Multiple Sclerosis single study
Tiziana Life Sciences uses its delivery technology to administer its fully human therapeutic anti-CD3 antibody, foralumab, to mucosal surfaces in the nose or gut; antibodies are usually injected or infused giving Tiziana a novel market position. Foralumab potentially modulates the immune system, so it could be used to treat various autoimmune diseases. A key project in Multiple Sclerosis (MS) has reported fresh data, highlighted on a key opinion leader (KOL) call. A progressive secondary MS patient using nasal foralumab for six months showed signs of disease retardation and is continuing treatment. A second patient started therapy in January 2022.
The single patient six-month data showed markedly lower levels of apparent brain inflammation on Positron Emission Tomography (PET) scanning. This uses a marker associated with activated microglial cells (immune cells found in the brain). As MS is caused by an autoimmune attack on the nervous system, this may indicate reduced inflammation. Associated clinical measurements showed that the inactive, secondary progressive MS diagnosed may have been retarded.
Foralumab activates regulatory T-cells (T-regs) which can move into the brain through the blood-brain barrier and potentially suppress inflammation. PET scanning showed reduced levels of a marker associated with activated microglial cells (brain-located immune cells). Activation of microglial cells is clinically associated with neurodegenerative diseases such as MS and Alzheimer's. If confirmed by further studies, it will be an exciting development as nasal foralumab is easy to administer with a good safety profile on current data.
The next stage, perhaps in 2023, could be an open-label, Phase 2 study in 10-20 patients. This could be followed by a large controlled study. We have no timeline but estimate that this is unlikely to report before late 2025 at the earliest. Whilst this current data is very exciting, it is a case report from one individual, hence, more patients are needed to draw firm conclusions.
Foralumab targets large, autoimmune disease indications such as MS with a novel approach to control disease. Current therapies 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 is listed on NASDAQ. As of 30 June 2021, net cash was £38.6mln (about US$52mln). The MS news drove a 63% rise in the share price from US$0.73 on 9 March to US$1.19 on 22 March. A US$5mln stock repurchase programme is in place.
Year end Dec 31 · 2019 · 2020
Revenue £-mln · 0.00 · 0.00
EBITDA (£M) · (7.8) · (19.4)
This update note is an abridged version of our comprehensive 22 September 2021 note. It focuses on the recent foralumab MS data. Other than updated clinical timelines as of 21 March 2022, it does not discuss milciclib and TZLS-501.
Note scope
After the initial MS clinical trial using nasal foralumab at the Brigham and Women's Hospital (Boston) (see our 22 September note) US Food and Drug Administration (FDA) permission was given for an Individual patient expanded access investigational new drug (IND) to offer extended therapy (Exhibit 1).
Exhibit 1 - First Patient
Source: Tiziana
The KOL call disclosed strong indicative evidence of foralumab effectiveness.
- Lower cytokine levels — these measurements showed that general inflammation was reduced. Cytokines are signalling molecules that activate immune cells.
- Clinical evidence — these were various standardised function tests like the timed 25-foot walk. These are crucial as they relate to daily life and patient well-being, and, commercially, to the level of daily care required.
- PET scanning — a high tech approach to assessing inflammation in the brain. These scans showed a clear reduction, Graph 1, indicating reduced inflammation in the brain that may correlate with the stabilisation of clinical disease and is consistent with reduced cytokine levels.
MS data summary
Graph 1 - Whole brain PET intensity
Source: ProActive replotted from Tiziana data
Graph 1 shows the whole brain PET data (discussed below) plotted to show time intervals clearly. The reductions are relative to baseline and compared to a reference point in the brain with a low initial value that showed little change. The patient had a six-week holiday after 3 months of dosing and this seems to be reflected in the apparent plateau between 3 months and 4.7 months. The fall in inflammation then resumes. The target of the imaging agent is normally present at low levels in all cells so, at some point, a plateau will be reached.
PET Data
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.
Exhibit 2 - Foralumab unique delivery
Source: Tiziana
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, which enables the antibody to circulate in the blood, called systemic exposure. 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.
Nasal dosing of foralumab is done in cycles. One cycle is a 50 microgram dose/day given three times/week for two weeks followed by rest week. Five cycles were given in the first three-month period.
Foralumab does not enter the blood on oral or nasal administration so this is not a route for systemic diseases 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. This T-reg action is the hypothesised mechanism behind the MS data. The advantages of the nasal route are no systemic exposure, more convenient administration and lower dosing.
Cytokine data
Cytokines are small signalling proteins released by activated immune cells to attract immune cells to an infection site and activate them. They can also affect other cell types. For example, the shivering and muscle aches associated with flu infection are due to cytokines as the immune system cells mobilise and attack the virus. In MS, activated immune cells attack the fatty myelin sheaths that insulate brain cells and allow electrical signals to pass. Lower cytokine levels in the blood are easily detected. The data, Graph 2, shows a reduction in interleukins and a more mixed response for interferon gamma. Graph 3 shows percentage falls.
Graph 2 - Cytokine data
Source: Tiziana
IL-6 levels in the patient fell by about 25%. High IL-6 levels are a driver of autoimmune disease (Kimura and Kishimoto (2010)); however, the picture is complex as IL-6 in the brain is normally produced by microglial cells and is important for brain health (Erta et al (2012)). More data is needed to determine the functional effects of foralumab. IL-6 is also involved in acute protection against bacterial infection and in generating antibody responses.
Interleukin-18 (IL-18) levels were unchanged. IL-18 in combination with IL-12 triggers IFN-gamma production. IL-18 is also linked to brain inflammation after injury and seems to increase Alzheimer's linked amyloid production by neurons. Tiziana notes that Alzheimer's disease is a possible further clinical indication for foralumab but we have no data as yet.
Graph 3 - Normalised cytokines
Source: Tiziana adapted by ProActive
Interferorn-1 beta (IFN-1 beta) is one of two IL-1 forms. It is involved in the immune response. IL-1 beta fell by about 80% very quickly but then rebounded giving a two-thirds fall. In the brain, IL-I beta is produced by microglial cells; other immune cells also produce IL-1 in the rest of the body. IL-1 also has a role in brain function and is linked to the control of body energy metabolism. One might speculate that the large fall is linked to the reduction in microglial activity seen in the PET scanning.
Interferon gamma (IFN-gamma) fell about 12% at the end of the period but as it fluctuated unchanged for most of the period, this might be a random event. IFN-gamma is a potent stimulator of killer T-cells and is involved the immune response against viral infection.
Clinical measures
These measures are the 25-foot walk and the nine-hole test, see Graphs 4 and 5; the red bar indicates the periods of treatment.
The 25-foot (7.62m) walk (Graph 4) requires the patient to walk 25 feet in a straight line on a level surface with their usual walking aid, if used, and is timed. The patient then walks back and the average is taken. A healthy person walks 25 feet in about four seconds. A person taking over six seconds might have some impairment and eight seconds or over indicates significant impairment.
In this case, the patient took nearly 40 seconds at the December 2020 assessment but improved naturally to under 20 seconds by the May 2021 start of therapy. This was not maintained and the walking time rose to over 30 seconds. Some of this deterioration happened during the six-week holiday period. Perhaps this implies that continuous therapy is needed; however, the PET data discussed below did not show any increase in activity.
Graph 4 - 25 ft walk
Source: Tiziana
The second timed evaluation (not shown) was the nine-hole test. This involves moving pegs from holes in one board to another. This measures small, delicate hand motor skills. It showed no improvement but there was no major deterioration.
These can be compared with the Enhanced Disability Scoring System (EDSS) and pyramidal scores (Graph 5). The EDSS scale measures the patient's daily capabilities and at the higher (more impaired) levels, is based on walking. The patient improved from 6.5 to 6 which means they improved from walking 20 metres with a walking frame to walking 100m with a walking stick. This is not time-dependent.
The pyramidal score tests the pyramid brain cells that control muscle movement. A score of 4 (higher is worse) implies impairment in the control of both legs. A score of 3 — the patient settled on this meaning an improvement — implies impairment in one leg (hemiparesis). Again, stable improvements were seen.
Graph 5 - EDSS motor score
Source: Tiziana
Graph 6 - Brain PET responses
Source: Tiziana
The PET data
The most convincing data set is from the PET data. PET scanning of microglial cells is done using imaging agents, Exhibit 3. Graph 1 above showed the overall averaged change. Graph 6 shows the changes in different brain regions (note the time axis is not to scale unlike in Graph 1). Exhibits 4, 5 and 6 show the PET scans at zero, after three months of dosing and after six months since trial entry (including the holiday period). The number of hot spots clearly reduces rapidly. As noted above, this may be linked to clinical stabilisation.
Exhibit 3 - Brain PET imaging
Source: Tiziana
PET scanning (Exhibit 3) uses a radioactive isotope, either C11 or F18, incorporated into an imaging agent (a pharmaceutical-like molecule). These isotopes emit positrons, a positive electron, antimatter. These soon meet normal particles and are totally annihilated with the energy converted to a gamma-ray: very high energy light. This easily passes through tissue and bone and is detected by the PET scanner. A brain image is then computed.
The imaging agent used in this study is F18PBR06. This binds Translocator Protein (TSPO) which is located in the outer mitochondrial membrane and is up-regulated in activated microglia (Singhal et al (2021)). TSPO is responsible for transporting fat molecules into mitochondria. Mitochondria are internal organelles that produce essential chemical energy. TSPO is found in all active cells, but active microglial cells have been presumed to have more of them, so light up on PET. PET scans are too low a resolution to see precise detail.
Microglail cells as markers of brain inflammation
The theory is that microglial cells are responsible for chronic brain inflammation. Guerrero and Sicotte (2020) reviewed the role of microglial cells and concluded that microglia in multiple sclerosis has a complex and controversial role with evidence suggesting that microglial cells play key roles in both active inflammation and remyelination. A 2018 review by Lassmann (2018) noted that "active cortical demyelination .... is associated with microglia activation at the site of active myelin destruction". However, TSPO levels in the brain may just reflect the number of microglial cells in an area, rather than their activation state (Woods 2021).
Exhibit 4 - Pre-treatment PET
Source: Tiziana
Exhibit 5 - Three month PET
Source: Tiziana
Exhibit 6 - Six month PET
Source: Tiziana
Conclusions
The medical conclusions are shown in Exhibit 7. From the investor viewpoint, these are exciting data that open the potential for activating T-regs by use of nasal foralumab to tackle not just some forms of MS but possibly also diseases like Alzheimer's. However, we caution that this data relates to one patient over a short time and much more development needs to be done. This further work will take some years and needs a significant cash investment. This implies that a large partner is needed.
Exhibit 7 - PET conclusions
Source: Tiziana
Foralumab in Crohn's disease
Oral foralumab to treat Crohn's disease has long been seen as a key indication. The mechanism of action of oral foralumab is believed to be through activation of mucosal immunity via proliferation of Tregs. 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 also a delivery system for an anti-CD3 monoclonal. Crohn's is a tough and intractable condition and products need to compete against steroids and increasing numbers of lower-cost 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 preventative treatment is needed. Anti-CD3 monoclonals like foralumab have shown efficacy in other T1D studies. Another anti-CD3, teplizumab (Provention), has been re-submitted to the FDA for T1D; 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.
IP Protection covering Foralumab
Foralumab’s direct patent protection expires in 2024. A US formulation patent will expire in 2036. For biological therapeutics, patents are less critical since, if approved, Foralumab as a new biological gains 12 years of 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.
Clinical trial status
The trial status and National Clinical Trials (NCT) numbers where published are shown in Table 1. Two studies have been withdrawn as of 3 March: a Phase I dose-escalation in MS as clinicians seem happy with the current 50 microgram dose and the proposed Brazilian COVID-19 study, withdrawn for commercial reasons.
In other candidate products, a milciclib trial, targeting K-RAS mutated non-small cell lung cancer may start in H1. No details have been announced. Milciclib will be given in combination with gemcitabine.
An initial safety Ib study in healthy volunteers on the anti-inflammatory monoclonal TZLS-501 is planned to start after the submission of an IND planned for H1 2022.
Table 1 - Clinical trials 2022
Source: Tiziana reports, clinicaltrials.gov
Tiziana background
Tiziana Life Sciences is 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 (American Depositary Receipt) NASDAQ listing in 2018. In October 2021, Tiziana created a new Bermuda-based holding company, consolidated its shares and listed the new shares on the NASDAQ thereby de-listing from AIM. Tiziana is now a US-listed, offshore-based company with a UK company registration.
By transferring to a direct NASDAQ listing, Tiziana directly accesses US capital markets and may eventually gain a US-style valuation. As Tiziana builds inherent value through its research & development programmes, fresh clinical data will reinforce and build the investment case.
Finnancial commentary
Tiziana is financially secure over 2022 and had £38.6mln cash on 30 June 2021 (31 December 2020: £48.2mln). The last capital increase was in 2020, raising a net £54.1mln. A £10mln fee linked to the fundraising was paid in shares.
Half-year fiscal 2021 (H1FY21) results showed a loss of £12.6mln (vs H1FY20 -£3.9mln). Research and development in H1FY21 increased to £12.6mln compared to £3.9mln 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.
A US$5mln stock repurchase programme has been announced. Tiziana believes that this is an attractive use of capital given the strength of its balance sheet.
Peer comparison
The most obvious peer comparator is Provention Bio (Provention Bio Inc (NASDAQ:PRVB)) with a market capitalisation of US$492mln (as of 22 March 2022). Its lead programme is humanised anti-CD3 mAb teplizumab (regulatory review stage) for Type-1 diabetes. The share price recovered after 28 January when Provention announced it was resubmitting its teplizumab BLA for Type-1 diabetes. If FDA approved, this will be a strong validation for anti-CD3 antibody control of the immune system. It also has other programmes, hence, Provention Bio is a later stage company with a 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 once 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 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.
We also caution that data from a single patient can be over-analysed. The placebo effect is known to be powerful; patients enrolled in clinical studies get a lot of extra medical attention and generally do better than those on standard care pathways. Doctors treat individuals, want them to do well and look for positive signs. By contrast, regulators and payors look for hard statistical data.
Sector trends
Many biotech companies saw their share prices fall over 2021 and Tiziana also suffered; however, companies like Tiziana, if they are well capitalised, continue to create value through steady clinical development and this value will at some point be recognised by new commercial partners and the markets, as happened in Q1 2022 with Provention. The biotech market appears to have stabilised for the moment after earlier share price reassessments.