Oxford Pharmascience: rebranded and focusing on pharma

The news earlier this year that drugs giant Pfizer would close its UK research centre was reflective of how major pharmaceutical companies are having to face up to a tougher business environment caused by increased competition, patent expiration on popular drugs and disappointingly few innovative replacements for out-of-patent drugs.

Companies like Pfizer need to find new ways to differentiate their products from competitors, and this provides opportunities for smaller companies in the life sciences industry. One such firm is Oxford Pharmascience (LON: OXP).

In May the firm changed its name to Oxford Pharmascience (from Oxford Nutrascience) to reflect a change of strategy that will see it focus on bringing its technologies to the pharmaceutical sector

“The model is changing for the big pharma companies,” says Nigel Theobald – the firm’s chief executive officer – who explains that the risk of bringing new drugs to market is high, while there is increasing competition to produce generic drugs that have been around for so long that they are no longer protected by patents.

Oxford Pharmascience believes it has an opportunity to help pharmaceutical companies differentiate their products for the generic drugs market with its drug delivery knowhow. “What we want to do is look at using our technology to enhance the performance of existing generic drugs,” says Theobald, who points out that the over-the-counter drugs market is already looking for more formats that drugs can be delivered in.

The firm is already developing chewable and liquid ibuprofen products that it intends to commercialise via over-the-counter (OTC) and prescription markets after it made a deal with Oxford University’s technology transfer company Isis Innovation in February this year.

Oxford Pharmascience says this technology provides for “outstanding” taste masking, enhanced drug stability and potential for “tuneable” drug release properties.

A major problem with ibuprofen is that some patients who use it, particularly children and the elderly, suffer from dysphagia (swallowing difficulty) while the drug itself can produce a burning sensation in the mouth at higher dosage. By combining Oxford Pharmascience’s own chewable tablet (“Chewitab”) technology and the taste masking system the firm believes it can develop a solution to the problem associated with higher dosage levels of ibuprofen in the non-tablet format.

This is of particular value to sufferers, for example, of arthritis who require regular and high-dosage levels of the pain reliever.

Chewitabs produce a light crunch when bitten and then dissolve quickly in the mouth, which means they can be taken without water. The company says that they are well suited for convenience-driven OTC medicines (including analgesics, allergy treatments and digestive aids) and medicines for the elderly.

Oxford Pharmascience also has a liquid suspension technology aimed at gels and syrups. Although gels and syrups are used for a range of medicines and nutraceutical (health food) products, they pose a number of challenges such as the dispersal of hydrophobic ingredients, maintaining stability and providing for acceptable sensory properties.

The combination of the technologies means that Oxford Pharmascience is able to produce higher single-dose ibuprofen chewable tablets and suspensions that do not cause any irritation or burn in the throat. The technology is already patent-protected in the UK, France and Germany, while a patent is pending in the US.

The firm expects to deliver completed dossiers for the 200mg and 400mg chewable ibuprofen tablets it is currently developing in 2012. Meanwhile, it is also developing a 400mg ibuprofen per 5ml liquid suspension product that will also be totally taste masked.

The firm plans to achieve similar deals that utilise university intellectual property in future. “We adapt it, build on it and make it more commercially viable,” says Theobald.

As far as the taste-masking technology is concerned, it is also applicable to a broad range of pharmaceuticals including major drug categories such as NSAIDS (Non-steroidal Anti-inflammatory drugs) and statins. Oxford Pharmascience plans to use the technology to develop and launch additional products in these areas.

So far the bulk of the company’s revenues has come from sales of its Ellactiva-branded calcium, supplements particularly in the Middle East, and during 2010 these revenues more than doubled to £123,000 (2009: £54,000).  The increased pre-tax loss of £830,000 (2009: £229,000) was in line with forecasts, according to the firm, and reflected both spending on technology development and the scale up of commercial activities.

Before it decided to pursue its pharmaceuticals-focused strategy Oxford Pharmascience’s attention had been concentrated on its nutraceuticals business, particularly its calcium supplements.

“While calcium will remain a strong part of our portfolio we recognise that we have a fantastic technology that is highly transferable from supplements to the larger, higher-value pharmaceutical market,” says Theobald. “We have completed much of our development and testing in the nutraceuticals industry, but it is the pharmaceuticals clients that will pay handsome milestone payments for firms that add value to their products.”

As far as the future is concerned, Oxford Pharmascience’s focus is now very much on coming up with solutions to help big pharma find better ways of delivering their drugs. “We’re always looking at where there is a particular problem that we can help with,” says Theobald.

Oxford Pharmascience joined London’s Alternative Investment Market in early 2010, raising £1.1 million through a placing of almost 63 million shares at 1.75 pence each. During the past year they have traded for between two pence and 5.375 pence, the high being reached in the weeks after it announced its taste-masking deal with Oxford University in February.


Market: AIM

Symbol: OXP

Price: 3.25p

Market cap: £15m