“Our goal was not to develop a pharmaceutical company but just to come up with something practical and safe and effective,” explains Dr Yutaka Niihara, as he talks about how he and colleague Willis Lee formed Emmaus Life Sciences Inc (OTCQX:EMMA) and developed Endari (L-glutamine), a treatment for the debilitating sickle cell disease.
“Fortunately, we found something based on our basic science research," added Niihara, who is chairman and CEO of Emmaus alongside Lee, the company's president and chief operating officer.
Niihara originally planned to become an oncologist when he entered the fellowship program at Harbor-UCLA Medical Center in 1989. That changed when, as part of his training, he saw the devastating impact of sickle cell disease on hematology patients - young people suffering pain that he says is significantly worse than that caused by cancer, with essentially no treatment at that time apart from narcotics.
The genetic disease is a result of gene mutation and is more likely in regions where malaria is common, or in ethnic groups that have migrated from areas that include Africa, India, and the Middle East. While those with a single sickle-cell gene are resistant to malaria, complications arise in those with two or more genes.
Rigid, deformed red blood cells result in the clogging of small blood vessels in sufferers. Niihara says it is like having mini-strokes or heart attacks throughout the body, resulting in severe pain. It can also lead to lower immunity in those afflicted with the condition, making them more susceptible to infectious diseases as well as strokes, heart attack, kidney failure, liver failure, and lung failure.
“It’s really a horrible disease,” he says. “In this country, even though we have among the best medical care in the world, the life expectancy is into their mid-40s. If you go to developing countries, it’s only about into their 20s at best.”
Until 1997, no drugs were available to ameliorate the effects of the disease. Then the US Food & Drug Administration (FDA) granted regular approval to hydroxyurea, which increases fetal hemoglobin and decreases the number of attacks. However, the long-term effects of the drug aren’t yet known.
Numbers game
It’s a numbers game, according to Niihara, and the fact that it is perceived as a disease more prevalent in developing countries makes finding drugs to deal with the condition less lucrative for the pharmaceuticals industry.
Until the mid-2000's, Niihara notes, many of the large pharmaceutical companies weren’t interested in tackling so-called orphan diseases. Globally, he says there are an estimated 20 million to 25 million sickle cell sufferers but in the US there are only about 100,000 patients and even fewer in Europe.
“For the effort you put into developing medication, they didn’t think they’d get a return,” Niihara adds. “With sickle cell disease, unfortunately, we don’t have strong advocates or activists. It could be because of the socio-economic status due to the ethnicity of the sufferers; I’m not really sure.”
While Niihara and his colleagues were recognised by the National Institutes of Health (NIH) and the FDA as very promising developers of medication for sickle cell disease, big pharma wasn’t interested in backing them, leading to him forming Emmaus, with Lee joining the company in its embryonic stage as they raised the capital required from “family and friends”.
Orphan drug designation
The FDA’s orphan drug designation for sickle cell – with equivalent status in many other developed countries – made developing drugs to tackle the disease more lucrative due to the economic benefits that accompany the designation.
“And once you develop it, you can get by with charging enormous amounts of money because you are protected,” Niihara notes. “The insurance companies are almost forced to cover this type of medication even though it’s very expensive.”
After a 20-year hiatus with no new drug candidates put forward since hydroxyurea, in 2017 the FDA approved Endari.
Emmaus, now a commercial-stage biopharmaceutical company, started marketing Endari in 2018, quickly building a regular client base of about 500 patients, which increased to about 800 by the end of 2019.
However, growth plateaued at about 1,000 patients in 2020 and 2021 due to the coronavirus (COVID-19) outbreak. With about 20,000-25,000 requiring frequent medical attention, he believes the company could reach about 5,000 patients in the US as COVID-19 restrictions ease.
“We are implementing a couple of strategic plans to try to achieve this in 2022,” he adds.
Global expansion plans
With limited sickle cell patient numbers in the US, Niihara reveals that Emmaus is also expanding into the Middle East, where the disease is far more prevalent. It has already acquired a temporary licence in Bahrain and is working on an early access basis with other countries including the United Arab Emirates, Saudi Arabia, Oman, Kuwait and Qatar.
“Hopefully we will have full marketing approval in these countries very soon,” he says. “We also have a footprint in Europe on an early access basis, especially in France and the UK.”
Other applications for Endari
While Endari may have a limited customer base in the US for patients targeting sickle cell disease, Niihara says the drug may also reverse diverticulosis, a disease of the intestine that is common among older patients in the US and other developed countries, with an estimated 40% of over-60s likely to develop it. Among them, he says about 10%-20% will develop a more serious condition known as diverticulitis.
“Frequently they require surgery or hospitalisation with antibiotics to reduce the inflammation,” he says. “We’ve never had anything to reverse this diverticulosis, which is the cause of diverticulitis, and we have good evidence that Endari can reverse it.”
The first phase of a pilot trial showed a 100% reversal of the condition in one patient within six months and a 50% reversal in a second patient.
“So, we are repeating the pilot trial at another institution in Texas and if we can confirm the earlier study among five patients, we plan to embark on phase 3 randomised double-blinded trials,” he says.
Endari, or L-glutamine, has been known to help many different conditions, including gastritis, says Niihara. However, as it can’t get exclusivity on a remedy for gastritis it’s not financially feasible whereas Emmaus is the first company to investigate Endari as a remedy for diverticulosis.
“We were able to get the patent almost worldwide, so we are really putting our focus on this,” he says.
A third-party facility is also using Endari on a research basis on burn patients to see if it accelerates healing, he adds.
More drugs in the pipeline
Endari aside, Niihara says Emmaus is also working on another compound for the treatment of cancers.
In October 2021, the company signed an agreement with South Korea’s Kainos (LSE:KNOS) Medicines, granting it an exclusive license to patent rights, know-how and other intellectual property relating to Kainos (LSE:KNOS)' novel IRAK4 inhibitor, referred to as KM10544, for the treatment of cancers including leukemia, lymphoma and solid tumors.
“We were fortunate enough to acquire the product and we did our own pre-clinical work,” he says. “The results were more dramatic than what they’d shared with us, so we went ahead and licenced the product and we are developing it. So far we have seen significant effectiveness in our laboratory against some difficult-to-treat hematological malignancies.”
Dividends also in the pipeline
Unlike many of its peers, Niihara says Emmaus has already been able to achieve a net income stream within two years of being in its commercial stage as it invests in drug development within a strict budget. With its planned expansion, he says the company is likely to double, if not triple, the size of the business in the short term.
“We have about 1,000 patients in treatment but we believe the US and the Middle East combined will quickly take us to 5,000 patients and I don’t think we’re going to significantly increase our expenditure,” he says.
While Emmaus is already net income positive, Niihara says there is potential for significant profits as it expands its customer base and continues developing its pipeline. With that, the company wants to start paying dividends in the near future to reward its shareholders.
“We have an exciting pipeline,” he concludes. “For example, there has never been a treatment that can actually reverse diverticulosis and the market is 600 times bigger than that for sickle cell disease. We want to demonstrate to investors that we are treading the path towards these achievements.”
Contact the author at stephen.gunnion@proactiveinvestors.com