A 12-week, Stage 2a proof of concept study using NP-120 or Ifenprodil to treat idiopathic pulmonary fibrosis (IPF) and chronic cough was recently completed by Vancouver-based Algernon Pharmaceuticals Inc. (AGN:CSE; AGNPF:OTCQB; AGN0:XFRA) — and it demonstrated that 13 out of 20 IPF patients who enrolled had stable or better lung capacity after 12 weeks.
The Phase 2 study’s positive topline data moved the company one step closer to bringing a new IPF and cough treatment to market.
“The IPF data look quite good,” said Dr. Martin Kolb, professor of respirology at McMaster University and global expert on IPF. Kolb is also a member of Algernon’s Medical and Scientific Advisory Board.
Toronto-based AlphaNorth Asset Management is Algernon's largest shareholder with about a 7% stake. Co-founder Steve Palmer says he continues to accumulate Algernon shares as the company trades near 52-week lows. He told Streetwise Reports that it's difficult to determine how the market will react to the study news.
AGN is incredibly undervalued having a market cap of only $6 million. AGN’s Ifenprodil has a well established safety profile and now promising initial IPF Phase 2a data — for an Orphan indication that is targeting an unmet medical need for a very large market opportunity... We recommend investors with a higher risk tolerance to aggressively purchase the stock."
— Research Capital Analyst Andre Uddin
"It's great news. The study was not designed for statistical significance, it was designed to see if there was any signal with this drug. To have achieved statistical significance with such a small number of patients is excellent," Palmer told Streetwise Reports. "However, the market has been pretty poor across the board...it's hard to predict in this kind of environment, how the stock will react. If we had a normal or good market, then I think the stock would react very positively."
Current IPF treatments cost as much US$90,000 annually in a market expected to be worth more than US$4.2 billion ($4.2B) by 2030. It's currently dominated by two pharmaceutical behemoths: Germany's Boehringer Ingelheim, and Roche, based in Basel, Switzerland.
IPF is a chronic lung disorder that results in patients suffering shortness of breath after stiffening, thickening and ultimately scarring (fibrosis) of their lung tissue. The disease is usually terminal less than six years after diagnosis.
The cough data showed that while Ifenprodil didn't achieve the more stringent primary endpoint on cough, 30% of patients saw a 50% reduction in their 24 hour cough count and overall, 75% of subjects saw improvements in their cough over 12 weeks. This may lead Algernon to focus on IPF patients who have associated cough instead of pursuing a separate Phase 2b study on cough alone.
“IPF is a $4B market while cough is a $1B market and so we have some thinking to do about next steps,” Algernon CEO Christopher J. Moreau told Streetwise Reports.
Based on the positive data, Algernon plans to file a Pre-Investigational New Drug Application with the U.S. Food and Drug Administration (FDA) for a Phase 2b IPF study.
If the study gets the green light, the company could switch to a new once-a-day dose of Ifenprodil. Patients who were in the 2a study took the drug three times daily.
Moreau said that and more have yet to be determined.
“We will communicate with the FDA and determine what our Phase 2b plan is and settle on the number of patients, the number of study arms, primary and secondary endpoints and likely a multiple dose treatment regime,” Moreau told Streetwise Reports. “There is a lot of work involved in planning a Phase 2 study and so it will be a number of months before we would be ready to start.”
He added that he believes some of the some big players in the pharmaceutical space are keeping an eye on Algernon and some have already signed non-disclosure agreements with the company.
How the Study Worked
IPF patients in the Stage 2a study in study groups in Australia and New Zealand had their lung function measured by forced vital capacity (FVC) — where a patient blows into a device measuring the force of their blowing — at the start of the trial, and then again after 12 weeks.
Patients whose FVC declined were classified as non-responders, while those whose FVC improved or remained stable were classified as responders.
Of the IPF 20 patients who enrolled, 13 (65%) had stable or improved FVC over the 12-week treatment period, whereas 40% of those treated with a placebo demonstrated similar or higher FVC over 12 weeks.
The drug essentially targets the body’s N-methyl-D-aspartate (NMDA) receptors and interupts glutamate signalling.
Algernon also reported that many of the serum markers — proC3, C3M, C6M, reC1M, proC8 and ELP-3 — trended lower during testing but the data did not reach statistical significance. Previous studies have shown that as these markers go up, so does the risk of disease progression and increased mortality.
Old Drugs, New Purpose
Drug studies typically start with a pre-clinical research phase where drugs are kept in the lab and never touch a human being. This phase has the highest failure rate at about 90%. If the drug moves forward, it goes into a Phase 1 study, which determines if a drug is safe for humans. Historically speaking, about 35% of drugs will fail in this phase.
Once a drug is considered safe, it can go into a Phase 2 clinical trial, which is the first time the drug is tested in the patient population the drug was intended to treat. If successful, the drug moves into a Phase 3 trial, which in essence is a much larger Phase 2. For new chemical entities, known as NCEs, the whole process usually takes about 13 or 14 years.
Algernon uses a different strategy. Its scientists examine research papers on drugs that have already been approved but are off patent and attempt to apply those same drugs to different diseases. One might say it’s akin to teaching an old drug a new “trick.”
By using a drug like Ifenprodil, which has already been approved, it shaves years off the development timeline.
Ifenprodil is still being distributed by Sanofi, but only in Japan where it is used to treat vertigo. This limited market exposure is part of Algernon’s drug strategy where the company only investigates drugs that have never before been approved in the U.S. or Europe.
"The benefit of this strategy is that it shortens the timeframe of the trial process because they can generally skip the Phase 1 because they already know that the drug is safe, and they can move right into Phase 2 studies to identify whether it works or not," AlphaNorth Asset Management co-founder Steve Palmer told Streetwise Reports in a story originally published on July 11.
IPF is also classified as an orphan disease indication — that means it’s considered a significant health problem and any new approved drugs to treat IPF in the U.S. get at least seven years of market exclusivity. It’s 10 years in Europe.
Algernon plans to file for an orphan designation with the U.S FDA for Ifenprodil and IPF shortly, as well as an application with the FDA for a Breakthrough Therapy designation.
Everybody’s Business
In addition to finding a new treatment for IPF, Algernon is also seeking ways to patent N, N-dimethyltryptamine (DMT), a psychedelic compound to treat strokes — a global market estimated at US$40 billion annually.
Another drug known as Repirinast, which was initially developed to treat asthma, is being repurposed by Algernon to treat kidney disease.
Repirinast was originally developed by Mitsubishi Tanabe Pharma for the Japanese market.
Following the news of the successful Phase 2a study, Research Capital Corp. Analyst Andre Uddin maintained his Speculative Buy rating on Algernon with a CA$25 target price.
Uddin wrote: "AGN is incredibly undervalued having a market cap of only $6 million. AGN’s ifenprodil has a well established safety profile and now promising initial IPF Phase 2a data — for an Orphan indication that is targeting an unmet medical need for a very large market opportunity... We recommend investors with a higher risk tolerance to aggressively purchase the stock."
Algernon recently completed a CA$1.2 million financing, basically replenishing the CA$1.2 million it had at the end of Q2. The company’s current burn rate is about $100,000 per month.
The company has 1.979 million shares issued, a small sum for any publicly traded company.
Toronto-based AlphaNorth Asset Management owns about 7% of Algernon, while Moreau owns slightly more than 1%.
Algernon trades in a 52-week range of CA$13 and CA$3.06. It closed at CA$3.14 on July 15.
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1) Brian Sylvester wrote this article with files from Steve Sobek for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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