Tiziana Life Sciences: Transformational potential
Tiziana Life Sciences lead programme Foralumab is notable in that not only is this the only fully human anti-CD3 specific mAb in clinical development, with broad potential for a range of inflammatory and autoimmune diseases, but also due to the novel proprietary formulations being developed by TILS for nasal and oral administration. These ground-breaking approaches can not only reduce the toxicity seen with systemic treatment they may also be more efficacious than standard injected biologics. Broadly, if clinical study outcomes are positive, this can potentially revolutionise treatment in the mAbs market which has a projected value over $130bn by 2025, comprising the best-selling drugs in the world.
The company is also accelerating the development of TZLS-501, a fully human anti-IL6R mAb, towards the clinic for COVID-19 treatment. The innovative delivery route via handheld nebulizer or inhaler to the lung, directly targets the main site of inflammation.
In July TILS filed a patent application on the use of Foralumab, to enhance success of chimeric antigen receptor T cells or CAR-T therapy. The approach covers the use of anti-CD-3 mAbs administered alone or in combination with other therapies to enhance CAR-T treatment, which is a highly promising space being developed for unmet need in cancers and other human diseases and could lead to the wide use of Foralumab if safe and efficacious.
Tiziana’s Phase I clinical study of oral Foralumab in Crohn’s Disease showed its proprietary oral formulation of Foralumab to be well tolerated. Phase II trials are planned in H2 20. Its alternative formulation and safety profile could provide a very attractive alternative to blockbuster IV drugs which registered c $4bn in Crohn’s in 2018. . Tiziana recently received the first-ever patent on oral delivery of all anti-CD3 monoclonal antibodies for the treatment of human disease supporting the differentiated approach.
Nasal Treatment with Foralumab for secondary progressive MS was well-tolerated in a Phase I trial and induced positive trends in biomarkers of immunomodulation and anti-inflammation in healthy volunteers. Data from these two Phase I trials with alternative oral and nasal routes of administration indicated that the toxicities that are commonly observed with anti-CD3 IV treatment were not observed. Moreover, data from biomarkers analysis also suggested upregulation of IL-10 and Tregs, which are vital to produce an anti-inflammatory effect and significantly, have the ability to cross the blood-brain barrier. In contrast, the majority of treatment approaches have not succeeded in crossing the barrier, hindering the ability to treat neurodegenerative diseases. The value of the MS treatment market is around $20bn, according to analyst estimates.
TILS is moving the development plan aggressively aiming for IND filing for TZLS-501 for treating COVID-19 respiratory complications in Q1 21. To our knowledge TILS is a pioneer in developing anti-IL-6R mAbs for administration via a nebulizer or inhaler direct to the lungs and has filed a patent on the approach. Also, TZLS-501 showed attractive preclinical anti-inflammatory mechanisms vs the market leading anti-IL6R mAb (Roche), which is being developed for COVID. This could lead to efficacy at lower doses. These factors suggest TZLS-501 can have significant clinical and commercial differentiation. Urgent unmet need means that development of TZLS-501 could be accelerated, possibly leading to its widespread supply for investigational use. the EC recently signed with Roche to supply sufficient quantities of the drug to the 27 member states for studies.
The effective site targeted delivery of biologics is a key goal of industry giants such as AstraZeneca, which is focused on developing new delivery modalities including oral administration of biologics. So, we anticipate that TILS can attract interest from players in this field if outcomes are successful. TILS’ proprietary formulation technologies are applicable to other antibodies as well. Hence, they have the potential for considerable future growth for example by licensing new candidates for its own pipeline or as a licensing target for big Pharma.
Phase II candidate Milciclib is a potentially versatile anti-cancer therapy has been widely clinically tested, establishing its safety profile, and signs of clinical benefit in treatment-resistant solid tumours. It is due to enter Phase III studies in combination with a standard treatment in liver cancer during 2021 with the potential to address unmet need in the vast Asian markets.
Imminent prospects of demerging genomic risk assessment assay, StemPrintER, for breast cancer can enable the separate therapeutic and genomics entities to seek the most suitable independent funding or partnerships to move forwards and highlight the value of each segment as a ‘pure-play’. The rationale is compelling given StemPrintER’s superiority in a retrospective study, outlined in a featured abstract published online at ASCO 2020 to a standard assay that was recently acquired by an industry giant Exact Sciences (EXAS) in a $2.8bn deal. Industry metrics suggest that the current market valuation of TILS does not fully reflect its underlying therapeutic pipeline and attributes no value to StemPrintER, even at a discount to the takeover multiple paid by EXAS. We suggest a target valuation of up to £700m for its therapeutic programs, on executing milestones over the next 12-18 months, with StemPrintER providing pure upside to the current market valuation. Initiation of Phase II studies with Foralumab or Phase I for TZLS-501 in COVID are also likely to be key inflection points.
Background
TILS/TLSA is listed on the London AIM market and has American depositary shares (ADS) on NASDAQ. It was founded in 2013 by its Executive Chairman, Gabriele Cerrone and listed on London’s AIM in 2014 through its reverse takeover of Tiziana Pharma Limited. TILS is focused on developing a therapeutic pipeline spanning inflammatory, autoimmune diseases and cancer. Its lead candidate is Foralumab, an anti-CD3 monoclonal antibody in-licensed from privately held Swiss biopharma company Novimmune in 2014. It is being developed in Crohn’s disease and for MS via proprietary and innovative modalities, with the potential to tackle high unmet need in these and other autoimmune and inflammatory diseases. Phase III-ready candidate, broad-spectrum--Cyclin Dependent Kinase-inhibitor Milciclib (in licensed from Nerviano), is a promising therapy for liver cancer and other solid tumours. TILS is preparing to initiate Phase I studies of anti-IL6 mAb, TZLS-501, treating severe inflammatory complications of COVID-19. TILS’s therapeutic pipeline is illustrated in the following chart. In 2014 the company entered an exclusive license agreement to develop a stem cell-based breast cancer risk assessment assay, StemPrintER, based on the top 20 stem cell markers for patient stratification in breast cancer. It did so with the Italian Foundation for Cancer Research (FIRC), the Institute for Molecular Oncology (IFOM), and the European Institute of Oncology (IEO).
Potential de-risking events ahead include:
- Phase II trial start with Foralumab (oral) in Crohn’s Disease patients
- Phase II trial start with Foralumab (intranasal) in progressive multiple sclerosis
- IND enabling activities for TZLS-501 with clinical study start planned in early 2021
- Spinout of StemPrintER pending shareholder agreement
- Grant-funded preclinical studies of Foralumab in Alzheimer’s Disease
- Further news on the clinical strategy with Milciclib.
A step change in mAb development
TILS is taking an innovative approach by developing its lead therapy Foralumab, a fully-human anti-CD3 mAb via oral and nasal routes of administration to offer new hope in treating severe inflammatory and autoimmune disease. These ground-breaking approaches can not only reduce the toxicity seen with the systemic treatment they may also be more efficacious than standard injected biologics. If ongoing clinical study outcomes are positive, this can potentially revolutionise the treatment approaches in the mAbs market with a value projected over $130bn by 2025, which comprises some of the best-selling drugs in the world.
Foralumab is notable in that not only is this the only fully human anti-CD3 specific mAb in clinical development but, also, by virtue of the novel proprietary formulations being developed by TILS for nasal and oral administration. The CD3 antigen is a key regulator in the activation of T cells which belong to a group of white blood cells that play a key role in immunity. Anti-CD3 therapies can normalise T cell function in cases where the immune system is turning on itself, causing auto-immune disease. These novel modalities offer a ground-breaking approach since most mAbs are administered intravenously or subcutaneously, largely because of the difficulty in formulation so successful outcomes can offer a step-change in this important class – not only through the potential for improved efficacy and lower toxicity but also in convenience and therefore potentially the duration of treatment.
TILS is advancing the development of the autoimmune regulating and anti-inflammatory properties of fully-human Foralumab. The lead indications and formulations are:
- Orally administered lyophilized and stabilized free-flowing powder of formulated Foralumab encapsulated in an enteric-coated capsule, to treat moderate to severe Crohn’s disease
- An intranasal formulation for the treatment of secondary progressive multiple sclerosis for administration via an inhaler developed by Brigham and Women’s Hospital (BWH), Harvard Medical School.
Both approaches are based on topical or local targeting via activation of the mucosal immune system located in the GI tract and nasal passage. CEO, Dr Kunwar Shailubhai, invented the technology for the oral formulation, which has been developed to avoid degradation via stomach acids and to specifically target the GI tract. Intranasal administration of mAbs is an innovative and targeted approach towards immune manipulation of the Central Nervous System via the mucosal immune system of the nasal cavity.
Phase I clinical studies conducted by TILS to-date show both oral and intranasal formulations of Foralumab to be well tolerated and with promising efficacy in treating high unmet need in autoimmune and inflammatory diseases and with Phase II trials due to commence imminently.
A potentially disruptive site-targeted approach
The scientific rationale for this site-targeted approach is based on research completed by Chairman of the Company’s Scientific Advisory Board, Dr Howard Weiner, professor at the Brigham and Women's Hospital on the role of anti-CD3 antibodies and on the mucosal immune system, by targeting the tissues of the GI tract, which is well characterised as the main site of inflammation in CD. The nasal mucosa offers a route to the immune mechanisms of the CNS. The rationale for developing nasal and oral formulations is to achieve site-targeted therapeutic benefits, while avoiding the potentially life threatening side effects of systemic mAb administration which include Cytokine release syndrome (CRS) which is an acute inflammatory reaction that can cause severe reactions including multiple organ failure.
TILS has selected Crohn’s disease as a lead indication for oral Foralumab owing to the promising anti-inflammatory effect, the body of preclinical and clinical evidence coupled with high unmet need (an estimated 800,000 people in US alone are currently affected). Humira, which is the standard mAb for Crohn’s, is one of the best-selling drugs of all time, peaking at $20bn of revenues in 2019, including other indications such as rheumatoid arthritis. The Crohn’s treatment market is worth approximately $13bn.
As we have said, Foralumab is a fully-human anti-CD3 specific mAb; that is to say, it binds to the epsilon chain of CD3 a T-cell surface antigen. In fact, one of the first mAbs approved (in 1985) for human use, was an anti-CD3 mAb. It was J&J’s Muromonab/Orthoclone OKT3, for dampening overactive immunity in transplant rejection patients. However, Muromonab is derived from murine (mouse) antibodies, which can trigger a severe immune response (immunogenicity) in humans, causing serious dose-limiting toxicity and reducing efficacy. This was the main reason J&J withdrew Muromonab from the market in 2010. Clinical studies conducted with intravenous administration indicated that Foralumab does not elicit an immune response as it a fully human anti-CD3 mAb. In addition, preclinical animal studies independently conducted by Prof. Howard Weiner and Prof. Kevan Herold (Ogura et al., 2019) demonstrated that, in side-by-side comparison, orally administered Foralumab and OKT3 act through identical biochemical mechanisms and their potencies are similar.
The advent of techniques enabling humanised monoclonal antibodies to be developed and modified from animal species to present the properties of human variants represents significant progress and improvement in terms of greater binding specificity and reduced immunogenicity.
As a class, humanised mAbs remain among the most efficacious therapies we know today and represent an addressable market of over $100bn. However, there have been no CD3-specific mAbs yet approved since Muromonab. Provention Bio (PRVB) is developing Teplizumab for the treatment and prevention of type-1 diabetes as its lead programme and it recently reported that it significantly delayed the onset of T1D in a pivotal study. PDLBiopharma (PDLI)’s Visilizumab/Nuvion was developed for CD and related inflammatory bowel disease ulcerative colitis (UC) as well as transplant rejection (GVHD), although its development was held back by its adverse safety profile and lack of efficacy.
Evolution of anti-CD3 mabs - (TILS presentation)
Technological advances have enabled fully human mAbs to be developed at scale to maximise therapeutic properties while reducing side effects yet further. Hence, AbbVie’s Humira, the first fully-human mAb approved in 2002, is one of the best-selling drugs of all time, and more than 70% of mAbs approved in the past two years have been fully human.
The scientific rationale for Foralumab is supported by a number of preclinical and clinical studies demonstrating the capacity for T cell activation via oral and nasal administration, and the utility of CD3 targeting to alleviate a range of autoimmune and inflammatory diseases. This in turn offers opportunities in huge addressable markets, including rheumatoid arthritis, lupus, graft versus host disease (GVHD), type 1 diabetes (T1D) and psoriasis.
This strong rationale was reinforced by the recent results of first-in-human studies of Foralumab conducted by TILS which concluded that Foralumab is safe and well tolerated and has promising immunoregulatory effects.
Maximising value, developing a platform
TILS licensed exclusive worldwide rights to Foralumab from the privately held Swiss biopharma company, Novimmune, in 2014, which developed Foralumab formulated for intravenous (IV) administration in Crohn’s disease. TILS subsequently developed its proprietary and novel formulations with a view to investigating the therapeutic effect of CD3-targeting in a fully human mAb format. Studies to-date show that TILS has overcome the challenges of reformulating monoclonal antibodies and its approach aims to also overcome the lack of bioavailability seen with other orally or nasally administered protein-based drugs.
Tiziana seeks to protect its novel formulations and for alternative indications to maximise the value and applications of the technology. It recently received the first-ever Patent on oral delivery of all anti-CD3 monoclonal antibodies for treatment of human diseases. This also included stabilized liquid formulation of Foralumab and other anti-CD3 mAbs for nasal administration. The Company is developing a proprietary approach, building in flexibility to allow it to grow its pipeline by expanding the indications and routes of administration. It can also allow TILS to in license approved drugs for reformulation.
Foralumab has the potential to effectively target CD3 to modulate autoimmune and inflammatory disease, in the same way as mouse or humanised anti-CD3 mAbs, but with the potential benefit of lower toxicity.
Dr Weiner discovered that oral or nasal administration of anti-CD3 mAb induces mucosal tolerance to activate T regulatory cells (Tregs). This can provide site-targeted immunomodulation to suppress inflammation leading to the theory that this scientific concept could be effective for the treatment of a variety of autoimmune and inflammatory diseases.
TILS has chosen to prioritise Crohn’s disease as the lead indication for oral Foralumab because of the scientific rationale, the existing body of evidence and the unmet need for treatments that can improve on the standard of care. As we have said, the size of the addressable market in this indication provides a very attractive commercial opportunity if outcomes are consistent with earlier studies.
Crohn’s Disease is a chronic condition with relapsing and recurring episodes of diarrhoea, severe weight loss, cramps, blood in the stool, fever and fatigue. In severe cases it can lead to perianal fistula or ulcers along with inflamed joints and anaemia. CD is differentiated by chronic inflammation of any portion of the GI tract, in contrast to ulcerative colitis where inflammation is limited only to the colon. Crohn’s disease is most common in Western Europe and North America. An estimated 800,000 Americans are currently affected by this disorder. Mild to moderate treatments include immunosuppressants such as steroids while more severe cases receive treatment with biologics such as Humira which can cause dose-limiting toxicity and severe infection.
In addition, the versatility of Foralumab can offer wide prospects of additional treatment modalities. This was recently illustrated through a newly filed patent by Tiziana for use of Foralumab to enhance the potential for success in CAR-T therapy. The ability to pursue this would likely depend on new funding or partnering but this prospect. This includes combinations with other stimulatory drugs, offering huge scope for enhancing the company’s clinical pipeline. In CAR-T therapy Foralumab might play a part in helping enhance treatment along with other therapies that help stimulate T cell production or longevity or prevent relapse which have been some of the main barriers in development. CAR-T therapy development, a form of next-gen immunotherapy, is seeing very fast strides driven by significant investment in cell therapy space. This is because of the potential to treat solid and blood cancers as well as rare diseases.
A body of evidence to support Foralumab
A preclinical study carried out by TILS demonstrated a significant and very promising finding, that oral Foralumab is as potent as OKT3 – it induced effective immunomodulation but with lower toxicity;
‘Oral Treatment with Foralumab, a fully human anti-CD3 monoclonal antibody, prevents skin xenograft rejection in mice with human immune systems’(Ogura et al, ‘Oral treatment with Foralumab, a fully human anti‐CD3 monoclonal antibody, prevents skin xenograft rejection in mice with human immune systems’ [2017] Clinical Immunology)
These results suggest that site specific delivery is a modality that could help reduce toxicity caused by systemic absorption ie via intravenous administration. This preclinical study supports the scientific rationale for Foralumab’s equivalence to OKT3.
Immunomodulation was induced via the activation of regulatory T cells (Tregs), which play a key role in regulating self‐tolerance, therefore supporting the rationale for the clinical development of oral Foralumab in autoimmune disease.
This is supported by a body clinical evidence on anti-CD3 mAbs although while humanised CD3 mAbs have been tested in clinical studies, none are yet licensed.
This exciting finding has been reinforced in a number of other studies including in a small clinical study conducted by a team at the BWH Published in Crohn’s and Colitis, July 2019 – ‘Orally administered OKT3 – in 6 patients with moderate to severe ulcerative colitis’ The biologic effects of oral anti-CD3 included significantly increased proliferation in response to anti-CD3 and anti-inflammatory gene expression profile in peripheral blood mononuclear cells. No serious treatment-related adverse events occurred.
Conclusions of the two Phase 2a trials of IV Foralumab, conducted by Novimmune, in patients with Crohn’s disease and renal allograft rejection in kidney transplants demonstrated Foralumab’s immunomodulatory activity in humans. Foralumab was well tolerated with most side effects being infusion related reactions. (NovImmune SA, Integrated Clinical Study Report NI-0401-02). These conclusions support the rationale for developing oral Foralumab by Tiziana in Crohn’s disease.
Positive clinical safety data oral Foralumab
TILS initiated a Phase I clinical trial of oral Foralumab in Dec 2019 in healthy volunteers with a proprietary oral formulation of Foralumab encapsulated in enteric-coated capsules. The primary objective of this single ascending dose phase I study, at the BWH, Harvard Medical School, Boston, was to determine the safety and tolerability of orally administered Foralumab.
The trial was a 12-patient, single-site, double-blind, placebo-controlled, single ascending dose study in healthy subjects in which Foralumab was orally administered at 1.25, 2.5 and 5.0 mg per dose. Each cohort comprised of 4 subjects, of whom 3 received Foralumab treatment and 1 received a placebo capsule.
In January 2020 TILS reported the top line results of Phase 1 clinical study of Foralumab. The formulation was well-tolerated at all doses tested and there were no drug-related safety issues, even at the highest dose of 5 mg in this trial.
Tiziana is preparing to initiate a Phase II trial in Crohn’s sufferers – this will be a gold standard double blind, randomised placebo-controlled study and aims to recruit 48 patients over four arms with once daily dosing of placebo or Foralumab. The primary endpoint measured will be safety and tolerability, along with a range of metabolic parameters, immunological markers and liver function tests. In addition, the study will monitor efficacy and changes in immunomodulatory activity compared to baseline levels. The proposed protocol targets 30 days of treatment and 30day follow-up, therefore we estimate that total duration including data analysis might be completed in six to eight months from initiation.
Commercial scope Foralumab Crohn’s disease
The advanced Crohn’s Disease therapy market is dominated by mAbs including Humira - AbbVie’s anti-TNF alpha mAb registered FY17 sales of c $4bn in the indication. Other therapies include IL-12/IL-23 targeting Stelara which features along with Humira among the top ten selling treatments worldwide.
Notable late stage development candidates include Filgotinib (Gilead/Galapagos) a Janus kinase 1 (JAK1) inhibitor which is also under review for approval in rheumatoid arthritis and is being developed for ulcerative colitis. Ozanimod (Celgene), is an immunomodulator with Phase III studies being initiated for moderate to severe CD sufferers, while Janssen’s Tremfya/guselkumab – an IL-23 targeting mAb is being trialled for moderate-to-severe CD. There are 294 late stage clinical trials listed on Clinical Trials.gov competing for a share of this large and fast-growing market and in light of Humira’s patent expiry in CD, a number of generic versions of Humira have been successfully launched already. The projected value of the IBD market which includes the UC market is over $13bn by 2025.
While the landscape is dominated by Big Pharma, Foralumab’s potential in CD could lie in treating populations which are failing on first line therapies, or for patients suffering from serious side effects of long-term treatment. For Humira these include serious infections including TB and lymphoma. In addition, its competitive advantage could be as an attractive dosing alternative to the generally IV or subcutaneously administered standard therapies. For example, this could be easier and less expensive to administer than IV mAbs.
So, if the outcomes of the forthcoming Phase II study of Foralumab are positive, this could be a very important catalyst for deal discussions with Big pharma given the blockbuster size of the Crohn’s market and particularly as patents on Humira are due to expire.
Oral Foralumab’s alternative formulation and mode of admin are other factors that can set it apart and would make it an attractive license target if it proves to be efficacious and well tolerated in ongoing clinical studies and Tiziana was recently granted a patent covering its proprietary platform technology for the oral administration of Foralumab and all other anti-CD3 monoclonal antibodies. Alternatively, TILS might seek to separately out-license its formulation technology as a delivery platform to Big pharma if ongoing results provide proof of concept.
The effective site targeted delivery of biologics is a key target of the industry, for example Astra Zeneca is focused on developing new delivery modalities including oral administration of biologics that can penetrate the intestinal wall, so we anticipate that TILS can attract significant interest from players in this field if outcomes are successful including potentially to overcome patent expiries of blockbuster drugs.
US and Europe are likely to offer the biggest commercial potential with up to 600,000 eligible sufferers assuming up to 70% of adults receive a diagnosis. (Centers for disease Control and Prevention ‘Epidemiology of the IBD’). According to the Crohn’s and Colitis foundation of America around 75% of patients will eventually need surgery, so pricing of $35,000 per annum in line with other biologics, implies that the addressable market is worth around $10bn.
Follow-on opportunities in other areas of high unmet need where the mode of admin and side effect profile provide a compelling clinical and commercial rationale for Foralumab include in type 1 diabetes (T1D) and fatty liver disease (NASH) or alternatively in other indications where anti-CD3 mAbs have been halted because of toxicity.
TILS has limited resources at present to pursue all indications for oral Foralumab although in our view, positive Phase II data can open a broad range of options. We can see that it might be advantageous to retain rights in the main market with Crohn’s into later clinical development if possible, to maximise returns. So it could seek partner for Europe and retain US development rights if Phase II data are positive to accelerate development, which could also help stimulate interest in Foralumab in additional indications, or indeed, raise the profile of the oral enteric formulation to other Big Pharma mAb companies.
Nasal Foralumab
TILS is developing a pioneering approach in to directly target the CNS via intranasal delivery of Foralumab, an approach developed by TILS with Dr Howard Weiner through his extensive research conducted at the BWH covering neurodegenerative diseases like Multiple Sclerosis (MS) and Amyotrophic lateral sclerosis (ALS). Findings support its potential to target abnormal neuronal activity via regulatory T cells.
TILS has already completed a positive Phase I safety study of intranasal Foralumab in neurodegenerative diseases so nasal administration offers new hope for treating diseases which until now have largely been limited to symptom control.
MS is a devastating, chronic inflammatory disease of the CNS, affecting approximately 2.3m people worldwide and up to 1 million people in the US according to a study conducted by the National MS Society. Generally, MS is divided into its most prevalent relapsing and remitting type (RRMS), and primary and secondary progressive forms (SPMS/PPMS). The former is characterised by periods of apparent freedom from symptoms followed by relapse, and is thought to be caused by an auto-immune attack on myelin, which is the insulation protecting the nerves. In progressive MS, nerve damage is more pronounced than inflammation.
MS affects vision, speech, control of limb function and balance and most patients including those with RRMS move into a progressive form of the disease after around 10 years. In Europe and in the US, the disease is estimated to affect about two to three people per 100,000 per year. (Elaine Kingswell, ‘Incidence and Prevalence of MS in Europe’ BMC Neurology)
While there has been substantial therapeutic progress during the past 20 years, MS is a major cause of non-traumatic, permanent neurological disability in young adults. First line interferon beta-1a treatments like Rebif (EMD Serono) and Avonex (Biogen) can help to reduce the rate of relapse and slow disease progression.
Monoclonal antibodies are now among the most promising therapies for MS; recent approvals include Biogen’s Tysabri (natalizumab) also approved in Crohn’s disease, and Sanofi Genzyme’s Lemtrada (alemtuzumab) for RRMS, followed by the 2017 approval of Roche/Genentech’s Ocrevus (ocrelizumab) for both RRMS and PPMS. However, in real world settings Ocrevus is more efficacious as an anti-inflammatory rather than in helping to address nerve damage seen in PPMS and provides clinically meaningful yet relatively modest improvement for MS sufferers. Despite this advance, the disease remains incurable and most therapies are limited to the RRMS stages. Such treatments also promote serious side effects.
In Nov 2018 TILS initiated a Phase I clinical trial of nasally administered Foralumab in healthy volunteers in an ascending dose study with the primary endpoint of safety and tolerability.
Intranasal Foralumab safe promising anti-inflammatory effects
In September 2019 TILS reported Phase I clinical data demonstrated Nasal Treatment with Foralumab was well-tolerated and Produced Positive Trend in Biomarkers of Immunomodulation and Anti-inflammation in Healthy Volunteers
- Treatment was well-tolerated and no drug-related safety issues were reported at any of the doses.
- No drug-related changes were observed in vital signs among subjects at pre-dose, during treatment and at discharge.
- Nasally administered Foralumab at the 50 µg dose suppressed cytotoxic CD8+ as well as perforin secreting CD8+ cells, which have been implicated in neurodegeneration in multiple sclerosis (MS).
- Treatment at 50 mg stimulated production of anti-inflammatory cytokine IL-10 and suppressed production of pro-inflammatory cytokine IFN-γ, suggesting upregulation of T regulatory cells (Tregs) Upregulation of Tregs is particularly important because Tregs have the ability to cross-through blood-brain barriers. A majority of orally or intravenously drugs are not able to cross-through blood-brain barriers, and thereby are not successful in treatment of neurodegenerative diseases.
Conclusions were that nasal Foralumab was well-tolerated, but it also exhibited significantly positive immunomodulatory effects that indicated that Tregs had been stimulated giving rise to favourable immune reactions.
This follows on from earlier preclinical research done by Dr Weiner on the role of anti-CD3 mAbs which concluded that intranasal delivery demonstrates that this route of administration induces Tregs in the cervical lymph nodes, in animal models of LupusNasal Anti-CD3 Antibody Ameliorates Lupus by Inducing an IL-10-Secreting cells; Wu HY, Quintana, Wiener HL. Separately, in MS models, Dr Weiner discovered that nasal administration induced Tregs that crossed the blood brain barrier via the peripheral CNS, providing an anti-inflammatory signal. These studies serve to support the concept of mucosal administration and was shown to normalise microglial cells which regulate myelin production and are damaged in MS patients.
Studies suggest that Treg activation is associated with nerve damage repair or remyelination, so these findings suggest potential for positive clinical benefits in neurodegenerative disease (Dombrowski et al, ‘Regulatory T cells promote myelin regeneration in the Central Nervous System’ Nature Neuroscience).]
So in conclusion nasal anti-CD3 mAb therapy appears to be a safe way of activating the immune response by targeting the mucosal as opposed to the systemic immune system, providing a focus for TILS to advance in MS.
Next steps nasal Foralumab
The company is preparing to advance nasal Foralumab into a Phase IIb study in progressive MS patients. The protocol has not yet been confirmed but this is likely to be a placebo-controlled, multi-dose study, comprising around 60 patients with three dosing arms vs placebo. The endpoints measured will include safety and potentially glial cell activation. We estimate a six-month duration and initiation is anticipated during H220 depending on regulatory approval.
Acute unmet need in progressive MS
The MS treatment landscape was changed by the FDA approval of Ocrevus in 2017 marking a new era of treatment given it was the first disease-modifying therapy and the first approved for harder to treat PPMS as well as the relapsing form of the disease. Pivotal studies showed it significantly lowered annualised relapse rate and disability progression at 12 weeks after onset compared to REBIF. Until that time treatment options had been limited to symptom alleviation and controlling the rate of relapse.
Progressive MS represents c 10% of the total number of MS sufferers, evidence shows significant uptake of Ocrevus in both PPMS and RRMS groups. Serious side effects include a high rate of breast cancer seen during clinical trials, and those resulting from compromised immunity. Ocrevus is administered via infusion, every six months and costs up to $65,000 per patient per year, Roche reported $2.4bn of Ocrevus sales in 2018 its launch year and is slated to reach c $5bn sales in 2020 (Fierce Pharma).
Other hopeful programs include those in the cell therapy space like allogenic cell therapy ATA188 (Atara Therapeutics) and oral anti-inflammatory treatment MN166 from MediciNova, which fared well in Phase II studies and is on track for further development. TKI Masitinib and MD1003 (Biotin) are two of the latest stage candidates in development identified by the MS Trust.
There are a fairly limited number of other late stage clinical programs for progressive MS and so that if the alternative modality and mechanism of nasal Foralumab is safe and efficacious it could be an important supplementation to other treatment options particularly given the severe side effect profile of Ocrevus and given the acute unmet need.
The value of the MS treatment market is around $20bn, according to analyst estimates. Given that most treatments are in RRMS, an effective intranasal formulation could achieve a large share in the virtually untapped progressive MS market. The value of the Ocrevus sales illustrates that it is still relatively unpenetrated - we calculate around 0.5 million or 10% of the total new cases diagnosed each year being in the PPMS stage according to MS Trust (with a wider potential in secondary progressive MS) suggesting potential blockbuster dimensions for Foralumab, even at a discount to the annual cost of Ocrevus. Again, as for oral Foralumab, the intranasal formulation could prove to be an attractive platform to license to other biopharma companies given the lack of options in neurodegenerative disease, including the challenge presented by the lack of permeability of the blood brain barrier preventing effective dosing of most therapies.
Investigating the potential to treat Alzheimer’s
In June 2020 Dr Howard Weiner received a competitive research grant from the National Institutes of Health (NIH) to investigate nasal anti-CD3 for the treatment of Alzheimer's disease. Preclinical animal studies have established that nasal administration of anti-CD3 mAbs can modulate brain microglia and ameliorate disease in animal models (Mayo, L et al, ‘Brain').
This is a major scientific advancement that provides the basis to move forward with clinical development of nasally administered Foralumab in Alzheimer’s disease as it is recognized that brain microglia have a critical role in Alzheimer’s disease, including potentially affecting synaptic connections within the neural circuits where memories are allocated. Microglia mediate forgetting via complement-dependent synaptic elimination, (Wang et al Neuroscience).
Sadly there has been an almost total lack of progress in AD treatment approaches have focused on dealing with the build-up of amyloid-beta, a protein widely believed to be responsible for impairment of cognition and memory. Recent disappointments based on this approach include Phase III failures of solanezumab (Lilly) and gantenerumab (Roche) which aimed to slow down major disease effects including the progression of memory loss.
Many licensed treatments are used to help control behavioural symptoms such as the cholinesterase inhibitors which are prescribed for mild to moderate Alzheimer’s disease. These medications include Razadyne (galantamine), Exelon (rivastigmine), and Aricept (donepezil) and for moderate to severe AD - Namenda (memantine).
Foralumab may offer an entirely novel approach to treating dementia and could offer new hope to sufferers and their families. Despite intensive research, AD mechanisms still remain elusive. Microglia, the macrophages of the central nervous system, have been identified in recent years as key determinants in the pathology of AD – Dr Weiner’s research aims to clarify the role of microglial action and this could help to discover if activation or inhibition is the key to alleviating the disease.
If outcomes of these studies are positive, this provides another major value-enhancing event for Tiziana, broadening the potential of nasal Foralumab in an area of acute unmet need – so far unpenetrated by even the largest pharma companies.
Milciclib advanced cancer therapy
Milciclib is an oral therapy targeting the interruption of cell cycle growth of solid cancers by inhibiting a range of proteins known as cyclin-dependent kinases (CDKs), tropomycin receptor kinases (TRKs) and Src kinases. Milciclib has been tested in eight Phase I and II clinical studies in 316 patients, showing it to be a promising treatment for controlling abnormal cell growth and prolonging patient survival in advanced and metastatic cancers and confirming its positive safety profile.
Milciclib is an oral therapy targeting the interruption of cell cycle growth of solid cancers by inhibiting a range of proteins known as cyclin-dependent kinases (CDKs), tropomycin receptor kinases (TRKs) and Src kinases. Milciclib has been tested in eight Phase I and II clinical studies in 316 patients, showing it to be a promising treatment for controlling abnormal cell growth and prolonging patient survival in advanced and metastatic cancers and confirming its positive safety profile.
Of the eight studies conducted one showed particular promising benefits in chemotherapy-resistant patients in solid cancers. The ‘Phase 1 dose-escalation study of Milciclib in combination with gemcitabine in 36% of patients (n=16) with refractory solid tumors’ exhibited clinical activity in patients including those refractory to gemcitabine. (Sandrine Aspeslagh et al in Cancer Chemotherapy Pharmacology).
Milciclib has the potential to treat a range of solid cancers, although TILS has focused on developing its potential in advanced liver cancer (hepatocellular cancer/HCC) in Phase II studies because of the unmet need and the scientific rationale.
HCC is the most common form of liver cancer, and is the third leading cause of cancer death worldwide, largely due to an increasing incidence of hepatitis virus infection in Asia as well as the frequently late stage of diagnosis. Sadly, for the period 2009-15 the American Cancer Society reports a 5-year relative survival rate for the c 60% of patients diagnosed with tumours that have spread beyond early stage, of just 11% for regional or 2% for distant tumours. Around 42,800 people in US are diagnosed with liver cancer each year, compared to over 400,000 in Eastern Asia which comprises over half of the new diagnoses of HCC worldwide.
For many years the main pharmaceutical therapy was Bayer/Onyx Pharma’s multi-kinase inhibitor Sorafenib/Nexavar until the recent approval of immunotherapies starting with Bristol Myers Squibb’s monoclonal antibody nivolumab/OPDIVO in 2017. In addition other multi-kinase inhibitor have been approved recently like Bayer’s Regorafenib/Stivarga in 2017 and Lenvima (Esai/Merck) approved in 2018, for unresectable HCC.
Prior to in-licensing by Tiziana from Nerviano Medical Sciences in 2015, Milciclib was granted orphan designation by the European Commission and by the FDA. This was for the treatment of malignant thymoma and an aggressive form of thymic carcinoma in patients previously treated with chemotherapy. In two Phase 2a trials, CDKO-125a-006 and CDKO125a-007, Milciclib showed signs of slowing disease progression and acceptable safety.
TILS initiated a Phase 2a trial (CDKO-125a-010) of Milciclib safety and tolerability as a single therapy in Sorafenib-resistant patients with HCC in the first half of 2017. Typically, this population of patients have an advanced form of the disease with poor prognosis and an average overall survival expectancy of 3-5 months. In May 2018, the Independent Data Monitor committee completed an interim analysis of tolerability data from the first eleven treated patients and recommended expansion of the initial cohort to an additional 20 patients to complete the trial enrolment, which was completed in December 2018.
Milciclib Phase II data
Commercial Prospects for Milciclib
There are a growing range of treatment options in HCC including second line regorafenib – and preventive approaches like wider roll out of HBV vaccination which may help to reduce incidence, as well as better and earlier non-invasive diagnosis.
The global liver cancer treatment market was valued at $0.5bn in 2017 and this is expected to grow very quickly to reach more than $2bn by 2025 (Fior Markets) driven by immunotherapy and new targeted therapies. HCC follows on from chronic liver diseases, particularly liver cirrhosis, arising from risk factors including chronic hepatitis B or C virus infection, excessive alcohol consumption, and occurrence of non-alcoholic fatty liver disease NAFLD (Andrea Marengo, ‘Liver Cancer: Connections with Obesity, Fatty Liver, and Cirrhosis [2016] Annual Rev Med). Other risk factors include tobacco use, diabetes, and obesity. NAFLD is becoming an important cause of HCC in the advanced economies, as the number of patients suffering from metabolic syndromes is rapidly increasing.
The main prospects for Milciclib are currently in HCC in the Asian markets, notably in China where the prevalence of HBV has driven up the occurrence of liver cancer. The Asian incidence of HCC is around three times the size of the US and Europe markets combined and China is said to account for over 50% of HCC cases worldwide. Tiziana plans to explore the options for combining Milciclib with an approved targeted therapy starting in 2021. For example, the positioning could be for chemo-resistant patients, those who are not eligible for immunotherapy, or to help improve on the relatively modest survival benefit seen with Sorafenib and Regorafenib which can be meaningful given the poor prognosis. In our view, it is likely that Tiziana would seek a specialist partner to take Milciclib forward potentially including conducting population-specific studies for China, for example. Clearly, the clinical evidence base in other types of solid tumour provides a pathway for approval of Milciclib in other advanced cancers, particularly given the orphan designation in thymoma/thymic carcinoma.
StemPrinterER: Guiding Therapeutic Precision
In 2014, TILS entered an exclusive license agreement to develop a stem cell-based breast cancer risk assessment assay based on the top 20 stem cell markers for patient stratification in breast cancer. It tied up with the Italian Foundation for Cancer Research (FIRC), the Institute for Molecular Oncology (IFOM), and the European Institute of Oncology (IEO). The agreement set out terms for a four-year development programme to fund research into technologies using these Top 20 genes.
The first prognostic assay to emerge from the research work was StemPrintER, a multi-gene assay intended for the prediction of the risk of recurrence in luminal, oestrogen receptor-positive HER2-negative breast cancer patients, based on the detection of 20 cancer stem cell markers. The assay is a stem cell biology-based genomic tool for the prediction of disease recurrence in breast cancer patients and guides life-saving decision-making on treatment. The assay has been evaluated in an initial retrospective validation study using a consecutive cohort of approximately 2,400 patients with breast cancer.
The clinical rationale for StemPrintER is compelling: It provides patients with breast cancer the information to help choose treatment by providing a scoring system to boost subjective decision-making to an informed choice on treatment.
TILS recently submitted two abstracts which summarised these validation studies, which were selected for presentation at the American Society of Clinical Oncology's 2020 Virtual Conference held in June. This is an exceptional achievement given ASCO’s selectivity. Furthermore, the conclusions shown were that StemPrintER provided a superior and more refined tool compared to the standard Oncotype DX.
The first; entitled Comparison of StemPrintER, a novel biology-based genomic predictor of distant recurrence in breast cancer, with Oncotype DX in the TransATAC[1] cohort was funded by the Italian Association for Cancer Research (AIRC) and Cancer Research UK (CRUK).
The validation study concluded that in ER+/HER2- TransATAC breast cancer patients, StemPrintER Risk Score was highly prognostic for distant metastasis and was superior to the OncoType DX Recurrence Score in providing additional prognostic information to conventional clinicopathological parameters.
Separately the analysis of outcomes comparing SPRS combined with other clinical assessment parameters nodal assessment and tumour size, termed SPARE was presented in an abstract entitled;
In conclusion - SPARE represents a more refined clinical tool, compared to standard clinicopathological parameters, that could be used for personalized therapeutic decision making in ER+/HER2- breast cancer patients, approximately 20% more effective.
The route to crystallising value of StemPrintER
StemPrintER is being developed as an accredited laboratory-developed test (LDT) through the Clinical Laboratory Improvement Amendments (CLIA) waiver pathway in US. Regulatory approval requires an additional validation study to be completed for market approval as a LDT in US and Europe, although this is a much less arduous route than full FDA regulatory clearance and can be completed in around 6 months.
The Company is preparing to launch a retrospective validation study using an independent cohort to continue further development of StemPrintER. At the same time, TILS has stated that its intention is to crystallise the value by a spin-out into a separate diagnostics company. The commercial prospects for StemPrintER look very buoyant given the size of the unmet need, the projected addressable market, as well as its superiority to a market standard, if a validation study confirms this promise.
High growth and margin prospects StemPrintER
The OncotypeDX breast assay was among a range of tests acquired by Exact Sciences when it bought Genomic Health Inc for $2.8bn in cash and stock in 2019. In 2020, more than 300,000 women are expected to be diagnosed with breast cancer in the United States, according to the American Cancer Society. Worldwide, it is estimated that there were around 2mln newly diagnosed cases of breast cancer in 2018.
Oncotype DX is a standard for guiding chemotherapy decisions along with other leading assays, EndoPredict and Prosigna. The Oncotype IQ Genomic Intelligence Platform is comprised of Oncotype DX gene expression tests for breast, prostate and colon cancers, as well as an early-stage Oncotype DX AR-V7 Nucleus Detect test, a liquid-based test for advanced-stage prostate cancer. Oncotype DX breast appears to be the lead product; it is supported by randomised, controlled study data, and has been extensively utilised. Pre-acquisition, the test generated $162mln of H1 2019 revenues for Genomic Health, and $299m in FY2018 out of total revenues of $335m.
[1]transATAC was a translational study of archival samples from the Arimidex, Tamoxifen, Alone or in Combination (ATAC) trial of menopausal women.
In Q1 2020 EXAS saw revenues jump to $348mln from $162mln in Q1 2019, including $128mln of OncotypeDX precision oncology revenues, although this appears to be the tip of the iceberg since EXAS estimates that breast cancer diagnostic market opportunity is worth around $1bn globally, including c$500m in US. EXAS estimates that the total addressable market for the Oncotype Breast and urology range is $2bn, so breast cancer presents 50% of this value. EXAS management has guided on combined FY 20 proforma revenues of around $1.6bn, and gross profit of $1.2 billion (75% gross margin) compared to $0.9bn revenue in FY19.
StemPrintER’s prospects are linked to achieving positive data, take up into international clinical practice guidelines, as well as broad reimbursement and build out and execution of clinical and commercial infrastructure. Its clinical prospects appear very positive given the striking initial data.
Tiziana states that it will demerge StemPrintER into a separate company imminently. This will likely be the route to crystallising the significant value of both its therapeutic and diagnostic programs, to maximise value to shareholders. We look at valuation multiples later on in more detail although clearly the c 19% to VWAP premium paid by EXAS for Genomic Health bodes well for the prospects for the demerger, even allowing a discount for its earlier stage of development.
TZLS-501 an innovative approach for treating COVID-19
Tiziana is developing TZLS-501, a fully human anti-IL-6R (Interleukin 6 Receptor) targeting antibody which is a promising treatment for inflammatory disorders and autoimmune diseases. The Company in-licensed TZLS-501, which is a preclinical candidate, from Novimmune, a Swiss biotechnology company, in 2017 and which is currently under license from Bristol Myers Squibb (BMS) and is evaluating broad options including development in combination with Foralumab.
With the advent of the COVID-19 pandemic, TILS has taken an innovative approach to leverage the potential of TZLS-501 following on from the potential demonstrated by other IL-6R blockers in small Chinese studies. This led to study starts with Roche’s Actemra (tocilizumab) and Regeneron/Sanofi’s Kevzara (sarilumab) although the trials of the latter were recently stopped following negative outcomes.
Tiziana has developed a handheld nebuliser with its partner Sciarra Labs, to deliver TZLS-501 directly into the lungs of patients infected with COVID-19. It recently filed a provisional patent for inhalation delivery of an anti-IL6R mAb for the treatment of COVID-19 and is moving the development plan forwards very aggressively, kicking off GMP grade production via STC Biologics in preparation for IND filing planned in Q121. Tiziana’s approach and the scientific rationale for TZLS-501 differentiates it entirely from existing protocols and can provide a number of clinical and commercial advantages.
IL-6 is a type of cytokine or protein that plays a major role in stimulating unfavourable immune responses, such as in Acute Respiratory Distress Syndrome (ARDS) and autoimmune diseases like rheumatoid arthritis. In COVID-19 infection, one of the main dangers in some patients is severe and potentially fatal overreaction of the immune system caused by the uncontrolled release of cytokines known as a cytokine storm. If not managed effectively, this can lead to fatal and uncontrolled inflammation, lung injury and organ failure.
Promising scientific rationale for TZLS-501 to treat COVID
The role of IL-6 in inducing inflammation in ARDS is already well established and Tiziana is investigating the potential advantages of TZLS-501 compared to other mAbs like Actemra. The rationale is as follows;
- Excessive levels of circulating IL6 are the major cause of COVID-19 progression therefore depletion of circulating IL6 is an attractive approach to provide immediate relief to patients with COVID-19
- TZLS-501 binds to both the membrane-bound and soluble forms of the IL6R and efficiently depletes circulating levels of the IL-6 in the blood in preclinical studies
These are key points as TZLS-501 has affinity for both membrane and soluble forms of IL6R as does Actemra however, in preclinical studies (LaCroix et al, ‘Novel Insights into Interleukin 6) TZLS-501 demonstrated the potential to deplete the circulating IL-6 more efficiently than Actemra. If this factor is borne out in clinical studies, it could translate into clinical treatment advantages in COVID-19 to help alleviate lung damage. Higher affinity for circulating IL-6 could also provide other advantages including lower dosing potentially reducing side effects and cost of treatment. Toxicology studies are underway ahead of the IND filing planned in Q121. In addition, the Company is pursuing an entirely novel route of administration covering all anti-IL6R mAbs that can revolutionise the approach.
Directly targeting the main site of infection
To date, trials of anti-IL6R mAbs have as far as we know focused largely on IV or subcutaneous route of administration so that the nebulizer approach is novel and is designed to give a direct route to the main site of inflammation. So while TZLS-501 is still at the preclinical stage, the novel approach plus, the high affinity for soluble IL-6 seen in early studies and the fact that it is a fully human mAb could offer very significant clinical and commercial considerations if safety and efficacy outcomes are positive. TILS has filed an anti-IL-6R mAb patent application and is probably the first company to use this delivery approach. The patent covers:
- Use of the antibody for immediate treatment of COVID-19 patients
- Delivery via aerosol formulation by an inhaler or nebulizer, which can be easy to use for children and elderly people
- Administration as aerosol formulation by an inhaler/nebulizer, either alone or in combination with intravenous administration
The comprehensive approach also allows for combination with other antivirals like Gilead’s remdesivir, which fits with current trial protocols for other anti-IL6R mAbs. The development of a nebulizer can provide very significant advantages. Apart from being a site-targeted approach, a nebulizer or inhaler could potentially allow a broader population of patients to receive TZLS-501 potentially avoiding the costs of IV infusion. This might also include stepping up treatment prior to hyperinflammation.
COVID-19 Progression
Source: Tiziana
Gilead Sciences recently announced that it will run a study with a nebulised form of remdesivir reinforcing the rationale for direct delivery to the lungs. Remdesivir is being trialled in a variety of combinations and patient groups. The rationale includes administering the drug at an earlier stage in the infection in line with existing clinical guidelines outside of COVID, but also as with TZLS-501, targets the need for treating patients more quickly and easily, including outside the hospital setting.
Source: Tiziana
If the drug device combination of nebulised or inhaled TZLS-501 is efficacious and safe, this might also provide an attractive target for licencing as a technology platform to other mAb or lung injury drug developers for extending the patent or reformulating other mAbs/drugs. As we have said effective site-targeted delivery of biologics is a key target of the industry certainly the patent filing allows for this approach.
Key comparators are chiefly repurposed anti-IL-6R drugs. Regeneron joined forces with Sanofi for global testing of Kevzara and the Phase II/III study kicked off in US in Spring aiming to recruit up to 400 patients. However, results of Regeneron’s Phase II US study to test the drug in patients with severe or critical respiratory illness produced negative outcomes and the trial was recently stopped. Multiple studies are ongoing worldwide including Roche’s Phase III COVACTA with Actemra for patients hospitalised with severe COVID pneumonia including in combination with SoC, and antiviral treatment. Primary and secondary endpoints include clinical status, mortality, mechanical ventilation and intensive care unit (ICU) variables. In early stage patients in Italy, there was no improvement in outcomes including mortality but there are still high hopes for Actemra in more advanced infection or as a combination treatment with combination studies ongoing including with Gilead’s antiviral drug remdesivir which was granted Emergency Use Authorisation.
Parties are scaling up and preparing to supply millions of doses worldwide for stockpiling in partnership with Federal authorities including BARDA even ahead of approval. There are also a handful of other anti-IL6 antibodies in development which are not being developed for COVID but which are more advanced including one at the filing stage and three or four Phase III candidates for other indications.
Commercial prospects in a changing landscape
The treatment market for COVID-19 is clearly still very new however there is clearly a large market for an effective treatment. In addition many major authorities including BARDA and WHO can help fund and expedite the development of COVID treatments. So the Company might be successful in attracting early partners and/or other sources of non-dilutive funding for the development of TZLS-501 as its peers have done. This might also include expedited development of TZLS-501 given the urgency. There are a number of factors including the administration route as well as the potential mechanism and affinity of TZLS-501 that suggest it is a very promising candidate for treating COVID inflammation.
Even after an effective COVID-19 vaccine can be approved, treatments that can alleviate or manage severe lung injury will continue to be needed, certainly if coronavirus or a related viruses become a seasonal occurrence, and are to be stockpiled for future use. We have unfortunately seen after lockdown easing, pockets of recurrence in UK as well as uncontrolled outbreaks in US so that an effective treatment would likely be extensively used including potentially in combination with an antiviral treatment like remdesivir or other anti-inflammatory drugs.
Therefore the commercial potential for TZLS-501 can be very significant owing to its novel route of admin, broad positioning and the potential mechanistic advantages. Initial approvals of anti-IL-6R mAb Actemra in China, based on positive results from small patient samples, led Chinese health authority to add it to the COVID treatment protocols. So there is also potential for TZLS-501 to be broadly taken up for investigational use if early clinical outcomes are positive judging by the precedent seen with EC broad supply agreements for investigational use of Actemra.
Blue Sky is fuelling the early-stage pipeline
In April TILS in-licensed all of the IP relating to a nanoparticle-based formulation of Actinomycin D (Dactinomycin), from Rasna Therapeutics to expand its pipeline and subsequently filed a provisional patent application on the combination of nanoparticle-Actinomycin D with anti-IL-6R as a potential therapy for management of COVID-19 disease.
The rationale is based on the anecdotal evidence of the potential of NP ACT D for treating other corona strains and on Act D’s therapeutic value as a broad spectrum antibiotic for infectious disease and cancer. The reformulation enabled gradual delivery via the nanoparticle produced minimal toxicity in animal studies; in contrast Dactinomycin is severely toxic delivered intravenously.
TILS is not currently prioritising development of the nanoparticle – establishing an IND for TZLS-501 is the priority - and it is likely to require human testing separately before combination with the anti-IL-6. It remains an interesting asset acquired at a value that provides potential upside in future including for other indications like lymphoma. Furthermore, TZLS-501 has potential in other autoimmune indications, including in combination with Foralumab, so that kick-starting its development can help safety data to be developed. Tiziana has already filed a patent to protect its combination with oral/nasal anti-CD3 mAbs.
Sensitivities
Tiziana is exposed to the usual challenges and issues facing biotech companies, the key value driver is Foralumab and so the timing, regulatory progress of these lead intranasal and oral candidates is central to the investment case. There is already a compelling clinical and preclinical evidence base although to date clinical studies with reformulated Foralumab have been relatively small and would require confirmation in larger studies.
The de-merger of StemPrintER can be a value-enhancing event and this would depend on market appetite for new shares in a new separate entity from existing and new shareholders. The spinout could enable management to focus on its therapeutic programs and precedent set by EXAS demonstrates the attractive demand and market valuations of genomic tools such as StemPrintER.
TILS has developed a patent portfolio to protect its technology including methods of use for its delivery modalities and it is essential that it is able to uphold and protect its IP to retain its innovative and potentially competitive edge. As for any other small biotech company TILS has previously had recourse to dilutive forms of funding and its ongoing financing is via an equity ATM. The timely execution of its clinical studies can help minimise the need for recourse to further equity funding.
A healthy cash runway
Tiziana ended December 2019 with £0.2mln of net cash and £1.4mln convertible loan which converted into shares in March 2020. Since end-December 2019, it has raised approximately $14.4mln, issuing a total of 29.7mln shares. This includes its March raise of $10m gross issuing 6,118,797 shares and 1,743,445 shares issued under its April At the Market ATM sales agreement (which expires end July) raising $1,985,004 of a total $20mln draw down available. In April, Tiziana issued 6,118,797 new shares raising £1.59mln to cover retirement of its convertible debt plus interest. Market estimates show that the remaining $18mln funding from its ATM provides cash runway into early 2021, which should cover its planned development of Foralumab to new inflection points, assuming timely trial starts. Current total number of ordinary shares in issue is 166,409,013.
Valuation
We use a peer group comparators at a similar stage in development. TILS is a clinical-stage biotech and as such it is usual for its clinical-stage assets to be the focus for evaluation. Future upside will be provided by the entry into the clinical studies of its other assets such as TZLS-501, positive data on Foralumab, or initiation of additional studies for auto-immune and inflammatory diseases of Foralumab.
- Foralumab, intranasal, secondary progressive MS, Phase II ready
- Foralumab, oral Crohn’s Disease, Phase II ready
- Milciclib, treatment resistant or advanced HCC, Phase II/III (secondary potential as monotherapy or in other solid tumours)
The current market cap of TILS based on the valuation of a peer group with clinical assets at a similar stage of development suggests that it fails to reflect the value of its therapeutic pipeline let alone StemPrintER. At the same time, there are a range of milestone events ahead that can further de-risk its clinical pipeline providing upside potential.
These include the initiation of Phase II studies of Foralumab for intranasal and oral admin – initiation of a Phase IIb/III Milciclib study, IND grant and initiation of studies of TZLS-501 and successful outcomes of studies in AD with intranasal Foralumab, potentially leading to Phase I study start.
At the same time, analysis of a group of biotech companies at a slightly more advanced stage shows the potential upside for TILS suggesting a 12-18 month valuation on the execution of its clinical development milestones including successful Phase II outcomes with Foralumab.
Therapeutic peers
In conclusion, the current market cap of TILS does not reflect fully the value of the underlying clinical therapeutic programmes and there are likely to be events on the horizon that can further de-risk its clinical them. These events should provide attractive upside over the coming 6-12 months, such as initiation of Phase II studies of Foralumab/Phase I study start with TZLS-501. We suggest a current valuation of between $450-$700mln (c £500mln) with upside potential towards £700mln for the therapeutic business alone if the clinical study results anticipated over the next 12-18 months are positive.
Therefore, on this basis, StemPrintER provides pure upside at this valuation for investors in our view. Furthermore, there can be opportunities ahead to trigger interest from parties interested in partnering these candidates as more data are developed including developers of mAbs or therapies for treating autoimmune or inflammatory disease with pharma partners looking for innovative therapies to complement internal R&D expertise.
The EXAS acquisition of Genomic Health at $2.8bn at a 19% premium to its VWAP value is equivalent to a c10 x multiple its historical revenues. Even allowing a discount given the need for further clinical validation of StemPrintER and commercial execution, would suggest that a ‘highly rated’ valuation of a genomics oncology risk profiling company can be justified.
Spinout can crystallise value and strategic aims
The spinout of STEM is a logical step in our view on many fronts given the diverging focus and strategic direction of therapeutic and diagnostic/prognostic development programmes. This would provide separate management teams the opportunity to focus on advancing their development in very significant but very different markets to maximise potential. Crucially, it can also enable the separate entities to seek independent funding or partnerships most suitable to move forwards and highlight the value of each segment as a ‘pure-play’.
The company is due to issue a circular to investors imminently. StemPrintER is 100% owned by Tiziana so there is likely to be a proportionate issue to shareholders in a new entity at the time of the demerger.
In conclusion, the current valuation suggests that the prospects of the therapeutic pipeline are not yet fully recognised, and with innovative approaches, ground-breaking prospects and with further de-risking events ahead and appears to exclude any value for StemPrintER based on market valuations of peers.
De-risking events ahead include:
- Phase II trial start with Foralumab in Crohn’s Disease patients
- Phase II trial start with Foralumab in Multiple Sclerosis
- IND enabling activities for TZLS-501 with clinical study start planned in early 2021
- Spinout of StemPrintER pending shareholder agreement
- Fully funded studies of Foralumab in Alzheimer’s Disease
- Further news on protocols or strategy for Milciclib study.
Biographies of Key Management members
Kunwar Shailubhai, PhD, MBA, CEO & CSO
- Co-founder, EVP & CSO of Synergy Pharmaceuticalsm(NASDAQ: SGYP); pioneer of GC-C agonist technology; inventor of TRULANCE, which is approved for chronic constipation and IBS-C; VP, Callisto Pharmaceuticals; Group Leader, Monsanto Co.
Gabriele Cerrone, Executive Chairman
- Track record of successful corporate financing, he has listed nine companies, including seven on NASDAQ and two in London. Former chairman of biotech firms Trovagene, Gensignia, Rasna, Contravir and Okyo; co-founder and director of two NASDAQ-listed companies that brought two drugs from the discovery stage to the market with an FDA approval (Synergy Pharmaceuticals and Siga Technologies); Cerrone played a key role in the sale of Inhibitex to BMS for $2.5bn. He has an MBA from the Stern School of Business, NY, US.
Scientific Advisory Committee
Howard Weiner, MD
- Professor of Neurology at Harvard Med; Director and Founder of the Partners MS Center and Co-Director of the Ann Romney Center for Neurologic Diseases; Pioneered investigation of the mucosal immune system for the treatment of autoimmune and other diseases.
Kevin Herold, MD
- Professor of Immunology and Medicine, Deputy Director, Yale Center for Clinical Investigation; Director of the Yale Diabetes Center and TrialNet Center, Yale; expert in autoimmune diseases and anti-CD3 mAb therapies.
Arun Sanyal, MD
- Charles Caravati Distinguished Professor and Chair, Virginia Commonwealth University School of Medicine; world class expert in liver diseases.
Napoleone Ferrara, MD
- Inventor of Avastin (bevacizumab)/$6bn pa rev product; 2010 Lasker Award for contribution to medical science; Senior Deputy Director, Basic Sciences, Moores Cancer Center, UC San Diego; Distinguished Professor of Pathology, School of Medicine, UC San Diego.
Fabio Piscaglia, MD
- Associate Professor, Medical and Surgical Sciences at the University of Bologna; Leader in liver diseases and transplantation; 2017 Winner of a National Institute of Health (NIH) of United States of America grant.
Angelo Sangiovanni, MD
- Adjunct Professor of Gastroenterology at the University of Milan; Leader in liver disease and gastroenterology; Awarded Best Scientific Publication in clinical Hepatology in Italy.
Erica Villa, MD
- Professor and Chief GI Unit; Chairman of the Department of Internal Medicine Universitaria di Modena, Policlinico, Modena, Italy; Leader in Clinical Hepatology and Translational Medicine.