One of the biggest challenges with today's cancer treatments is that many patients develop resistance. With an aging population, the patient population is growing, and so are the challenges it brings. Scandion Oncology is a Danish biotechnology company listed on the Swedish Spotlight, which has taken on the task of mastering cancer drug resistance by developing drugs that reverse the development of resistance and restore cancer cells' susceptibility to treatment.
Issuance to further develop broad pipeline
The company's most advanced candidate, SCO-101, is now preparing to enter clinical phase II in metastatic colorectal cancer. The study is expected to start before the end of the year and will be closely followed by not one, but two, phase II studies in breast cancer. In addition to SCO-101, the company is developing several other candidates against cancer drug resistance and also has a candidate against antibiotic resistance.
To finance the upcoming phase II studies, Scandion Onocology is now raising new capital through a program of SEK 29,3 million with an associated warrant program that could give the company an additional SEK 12,4 million if fully exercised.
Read also Scandion Oncology raises SEK 29+12 million with an eye on phase II for flagship project (June 26, 2019)
CEO sees great future potential
BioStock contacted Nils Brunner, CEO of Scandion Oncology, to learn more about the company's candidates, upcoming milestones and the share issue.
Scandion Oncology is a spin-off from the Danish biotechnology company Saniona. Can you tell us a bit about how it came about and what your relationship with Saniona is today?
– While working as researchers at the University of Copenhagen, we established a new screening platform where we could test whether a drug or substance affects resistance to cancer drugs. We gained access to substances and drugs from Saniona and through screening these, we identified SCO-101 as a very potent candidate for blocking chemotherapy resistance. Based on the discovery, Scandion Oncology was formed as a spin-out from Saniona and the University of Copenhagen.
– A very nice part of the story is that SC0-101 had already undergone four Phase I clinical trials in oral form and had been shown to be safe with very limited toxicity. Previously, the candidate had been tested in a non-cancer indication and the project had been stopped along the way. I think they spent around DKK 100 million on the development of the candidate before we took over the rights.
Your business is focused on developing drugs to combat drug resistance, specifically cancer drug resistance. Why do you think there is still a lack of drugs on the market that overcome chemotherapy resistance?
– This is a difficult question to answer. Today, many companies focus their cancer research on immuno-oncology, which is one of the most important innovations in cancer treatment. However, only a limited number of cancer patients are suitable candidates for immuno-oncology treatment. Recently, large phase III studies have also indicated that immuno-oncology drugs should be combined with standard chemotherapy drugs, but in this case the cancer cells must be susceptible to the chemotherapy for the combination effect to be noticeable. In this regard, SCO-101 could play a major role by making cells susceptible to chemotherapy before immuno-oncology drugs are used.
How are cancer patients who develop resistance to chemotherapy treated today and what is the medical need in this group?
– Unfortunately, resistance is often characterized by resistance to many different forms of cancer drugs. This means that oncologists are reluctant to offer further treatment to a patient who exhibits cancer drug resistance. Often the alternative is a “trial and error” strategy where other drugs are tested, but the benefits are often extremely limited.
Can you briefly tell us how your lead candidate SCO-101 works?
- We have so far discovered two different mechanisms of action of SC0-101. One is the inhibition of so-called efflux pumps. These pumps are located at the membrane of cancer cells and can be upregulated 100 – 1000 times in resistant cancer cells. The pumps bind the chemotherapy and pump the drug out of the cell so that it cannot be killed. The second mechanism of action of SCO-101, which is also very important, is that the candidate inhibits some very specific kinases involved in drug resistance. Kinases are enzymes that activate proteins that in turn regulate cell functions.
What is the safety profile of SCO-101?
– SCO-101 has been tested in 92 healthy volunteers and has been shown to be a very safe oral drug with limited toxicity. During our meeting with the Danish Medicines Agency, we were informed that we could start Phase II clinical trials based on the good results from the previous Phase I trials.
According to your communicated timeframe, you are to begin your first phase II with SCO-101 before the end of the year. How many patients is the study intended to include and what will the study's endpoints be?
– The first phase II study will include patients with metastatic and drug-resistant colorectal cancer. Since SCO-101 has never been combined with chemotherapy, we will begin the phase II study with a so-called run-in phase where groups of 3 patients will receive increasing doses of SCO-101 in combination with standard doses of chemotherapy. Once we have determined the optimal SCO-101 dose, an additional 15 patients will receive the combination treatment. In total, we expect to include 21 patients in the study.
– The study's endpoint is objective response (tumor shrinkage) and safety. In addition, we are developing so-called predictive biomarkers to be able to select the patients who have the greatest chance of benefiting from SCO-101 treatment in combination with chemotherapy.
After the start of the study at the turn of the year, you hope to be able to communicate the first efficacy data as early as Q2 2020. How come you believe you will have results so quickly?
– The run-in portion of the study that I mentioned above will include six patients in the final dose group. It is the data from these six patients – who received the optimal dose of SCO-101 and chemotherapy – that we will be able to report in Q2 2020.
»We have therefore chosen to proceed in two indications and with two different chemotherapy drugs. I expect that in both studies we will see an added effect by combining SCO-101 with chemotherapy. With such results, we will be a very attractive company!« – Nils Brünner, CEO Scandion Oncology
Shortly after the start of the phase II study in metastatic colorectal cancer, you also plan to initiate a phase II study in breast cancer with the same candidate. Why have you chosen parallel development within two development tracks for SCO-101 and do you expect the results to differ between the indications?
– There are several reasons. I now have a management team that covers all the competencies needed to successfully conduct clinical phase II studies. We have produced more than 10 kilos of SCO-101 and the response we received during the meeting with the Danish Medical Products Agency was extremely positive. The clinical investigators (4 different oncology departments) are also very eager to use SCO-101 as many of their patients lack treatment options. Finally, my discussions with big pharma have convinced me that we need at least two clinical phase II studies with positive results to secure the most valuable partnership or licensing agreement possible.
– We have therefore chosen to proceed within two indications and with two different chemotherapy drugs. I expect that in both studies we will see an added effect by combining SCO-101 with chemotherapy. With such results, we will be a very attractive company!
You are developing drugs that are designed to counteract resistance to other drugs. Do your candidates have any disease impact/treatment effect even if they are not combined with other drugs that are designed to attack the cancer itself?
– The results from clinical phase I show that SCO-101 has only one effect besides blocking resistance. That effect involves a liver enzyme that helps to get rid of breakdown products from hemoglobin, the molecule in red blood cells that binds oxygen. The inhibitory effect is reversible and has no significance for the phase II plans.
»The goal is for SCO-101 to be used in combination with chemotherapy as soon as the patient is diagnosed with cancer. In this way, it would be possible to kill the drug-resistant cancer cells that are present in the body as early as the time of diagnosis, and then the patient should be able to be cured without the risk of disease recurrence.«
It is widely known that cancer drug resistance is a major treatment problem that ultimately leads to the death of many cancer patients. Those who develop treatment resistance are usually attributed a rather dismal prognosis. How much benefit could a drug that reverses resistance have for this prognosis? Is it possible to cure the disease in this patient group or will your candidates primarily contribute to prolonging the lives of people with incurable cancer?
– My vision is that by combining SCO-101 with standard chemotherapy, we will be able to cure significantly more cancer patients than we do today. In the planned phase II study, we will recruit patients with metastatic and drug-resistant cancer. I expect that the addition of SCO-101 to these patients' treatment will prolong their survival.
– However, the goal is for SCO-101 to be used in combination with chemotherapy as soon as the patient is diagnosed with cancer. In this way, it would be possible to kill the drug-resistant cancer cells that are in the body as early as the time of diagnosis, and then the patient should be able to be cured without the risk of disease recurrence. Unfortunately, recurrence is common today.
You have previously said that you have received a positive response when you have spoken to clinicians about your development pipeline. Can you tell us about this and what the positive response is due to?
– Being an oncologist is a wonderful job where you can really make a difference for cancer patients. It is also a tough job because almost half of your patients will eventually die from their disease. Having access to a drug like SCO-101 means that you can give hope to many cancer patients who would otherwise be told that there are no other treatment options when the cancer has developed resistance.
– My clinical colleagues therefore see SCO-101 as an exciting new opportunity to reduce the frighteningly high mortality rate in cancer. This is also the reason why they have chosen to participate in the work by including their patients in the SCO-101 study.
How do you think the positive reception will affect your chances of achieving significant market penetration in the event of future market approval?
– Today, there are no drugs on the market that are similar to SCO-101. Since the medical need is so great, I expect rapid and deep market penetration.
Do you intend to enter into agreements for your respective products and, if so, when in the development process is this relevant?
– I expect to see a lot of interest from potential partners and licensees as soon as we have treated the first patients. It is important that we create maximum value for Scandion Oncology and its shareholders through the clinical studies.
When evaluating potential future partners, do you see your candidates as a subcomponent in combination therapies where the partner's drug is another component, or do you see your candidates as general products that can be combined with several different chemotherapies?
– At the moment, both options are definitely possible, but it is too early to speculate about it now.
You also have an ongoing project in antibiotic resistance, but the idea is mainly to further develop it together with external actors. Are there any discussions going on for this?
– Unfortunately, I cannot give you any details about this yet.
In addition to cancer drug and antibiotic resistance, do you see any potential for your treatment concept in other disease and/or treatment areas and, if so, which ones?
– Scandion Oncology will focus on cancer treatment and drug resistance. If we identify treatment areas outside of cancer, these will be out-licensed or spun off into separate companies.
»As soon as we have treated the first patients with SCO-101 in combination with chemotherapy, which will happen in late 2019 and early 2020, we will be ready to present all preclinical and clinical data to potential partners and licensees of SCO-101. We are already planning to begin such meetings in January 2020.«
Already in connection with your IPO in the fall of 2018, you flagged that you would raise capital in 2019. Now you are doing just that through an issue of just under SEK 30 million and a warrant of just over SEK 12 million with a subscription period in the fall of 2020. A fully subscribed issue will cover your capital needs until mid-2021, and if the warrant is fully exercised, you will be able to make it until the end of 2021. You seem to have a relatively low burn rate in relation to other companies active in oncology, especially considering your two upcoming phase II studies. What is the reason for this?
– It is true that our burn rate is relatively low. The reason is that we have already paid for the drug production. In addition, we are conducting so-called Investigator Initiated Trials, which means that Scandion Oncology will only pay for the addition of the SCO-101 treatment while the hospitals will pay for all standard care. I see this as proof of a great commitment from our clinical partners.
– As I mentioned earlier, around DKK 100 million had already been invested in SCO-101 when we obtained the rights to the candidate, even though it was in a non-cancer indication. It is especially the clinical phase I study with 92 healthy individuals that has been costly. Following the decision from the Danish Medicines Agency, Scandion Oncology does not need to repeat the phase I study, but can continue directly with a phase II study, which has saved us a lot of money.
– Finally, the study includes patients with advanced disease that also exhibits drug resistance. This means that we will not need to include very many patients to be able to prove the effect of SCO-101 in combination with standard chemotherapy, but we expect to treat only 21 patients.
According to your prospectus, three quarters of the capital injection will be used to finance the two phase II studies in mCRC and breast cancer. Furthermore, around 9 percent will be allocated to patent and business development activities, what will these activities consist of?
– As soon as we have treated the first patients with SCO-101 in combination with chemotherapy, which will happen in late 2019 and early 2020, we will be ready to present all preclinical and clinical data to potential partners and licensees of SCO-101. We are already planning to begin such meetings in January 2020.
You believe you can obtain research grants – soft money – to finance a third phase II study in breast cancer with SCO-101. What do you base that on?
– Scandion Oncology has already received several EU grants. We will use these as stepping stones to apply for the large grants of 2-3 million Euros. When our CSO Jan Stenvang and I worked at the University of Copenhagen, we received several million DKK for our research. For example, we ran the Danish-Chinese Center for Cancer Drug Resistance, for which we received about 32 million DKK from the Danish The Swedish National Research Foundation. So we have a lot of experience when it comes to grant applications.
»We have two other candidates that block cancer drug resistance. […] With these three candidates (SCO-101 + the other two), I think we cover about 60 percent of all cancer treatments.«
What milestones do you expect in the near future for the rest of the pipeline, beyond SCO-101?
– We have two other candidates that block cancer drug resistance. We want to advance these so that they are ready for clinical trials. These two candidates cover different cancer types and resistance mechanisms than SCO-101 does. With these three candidates (SCO-101 + the other two), I believe we cover about 60 percent of all cancer treatments.
If you were to approach an investor who is considering investing in Scandion Oncology but needs that little extra push, how would you motivate them that it is a good investment decision to participate in your issue?
– The medical need is extremely large and it is urgent. The market is very large and since SCO-101 is a tablet, it will be easy for the healthcare system to adapt to using SCO-101. So financially it looks good.
But what is even more important to me is that we are now introducing a new way to treat cancer. There is a huge need for new approaches because nearly half of all people diagnosed with cancer today die from their disease. We simply have to give SCO-101 a chance to become a drug that makes a big difference in cancer treatment.
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