Capital injection to bring Xspray to market

The Solna-based pharmaceutical company Xspray Pharma develops stable amorphous versions of established drugs. The company's patented HyNaptechnology makes it possible to improve the bioavailability and solubility of protein kinase inhibitors (PKIs), in particular. This is an important drug class in cancer treatment, representing a market of approximately USD 33 billion.

Traditionally, crystalline forms of the active substances are used in PKIs. One downside to this is that the absorption of the drug in the body can vary, depending on factors such as food intake or the use of pH-increasing drugs. The risk of high so-called variability is twofold; if the absorption is too low, the drug will have a lower effect, and if the absorption is too high, the risk of unwanted side effects increases.

Several advantages of Xspray's technology

Here Xspray wants to provide a better alternative. It is widely known that amorphous drug products provide better solubility and lower variability compared to their crystalline form, and that they are also pH independent. However, it is important to ensure that the amorphous state of the product is stable over time, otherwise the product tends to revert to a more crystalline state. This is exactly what Xspray’s HyNap technology enables – a stable amorphous drug product.

Another advantage of the company's technology is more patent-related, albeit central to the company's strategy. Big Pharma protects its blockbusters with multiple layers of patents, often focusing on crystalline versions of the drug. Once a main patent expires, opportunities may arise to launch an amorphous product.

Eyes set on BMS blockbuster

Such a situation has now arisen at the main project with DasynocThe drug candidate is a biobetter of BMS PKI Sprycel, which is used in the treatment of chronic myeloid leukemia and acute lymphoblastic leukemia and which last year sold for over USD 1,9 billion.

In bioequivalence studies, Xspray has shown that Dasynoc can be given at a lower dose than Sprycel and still achieve the desired effect, with significantly lower variability. The lower dose is expected to result in fewer side effects. In addition, absorption has been completely independent of the pH value of the stomach, which means that Dasynoc can be given in combination with gastric acid-inhibiting and gastric acid-lowering drugs, such as omeprazole.

On the road to market entry

When it comes to market launch, the initial focus is on the US. Xspray has already opened the door to the US market. The company is working to supplement its FDA application with the information on dosage and third-party manufacturing that the authority has requested. However, the FDA has not had any comments on the stability of the product or its clinical data.

The plan is to submit the supplement during the fourth quarter and the company expects a response within a maximum of six months. Upon approval, Xspray is ready with the partner Eversana, an experienced player in the marketing and sales of cancer drugs, who will be responsible for commercialization in the country.

However, Dasynoc is not the only project in Xspray's portfolio. Next up is XS003-nilotinib which is an improved version of Novartis Tasigna. The next step here is pivotal studies in healthy volunteers, which are planned to begin next year. The portfolio also consists of the candidates XS008-axitinib and XS025-cabozantinib, which is undergoing formulation development.

Issuance and loans drive launch

To finance the commercialization of the product portfolio and the launch of the first product next year, Xspray is currently raising capital totaling SEK 235 million, consisting of a rights issue and a loan with subscription rights attached. The issue is for SEK 135 million and is fully covered by subscription commitments, letters of intent and guarantees from several of the company's major owners, including well-known investors such as Flerie, The Baltic Sea Foundation and Fourth AP Fund.

The loan of SEK 100 million comes from Fenja Capital II and Bundle, who are simultaneously allocated 1 warrants. These give the right to subscribe for new shares at SEK 150 per share until November 000, 50. After that, the subscription price of the warrants will be increased to SEK 6 per share until November 2025, 60.

The proceeds from the capital raising will primarily support market preparations, as well as building up stocks of Dasynoc in preparation for potential FDA approval. Parts of the proceeds will also be allocated to ongoing development activities in other projects.

In the event of market approval for Dasynoc, the plan is to raise additional loans totaling SEK 200 million to cover the increased costs expected in connection with the launch, such as inventory, accounts receivable and marketing.

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