Originally published by NDF Research
SUDA Pharmaceuticals is a drug delivery company focused on oral spray formulations of existing drugs.
Over the last few years the company has generated considerable in vivo evidence that its technology can create safer and much faster-acting versions of the original drug.
Commercially this platform has started to deliver for SUDA shareholders, as evidenced by a mid-2017 licensing deal with Teva. We believe more such deals are in the offing. An encouraging aspect of SUDA’s development since 2010 has been the opportunistic way in which it has improved its technology base over time. A good example of that is SUDA’s Anagrelide Project, which it initiated in June 2017 and where the aim is to take a drug approved for a rare blood disorder and turn it into a cancer drug. In this update note we look at the Anagrelide Project in more detail. Our 17 cents per share price target remains in place.
Current price $0.014
Target price $0.17
Daily Turnover: ~A$30,000
Market Cap: A$17.1m
Shares Issued: 1,221.4m
52-Week High: $0.025
52-Week Low: $0.014
SUDA is a drug delivery company focused on oral spray formulations of existing drugs. Between 2013 and 2016 the company worked primarily on a suite of oral sprays that it had acquired from a US company called NovaDel Pharma. More recently SUDA developed its own drug delivery technology called ‘Hydrotrope’ and this is the basis of current work. SUDA’s foundation product, ArTiMist, a sub-lingual oral spray for the delivery of the anti-malarial drug artemether, did not come from the NovaDel technology but was the first product that SUDA developed.
SUDA is pre-clinical with an anagrelide oro-mucosal spray, which could be a powerful new treatment option for many cancers. In our 14 August 2017 initiation piece on SUDA we commented that ‘an encouraging aspect of SUDA’s development since 2010 has been the opportunistic way in which it has improved its technology base over time’. A good example of that, which we did not focus on very deeply in the 14 August note, is SUDA’s anagrelide Project, which it initiated in June 2017 and where the aim is to take a drug approved for a rare blood disorder and turn it into a cancer drug. In this update note we look at the Anagrelide Project in more detail.
Anagrelide is a currently an Orphan drug, in tablet form, for a rare blood disorder. Anagrelide, marketed by Shire1 as Agrylin in the US and as Xagrid in other territories, is a small molecule drug for the treatment for Essential Thrombocythemia, a rare blood disorder where too many platelets are produced in the bone marrow2. Platelets are essential to control bleeding, but too many platelets can result in abnormal blood clotting that can be fatal. In addition, Essential Thrombocythemia can also transition to Acute Myeloid Leukemia (AML) in a small minority of patients3. Anagrelide, which belongs to a drug class called the ‘imidazoquinolines’4, lowers platelet counts by inhibiting the maturation of a platelet precursor cell called the ‘megakaryocyte’, as well as the formation of an intermediate product called the ‘proplatelet’5. The drug was originally developed by Bristol-Myers Squibb in the 1970s and 1980s6 and outlicensed in 1991 to a specialty pharma company called Roberts Pharmaceutical. Roberts gained FDA approval for Agrylin in 1997, a couple of years before the company was acquired by Shire7. That company gained European approval for Xagrid in 2004. Anagrelide is one of two standard-of-care drugs used in Essential Thrombocythemia, the other being hydroxyurea, an inhibitor of DNA synthesis. Whilst there are many that regard hydroxyurea as safer than anagrelide8, the former drug does not have the specificity to target platelet production that differentiates anagrelide. The main issue with anagrelide is the cardiac side effects – which includes palpitations and arrhythmias, fluid retention, heart failure, and headaches9 – arising from the drug’s vasodilatory and positive inotropic properties10.
Why Anagrelide could be a significant new cancer drug. A significant body of work over the years has identified overproduction of platelets as being important in cancer – not just AML but multiple tumour types of high prevalence including breast11 and lung cancer12. We’ve long known that ‘paraneoplastic thrombocytosis’13 is commonplace in cancer, with that condition tending to predict poorer outcomes for patients14. More recently, a good deal of the relationship between cancer and platelets has been elucidated: Tumours are able to stimulate platelet production and activation15, and the platelets in turn confer significant advantages to the tumour:
- – Platelets, when they adhere to cancer cells, form a protective cloak that helps the cancer escape immune surveillance and destruction by Natural Killer cells16;
- – Platelets help in the process of tumour angiogenesis, that is, the formation of new blood vessels to feed the tumour17;
- – Platelets help cancers gain the ability to metastasise18;
- – Platelets enhance the tumour microenvironment19;
– Platelets secrete many growth factors that stimulate cancer cell proliferation20
This evidence has suggested that drugs which act to reduce platelet numbers could significantly enhance conventional chemotherapy. Around 2014 that thinking led Dr Stephen Damment, formerly Shire’s Head of Biosciences21, to start a company called Aluztra Bio in order to reprofile anagrelide as an anti-cancer agent. Working with former colleague Richard Franklin and with Professor Jorge Erusalimsky of Cardiff Metropolitan University, an authority on megakaryocyte biology, Aluztra Bio performed several experiments to demonstrate that reprofiled anagrelide would work in this setting, and filed for the relevant patent protection22, with the support of the charity Cancer Research UK.
Anagrelide can work best as an anti-cancer agent if it is an oral spray. Anagrelide makes an ideal platelet lowering drug for anti-cancer purposes because it is highly selective – it only inhibits platelets, leaving other blood cell lines untouched23. The problem, as we noted above, is the high level of cardio-stimulation, which makes anagrelide unsuitable for patients with any kind of heart trouble and may historically have caused around a quarter of patients to discontinue treatment24. The unwanted cardiovascular side effects arise because anagrelide is a PDE3 inhibitor. Phosphodiesterase type 3 is an enzyme that regulates heart muscle. Knock down PDE3, and the resulting increase in a secondary messenger25 called cyclic AMP causes increased calcium influx into the cardiac cells, prompting the heart to beat faster. For anagrelide, work in which Franklin and Erusalimsky were involved established way back in 2005 that much of the cardio-stimulation came from BCH24426, one of the metabolites of anagrelide created by the patient’s livers26. That metabolite typically showed up in the patient’s bloodstreams at much higher levels than the original drug27. Which suggested a very simple solution – if anagrelide could be formulated as an oral spray or as a transdermal drug, the first pass metabolism in the liver that results when a drug is delivered as a pill would be avoided. This made anagrelide a highly attractive drug for SUDA with its OroMist platform, which allows reformulation of drugs so that they are delivered via the oro-mucosal route, and was the main reason why SUDA acquired the rights to the Aluztra Bio intellectual property. SUDA signed MoU with Aluztra last June and completed the acquisition of the IP In January 2018. Should SUDA develop a drug from this IP, it will pay a low single-digit percentage royalty on sales or a share of income from commercialisation.
SUDA can now proceed to realise Aluztra Bio’s vision. SUDA has commenced the formulation work for an OroMist spray of anagrelide. Once it identifies a formulation with the right pharmacodynamic properties, including efficient permeation across the oral mucosa membrane and a low level of cardio-stimulation in the animal models, it will then need to pick an appropriate cancer in which to study the anti-cancer properties of the drug. We believe there are multiple paths it can then pursue. An obvious one is to try the drug out in a more aggressive cancer where platelets overproduction is known to be highly prevalence, such as ovarian cancer. An early experiment which we expect the company will perform will be to evaluate anagrelide in conjunction with the checkpoint inhibitors to see if anagrelide-induced changes in the tumour microenvironment will improve the effectiveness of these drugs. We expect that 2018 will see SUDA able to publicly discuss its preferred development pathway for the anagrelide project.
SUDA could also make anagrelide a more effective drug for Essential Thrombocythemia. In spite of the cardiovascular drawbacks of Agrylin/Xagrid, the product enjoyed US$152.5m in global sales for Shire prior to its going generic in the US in 2005. The prevalence of Essential Thrombocythemia is about 22 per 100,000 people28, which makes for a patient population in advanced industrial countries of around 230,000, and a rest-of-world population of 1.4 million. It’s not unreasonable that an OroMist-formulated anagrelide could becoming the product of choice for Essential Thrombocythemia instead of hydroxyurea, considerably expanding the market opportunity.
We’ve included some additional valuation for the Anagrelide Project in our model, since the project has now moved beyond the conceptual and is being formulated and optimised. Due to the early stage of the anagrelide project we have only put a notional valuation on the project. We reserve the right to review this valuation as the project progresses. We also think anagrelide can provide an important validation of the thinking behind our current 17 cent share price target, which reflects early-stage valuations for a range of SUDA projects.
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