Arcede Pharma specializes in developing treatments for respiratory diseases such as chronic obstructive pulmonary disease (COPD). Their drug candidate RCD405 is designed to not only relieve symptoms but also address the underlying causes of COPD.
RCD405 stands out from existing treatments through a combined mechanism of action, which both dilates the airways and reduces inflammation. Arcede Pharma hopes that this will lead to a more effective treatment for COPD patients, while also having a more favorable side effect profile than current treatment regimens.
Sees great market potential
With RCD405, the company is targeting one of the largest pharmaceutical markets. In an attempt to estimate the potential, an analysis was recently conducted based on two different scenarios for the drug candidate. In the first scenario, RCD405 is introduced as an add-on treatment to already established COPD drugs and this sees potential annual sales of approximately EUR 2 billion in the US and the four largest countries in Europe.
In the next scenario, RCD405 is seen as a first-in-class treatment with disease-modifying properties. In that scenario, sales could reach over EUR 16 billion annually, according to the company.
Tox program completed
The company took the last major preclinical step with the candidate last fall, when it was able to complete the toxicology program. From a regulatory perspective, the door is thus open to taking the next step in development, clinical phase I studies. Enough so that the project has promising preclinical data behind it, but it is only now that we can get an indication of how RCD405 will work in humans.
Preparations continue
Before the company can dose its first participant, however, it needs to do some preparatory work. The most important thing here is to find the right dosage and concentration to ensure that it has a good effect in humans, without compromising on safety.
Arcede Pharma works together with two research groups at Lunds university and Karolinska Institute, who also continued to study the candidate's effect. In that work, they were able to show that RCD405 has both airway relaxant and anti-inflammatory effects in two different disease models of airway inflammation.
This is data that they hope to present in one of the scientific journals that cover the field. In addition to the academic collaborations, Arcede Pharma is also working together with the inhaler company Iconovo, who is responsible for the actual formulation of the drug.
If the work goes according to plan, it is expected that the project will be able to enter the clinic next winter.
TO1 will finance preparations for the clinic
To finance the preparations for the clinical development stage, the company is currently exercising the TO1 warrant, which was issued in connection with the summer rights issue. Arcede then received an additional SEK 9,2 million and if TO1 is fully utilized, the company will receive an injection of approximately SEK 10 million, before fees and issue costs. The TO1 subscription price is set at SEK 0,09 per share, which is approximately what the Arcede share is trading at at the time of writing.
Chairman comments
In connection with the capital raising, BioStock contacted Arcede Pharma's chairman of the board Ingemar Kihlstrom, to find out more about the development.
There are many established treatments for COPD and asthma, how do you plan to position yourself in the market?
– Since we have a new mechanism of action and a dual effect, we hope that this is a treatment that can be started at a much earlier stage of the disease and thereby prevent the disease from worsening. In this way, we target not only those who are already receiving treatment, but also those who have not previously been treated because they are at an earlier stage of the disease.
You recently conducted an analysis of the market potential for RCD405. Can you tell us a little more about the two scenarios you developed and how you calculated the potential in each scenario?
– We have developed these two scenarios in collaboration with experienced consultants in the field. They have taken into account the total proportion of the population with COPD in each country included in the analysis and then looked at how many of these patients would be eligible for the different types of treatment.
– They then estimated the percentage of these who would be prescribed the treatment based on estimates from similar types of drugs in asthma, COPD, but also other inflammatory diseases.
– So it is a fairly complex analysis with several variables and which may of course change the more we understand about the exact mechanism of action.
You recently announced that CEO Mia Lundblad has chosen to move on to a position outside the company. How is the search for a new permanent CEO going?
– The work of recruiting a new CEO has already been initiated through a recruitment firm.
In the meantime, you will take over as acting chairman of the board, while your CFO Erik Magnusson will become acting CEO. How have you divided the responsibilities between you?
– The board has decided that Erik will be acting CEO from February 1st with full responsibility for the daily operational work. As I have extensive experience of the project from my time at Respiratorius, my task will be to support him in R&D issues and long-term strategic tasks.
You are currently in the process of paying for your TO1. How will the money from that be used?
– If the warrants are fully subscribed, the company can receive approximately SEK 10 million, before issue costs. This contribution will help us prepare for Phase I, including completing formulation activities and starting production of the substance.
What do you think makes Arcede an attractive investment right now?
– The most important thing is to be able to carry out as many of the planned activities as possible before the start of phase I to reduce the risk of delay and so that we can start the first clinical study as early as next winter.