“We say what we do and we do what we say,” states Pila Pharmas CEO and founder Dorte X. Gram after releasing its first quarterly report since the stock was listed on Nasdaq First North Growth Market during the summer. The listing is clearly considered one of the year's major events for the company, which at the same time raised SEK 35 million to finance the further development of the drug candidate. XEN-D0501 against type 2 diabetes.
The company's guiding principle Nobel Prize-winning
The candidate targets the so-called TRPV1 receptor, which received a lot of attention this fall after it was announced that its discoverer, the American David Julius, will be awarded the 2021 Nobel Prize in Medicine. The discovery that the receptor plays an important role in how people experience temperature and pain was a major breakthrough in understanding how the brain processes different sensory expressions. You can read more about the nomination and its potential impact at Pila Pharma here.
Pila believes in a broader role for TRPV1
According to the company, however, the TRPV1 receptor has an even greater role and is believed to also affect our insulin secretion and insulin sensitivity. The theory has been further strengthened by the fact that a phase IIa study was able to see a clear insulin response in type 2 diabetics treated with XEN-D0501. The next step for Pila Pharma is to have the results confirmed in a larger phase IIb study where the primary goal will be to reduce blood sugar over a longer period. In the study, the candidate will be tested on between 250 and 300 patients over a period of three months. According to the current plan, it hopes to be able to present results in early 2024.
The company has previously secured XEN-D0501 tablets for the study and recently received GMP certification for the intended placebo tablets.
Prepares toxicology and finalizes negotiations with CRO
However, to initiate the next clinical development phase, additional preclinical studies, such as a toxicology program, are required. Production of XEN-D0501 substance for the tox studies is in full swing and final negotiations are currently underway with a Contract Research Organization (CRO) on the implementation of the program. In parallel, several different CROs are being evaluated for the execution of the upcoming Phase IIb study.
CEO comments
BioStock contacted Gram for comment on the first quarterly report as a listed company.
You are reporting an eventful quarter, where you were listed and at the same time raised SEK 35 million. How do you view the company's financial situation?
– Right now our coffers are full and it is more than enough to finance the planned initial activities to develop the Active Pharmaceutical Ingredient (API) and to test it in two animal species. This way we can first ensure that it is well tolerated in animals before we move on to testing it in humans.
– The plan is then to finance the clinical study by redeeming our TO1 at the end of May 2022. After that, we plan another issue, at a well-chosen time. We are already in dialogue with potential financial partners who want to be part of the next capital round and we consider it very likely that we will be able to finance the entire phase IIb study.
Given that the candidate has already been evaluated in Phase IIa clinical trials, what makes additional toxicology studies required at this stage?
– The regulatory authorities are responsible for protecting human health. To ensure this is done, they require that a substance to be tested in humans has first shown good safety in at least two animal species. The animal models must last for at least as long a period as the clinical study for which permission is sought.
– We are planning a three-month phase IIb study because that is the minimum requirement for the authorities – if we can demonstrate good efficacy – to let us proceed to phase III. Therefore, before the phase IIb study, we must conduct a three-month tox study.
– We already have data from one-month tox studies in two animal species, which Bayer conducted, which show that our substance is very well tolerated. We expect that this will also be the case after three months. Therefore, we see the tox studies as something that is necessary to meet the regulatory requirements for continued clinical development, rather than a high-risk moment. We are already underway with the API manufacturing, which is progressing according to plan, and we hope to start the tox studies before next summer.
The diabetes market is, as you know, huge. Given the positive Phase IIb results, how do you plan to position your candidate and what market potential can be expected?
– Yes, the diabetes market continues to expand and is probably already larger than the estimates we have. But the total diabetes market is estimated to be worth approximately SEK 400 billion per year. Half of this, approximately SEK 200 billion, is the market for tablet-based diabetes treatment. In the long term, we hope to be able to take 2 to 10 percent of this market segment.
– We are currently working on updating our risk-adjusted present value calculation, and we hope to be able to present new calculations of our potential value in the near future. But it is already clear that these are enormous sums.
You have previously communicated that you intend to out-license the candidate for a future phase III study. The market is naturally interested in this, not least considering that there are a number of large players in the diabetes field and that you yourself have a past from one of the largest, namely Novo Nordisk. What is your process for finding a future taker?
– We already have a well-developed contact network that includes potential partners. Our primary focus is therefore on ensuring good Phase IIb data, which in turn drives real interest from potential partners. Once the study is underway, in 2023, I will intensify these dialogues so that we have created the conditions for a quick agreement in good time.
– However, everything depends on the data the study generates. Right now, it is therefore important to optimize the study design, find the right study partners and build a competent organization that ensures that our study is of the highest quality.
If we instead focus on what's happening in the near future, what milestones do you see ahead?
– Work is currently underway to synthesize new active study material and we expect this to be completed in the spring. In parallel, we are planning the tox study and preparing to be able to start it as soon as the study material is ready.
– A third track is that we are working on formulating the study design for the phase IIb study. Once the design is in place, we will select a CRO partner. Before the summer of 2022, the partner will then find between 50 and 100 qualified clinics that can assist with patient recruitment and conduct the study.
– We are now a team of four employees and about ten consultants plus those who work with the synthesis. The plan is to expand the organization and in preparation for that, we are now preparing documents that describe Pila Pharma as a company, what drives us and how we work. When the documents are in place, around the turn of the year, the hiring processes can begin. I estimate that we need to expand by 4-6 people during the first half of next year.
– Overall, this means that we are a company under construction, which is very pleasing. We have just decided to move to larger premises because we already need more space for everyone working on the Phase IIb preparations!
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