PharmAust makes progress in the quarter as it lays the foundation for commercialisation

PharmAust has had a busy and productive quarter, setting the foundations for the commercialisation of its lead drug, monepantel.

Clinical stage biotech company, PharmAust (ASX:PAA), has had a very productive last quarter, making progress and hitting milestones on several fronts.

Highlights for the quarter include the success in Phase IIb trial in pet dogs with B cell lymphoma.

Last month, PAA’s shares jumped 5% after it announced the successful treatment of 15 pet dogs in Phase IIb studies, achieving the two trial objectives of tumour regression, and increase in progression-free survival.

Another highlight for the quarter relates to its anti-viral disease work, where it signed an agreement with Melbourne-based Walter and Eliza Hall Institute (WEHI), to investigate the effects of monepantel on human T-lymphotrophic virus-1 (HTLV-1).

On the financial front, PAA’s wholly-owned subsidiary Epichem finished the year with $3.2m in unaudited revenue, and generated a profit of around $300k.

PharmAust’s clinical trials

Phase II Canine Cancer Trial

Following the treatment of 15 pet dogs during its Phase IIa and Phase IIb studies, MPL has demonstrated sufficient anti-cancer activity to continue the development into Phase III.

B-cell lymphoma is one of the most aggressive cancers to study in canine oncology.

MPL’s ability to target a central metabolic pathway associated with tumour growth (mTOR) provides confidence that MPL will have application in other cancers, which it will explore in the Phase III studies.

PharmAust is now contacting leading global animal healthcare companies to seek partners to co-develop and commercialise MPL for treatment of veterinary cancers.

The company has hired former Elanco Animal Health executive Dr Kim Agnew to assist with this process.

Phase II Human Cancer Trial

Apart from pets, PharmAust continues to take key steps towards progressing the evaluation of MPL in human trials.

The company has identified clinical oncology units in Italy and the United Kingdom to evaluate the company’s new MPL tablet in a Phase II trial, and to discuss the optimal type of cancers to target.

Discussions include a possible pancreatic cancer trial in Italy, and oesophageal human cancer trial in the UK.

A Phase I clinical trial held at Royal Adelaide Hospital in 2015 demonstrated suppression of cancer markers, but the “highly unpalatable” liquid formula forced the early stoppage of the study.

The company has since managed to reformulate the liquid into a tablet that resolves these palatability issues.

COVID-19 Testing

PharmAust previously demonstrated MPL’s antiviral activity in two independent laboratories in Australia in both primate and non-primate cell cultures.

Last week, the company announced that three independent laboratories have finished examining the effects of MPL and metabolite monepantel sulfone (MPLS) on SARS-CoV2 infection, which is the causal agent of COVID-19 disease.

Data from the testing conducted at Leiden University Medical Center (LUMC) once again demonstrated MPL’s antiviral activity.

Although there were solubility issues with MPL in certain in vitro model systems, this does not impact the clinical work, either in dogs or humans.

PharmAust has also been engaging with clinicians in the US, as well as Eastern and Caucasus countries and The Balkans about a Phase I trial in human patients to treat COVID-19.

PharmAust director, Sam Wright told Stockhead: “We are very pleased with the results so far and are eager to commence human clinical trials once the tablets have been produced.”

Phase I/II Human Trial in Motor Neurone Disease

A Phase I/II clinical trial on MPL for human patients with motor neurone diseases (MND) is set to commence in Q1 2022, following an ethics approval, and an announced $900k funding from AFL-linked charity, FightMND (yet to be received).

The study will look specifically into patients with Amyotrophic Lateral Sclerosis/ Motor Neurone Disease (ALS/MND) – a condition that became widely known following the affliction of renowned physicist, Stephen Hawking.

The aim and use of MPL is to provide a better treatment with positive therapeutic impact, by ameliorating the ALS/MNS disease progression.

If effective, MPL would reduce the rate of degeneration and loss of motor neurons in the anterior horns and motor nuclei of the brainstem.

With success in the clinic, PharmAust expects that MPL will receive orphan drug designation by the FDA for the indication of motor neurone disease.

Manufacturing of GMP-grade tablets

PharmAust previously announced the commencement of production of 10kg of GMP-grade MPL for research and development (R&D) purposes to support its coming human trials.

The GMP-grade MPL compound is being manufactured in collaboration with Syngene International Ltd (NSE: SYNGENE) and Catalent Pharma Solutions (NYSE: CTLT) , which will perform scaled-up manufacture of GMP-grade monepantel tablets suitable for use in the upcoming trials.

GMP tablet manufacture is a key component for undertaking GCP (Good Clinical Practice) trials, and will enable data from forthcoming trials to be admissible to the US FDA.

Due to the impact of COVID-19 on global supply chains however, productions have been delayed by Syngene, which means the commencement of human trials in MND, COVID-19 and cancer will be delayed until Q2 of CY22.

In an effort to ensure PharmAust has more than adequate supplies of MPL going forward, the company will procure an additional 10kg of GMP Grade MPL, which is expected to be manufactured by Q1/2 of CY22.

Epichem and waste-to-fuel technology

Epichem has reported FY21 Revenue of $3.2m, with an unaudited profit of ~$300k.

During the quarter, the contracted medicinal chemistry subsidiary of PAA secured new projects from new and existing customers.

The new clients include PYC Therapeutics (ASX: PYC), where Epichem worked in partnership to develop a world-first treatment for thousands of sufferers of retinitis pigmentosa around the world.

Epichem also continues to support the PharmAust drug development pipeline with validation and reformulation.

It also provides PAA with GMP synthesis and stability support, as well as drug inventory dispensing to clinical trial centres.

Epichem also continues to pursue its novel, innovative and disruptive Oxidative Hydrothermal Dissolution (OHD) technology to convert and re-purpose biomass and feedstock into valuable end products.

In short, OHD converts solid organic material to low-molecular-weight, water-soluble products using small amounts of dissolved oxygen in liquid water at high temperature and pressure.

Epichem will help to advance OHD technology by using biomass and feedstock flow reactor material science.

The flow reactor is a world-first, with the potential to turn a wide range of waste and biomass feedstock into valuable energy products.

Solid financial position

PharmAust is adequately funded, with $3.07 million as at 30 June. A further $380k was received in July 2021 from DNDi (Epichem’s largest customer) for work on its flagship project on Chagas disease. These funds were not included in the Appendix 4C as they were received after 30 June 2021.

During the quarter, payments for R&D were $0.154 million and represented costs involved with the development MPL, as well as salary allocations of Dr Richard Mollard who is 100% focused on R&D activities.

These cash outflows for the quarter were in line with management expectations.

PharmAust reported net cash used in operating activities for the financial year of $1.078 million and cash at bank of $3.07 million. This represents 11.4 quarters of funding available.

PharmAust has not received any funding from the $900k committed from FightMND as yet. The first instalment of $200k is due to be received after GMP manufacture of MPL has been completed.

This article was developed in collaboration with PharmAust, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.