Generally speaking, people have a relatively rudimentary understanding of drug development and marketing. Fact is, people aren’t really forced to assimilate the process, so it remains simplified. Those with more experience in the drug development space have a deeper comprehension of labyrinthine nature of drug development, whether it is in developing a drug for a disease, or finding a disease for a drug.
In this highly technical world, people tend to understand that riches can accompany entrepreneurs like Elon Musk or Mark Zuckerberg dominating new market categories, but are disconnected from the fact that new, lucrative markets can equally be created in healthcare. This has not eluded the companies below looking to tap into a new market by developing the first-ever drug for the treatment of oral mucositis, an unpleasant side effect of cancer therapy.
Creating a Market
“Finding a disease for a drug” may sound like a fool’s task, but nothing could be further from the truth. It happens frequently, only it is branded as “education” or sometimes a more popular term like “disruptor.”
Merck (NYSE: MRK) did it back in the 1960’s with its antidepressant amitriptyline. Believe it or not, clinical depression was a rare disorder back then, but thanks to a brilliant marketing ploy involving sending out 50,000 copies of Frank Ayd’s “Recognizing the Depressed Patient “ to general practitioners across the U.S., diagnose rates went up significantly and so did amitriptyline sales.
GlaxoSmithKline (NYSE: GSK) went a different route once its Parkinson’s disease drug Requip won FDA approval for restless leg syndrome (RLS) in May 2005. At that time, RLS was a relatively mysterious condition. Ahead of the approval, in June 2003, a new survey on RLS was discussed by Glaxo in a press release covering how millions of Americans suffer from the neurological disorder and that they should “not suffer but instead talk with their physician about a treatment plan.” Conducted by Ziment, the study was funded by Glaxo.
In a similar vein, it’s certainly not uncommon for companies to sponsor research reports on certain markets that they are addressing to put a circle around the potential market opportunity.
You see those drug ads on the television all the time? They’re not just reminding you about a drug that can possibly help you if you’re diagnosed with a disease or condition, they’re helping you recognize that maybe you might have a disease or condition too. We’re not talking conspiracy theory here, it’s a marketing/education scheme rolled up in a 60 second blip that works great for drug makers.
“Creating a market” doesn’t necessarily mean actually employing doctor- or patient-facing tactics to result in increased diagnoses. Many times the market is already there; it just has to have some light put on it to remind everyone. It’s branding, if you will, and it serves multiple purposes, including getting the new drug center stage to analysts and companies, simultaneously letting consumers know that it’s okay to have the malady and there is a treatment for it.
It all has to do with what the pharma experts at McKinsey & Co. have dubbed as “category creators” and “market shapers” and the strategies that need to be utilized to increase the odds of success for a product launch. It’s ingenious and rewarding if a company can become a category creator. As detailed in Harvard Business Review, category creators experience much higher revenue and market capitalization growth.
Take Merck again for example. The drug giant was a true category creator in 2006 with Gardasil, its recombinant human papillomavirus vaccine used to prevent certain strains of HPV, specifically those implicated in the majority of cases of cervical cancer. The Gardasil franchise remains strong today, growing 6% year-over-year in 2017 in generating $2.3 billion for Merck thanks to increased global demand.
Oral Mucositis Drug…Category Creator or Market Shaper?
Oral mucositis is a painful condition resulting from cancer therapy characterized by erythematous and ulcerative lesions of the oral mucosa. It’s an unfortunate side effect most frequently the result of chemotherapy and/or radiation therapy in areas near the mouth. The pain can be so intense that nutrition and oral hygiene can be compromised. Furthermore, the patient is at increased risk of local and systemic infection and, when Severe OM (SOM, defined by the World Health Organization as Grade 3 or 4) sets in, the cancer therapy regimen may need to be suspended to treat the SOM first.
There is currently only one drug approved to OM, palifermin (brand name Kepivance by Amgen (NASDAQ: AMGN)), an IV drug approved specifically to treat OM in blood cancer patients undergoing high-dose chemotherapy, with or without radiation, followed by a bone marrow transplant. Studies show palifermin is not effective against solid tumors.
As it stands, there are no approved drugs for the treatment or prevention of SOM in head and neck cancer patients receiving chemoradiation, the disease/therapy regimen where SOM most frequently presents.
This situation begs the question: Would a new OM drug be a category creator or market shaper? It seems that this is one of the rare times when a new drug could be both, even though a category creator is probably most accurate. Given that there are no drugs for the most treatment of SOM, much less prevention of it occurring in the first place, it’s a blue sky (new category) opportunity.
On the other side of the coin, this isn’t a new market. It is one of great unmet medical need that oncologists and radiologists know very well. For instance, the frequency of OM in head and neck cancer patients (64,690 annually in U.S.) receiving chemoradiation is nearly 100%. For any cancer patient (1.69 million new diagnoses in the U.S. in 2016) receiving chemotherapy, the odds of developing OM are about 40%, with the chance increasing with the number or treatment cycles.
OM for head and neck cancer patients has been reported as the most distressing symptom in treatment regimens. Thing is, these patients currently only have palliative care of so-called “magic mouthwashes” to help alleviate the symptoms.
Anyway you shake it, category creator or market shaper, the dearth of option means an effective drug should command plenty of market share, with competition heating up based upon efficacy and pricing models as other drugs hit the market.
So Who Wants It?
The OM space is probably as exciting now as any time in history. Several companies are making real progress in developing bona fide drugs – not just magic mouthwash concoctions – in a bid to tap into the lucrative market. How much exactly is difficult to discern simply because there is nothing out there to use as a yardstick.
Enzychem Lifesciences (KONEX:183490) estimates that an effective OM drug could generate $2.6 billion worldwide annually. The South Korean biotech is hoping to get its EC-18 to the finish line for treating OM.
Enzychem said recently that the U.S. FDA granted Fast Track designation for EC-18, a synthetic palmitoyl-2-linoleoyl-3-acetyl-rac-glycerol (mosedipimod) with immunomodulation function. A Fast Track designation is meant to foster development of new drugs to treat serious conditions with unmet medical need by expediting the review process.
After successfully completing a Phase 1 trial (finding the data has proven difficult), the company is gearing up for a Phase 2 trial evaluating the oral drug for safety and efficacy in head and neck cancer (HNC) patients receiving radiation and cisplatin (chemotherapy). According to clinicaltrials.gov, the trial was expected to start in January with an aggressive forecast for completion in June 2019, but the status indicates that recruitment for enrollment has still not yet begun, so completing the study next year is starting to look less likely.
Innovation Pharmaceuticals (OTCQB: IPIX) is also developing its novel drug, named Brilacidin-OM, under an FDA Fast Track designation. Brilacidin-OM is part of the company’s “defensin mimetic” franchise, non-peptide compounds that mimic that body’s innate immune system. The Massachusetts-based company has delivered a spate of positive news recently on the successfully completed 60-patient Phase 2 trial of Brilacidin-OM for HNC patients receiving chemoradiation. Innovation Pharma is separated from the pack in a number of ways, including being Phase 3-ready and hitting the primary endpoint in the Phase 2 study by demonstrating that their oral rinse formulation was beneficial in preventing the onset of SOM in addition to key secondary endpoints, namely reducing the duration of SOM when it did develop. Most other pharmas developing drugs are focused on reducing duration, not prevention.
In addition to the headline of meeting endpoints by reducing the incidence of SOM by 38.7% in the “per protocol” group receiving Brilacidin-OM compared to those in the placebo group, a deeper dive into the data recently has uncovered important information in the company moving into pivotal trials. Earlier this month, IPIX showed that Brilacidin-OM reduced the risk of the incidence of SOM in patients receiving aggressive chemotherapy (high doses of cisplatin) by as much as 80.3% compared to placebo. Given the trend in HNC treatment programs moving towards higher dosing regimens, this latest piece of data is particularly important towards the goal of one day seeing Brilacidin-OM as an integral part of every HNC treatment program.
Looking at the data on the duration of SOM showed that the overall median time that SOM lasted was cut from 5.5 days in the 20 patients in the “per protocol” placebo group to 0 days in the 19 patients in the per protocol Brilacidin-OM group. The company simply referred to the duration as “less than one day” in the press release. Granted, the sample size was small around 20 patients due to the enrollment size and fact that many patients never developed SOM, but the aggregate of prevention and cutting SOM duration from 5.5 days to under 1 is nothing shy of impressive and essentially unparalleled by competitors.
Innovation also reported Brilacidin-OM patients feeling better (less swollen, less burning sensation) compared to those in the placebo arm, which was underscored by the fact that was not a single unplanned office visit, emergency room visits or hospital admission by a patient in the treatment arm, compared to four in the placebo group.
While the company continues to cull the data and prepares for an end of phase 2 meeting with the FDA, it hasn’t discussed the next potential step forward. Considering the efficacy in HNC patients on high doses of cisplatin, this would seem like a logical pathway to structure a Phase 3 study to increase the odds of success and attracting a high-profile partner with the end-game being the first to market.
The data is there for IPIX and the company says it wants to formulate its product in a sachet format (like a sugar packet) for easy administration away from a medical setting, which is ideal. A larger trial (>200 patients) holds the key to success and much higher valuation for IPIX.
Galera Therapeutics, a private company, rattled the OM space at the end of February by becoming the first company to receive a Breakthrough Therapy designation from the FDA for an OM drug candidate. Like Fast Track, the designation is designed to expedite development of therapies targeting areas in serious need. Breakthrough Therapy comes with all the benefits of a Fast Track in addition to intensive guidance from the FDA on an efficient drug development program, including help from senior FDA managers.
Since the program’s inception in 2012, the FDA has only awarded about 210 Breakthrough designations. Galera’s designation for OM speaks volumes about the FDA’s sense of urgency to develop new drugs for the indication.
Galera received the designation based upon its successful Phase 2b trial of its lead drug candidate, the intravenous drug GC4419, a highly selective and potent small molecule dismutase mimetic for SOM. The 223-patient trial met its primary endpoint with HNC patients receiving chemotherapy (cisplatin) and radiation in the GC4419 group demonstrating a significant reduction in the duration of SOM.
In the “intent-to-treat” population, patients administered the higher dose of GC4419 (90 mg) experienced a SOM duration of 1.5 days, versus 19 days for patients in the placebo group, a 92% reduction. Why placebo patients in the Galera trial had 19 days of SOM versus only 5.5 days for the IPIX trial is unexplainable without a much deeper look under the hood.
Galera’s trial also met its secondary endpoints in reducing the incidence of SOM by 34% (36% in patients receiving up to 60 Gy of radiation) and reducing the incidence of Grade 4 SOM by 47%.
Like IPIX, the data looks good and a Phase 3 study is necessary, but Galera could face a significant hurdle with the 60-minute IV administration every time radiation therapy is given. While it can lower the chances of SOM, it’s not the optimal delivery method for patients and carries a sizeable price tag to complete versus oral administration. Regardless, these are still two front runners in the business.
Soligenix (NASDAQ: SNGX) certainly has to be mentioned in the mix given that the company is New Jersey-based company is quite possibly the only pharma company (not a university or organization) that is actively recruiting in a Phase 3 trial. The study is designed to assess the efficacy of SGX942 compared to placebo in decreasing the duration of SOM in patients receiving chemoradiation treatment for the treatment of HNC.
SGX942 is Soligenix’s lead clinical Innate Defense Regulator (IDR) candidate, containing the active ingredient dusquetide, a fully synthetic, 5-amino acid peptide. The IDR technology platform represents a novel and innovative approach to therapeutically modulating immune defenses by targeting the innate immune system.
SGX942 is also being developed under a Fast Track designation for OM.
In a 111-patient Phase 2 trial, SGX942 administered intravenously was shown to reduce the median duration of SOM by 50% (from 18 days to 9 days) compared to placebo. In patients on the most aggressive chemotherapy regimens, SOM duration was trimmed from 30 days to 10 days (67%) for those in the treatment group compared to placebo.
Other benefits of SGX942 were also realized, including a lower infection rate; increased incidence of “complete resolution” tumor status compared to placebo at the one-month follow-up visit; reduced amount of opiate use compared to placebo; and a reduced mortality rate compared to placebo over the 12 month follow-up visits.
Like Galera, Soligenix is developing an IV-drug. While clearly out in front with its 190-patient Phase 3 study, called DOM-INNATE, initiated in July 2017, the results from the mid-stage trial underwhelm compared to that of Innovation Pharma and Galera. While the company certainly could be first to seek and FDA approval if the Phase 3 trial hits its endpoints, the data will have to improve from the Phase 2 data to be able to swat away other companies nipping at their heels.
Oragenics (NYSE American: OGEN) kicked off a 200-patient Phase 2 trial of its peptide oral rinse AG013 in August. Not surprisingly, Oragenics is evaluating its therapy in HNC patients receiving chemoradiation. The drug also has a FDA Fast Track designation. AG013, which was designed by and licensed from Oragenics’ partner Intrexon (NYSE: XON), acts by delivering Trefoil Factor 1, a protective secretory protein expressed widely in the gastrointestinal mucosa, to the mucosal tissues in the oral cavity.
Oragenics is doing something different that the aforementioned peers by looking across the whole OM continuum (WHO Grades 1-4) compared to placebo, rather than just at SOM. To that point, the company is evaluating AG013 for safety and efficacy as measured by the duration, time to development, and overall incidence of OM during the active treatment phase, beginning from the start of chemoradiation therapy until two weeks following its completion.
One month ago, Oragenics completed enrollment of the interim analysis cohort of 20 patients in its study. Preliminary data from these first 20 patients is expected during this quarter with top-line results of the trial expected in 2019.
Somewhat akin to Soligenix, Oragenics had positive data from earlier research, but it is likely hoping to see the data improve in the mid-stage trial. In a small Phase 1b trial, all patients in the placebo group experienced 2 days of ulcerative oral mucositis (UOM), whereas 29% of the patients in the AG013 group had no UOM or a duration of only 1 day. Fewer office and emergency room visits were also reported, but no differences were observed regarding mouth or throat soreness, opioid use or gastrostomy tube placement.
Some other mentions that frequently join the OM conversation include: Izun Pharmaceuticals (private), which completed a Phase 2 trial of its oral rinse last year and said in October that the results were positive, but failed to disclose any real data; AMAG Pharmaceuticals (NASDAQ: AMAG), which owns MuGard, an oral mucoadhesive (a medical device, not a drug by FDA standards) that has been on the market for a number of years; and Monopar Therapeutics (private) with its mucobuccal tablet called Validive acquired from Paris-based Onxeo (CPH: ONXEO) that completed a 183-patient Phase 2 trial in 2015 evaluating the tablet for safety and efficacy in patients with HNC receiving chemoradiation therapy.
Watch for More News, It Could be a Big Catalyst
It’s safe to say that development of all these drugs is making the race interesting. There have been hundreds of trials by companies trying to penetrate the OM market that even the most conservative estimates put into the hundreds of millions of dollars annually. The days of failed trials look to nearly be over as companies home in on the indication like never before with robust mid-stage data. As all these companies move deeper in the clinical trial process, it looks like one of them is going to be the next category creator.
