Cytogenix (fka CYGX)

[downregul8]

The Wawh and Gdepc I do think that there is gold in them thar hills – but when and how we get to it still unfolding.

First as I understand it, the material from the prototype can only be used for pre-clinical work – most likely small scale animal testing. Again as I understand it, the clinical grade material has to come from a cGMP facility. We need the end of construction date and the estimated time for certification. Does anyone have the target “production ready” date for this? That will answer the earliest time that cygx can begin selling clinical grade material. The next question is how much can we sell – based on demand not capacity. The only number that I’ve seen in the past was cygx’s projection of about 10 grams needed for the Simplivar trials. So to get an overall market demand number for test quantities we need to know how many DNA product trials are running or pending IND approval and we need to know how many of those would be synDNA candidates. It's also critical to find out what the phase the synDNA can enter – that’s a biggie because it affects the overall demand and timing. The last piece we need to guestimate is the timing and likelihood of an eventual product release using synDNA. That’s when the demand will spike.

Now for some fun with numbers. There are some statistics here http://www.fda.gov/cder/rdmt/default.htm the INDs are at the bottom of the page. There are about 12K total INDs in process as we speak (way more than I would have guessed but the bulk of those are listed as non-commercial not sure if that matters or not). The individual studies are not listed but I think it’s safe to assume that only a very small percent are DNA based. Looking across the field to the likes of gnta, isis, etc. each with a handful of trials I would guess that there may be 100-200 total DNA based trials in the works. Assuming that we will be targeting phase I trials to begin with, that would cut the number to maybe 25-50 candidates, and assuming we get 20% of those – since there is some risk in trying this material over what may have been used in their pre-clinical work not all companies may want to jump on board at this point - the number is down to 5-10 potential early adopters that we can supply clinical grade synDNA to – starting sometime after the cGMP facility is complete. This equates to about 50 to 100 grams over the course of the whole trial or about 10 to 20 grams/yr for the first wave of customers. If the early testing goes well, the demand should steadily increase. If it is possible to substitute the material in later trial phases, the demand will rise even faster but still at the rate of about 10 grams/trial. The demand is probably not steady over the course of a trial but for the sake of argument if you divide the trial demand by the number of years for the trial (optimistically four) cygx would have to sign up 400 trails to have a demand of 1kg/yr of syn DNA. That number of DNA trials may not even be in existence today but it puts a reasonable upper limit on the sales for testing. This is not where the big money is.

The mother lode will be found when there is a product release that uses synDNA. This is why the answer to when synDNA can be substituted is so critical. Someone tossed out a DNA quantity number before for a vaccine. I believe it was something like 1 to 2 kilos for a production run but that may be low. Point is that for this to be the windfall people hope, it requires that the synDNA is used in a lot of DNA based products that are passed the approval stage.

For some more fun with numbers. Out of the 12K active INDs it looked like only about 200 – 300 drugs are approved/year (I couldn’t find a total at the link provided so if someone has a better number feel free to share.) If one to two percent of the INDs are DNA based then only 2 to 6 DNA based products will be approved per year. I expect the number will rise over time but this is still a good guestimate for short-term demand. How many of those can or will use synDNA statistically depends on how many trials cygx can get the synDNA into.

Note: To the best of my knowledge there have been very few DNA based products approved and no human DNA vaccines approved. So even if the absolute best-case scenario where synDNA can be used post-approval, there is very little large-scale short-term demand. This is a market in the making and will take some time. And because it will take some time, the door will be little wider open for competition. It is critical for the success of this product that cygx aggressively markets this product now and begins signing up companies who want to use it in their clinical and pre-clinical studies to increase the exposure and to increase the chance that one of the products using synDNA will be approved. This is why some people were surprised that cygx dropped out of last year’s vaccine conference. They need to know all of the players, where they are in their testing, and start pounding on doors. As attractive as it is to us, it still represents an unknown to potential customers – who are trying to minimize uncertainty as they enter clinical testing. Early adopters will have to assume some risk in hopes of better results or eventual return and because not everyone is open to risk it will take some persuasion in the beginning. It’s time for a couple of experienced sales people to join the team but because the initial sales may be small it may be a difficult sell to get them – so to speak.

Disclaimer: There are clearly a lot of companies making DNA today so there is either an existing market that I’m not aware of or they are all hoping for something in the future. If anyone knows where all the genetic goo is used today please let us know.