Further expansion of AI-based R&D
Poolbeg Pharma yesterday announced a deal with the Israeli artificial intelligence (AI)-based biotech CytoReason to conduct a drug discovery programme aimed at identifying potential drug development candidates for the treatment of influenza. The move represents Poolbeg's second foray into AI-based drug discovery following its recent partnership with the US firm, OneThree Biotech, which is aimed at identifying development candidates for respiratory syncytial virus (RSV) infection.
Both programmes make use of data from prior human challenge studies that have been conducted by Open Orphan or its predecessor hVIVO. In both cases, the intention is to identify potential candidates that have been studied in other indications but can be repurposed for influenza and RSV infection. Initial results are expected from OneThree Biotech later this year and from CytoReason in early 2023.
CytoReason has built a validated AI model that can examine data generated by bulk RNA sequencing ("bulk transcriptomics"). Poolbeg expects that the programme to identify novel targets that are critical to the mechanism of influenza infection and recovery. It hopes that this will, in turn, allow it to identify compounds that can be repurposed as development candidates for the disease.The earlier deal with OneThree Biotech envisages the US firm building an AI model for RSV to reveal new disease-relevant cell signalling pathways and identify development candidates. OneThree Biotech has developed a number of AI tools, including a machine-learning algorithm called BANDIT (Bayesian ANalysis to determine Drug Interaction Targets) that makes use of data on prospective drug compounds in order to predict the enzymes or receptors they interact with in order to exert a therapeutic effect.
Both AI partners will examine Poolbeg's dataset that consists for RNA and protein expression data at baseline and at various time points over the course of the infection, together with viral load and symptoms, from the human volunteer studies.
Deal with Israeli firm to establish new R&D programme in influenza
In both cases, the intention is to identify drug candidates with Phase 1 safety data (from trials conducted in other indications). In this way, the approach should allow Poolbeg to identify clinical-stage candidates that quickly and cost-effectively for development. The concept is similar to that used by hVIVO, albeit without the use of AI tools, to identify what is now Poolbeg's lead compound POLB 001. hVIVO identified the p38MAPK pathway as being important in the response to influenza based on an analysis of human challenge data and in-licensed a p38MAPK inhibitor from Palau, a Spanish company, that was later transferred to Poolbeg, via the spin-out.
Detailed financial terms of the two arrangements have not been disclosed, although we assume that the partners will receive milestones and royalties from any successfully-developed molecules per the standard industry model. Typically, such arrangements would be back-end loaded.
Year end Sep 30 · 2020 · 2021 · 2022
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In common with most companies in the biotech sector, Poolbeg's shares have come under significant selling pressure in the last year (small cap biotechs have generally fallen by half since peaking in February 2021). Subtracting the £20mln cash from the market capitalisation, shows the enterprise value is less than £10mln (which compares with ~£25mln at the time of the spin off last year). This may therefore represent an attractive entry point for new investors.
Valuation: attractive given cash underpinning
Since its formation in early/mid-2021, Poolbeg has made significant progress in developing its R&D pipeline. It is advancing POLB 001 towards clinical trials and has added three new preclinical/discovery R&D programmes. Two of these have been obtained from academic sources: a nasally delivered anti-viral for respiratory infections (licensed from the University of Warwick and now called POLB 002) and a vaccine (MelioVac or POLB 003 from University College Dublin) for melioidosis, a severe infection common in many tropical and subtropical regions. Poolbeg is also evaluating five other candidates from University College Dublin.
Poolbeg also signed a number of deals with commercial and/or out-sourcing partners to advance its portfolio programmes. These include licensing a nano-encapsulation technology from AnaBio Technologies, an Ireland-based biotech, that allows the formulation of vaccines for oral delivery,
Poolbeg is currently conducting GMP manufacturing and other activities designed to progress POLB 001 towards trials later this year. The study will be a human challenge in the LPS model of the severe immune response to influenza (the reaction is triggered by exposure to LPS, not the influenza virus itself). This trial is expected to start in June and should complete within a few months. As POLB 001 has, under previous licensees, been tested in multiple studies, its safety has been established and assuming the challenge trial is successful, it should be in a position to move rapidly to pivotal stage studies.
POLB 001 advancing towards trials in June
Earlier this month, Poolbeg reported 2021 financial results that covered a roughly nine-month operating period from its formation, of which some six were as an independent company (following its spin-out from Open Orphan). Cash at the December 31 year-end was £20.9mln, after the loss for the period was £2.3mln including some one-time costs associated with the spin-off and share listing.
Some £440k was spent on R&D in 2021 and even anticipating a significant increase in spending this year, means Poolbeg is well capitalised, which may be an important consideration given current heightened economic uncertainties.
2021 results