Biosergen is carrying out a SEK 40.5 million rights issue to conduct a first-in-patient safety and efficacy study with the antifungal drug candidate BSG005. This will set the stage for the phase II and III clinical studies, which will be financed and undertaken in collaboration with the Indian partner, Alkem. BioStock contacted Biosergen CEO Tine Kold Olesen to get more insights.

Swedish biotech Biosergen is targeting an important unmet medical need and major global health threat: invasive life-threatening fungal infections. These infections arise primarily in patients with a weakened immune system, e.g. cancer patients, transplant recepients or HIV patients, and are characterised by a mortality rate of up to 90 per cent within the first two weeks of onset. Designated as an emerging global health threat by WHO, it is estimated that 2.5 million people die from invasive fungal disease each year, regardless of other underlying diseases.

Kills broad spectrum of fungi

The company´s drug candidate BSG005 is an anti-fungicide that kills a broad spectrum of fungi. Its stand-out feature is its ability to kill the fungi, thereby minimising the risk of multi-drug resistance, which is an emerging global health threat. Additionally, BSG005 manifests a superior safety profile compared to current treatment options.

Taken together, validation of this candidate’s characteristics will allow for wide use as it enables treatment of patients with a weakened immune system. In the future, it could also be used to treat unspecified fungal infections in other groups of patients, such as those with diabetes and COPD, which today are underserved with unmet medical needs, and for whom more efficient treatment could be lifesaving.

Entered into partnership last fall

BSG005 been shown to be safe and well tolerated in healthy volunteers and, in the fall of 2023, Biosergen teamed up with the pharmaceutical company Alkem to advance the project further. More specifically, Alkem will finance and conduct the phase II and phase III trials necessary for regulatory approval in India.

This partnership underscores BSG005’s global promise, with Alkem absorbing clinical trial costs in exchange for full commercial rights in India.  Some of Alkem’s investment will also be converted into Biosergen shares at a premium price. Meanwhile, Biosergen retains the rights to commercialise BSG005 in the rest of the world, and thus aims to advance the drug’s development in all other markets.

Rights issue to finance first efficacy study

This year, the partners are set to initiate the first-in-patient safety and efficacy study for the candidate. This trial will focus on patients with resistance to or intolerant to currently existing therapies, addressing a significant unmet medical need as these patients have not responded to currently available treatments. The top-line results of this study are expected in the fourth quarter of 2024.

To finance these advances, Biosergen is conducting a rights issue, looking to raise initially 40.5 MSEK. In addition to financing the study, the rights issue proceeds are also covering the cost of substance manufacturing for the upcoming phase II and III studies.

Comments from the CEO

BioStock contacted CEO Tine Kold Olesen to learn more about the development of BSG005 and the capital raise.

BSG005 is targeting invasive fungal infections. Can you give us a brief overview of the current treatment landscape?

– Based on a highly impactful publication released in January 2024, the incidence of life-threatening fungal disease is 66 per cent higher than previously estimated. It is primarily affecting people with a weak immune system. Though, surprisingly, COPD patients in particular have not previously been recognised as patients at risk, which will markedly change the needs of any antifungal therapy in the future.

– Today there are three main categories of treatments, two of these categories are not broad-spectrum and associated with high risk of drug-resistance as they merely inhibit the growth of fungi. Some of these anti-fungals are also widely used in agriculture, leading to the formation of drug-resistance becoming a major global issue.

– The third category of anti-fungals are broad spectrum and kills the fungi with little risk of formation of drug-resistance. This is excellent but importantly the use of these compounds is limited due to severe side effects. BSG005 belongs to this category of broad spectrum anti-fungals, but was genetically modified to be safe and data from a phase Ia trial of healthy volunteers has shown that this is the case.

Provided all goes well in the upcoming development, what difference will BSG005 make for patients and caregivers?

– With BSG005 being broad-spectrum, killing the fungus and thereby avoiding drug resistance while also being safe, it will give patients and caregivers a higher hope for survival. Also note that some patients have multiple fungal infections and if you only target one of the fungi, then others will take over.

Before starting the phase II programme, you have decided to conduct a smaller efficacy study. Can you elaborate on your development strategy?

– We have decided to start with some of the most difficult patients to treat. This is in line with our mission of treating resistant and/or difficult to treat invasive fungal infections. BSG005 was designed to help these patients. If we can show positive safety and efficacy data, we have opened the door to a rescue treatment programme, and, at the same time, we will have data to show that we have a strong value proposition.

Right now, you are looking to develop BSG005 for the Indian market together with Alkem. What are the plans for the rest of the world?

– In the co-development agreement, Alkem is responsible for India. Biosergen can develop BSG005 in the rest of the world. We can run phase II and III trials within the same indication. All trials will follow world-wide guidelines with the purpose of compiling the data to be used for global regulatory purposes. This strategy will require regulatory advice as we progress in the development.

How will you be able to leverage the data coming from the Alkem partnership in establishing a partnership for other markets?

– The immediate plan with Alkem is to generate more patient data. More patient data will definitely attract other major investors.

You took the helm of the company just this February. Why are you best suited to drive the continued clinical development alongside your partnering efforts?

– Educationally, I have both a scientific and a financial background. I have 25 years of global experience in developing novel treatments from very early clinical stage (first-in-man) through regulatory approval and lifecycle management, working both hands-on and from a strategic perspective. My prior experience also includes co-development efforts with major global pharmaceutical companies. I have been the COO in Biosergen for the past 2.5 years leading up to the transition in leadership.

You are looking to raise an initial SEK 40.5 million through the rights issue. What are your best arguments for participating in this capital raise?

– We are a clinical stage biotech, meaning some of the early uncertainties, such as the safety profile, have been addressed, resulting in that the compound has much higher probability of success. We have entered the clinical stage in intensive care settings, which translates into much shorter timelines for clinical follow-up than e.g. cancer. We are in a therapeutic field where there is a very high unmet medical need.

– There is awareness from the authorities to get more effective antifungal treatments and, finally, the market is much larger than anticipated. My estimate is that we can have a treatment ready within 5 – 6 years for the first indication.

– In summary, both external and internal factors as well as the very attractive terms and conditions of the offer makes it very attractive to invest.

This material has been created for marketing purposes and is not and shall not be deemed to constitute a prospectus under applicable laws and regulations. The complete terms and conditions of the rights issue and more information about the company have been presented in a prospectus that was published on biosergen.net March 5 2024.

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