Innovation Pharmaceuticals Inc (IPIX)

[slcimmuno]

agree - B-OM has huge potential given current SOC Standard of Care (lack of an effective treatment) -- below one of the best recaps i've come across on OM mkt... article focuses on Validive but commentary/projections can be extended to Brilacidin potential, put its possible future value in context.

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VALIDIVE -- targeting side effects of radio and chemotherapies

Validive is a product based on Onxeo's proprietary mucoadhesive buccal tablet technology. It is a novel delivery method for clonidine, a versatile drug used to treat hypertension among others. It is designed to treat patients suffering from severe oral mucositis (OM), an inflammation of the mouth that is a very common side effect of nearly all cancer treatments with radiotherapy or chemos.

Severity of OM is rated according to a WHO scale from 1 to 4, with 4 being the worst stage of the inflammation -- grade 3 and 4 are considered highly debilitating affections which can lead to hospitalization of the patient and parenteral nutrition (intravenous feeding) leading to delays or interruption of the cancer treatment. OM also has a high burden economic impact on hospitalizations as it is associated with additional charges ranging anywhere between $1.700 to $6.000 per patient per treatment cycle, or even more in particular cases.

Validive efficacy results in head and neck cancer patients

Validive is being tested specifically to treat head and neck cancer (HNC) patients who are extremely exposed during their treatment. It is estimated that around 75% of HNC patients will be treated with chemotherapy or radiotherapy and around 80% of those will be affected by oral mucositis -- and even close to 100% in patients receiving high-dose in-mouth radiations. HNC affects approximately 60.000 people per year in the US and nearly 100.000 in Europe. In total, there are approximately 700.000 new HNC patients worldwide each year, including 250.000 in Asia (source: Globocan, 2012 statistics). In HNC patients, hospitalization costs due to severe OM treatments are very high -- one study evaluated the median incremental costs in US hospitals at over $17.000 per patient (see also here). In the US and Europe combined, considering that 50% of all patients affected by oral mucositis will reach grade 3 or 4 (severe) and assuming an annual treatment price of EUR 5.000 in Europe and $10.000 in the US, these numbers give an overall market opportunity estimated at around $600 million per year in HNC only -- this seems coherent with actual GlobalData market research, which forecasts annual sales of over $1 billion for 2017 for OM treatments in major markets (US, Europe and Japan).

In October 2014, Onxeo reported preliminary results of Validive phase 2 trial (randomized, double-blind and placebo-controlled, N=183) for the prevention of severe (grade 3 to 4) OM in HNC patients: in addition to a good safety profile, Validive demonstrated a significant decrease in the incidence of severe oral mucositis -- there was a 16% difference in absolute incidence rate of OM in the Validive group (45%) compared to placebo (61%) i.e. a 26% decrease in relative value. Besides, equally as important, patients treated with Validive were able to be treated with higher doses of radiation and for a longer time before the occurrence of OM -- safety profile was good and compliance was high (80%) due to the convenience of Validive oral tablets. Complete results are expected later in 2015, but Onxeo has already decided to start a larger phase 3 trial in the same patient population based on these encouraging preliminary results. Validive is already Fast-tracked by the FDA and designated as an Orphan Drug by the EMA -- designing the phase 3 should be quick and the trial should start somewhere in late 2015.

Validive competition in oral mucositis

In HNC patients, there is currently no approved preventive or curative treatment for OM. The most common management protocol is palliative treatment such as the use of mouthwash or gels. Several types of products have been approved by the FDA in the last years -- under the "medical device" approval path and not as drugs -- and some of them claim efficacy in OM management including:

MuGard -- produced by PlasmaTech (PTBI): a mucoadhesive gel that provides a protective coating to the oral mucosa, it is sold in the US for around $1.500 per 6-week treatment. MuGard should also be commercialized in Europe in 2015. Its main advantages are its relatively low pricing and its convenience. MuGard did show statistical efficacy against placebo in reducing OM symptoms, but since this is considered a "medical device" and not a drug, it has no formal approval as an OM treatment.

Gelclair -- produced by DARA Biosciences (DARA): sold around $125 for 21 doses, it did not prove any significant clinical efficacy in clinical trials for OM. It is essentially a polyvalent mouthwash.

Some treatment centers also prepare their own rinses, based on local formulations, but they are usually used to palliate patients and are not very effective.

Currently not approved for HNC, the most relevant competitor to Validive would be Kepivance -- owned by Amgen and distributed by Swedish Orphan BioVitrum (OTCPK:BIOVF) -- a recombinant human keratinocyte growth factor formulation, administered intravenously. Kepivance (palifermin) is only approved in bone marrow cancers. The drug has already been tested in HNC in a previous clinical trial, and it showed a statistical decrease of 15% in OM (compared to 16% for Validive) although it did not prove a statistical delay in the occurrence of the inflammation nor a difference in chemo dosage reduction -- for these reasons, there were concerns about cost-benefit and optimal dosage issues in HNC. Kepivance is still being tested in an ongoing phase 3 trial for HNC. However, with inferior or similar efficacy results than Onxeo's drug, its intravenous administration (for 3 days) could be a real disadvantage when compared to Validive oral formulation. Kepivance pricing ranges from EUR 5.000 to $9.900 per treatment. Latest available data of Kepivance worldwide annual sales indicate around $85 million (2011).

In the long-term and if Validive phase 3 trial in HNC is a success, Onxeo could eventually seek extensions in other types of cancers -- it is estimated that a significant proportion, between 25 and 60% of most cancer patients regardless of cancer type, will experience oral mucositis in the course of their radio- or chemotherapy. So, with competitive advantages in regard to existing therapies and with similar or better efficacy results, there could be an interesting opportunity for Validive in the global oncology market.

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Validive value estimate - considering an annual market of $600 million in severe OM specific to HNC patients in the US and Europe combined (see calculations above) and assuming that Validive gets a 20% market share in these patients owing to its convenient use but taking into account competition from cheaper products, I estimate that Validive could reach the market around 2019 and generate peak sales of $120 million in the following years (of which $80 million in the US and the rest in Europe). Assuming off-label use or extension in other types of cancers and a progressive penetration of the Asian market (around 250.000 HNC patients per year), I believe that global sales of $200 million could be achieved for Validive, of which 50% is taken into account for 2022 sales.

https://seekingalpha.com/article/2996646-onxeo-an-upcoming-mid-sized-pharma-with-ambitions