In-depth partnering discussions for Respiratorius
Lund-based Respiratorius is at a crucial stage with its drug candidate VAL001. In the year-end report, CEO Johan Drott emphasises that finding the right partner and securing an agreement is a process that requires patience. In-depth discussions are currently underway with a potential taker, and BioStock has spoken to Johan to learn more about the progress.
Respiratorius has developed the drug candidate VAL001 for the treatment of diffuse large B-cell lymphoma (DLBCL). The candidate is intended to be used as a pre-treatment, given before today’s standard treatment for the disease, R-CHOP. The company has strong data from previous studies. Based on that, the European Medicines Agency (EMA) recommended taking the project directly into phase III, thus skipping additional phase II studies. One phase III study is expected to be enough to move VAL001 to market, given positive results.
Respiratorius has developed a new patented formulation, meaning that the product itself is fully development. All that remains is to take the project through the final phase of clinical trials before launch, which requires a financially strong partner.
In-depth discussions with potential partner
In the fourth quarter report for 2023, the company announced that it is at a crucial stage in its development. During the year, they held discussions with potential partners and sound out the market to find additional stakeholders. While there has been positive feedback and interest in the project, the stumbling block lies in the investment required to take it through phase III.
Respiratorius has deepened discussions with a potential partner, but the report highlights that several challenges remain before an agreement can be reached. The team is working diligently to address these challenges and hopes to present the outcome of this effort shortly, especially considering the company’s financial position. Taking a quick look at the report, the cash flow for the quarter was SEK -0.9 million and the cash balance amounted to SEK 1.9 million at the end of 2023.
CEO comments
BioStock has reached out to Respiratorius CEO Johan Drott to learn more.
You state in the report that you have intensified discussions with a potential partner, but that several challenges remain. What type of challenges are these?
– At the current stage, I cannot go into details regarding the challenges. We will continue to systematically address these and drive the process forward at the highest possible pace. We do face a challenge in terms of time considering the liquidity of the company.
You also express that “a lot of time is devoted to reaching an agreement with the counterpart” and less time to discussing monetary figures between the companies. Can you elaborate?
– The substantial investment is preceded by a thorough decision-making process. Of course, there are different perspectives that need to be evaluated and balanced with the counterpart. Agreement is also crucial for the ongoing progress of the development.
You often mention the substantial investment needed to advance the project through phase III as a major reason for the difficulty in reaching an agreement. What possible solutions are there for this?
– The parameters are quite fixed due to the size of the study, but we have addressed risks and conducted a prediction of outcomes in a phase III study based on our previous clinical results. As previously communicated, we have demonstrated a high likelihood of a positive outcome in a phase III study. Considering that valproate has a well-established safety profile, our assessment is that we have laid a solid foundation regarding risk assessment.
In the report you write that Respiratorius has made a SEK 10 million unconditional equity contribution to Valcuria. Can you tell us more about why this is being done?
– This change is made to settle a loan to Respiratorius that has financed development costs in Valcuria AB, which Respiratorius owns 100 percent of. It is about refining he group’s financial statements, where there was an imbalance regarding Valcuria. It does not change Respiratorius’ overall financial situation.
The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.
