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INVESTMENT OVERVIEW

Synairgen expands mid-stage COPD study as it raises £2.9mln from investors

The drug developer had originally to recruit 80 people for the second part of its phase II study of its SNG001 treatment, but it will now assess 120 patients
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The £2.9mln placing will fund the trial expansion as well two early stage investments

Synairgen plc (LON:SNG) boss Richard Marsden said his company made “good progress” in the first half of 2018 as it continues to develop a cold and flu treatment for chronic obstructive pulmonary disease (COPD) sufferers.

Typically, people with COPD are five times more likely than asthma sufferers to exacerbate cold and flu symptoms.

Part two of trial expanded to 120 patients

The first part of a mid-stage trial concluded earlier this year and involved dosing ten people who had no evidence of viral infection to examine levels of antiviral biomarkers in response to SNG001.

The results showed that not only was the inhaled interferon beta treatment safe and well tolerated but that it also boosted antiviral defences in the lung to prevent viruses spreading from the upper respiratory tract (nose, mouth and throat).

READ: Synairgen and why DCF analysis doesn’t provide the full picture

Chairman Simon Shaw said this response to the drug was “crucial” as it demonstrated proof of mechanism.

A second part to the trial is set to get underway during the 2018/29 winter cold virus season and has been designed to measure what Synairgen describes as “efficacy endpoints” and biomarker levels in patients with a respiratory virus.

A total of 120 patients will now take part – up from 80 previously – receiving either SNG001 or a placebo that has no medical impact on the person receiving it. A readout from the study is due in the second half of 2019.

£2.9mln fundraise unveiled

To help fund the trial’s expansion, Synairgen unveiled plans to raise £2.9mln from investors on Tuesday.

The company is selling 109,375 new shares at 16p apiece – an 11% discount to Monday’s closing price.

The cash injection will also be used to fund investment in “two new early-stage opportunities” which the board has identified.

WATCH: Synairgen pleased with further data from lead COPD drug

On top of that, it will boost Synairgen’s cash resources, which stood at £5.3mln at the end of June (H1 17: £3.1mln).

For the six months ended June 30, Synairgen recorded an operational loss of £1.9mln (H1 17: £1.6mln), reflecting increased R&D costs as it pushed ahead with the mid-stage COPD study.

“Good progress”

“Synairgen has made good progress in the first half of 2018,” said chief executive Richard Marsden.

“We are pleased to see that the phase II clinical trial assessing interferon beta in COPD has started well and we look forward to continuing with the second part of the trial later this year.

“Our efforts will also focus on a number of potentially interesting collaborative opportunities to further strengthen our pipeline of therapies.”

Fibrosis compounds in phase I trials

Away from its lead drug, Synairgen also has a collaboration with Pharmaxis developing Lysyl Oxidase type 2 (LOXL2) inhibitor PXS-5382 to treat lung and liver fibrosis, which is currently in phase I clinical trials.

Late last year, the two re-cast their agreement with Synairgen receiving £5mln and the promise of a 17% share of any future partnership deal Pharmaxis is able to negotiate.

Data from the study is expected later this year, after which the programme should be ready for out-licensing.

READ: Synairgen's new fibrosis collaboration terms will free it to work on other areas

It is clear both companies are cautiously optimistic of success, too, with Pharmaxis saying back in July: “This is still early days but both drugs so far have good safety profiles, behave in a predictable fashion as the dose is increased and most significantly we have managed to measure their impact on the target LOXL2 enzyme in human serum.

“Both compounds achieved a significant and long-lasting inhibition which positions them as best in class drugs.”

Pharmaxis has also said that there has been increased interest in both of the drugs and that finding a partner would be its “number one objective” for the rest of this year.

Shares fell 8% to 16.5p on Tuesday afternoon in response to the slightly discounted placing.

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