2022 update: US listing and fresh data emerging
Tiziana Life Sciences delivers its fully human therapeutic antibody, foralumab, to mucosal surfaces in the nose or gut aiming to modulate various autoimmune diseases. A key project is running in Multiple Sclerosis (MS) with nasal foralumab. There is positive progress in the individual patient expanded access extension to the successful phase I in MS. One secondary MS patient has been treated for three months and is continuing for another three. The FDA has authorised a second patient to start treatment. A dose-escalation study is planned.
Oral Foralumab is scheduled to enter clinical development for Crohn’s in Q122. In Type 1 diabetes, a phase Ia in healthy volunteers is planned after an IND submission in Q122 using subcutaneous delivery.
Tiziana has a small molecule cancer therapy (milciclib) in development for solid cancers. A phase II trial in combination with gemcitabine in K-RAS non-small cell lung cancer should start in Q122. It may start phase Ia in Q122 in healthy volunteers after IND approval.
In 2021, a deal with Precision Biosciences was signed for subcutaneous foralumab for use as a lympho-depleting agent. This might progress over 2022 to improve efficacy in CAR T-cell therapy.
Tiziana is now solely listed on NASDAQ and de-listed in London in October 2021. As of 30 June 2021, net cash was £38.6mln (about US$52mln).
Foralumab targets large, autoimmune disease indications such as MS with a novel approach. The therapies currently available are not always able to control the immune system longer-term. A new, easy to administer product that boosts T-regs might establish a lucrative adjuvant market.
If foralumab shows efficacy in Multiple Sclerosis, Crohn’s disease, and Type 1 diabetes, it might eventually become a core therapy. Blockbuster biological treatment markets for conditions like Crohn's are consolidating as patents expire but will still be very large and very lucrative. The MS market might grow to US$4.8bn.
Tiziana's transfer of its primary listing to NASDAQ in Q421 may eventually give a higher US-style valuation when backed by robust clinical data. The shares have been affected by the general downturn in biotech investment. Strong news flow in 2022 could drive a significant re-rating. A US$5mln stock repurchase program has been announced. This covers 6.4% of the current market capitalisation.
Year end Dec 31 · 2019 · 2020
Revenue £-mln · 0.00 · 0.00
EBITDA (£M) · 7.8 · 19.5
Tiziana Life Sciences is now a pure-play US biotech research company. Tiziana licensed the fully human monoclonal antibody foralumab in 2014 and the small molecule drug milciclib maleate in 2015. The company listed in London in 2014 with an ADR NASDAQ listing in 2018. In October 2021, Tiziana created a new Bermuda-based holding company, consolidated its shares on a two for one basis and listed the new shares on the NASDAQ thereby de-listing from AIM. Tiziana is now a US listed, offshore-based company.
By transferring to a direct NASDAQ listing, Tiziana now directly accesses US capital markets and may eventually gain a US-style valuation. However, the US biotech market is currently out of favour with investors. From highs of over $4 in January 2021, Tiziana shares are now priced at under $1. However, the fickle fashions of the stock market move faster than the painstaking processes of clinical development. As Tiziana builds inherent value through its R&D programmes, fresh clinical data will reinforce and build the investment case.
A $5mln stock repurchase program has been announced at a point where cash will be needed to fund the extensive clinical program. Tiziana believes that this is an attractive use of capital given the strength of its balance sheet.
Tiziana background
The full pipeline and current development progress are illustrated in Exhibit 1.
Exhibit 1 - Tiziana Pipeline
Source: Tiziana
The main focus remains on foralumab with its unique delivery method in some indications and T-reg modulating mode of action The extension MS study is progressing well and a wide-ranging set of trials is planned for 2022. The cancer drug milciclib is planned to restart trials in Q122. The anti-IL6 monoclonal is due to be submitted for investigational new drug (IND) acceptance in Q122. A safety study may then start.
This update note is an abridged version of our comprehensive 22 September 2021 note. It gives updated timelines. Only brief outlines of products are given here and our previous note should be consulted for a broader perspective including competition, clinical trial data analysis and markets.
Exhibit 2 - 2022 news timeline
Source: Tiziana
Clinical programme and timelines
The recent news of excellent progress in the nasal foralumab extension MS trial is very encouraging. Six month data for the first patient could be available in Q222. The next large MS trial listed on the database is NCT05029609, a dose-escalation study in 55 patients.
The next key project is in Crohn's disease. This uses orally delivered foralumab. A 16-patient Phase 1b (NCT05028946) is planned to start Q122.
Another Q122 foralumab trial is planned in autoimmune disease Type 1 diabetes (T1D); given by injection. This requires an IND and will be a volunteer safety study.
In other candidate products, a further milciclib trial, targeting K-RAS mutated non-small cell lung cancer may also start in Q1. Milciclib will be given in combination with gemcitabine. This naturally follows on from a study in liver cancer.
An initial safety Ib study in healthy volunteers on the anti-inflammatory monoclonal TZLS-501 (now injected subcutaneously) is planned to start in Q122 after submission of an IND. A possible inhaled delivery route is being evaluated.
The trial status and National Clinical Trials (NCT) numbers where published are shown in Table 1.
Table 1 - Clinical trials 2022
Source: Tiziana reports, clinicaltrials.gov
Foralumab (TZLS-401) - the lead therapeutic candidate in MS, Crohn's Disease and T1D
Tiziana licensed foralumab in 2014 as a fully human monoclonal IgG1k antibody, IgG being the type of antibody usually found in the blood that neutralises viruses, bacteria and foreign molecules. Foralumab targets the CD3 epsilon receptor. The antibody was engineered to minimise unwanted cytokine release (a side effect of older anti-CD3 antibodies) by modifying the Fc-region of the antibody with two changes. This means it is less able to bind a T-cell to another immune cell; this binding would normally trigger the release of potent cytokines and can cause immune reactions.
Foralumab was tested in its earlier development using intravenous delivery in a 40-patient, randomised, placebo-controlled safety study in Crohn’s patients (NCT00630643 completed Dec 2007); data in 2010 in Inflammatory Bowel Diseases. A small escalating dose study (NCT00805909) was run in 12 patients with Acute Renal Allograft Rejection; no data published.
Foralumab oral/ nasal formulations
The novel aspect of Tiziana's development of foralumab is the method of administration. In all current therapeutic applications, antibodies (mostly IgG types) are infused or injected to give systemic coverage. Tiziana takes a different approach. It delivers foralumab to the exterior nasal or gut surfaces. As antibodies are very large molecules, they will not on their own penetrate the mucosal surfaces of the body: the gut wall or nasal surfaces. To cross these epithelial barriers, they need to be transported by Fc carrier proteins into the immune cell-rich layers below. Here, foralumab is believed to stimulate the immune control systems controlled by regulatory T-cells (T-regs). This is thought to give the immune control potentially seen so far with this therapy.
Foralumab does not enter the blood on oral or nasal administration so this is not a route for systemic disease like rheumatoid arthritis. Regulatory immune cells (T-regs) modulated by foralumab action might cross the blood-brain barrier to affect immune processes in the brain.
Exhibit 3 - Foralumab unique delivery
Source: Tiziana
Exhibit 4 - MS extension study
Source: Tiziana
Foralumab in MS - update on contiunuation study
After the initial clinical trial using nasal MS at the Brigham and Women's Hospital (Boston) (see our 22 September note) FDA permission was given for an Individual patient expanded access IND to offer extended therapy (Exhibit 4). This was announced in May 2021 and started in November. It was announced in January 2022 that the first patient had been treated for three months and that the FDA had agreed that treatment would continue for a further three months. In addition, as the safety profile appears good, a second patient has now started treatment with FDA consent. The careful FDA review of this program and its extension is positive for further work in MS. Note that this extension is only two patients and much bigger trials are required - and are being planned.
Dosing of foralumab for MS is nasal and is administered in 3-week cycles, with 3 times/week dosing for the first 2 weeks followed by 1 week of rest period. Data from the extension study may be available from Q222.
Foralumab in Crohn's disease
Oral foralumab to treat Crohn's disease has long been seen as a key indication. Other oral anti-CD3 monoclonals have been tested in very small scale trials for inflammatory bowel disease and signs of efficacy have been noted. At the moment, this would be a novel use and delivery system for an anti-CD3 monoclonal. Crohn's is, however, a tough condition to tackle and products need to compete against steroids and increasing numbers of cheaper biosimilar biological agents.
Foralumab in Type 1 Diabetes (T1D)
Development of foralumab for T1D is now one of Tiziana's top three priorities. This is now planned as a subcutaneous injection; an oral product was originally envisaged. T1D is usually diagnosed initially in pre-teenaged children. This is a life-changing condition and a preventative treatment is needed. Anti-CD3 monoclonals like foralumab have shown efficacy in other T1D studies. Another anti-CD3, teplizumab (Provention), has been submitted to the FDA for T1D - although it was refused initial approval due to development data inconsistencies. Another anti-CD3, otelixizumab (GSK) failed a phase III. A safe foralumab formulation could be an important advance in treatment.
Milciclib (TZLS-201)
Milciclib is a cyclin-dependent kinase inhibitor (CDK) (predominately a CDK2 inhibitor) positioned to treat chemotherapy resistant cancers by inhibiting cell division. CDK2 inhibitors act at the G1-S transition of the cell cycle. Cancer cells that have mutated K-RAS signalling proteins are stimulated to grow and divide by entering G1. About 30% of nsclc patients have mutated K-RAS, mutated EGF receptors are also found. The combination drug selected, gemcitabine, blocks DNA replication during the S-phase of the cell cycle.
In a 16-patient study with various solid tumours, a 36% response rate was seen (Aspeslagh et al 2017). A monotherapy liver cancer study (NCT03109886) had 28 evaluable patients of whom showed 61% stable disease during treatment.
Milciclib was licensed in 2015. It has been studied in a total of eight Phase 1 and Phase 2 trials in 316 patients.
Figure 1 - Milciclib action
Source: Tiziana
Anti-IL 6 receptor mAb (TZLS-501)
Tiziana’s third product under development, TZLS-501, is an anti-interleukin-6-receptor monoclonal (mAb). Tiziana licensed the drug from Bristol Myers Squibb. The mAb binds to, and blocks, IL-6R, an inflammatory cytokine receptor that drives the inflammation associated with autoimmune diseases and cancer. TZLS-501 is to be given in phase I as a subcutaneous injection, a normal mAb administration route. A nebulized delivery route direct to the lung is also being considered.
IP Protection covering Tiziana's product portfolio
Foralumab’s direct patent protection expires in 2024. A US formulation patent will expire in 2036. For biological therapeutics, patents are much less critical since, if approved, Foralumab as a new biological gains 12 years of biological exclusivity from the FDA. In the EU, the period is 10 years. Foralumab has various use patent applications. If granted, these will expire between 2037 and 2040.
Milciclib as a small molecule has its main patent expiry in 2023. If approved, it will obtain a five-year exclusivity from the FDA and in Europe, will have eight years of data protection with ten years of market exclusivity. If other indications were developed, the exclusivity could extend to 11 years. Other patents may extend the available period of exclusivity to 2042.
Finnancial commentary
Tiziana is financially secure over 2022 and had £38.6m cash on 30 June 2021 (31 December 2020: £48.2m). The last capital increase was in 2020, raising a net £54.1mln.
H1FY21 results showed a loss of -£12.6m (vs H1FY20 -£3.9m). Research and development in H1FY21 increased to £12.6m compared to £3.9m in H1FY20. The increase was primarily due to investment into TZLS401(foralumab) and TZLS-501 (anti-IL6R). As further clinical trials commence, cash burn can be expected to rise over 2022.
Peer comparison
The most obvious peer comparator is Provention Bio (Provention Bio Inc (NASDAQ:PRVB)) with a market cap of US$243mln (as of 25 January 2022). Its lead programme is humanised anti-CD3 mAb teplizumab (phase III) being developed for Type-1 diabetes. It also has programmes in a vaccine (PRV-101), in lupus (PRV-3279) and in Celiac disease (PRV-015). Hence, Provention Bio is a later stage company with a better validated clinical hypothesis and a clear market opportunity in T1D. Tiziana can aim to reach this capitalisation once Phase 2 studies have shown both safety and clear efficacy indications for foralumab and pivotal studies are underway.
Risks & Sensitivities
All clinical stage smaller companies carry very high levels of risk. These can result in exceptional returns to the right circumstances, but this requires significant investment over several years. There are three broad risk categories.
Execution risk
The failure rate for biotech products is very high in the earlier trial phases with under 30% overall success rates; Phase 2 trials, in particular, are a big obstacle as here a product must show indications of clinical efficacy. Even later stage Phase 3 pivotal studies have only a 50%-60% probability of success in general. Regulatory processes can reveal clinical issues hidden from investors; the dreaded “complete response” letter from the FDA, refusing an approval, has crushed many hopes.
Tiziana must design fund and run carefully designed studies to convince a much larger pharmaceutical or biotechnology major to fund the later stages of its research. This will generate upfront fees and, potentially, milestones. Eventual regulatory clinical success is usually marked by a milestone. After that, the product has to be commercially successful and marketed strongly in a competitive global marketplace to generate substantial royalties.
Sector trends
There is always the possibility that sentiment will move against biotech again, as it did in the early to mid-2000s. Many biotech companies saw their share prices fall over 2021 and Tiziana has also suffered. However, companies like Tiziana if they are capitalised on, will continue to create value through steady clinical development and this value will at some point be recognised by new commercial partners and the markets.
We note that the US stock market, though enormous, is very competitive for investor attention and dollars. Analysts and commentators can be brutal. Tiziana as a small market capitalisation company might find it hard to attract attention and costs can be high. Tiziana is now solely on the NASDAQ. There is a US$5mln share buy-back program.