A Billion Dollar Market Just Waiting for a New Oral Mucositis Drug: Five Companies That Want It

“Oral mucositis is probably the most common, debilitating complication of cancer treatments, particularly chemotherapy and radiation.” That’s straight from The Oral Cancer Foundation website and a fair enough statement considering the condition has a high incidence rate and essentially no approved drugs to treat. Oral mucositis (OM) is characterized by atrophy to the mouth’s mucosal lining and ulcer formation, which can cause a extreme pain, difficulty eating and drinking, suspension of cancer therapy and even systemic sepsis and death.

Patients describe OM with terms such as "indescribable pain" and "more painful than the cancer." Treatment is often strong narcotics such as morphine, opioids, as well as the insertion of feeding tubes during week-long hospital stays.

With some half-a-million people in the U.S. suffering from OM every year, it represents and area of great unmet medical need and, essentially, a new market for a long-time problem.

Big Problem. Big Opportunity.

There are currently no FDA-approved drugs for the treatment of OM other than palifermin, a drug branded Kepivance by Amgen (NASDAQ: AMGN), an intravenous therapy which is only indicated for blood cancer patients undergoing high-dose chemotherapy, with or without radiation, followed by a bone marrow transplant. Kepivance has not been shown to be effective for solid tumors.

Historically, biotechs and specialty pharmas have tried to capitalize on an OM therapy with little success. The commercial struggles have been underscored by companies mostly developing topical coatings that qualify as medical devices, not “drugs,” that compete with and offer limited benefits to so-called “magic mouthwashes” concocted in-house by hospitals and often used in conjunction with other palliative therapies for the symptoms of OM, not the root cause.

For example, MuGard, an oral rinse developed by Aboena Therapeutics (NASDAQ: ABEO) back when it was known as Access Pharma and licensed by AMAG Pharma (NASDAQ: AMAG) in 2013 for $3.3 million upfront plus royalties, generated only $1.1 million in 2016 sales, according to AMAG’s 2016 Form 10-K filed with the SEC. MuGard was cleared for commercialization through the FDA 510(k) pathway as a medical device, rather than through a New Drug Application that requires the full boat of clinical studies and guidelines that new drugs and biologics are subject to.

Gelclair by EKR Therapeutics, Mucotrol by Edwards Pharmaceuticals and Caphosol by EUSA Pharma are examples of other palliative coating-type products cleared via the medical device pathway that are critiqued for poor reimbursement and data.

That said, the winds could be changing as some promising therapeutics are coming down the pipeline. For the best chance at finding commercial success, a new therapy will need to be superior to magic mouthwashes in treating OM symptoms and be prophylactic in nature, effectively reducing the often-exorbitant cost and therapeutic burdens associated with OM. These qualities will support insurance reimbursement, physician adoption, patient compliance and, ultimately, the genesis of a large, untapped market.

If a company can check these boxes with a new treatment, the U.S. OM market opportunity is difficult to even accurately gauge because it is a new market, although conservatively likely above $500 million annually. How so? Consider that incidence rates vary across cancer patient populations and therapies. For the estimated 63,000 Americans that will be diagnosed with head and neck cancer this year, many will receive radiation therapy (RT) and nearly every patient receiving RT will develop OM.

According to Dr. Stephen Sonis, widely regarded as a leading expert in OM and Professor of Oral Medicine at the Harvard School of Dental Medicine and Senior Surgeon at Brigham and Women's Hospital and the Dana-Farber Cancer Center, “Probably 60 to 70 percent of patients with cancers of the oral cavity, oral pharynx, hypopharynx, and nasopharynx, develop severe mucositis of such severity as to require increased hospitalization, emergency room visits, or breaks in treatment,” suggesting low-grade OM is the exception rather than the rule for many head and neck cancer patients.

At Grade 3, OM patients have oral ulcers and are on a liquid diet only. At Grade 4, oral alimentation is impossible.

For cancer patients receiving a standard regimen of chemotherapy, it’s estimated that 40 percent will develop OM. The Centers for Disease Control and Prevention estimates that about 650,000 cancer patients receive chemotherapy in an outpatient setting each year in the U.S. Generally speaking, there is a consensus that about 500,000 cases of OM occur in the U.S. annually right now.

Add in the economic burden and the market opportunity to address OM becomes even more clear. Estimates from a study published on PubMed pegged the supportive care costs of severe chemo-radiation-induced OM at $17,244 more than similar cancer patients without severe OM. It’s worth noting those figures were from nearly a decade ago and likely higher now. Not to say that every patient develops severe OM or tips the high-end of the supportive costs, but the metrics of 500,000 cases and $17,244 more per patient equates to a potential annual savings around $8.6 billion.

With no approved drugs, there is no leader, meaning there’s a blue-sky opportunity for drugs that make it to market. Enzychem Lifesciences, a South Korean biotech for which Dr. Sonis serves as an advisor, has a mid-stage experimental oral compound called EC-18 for chemo-radiotherapy-induced OM. The Seoul-based company said in October that it believes EC-18 could generate $2.6 billion (3 trillion won) in global sales should it one day be approved and reach that scale, providing some color to the opportunity at hand.

Top Contender: Enzychem

Enzychem has completed several trials of EC-18, primarily directed at neutropenia, a disease of abnormally low levels of neutrophils, a type of white blood cell, resulting in an increased vulnerability to infection. The mechanism of action has the company hypothesizing that the synthesized immune-modulating compound can address multiple indications, including sepsis, OM and inflammatory diseases.

The company was able to hop right into a Phase 2 trial after EC-18 was deemed safe across three Phase 1 trials for neutropenia. The 84-patient mid-stage trial was initiated in June, with recruitment anticipated for January 2018. The double-blind, placebo-controlled study is broken into two stages. The first stage is designed to evaluate safety across three escalating doses of EC-18 or placebo and the second looking at both safety and efficacy of drug versus placebo based upon optimal EC-18 dosing identified from the first stage of the trial.

The primary outcome is incidence of severe OM as defined as grades 3 or 4 by the World Health Organization (WHO) Oral Toxicity Scale, a standard global metric, at the end of and across seven weeks of therapy.

Top Contender: Innovation Pharmaceuticals (IPIX)

Dr. Sonis is not just lending his expertise to Enzychem, he has been working closely with Innovation Pharmaceuticals (OTCQB: IPIX) for years, officially taking the position as a Scientific Advisor in March 2016. Dr. Sonis has been assisting in the development of Innovation Pharma’s Brilacidin-OM, an oral rinse version of the company’s defensin-mimetic Brilacidin, a novel synthetic, non-peptidic small molecule shown to have a dynamic mechanism of action that demonstrates antibiotic, anti-inflammatory and immunomodulatory properties.

To that end, it’s a perfect fit for OM, given that it is a condition of inflammation and infection occurring in a typically depressed immune system. IPIX (née Cellceutix Corp.) is developing Brilacidin-OM under an FDA Fast Track designation to attenuate OM in patients with head and neck cancer undergoing chemo-radiation. Incidentally, the company at one point approached the FDA about an Orphan Drug designation, which can provide certain benefits for treating rare diseases, but was informed by the agency that OM was not rare enough to qualify, an auspicious moment speaking to market size.

IPIX is ahead of Enzychem and most others, as a 61-patient Phase 2 study has been completed with topline data expected in the coming weeks, a milestone moment for the company. The primary endpoint is evaluating incidence of severe OM (WHO grade 3-4) during and at the end of seven weeks of therapy.

Take note that Innovation Pharma and Enzychem have primary endpoints of “incidence” of OM. This is an important distinction between those looking at “duration” as the primary endpoint because it means that the companies are trying to prevent severe OM in the first place, rather than just trying to moderate the time patients must deal with severe OM. Both companies are looking at duration as a secondary endpoints, which is obviously important, but the blockbuster potential resides in stopping the onset of severe OM, as well as ameliorating the condition swiftly should it develop.

That’s not to say that others targeting severe OM aren’t looking at incidence, but defining it as a primary endpoint sets the bar a little higher for difficulty in achieving study success and speaks to confidence in the drug.

Innovation Pharma is looking to build upon positive interim data in March that showed a marked reduction in incidence of severe OM in patients treated with Brilacidin who received at least 55 Gy cumulative units of radiation. Merely a sample of the overall study, only 2 of 9 (22.22%) patients receiving Brilacidin-OM therapy developed severe OM, compared to 7 out of 10 patients (70%) in the placebo group. Furthermore, a look at secondary endpoints showed that when severe OM developed, it didn’t last as long for the two patients on Brilacidin-OM (mean = 10.5 days) versus those on placebo (mean = 14 days).

Brilacidin-OM was generally well tolerated with no drug-related adverse events reported.

The safety and efficacy data is anchored by several other clinical trials of Brilacidin in different formulations for different indications. As a single-dose intravenous antibiotic, the drug was shown to deliver comparable results to the seven-day regimen of the blockbuster daptomycin in treating Acute Bacterial Skin and Skin Structure Infections (ABSSSI) in a Phase 2b study. In a successfully completed Phase 2 proof-of-concept study earlier this year, the majority of patients treated with Brilacidin as an enema achieved clinical remission of ulcerative proctitis/ulcerative proctosigmoiditis, two forms of inflammatory bowel disease. Importantly, the UP/UPS study lends further validation to localized delivery of Brilacidin with minimal systemic exposure.

Looking ahead to the upcoming data set from the Phase 2 OM study, if such low incidence (22.22%) can be safely achieved, IPIX will be in an enviable position. As Dr. Sonis conveyed, a large percentage of head and neck cancer patients normally progress to severe OM even with today’s preventative measures. Another important part of un-blinding the data will allow IPIX to glean important info on the drug’s effect against certain types of tumors and therapies to determine parameters for a registration study if the data warrants. In any case, a substantial decrease in incidence and duration in severe OM for a rinse-and-spit drug delivery method puts IPIX amongst the leaders in the OM space, which is why investors will be watching closely for the data.

Top Contender: Monopar Therapeutics

In September, Onxeo S.A. (Euronext Paris, NASDAQ Copenhagen: ONXEO) made good on a 2016 promise to find a partner to advance Validive (Clonidine Lauriad) beyond a successfully completed 183-patient Phase 2 study completed in 2015 for the treatment of severe OM induced by radiotherapy or chemotherapy in patients suffering from head and neck cancer. The Phase 3-ready drug acts by reducing cytokine expression in the oral mucosa’s white blood cells, thus reducing ulcerations and pain in severe OM. Moreover, studies show high mucous and salivary concentration of clonidine as a result of Onxeo’s mucoadhesive tablet technology, increasing the localized effect where it’s needed while containing systemic exposure.

Through the new agreement, Onxeo granted exclusive worldwide rights to its Valadive, which has an Orphan Drug designation in Europe and a Fast Track designation in the U.S., to Chicago-based Monopar Therapeutics for $1.0 million upfront and up to $108 million in future milestone payments. Monopar is now completely responsible for the drug’s development, starting with a planned Phase 3 registration study.

The Phase 2 study showed a greater therapeutic benefit to patients with oropharyngeal cancer (OPC), a quickly growing sub-population of head and neck cancer patients, compared to non-OPC patients. Within this group, the data showed a reduced incidence of severe oral mucositis at eight weeks of treatment, improved OM symptoms, a reduction in radiotherapy-related adverse events and a safety profile similar to placebo, as well as noting strong patient compliance.

Validive is not being developed for any other indications.

Top Contender: Soligenix (SNGX)

Soligenix is developing SGX942 (dusquetide) for, much like the aforementioned companies, OM in head and neck cancer patients treated with chemo-radiation therapy. Based upon positive findings from a Phase 2 trial, Soligenix initiated a pivotal 190-patient Phase 3 study this summer with an estimated primary completion date of March 2019 (meaning final data is expected to be collected at that point for analysis).

The primary endpoint is the efficacy of SGX942 to reduce the duration of severe OM compared to placebo across 13 weeks of therapy, exclusively for patients with squamous cell carcinoma of the oral cavity and oropharynx. The fully-synthetic, 5-amino acid peptide, the first in Soligenix’s novel “Innate Defense Regulators” franchise, is delivered intravenously twice per week within three days of RT starting and continuing through two weeks after RT ends.

The fact that SGX942 is an IV therapy (as opposed to the preferred method of oral delivery) requiring many infusions and only for select indications could provide a unique set of challenges for commercial success going forward. However, the company has feedback from the European Medicines Agency that if the trial is successful, the aggregate data on SGX942 would support a marketing authorization application in Europe.

In the completed 111-patient Phase 2 study, SGX942 delivered compelling results, including reducing the duration of severe OM by 50% to 9 days compared to 18 days for those in the placebo group and cutting the duration of severe OM to 10 days from 30 days compared to placebo for those patients receiving the most aggressive type of chemo-radiation.

Being developed under a FDA Fast Track designation, SGX942 has been shown in studies to be safe and generally well tolerated. The drug also has a FDA Orphan Drug designation for the treatment of acute radiation syndrome.

In September 2016, Soligenix inked a deal with U.S.-based, China-focused specialty pharma SciClone Pharmaceuticals, Inc. (NASDAQ:SCLN). For a $3 million equity investment in Soligenix and a royalty package (along with SNGX keeping global manufacturing rights and supplying the product), SciClone was granted rights to develop, market, distribute and sell SGX942 in China, Hong Kong, Macau, Taiwan, South Korea and Vietnam.

Top Contender: Oragenics (OGEN)

Late in August, Oragenics (NYSE MKT: OGEN) dosed the first patient in a 200-patient Phase 2 trial of AG013, an oral rinse for the treatment of OM in head and neck cancer patients receiving chemo-radiation. AG013 was designed by Oragenics’ partner Intrexon Corp. (NYSE: XON) to deliver the therapeutic molecule Trefoil Factor 1, part of a class of peptides that help protect and repair gastrointestinal tissue, to the mucosal tissues in the oral cavity.

Oragenics licensed from Intrexon exclusive worldwide rights to develop and commercialize AG013 for OM in cancer patients. The drug has a FDA Fast Track designation for the indication.

While the basics of the Phase 2 trial are structured somewhat similar to peers’ studies, Oragenics has a slightly different primary goal. While others were looking at severe OM (WHO grades 3-4), Oragenics is looking across WHO OM grade spectrum in comparing the development, severity and duration of OM versus a placebo arm. In the study, patients will be administered AG013 from the start of RT until two weeks following the completion of RT.

AG013 for OM is the most advanced pipeline candidate at Oragenics and the only to make it to the clinical stage.

Taking Surgical Aim at OM

The market to treat OM is there and, in fact, quite large and screaming for someone to come take a big piece of it to help cancer patients in need. It’s just been a tough nut to crack, which has resulted in market participants not placing a great deal of value to promising OM drugs in development. That could prove to be a big mistake considering that Kepivance can command $10,000+ for a six-treatment cycle, which signals that companies can make money and insurance companies will provide coverage. A superior treatment for solid tumors should command industry attention.

Oral therapies are much more convenient and if new (bona fide) drugs (not devices) can one day garner an FDA blessing, they likely will be warmly embraced by doctors, patients and insurance providers alike, setting the market on its side and possibly creating a company-maker in the process.

Companies like those above are pioneers using new approaches, in some cases completely new classes of drugs, to make substantial advancements to successfully navigate their treatments into mid- and late-stage trials. Fingers crossed, one day soon there will be a watershed moment in OM when one – or maybe in multiple – drugs are available, filling a big void in cancer care.

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