensin molecules do not only kill bacteria on contact, they exhibit other beneficial immune-system characteristics typical of natural defensins. Moreover, these synthetic defensins, like natural defensins, interact only with the outer membrane of bacteria. Consequently, the chances that resistance can develop are radically if not completely reduced.
Polymedix Throws in the Towel
Despite the fact that a well-known investment banking firm had rated the company “outperform” only a few years earlier, Polymedix declared bankrupty on April Fool’s Day last year. The timing was inexplicable, coming just before remarkable results from the Phase 2a study were to be previewed at an important scientific conference in Germany in the spring of 2013.
Personally, I was upset because I had recommended the company. I was also mystified, because the situation was not unsalvageable, in my opinion. This is the reason, by the way, why transformational investors need to diversify the portion of their portfolio put into high-risk/high-potential companies. While I believe that these volatile world-changing technologies will, as a group, outperform every other sector, any single stock is vulnerable.
I haven’t talked to any of the principals at Polymedix since the bankruptcy, but they may have overreacted to rare adverse events in the Phase 2a study. It certainly wouldn’t have been the first time. In that study, the patients all had complicated skin infections caused by staph aureus, including methicillin-resistant forms. Two out of 215 patients in Russia and Ukraine saw increases in blood pressure, and one experienced an increase in platelets. More generally, some test patients experienced a tingling of toes and fingers (paresthesia), but this is not an unusual side effect of approved antibiotics.
Generally, I considered the trial a roaring success. There were no deaths and, most meaningfully, the efficacy of the drug was rated comparable to that of daptomycin. Moreover, the study yielded important information about dosing, which is exactly what Phase 2s are supposed to do.
The Dapto Market
So let’s look at daptomycin, which now owns the market that brilacidin addresses. “Dapto,” as it’s often called, is a blockbuster drug used as a last line of defense for serious bacterial infections, especially those caused by drug-resistant bacteria. It is used only rarely, in less than 10 percent of severe bacterial infections, but the drug’s premium is high, and so it accounts for over 80 percent of antibiotic revenues. Total revenues are approaching a billion dollars annually for Cubist Pharmaceuticals, which, ironically, acquired the drug from Eli Lilly.
In a move that probably still haunts Lilly executives, the company ceased development of dapto due to adverse events revealed in trials. Cubist scientists believed, however, that Lilly’s daptomycin trials had effectively overdosed patients. When Cubist reduced doses of dapto, adverse events were significantly reduced but efficacy remained high, and the FDA approved the drug, which is now sold as Cubicin.
Leo Ehrlich and his team at Cellceutix suspected that Polymedix had made the same mistake with its simplified defensin drug that Lilly made with daptomycin. Their view was based on expert analysis of available information, including data made public at the German conference after the bankruptcy. Also, the FDA had already approved a reduced dosing regimen for the Phase 2b trials, tacitly indicating their view that the dose could have been too high.
Others, however, apparently missed these critical pieces of information. As a result, Cellceutix was able to acquire the assets of Polymedix at auction, paying only $2.1 million in cash and 1.4 million shares of Cellceutix stock for technologies that had been valued at $227.4 million a few years earlier. Cellceutix assumed none of Polymedix’s debt. This is an amazing deal.
Cellceutix also retained key talent from Polymedix, including Dr. Dan R. Jorgensen, whom I spoke to along with Leo Ehrlich. Jorgensen is uniquely equipped to take brilacidin through the regulatory process because of his lead role in Pfizer’s Zmax single-dose azithromycin clinical development program. Cellceutix’s planned Phase 2b study will also include single-dose regimens, and Jorgensen’s experience in this area could be invaluable.
Jorgensen, by the way, is board certified in three medical areas: pediatrics, infectious diseases, and preventive medicine. He was VP of Clinical Research at AMAG Pharmaceuticals, where he oversaw 10 global clinical trials in multiple fields. He also worked at Aventis Pasteur, at the Centers for Disease Control and Prevention (CDC) as an Epidemic Intelligence Service Officer, and as Montana’s State Medical Officer.
Leo Ehrlich, CEO and CFO, is also an extremely impressive individual. He is a former founder, director, and CFO of one of my favorite companies, NanoViricides, Inc. (NNVC). Given his history with other publicly traded companies, I have confidence that he will see this new class of antibiotic through to market. Also at Cellceutix is President and CSO Krishna Menon, a brilliant scientist whose contract research organization contributed to NanoViricides’ scientific progress. He also played key roles in the development of Eli Lilly’s blockbuster cancer drugs Gemzar and Alimta.
Brilacidin Phase 2b Studies and the Single-Dose Grail
Cellceutix is very close to initiating Phase 2b studies focused on complicated skin infections. The following graphic sets forth a succinct overview of the protocol. ABSSSI, by the way, is the acronym for “acute bacterial skin and skin structure infections.”
The key aspect of this study protocol is that it will include a low single-dose regimen as well as a slightly higher single-dose regimen and a three-day regimen. All three regimens will be compared to daptomycin.
Every field of drug discovery seems to have its own so-called holy grail. In the world of antibiotics, the grail is an effective single-dose antibacterial therapy. Existing drugs like dapto need to be taken for multiple days. That is less than optimal, for several important reasons.
First of all, it’s costly, because multiple doses raise the cost of treatment. The raw cost of the drug is significant, but treatment also demands the scarce resources of institutions and medical personnel that must administer each IV-infused dose. An effective single-dose antibiotic would have huge pharmaco-economic implications, reducing institutional overhead meaningfully. In the current confused medical environment, anything that lowers clinic and hospital costs without sacrificing healthcare quality will be welcomed enthusiastically.
The Compliance Problem
There is also the issue of patient compliance due to the ever-present threat of antibiotic resistance. When a patient fails to finish a complete regimen of antibiotic therapy, it often allows the strongest bacteria to survive. Given the massive number of bacteria involved in an infection and the high frequency of mutation, noncompliance can quickly create highly resistant and lethal strains.
In fact, scientists duplicate this process purposely to test bacteria’s ability to develop resistance. When performed purposely in the lab, it’s called a “serial passage study.” While other important antibiotics rapidly evolve resistant mutations in serial passage studies, Dr. Jorgensen tells me that Cellceutix has completed 40 passages of brilacidin using Staphylococcus aureus with no sign of developing resistance. This is where you cue the trumpets.
Much of the media’s panic about the bacterial apocalypse is the result of the emergence of strains resistant to daptomycin, caused by noncompliant dosing. While I’m convinced that brilacidin’s defensin-based mechanism of action makes resistance unlikely if not impossible, a single-dose therapy would remove the possibility of noncompliance. Though I consider this a redundant benefit scientifically, the truth is that it will be an enormous marketing advantage, because the medical industry is conditioned to avoid noncompliance.
Moreover, Cubist hopes to replace daptomycin with one of the many variants it is developing. This would solve, at least temporarily, the dapto resistance problem as well as the company’s complicated patent issues. Though Cubist’s likely variants would also be multi-dose drugs, the company’s powerful and practiced antibiotic marketing network gives it a natural advantage over competitors, even if they have a more effective multi-dose therapy. For a newcomer to the field like Cellceutix to get fast traction, a single-dose therapeutic would confer a strong competitive advantage.
For all these reasons, a single-dose antibiotic would be a game changer, and a lot of people in the industry know it. If Cellceutix’s Phase 2b study validates the single-dose regimen, as I believe it will, the implications will be huge.
If Phase 2b is successful, the company will move into Phase 3 with its selected dose for complicated skin infections. Given the enormous size of the antibiotic market, we would expect a successful Phase 3 to make a lot of people very wealthy. It would not, however, be the end of the story.
The Enormous Brilacidin Pipeline
If brilacidin is approved by the FDA, the path is smoothed for other forms of the drug, aimed at diverse indications. Because basic safety issues will have been at least partially addressed, it should be easier to get approval for other types of infections. These include respiratory, blood, bone and joint, diabetic ulcer, and STD problems.
I’ve already told you that these synthetic defensins promote immune functions. To emphasize that point, I’ll address briefly oral mucositis.
I’ll spare you pictures of this terrible disorder, just as I’ve not inflicted on you photos of bacterial skin infections. Oral mucositis is not caused by bacteria. Rather, it is the ulceration and inflammation of the mouth and tongue that afflicts about 40 percent of those who receive chemotherapy. The rate doubles among those treated with both chemo and radiation for head or neck cancer.
The stresses of chemo and radiation are particularly hard on the fragile protective barrier cells in the mouth. Oral mucositis increases the risk of septicemia by a factor of four and can prevent talking, eating, or drinking. It is so painful that significant numbers of cancer patients reject treatment altogether. The only approved therapy, Kepivance, costs almost $10,000 per cycle but is rarely used because of its very narrowly defined label. Total additional costs for treating severe oral mucositis, however, are probably well in excess of $20,000 per patient, including extended hospitalization.
Cellceutix has a topical-rinse version of brilacidin diluted in saline solution, called Brilacidin-OM. According to Dr. Stephen T. Sonis, the Harvard authority on oral mucositis, Brilacidin-OM’s ability “to mitigate ulcerative mucositis in pre-clinical studies is significant and exciting.” In animal tests, the incidence of oral mucositis was cut from 42.7% to 2-4%. Treated animals experienced a 90% reduction in the length of the condition.
Simply rinsing the mouth three times a day with Brilacidin-OM should, I believe, effectively treat oral mucositis in humans, though we’ll need clinical trials to prove it. Very little of the drug would be expected to enter the system, so side effects would be minimal or nonexistent. It may even be possible to piggyback Brilacidin- OM on brilacidin’s safety data, allowing the company to go straight to Phase 2 trials.
Other barrier function disorders that might be treated with some version of brilacidin include IBD, IBS, proctitis, periodontitis, atopic dermatitis, diabetic ulcers, acne, and keratitis of the eye. Cellceutix has engaged a major pharmaceutical company to help create a formulation that will penetrate the epithelial cell barrier of the eye. Ehrlich believes this will be accomplished within six months.
Further investigation is required, but brilacidin could be useful in the treatment of cystic fibrosis, asthma, chronic bronchitis, otitis, and sinusitis. Given what we know about the natural effects of defensins on microorganisms, brilacidin is an extremely promising treatment for fungal, viral, and even parasitic diseases such as malaria. And Cellceutix has various other defensin compounds that may be even more useful in these areas.
The Rest of the Cellceutix Pipeline
Remarkably, Cellceutix’s defensin mimetics are not the only disruptive, breakthrough drug candidates in its pipeline. The company already had an extremely exciting and novel cancer drug in a Phase 1 trial. Known as Kevetrin, it activates the P53 gene pathway, which is always deactivated in cancers.
P53 is often called the “guardian angel gene.” More formerly known as TP53, this gene encodes the transcription factor p53, which is a cancer-suppressing transcription factor. Its discovery was a major scientific event, and the journal Science named p53 “Molecule of the Year” in 1993.
P53 activates gene-repair processes when a cell’s DNA is damaged. If the genetic damage is too great to repair, p53 triggers cell suicide—apoptosis. When functioning, p53 stops the mutations that can transform normal cells into cancer cells. P53 can fix nearly every gene but one—itself. This is why we find that cancers shut down or block p53 activity.
Discovered by Cellceutix cofounder Dr. Krishna Menon, Kevetrin is a pharmaceutical-grade salt of a molecule belonging to a class of chemicals known as thioureal compounds. Commonly used in industrial chemical processes, this class of compounds had never been investigated as potential drugs. Big Pharma has engaged in an expensive search for p53 activators in more likely places, but the search has been plagued with unexpected toxicities.
Currently, Kevetrin is in Phase 1 trial, with data expected by the end of the first quarter this year. Studies using Kevetrin are taking place at Dana-Farber Cancer Institute and Beth Israel Deaconess, both Harvard Cancer Centers. Due to the length of this issue, I’m going to save an extended analysis of Kevetrin for another time. Moreover, it is the defensin mimetic, brilacidin, that will first impact the company’s stock prices.
Cellceutix also has an extremely promising PRINS reduction psoriasis drug in Phase 1. Known as Prurisol, it is an ester of an approved drug, Ziagen, which has been used in humans millions of times. Cellceutix changed the way it metabolizes in the body and changed the dosing. Animal testing demonstrated remarkable efficacy. We’ll investigate this compound further in future issues.
Cellceutix has tremendous potential with brilacidin alone. With numerous backup drug candidates to reduce downside risk, the company is a compelling investment, with outstanding upside.
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