RespireRx Pharmaceuticals (OTCQB:RSPI) Inc is a tiny company with huge ambitions as it advances a portfolio of innovative drugs to combat neurological and psychiatric conditions, which affect millions around the world.
With a market cap of US$1.7 million, it is focused on conditions where there is a poorly or unmet need and aims to develop treatments, based on modifying neurotransmission (brain signalling), which have advantages to currently available drugs, if there are any.
For example, RespireRx has its sights on obstructive sleep apnea (OSA), attention deficit hyperactivity disorder (ADHD), epilepsy, chronic pain and spinal cord injury (SCI).
"We are trying to do what everybody in the industry tries to do and that is we're trying to take a different approach, be unique, have attributes about our drugs that are better than drugs that are currently available, or in the case of OSA, no drugs available, so we are trying to improve the patient experience," explained Jeff Margolis, RespireRx chief financial officer (CFO) in an interview with Proactive.
Obstructive sleep apnea is a seriously debilitating condition, which sees airflow decrease or stop completely during sleep. It is thought to affect up to a billion people around the world and 30 million in the US, though millions of people remain undiagnosed. Surprising then, that there is, as yet, no approved drug to treat it anywhere in the world.
Important co-morbidities
As well as leaving people tired and less able to function, the condition is linked to several important co-morbidities, including type II diabetes, heart failure, obesity, stroke, and even early death.
Margolis said it is estimated by the American Academy of Sleep Medicine, that the overall economic cost of OSA to the US, including treatment, lost work time, accidents and more is a staggering US$160 billion, with approximately US$12 billion attributed to the direct costs of diagnosis and treatment of the disease alone.
Currently, the most common treatment is a continuous positive airway pressure (CPAP) device - an uncomfortable and cumbersome device, which involves users wearing a mask and tube at night through which air is mechanically pumped.
In its most advanced program so far, RespireRx is repurposing a known drug called dronabinol, originally US Food & Drug Administration (FDA) approved for anorexia associated with AIDS and chemo-induced nausea and vomiting, to treat OSA. If successful, it would mean people could take a single pill - undoubtedly a preferable option.
Margolis noted that, although one possible competitor is developing a potential oral treatment, he believes RespireRx's product is superior and that the market is so big there is more than enough room for two players.
Another potential advantage for RespireRx is the recent advent of home testing kits for OSA, which actually make diagnosing the problem a whole lot easier, and means many more people could turn to the company's pill in the future.
"It used to be a terrible diagnostic process and then it would be mean a treatment option you weren't thrilled with. Now there's an easier diagnostic process but there's still no treatment," said Margolis.
Right direction
Things seem to be heading in the right direction for the company. The results of two Phase 2 mid-stage clinical trials showed statistically significant favorable results. The company has gone on to bench tests to reformulate the drug and its dosage to optimize it for all-night use. The next stage would be to test this on animals ahead of a potential investigational new drug (IND) filing with the FDA and then onto additional human studies.
Significantly, the fact that dronabinol has been approved for over 35 years also means RespireRx believes it can rely on previous data already seen by the FDA, such as for safety, and potentially carry out just one single Phase 3 study rather than two.
But RespireRx is no one-trick pony, relying on dronabinol alone. In its AMPAkines program, part of its neuromodulator activities, it is ready for a Phase 2A study on candidate CX1739 for spinal cord injury (SCI) and is Phase 2B ready for CX717 or CX1739 for attention deficit hyperactivity disorder (ADHD). These are multi-million and multi-billion markets respectively.
And in its GABAkines program, its KRM-II-81 candidate has been shown to be efficacious in multiple animal models for treatment-resistant epilepsy and chronic neuropathic pain - both also multi-million and multi-billion markets.
The company originally started life as AMPAkines-focused Cortex Pharmaceuticals in the late 1980s and Margolis has been involved for around nine years, in which time, he says, he has never known it not to be "financially strapped".
To pursue its programs, RespireRx filed last October a circular for a strategic 'Regulation A' offering to raise up to US$7.5 million over two years, which Margolis explained would be closed in chunks, when and if the market normalizes and the stock price of the company rises. It is also on the hunt for strategic partners, particularly to help finance larger clinical studies, such as for ADHD.
Similarly, the small-cap company is embarking on an internal restructuring - also in stages - and has divided its platforms into two named units - ResolutionRx, which hosts its pharmaceutical cannabinoids (dronabinol), and EndeavourRx - home to the AMPAkines and GABAkines programs.
Triggering event
"We are waiting for a triggering event that will enable us to create these entities as properly financed entities," explained Margolis, adding that this could be a party coming forward wanting to invest in a program but not the company as a whole, or a strategic partner, which wants to participate in a program, but not take on the risk of the other programs too.
"That triggering event will likely either be a private financing in one of those to-be-formed subsidiaries or a strategic transaction in one of those to-be-formed subsidiaries. In anticipation of that we are actually running them as named divisions," he added.
It is also worth noting that RespireRx is also transitioning its management after president and CEO Timothy Jones announced his intention to step down. Chief scientific officer Arnold S. Lippa will become interim president and interim CEO at the end of January. RespireRx reported that it has had "non-contentious preliminary discussions” with Jones regarding this process.
So with plans in place, an internal restructuring underway, potentially highly undervalued assets targeting what look like huge patient markets, RespireRx could well be a growth story to keep an eye on.
"We have a core group of what we believe are excellent assets that can be well managed by the existing management team and that can be advanced, in our case, assuming finance is available," summed up Margolis.
Contact the author at giles@proactiveinvestors.com