[ACCESSWIRE]
CORAL GABLES, FL / ACCESSWIRE / May 20, 2015 / If a global competition were held for the planet's most sadly ironic places, the hospital would place very high, if not win outright. This is not only true from before the late 19th century when the germ theory of disease became widely accepted. Before then, the hospital - a place that is designed to heal the sick - was just about the best place on Earth to contract a life-threatening infection due to unsanitary surgical procedures. This is still sadly true today as well. Hospitals are still the largest breeding grounds for deadly superbug infections due to the very sanitation procedures meant to stop them.
Hospitals essentially collect the sick and weak and expose them to the most resistant superbugs known to man. We often hear about hospital-borne antibiotic resistant bacterial infections like MRSA, but one comparatively overlooked area is fungal infections, especially among cancer patients and the immunocompromised. While the incidence of resistant invasive fungal infections (IFIs) is low at 6 per 100,000, the mortality rate is extraordinarily high at close to 30%. By comparison, MRSA incidence is actually lower at 4.5 per 100,000 with a mortality rate averaging 20%. In fact, a majority of hospital infections are caused by two main types of fungi, Candida and Aspergillus - responsible for over 90% of the 97,000 annual deaths from microbial infection in the US.
By the numbers then, IFIs are actually a much more serious problem than bacterial superbugs.
Cidara (CDTX)
Lately, investors have been responding as biotechs focused on antifungals have been having largely successful IPO's. Cidara Therapeutics (NASDAQ: CDTX) for example, raised $75M pricing its shares at $16 a piece in April, and has since expanded its total shares outstanding to 13.5M with a market cap of over $200M. While that does not sound astronomical, it is a very high valuation for a preclinical biotech that has not even reached the clinical trial stage.
Cidara's lead candidate is CD-101, an antifungal of the echinocandin class. Echinocandins are considered generally effective against systemic Candida infections, but require daily intravenous treatment with serious side effects and known drug interactions. Three echinocandins have been approved since this class of antifungals debuted in 2001, averaging one FDA approval every 4.5 years. CD-101 differs from the other three mainly in its half-life which is significantly longer and may allow for once a week rather than daily intravenous treatment, allowing for cheaper outpatient settings.
One of the main reasons why Cidara had such a successful IPO is its well-known executive staff that has been at the center of major acquisitions in the anti-infective space in recent years. These include Jeff Stein, former CEO of Trius, which was acquired by Cubist, which was acquired by Merck (MRK). Its chief medical officer Dirk Thye was a founder of Cerexa, which was acquired by Forest Labs, which was acquired by Actavis (ACT).
Ruthigen (RTGN)
Ruthigen (NASDAQ: RTGN) is in some ways more exciting than Cidara, though with less of a fireworks show during its IPO in April 2014. It raised a respectable $20M in its IPO. Its staff is not associated with huge Big Pharma acquisitions and mergers like Cidara's and the company is itself a spinoff of another microcap, Oculus (OCLS), so it had less fanfare. Nevertheless, the product Ruthigen is developing is quite intriguing in its simplicity, something of a modern throwback to the late 19th century surgical sanitation revolution pioneered by Joseph Lister using phenol on open surgical wounds in the 1870's. Ruthigen's main - in fact only - product is simply hypochlorous acid, a known and potent anti-infective. What makes it unique is Ruthigen's proprietary method of manufacturing it without any sodium hypochlorite, otherwise known as bleach, and adding in magnesium to increase biocompatibility. The company believes its formulation of hypochlorous acid can be applied directly to organs during and after open surgery without any serious tissue damage, and without the risk of bacteria or fungi developing resistance.
Abdomenal surgery is certainly a wide market, and with hypochlorous acid already a known and potent anti-infective compound against both bacteria and fungi, what makes Ruthigen's prospects so exciting even at the preclinical stage is that once safety is established in phase 1, proving efficacy in later trials should not prove to be much of an issue.
Matinas Biopharma (MTNB)
Matinas (OTCQB: MTNB), also focused on antifungals, enjoyed a July 2014 IPO that raised a respectable $25M, and now has a market cap of just over $50M. Though not exclusively an anti-infective company like the other two, its lead candidate is a product called cochleated amphotericin B. Cochleates are lipid sheets rolled into the shape of snail shell, manufactured cheaply from soybeans. Matinas acquired this pipeline product when it acquired Aquarius Biotechnologies. Amphotericin B has been on the market for more than half a century and is known as one of the most potent antifungals available on the market. The problem is that there are serious side effects involved which can even be fatal, so the treatment is often used as a last resort.
Matinas believes it has solved the major safety problem associated with amphotericin B by encapsulating the antifungal into lipid cochleates, which are swallowed by white blood cells and then unfurled inside them along by calcium diffusion along with the amphotericin B molecules. This keeps the antibiotic inert until it ends up inside the very immune cells that attack fungal infections.
Matinas is further along the clinical pipeline than the other two, scheduled to begin a phase 2a study this quarter that will be entirely funded by the National Institute of Health, with Matinas supplying the drug. Safety has already been established in phase 1 on healthy subjects, which itself is a pretty big deal because amphotericin B is such a strong anti fungal with normally severe side effects.
The potential with cochleated amphotericin B, or CAMB, is blockbuster. The current safest version of the drug is Gilead's AmBisome which sold $388M in 2014, but other less effective antifungals on the market called azoles have sold in the billions despite being weaker. Doctors generally prescribe the weaker drugs first due to the fact that they are much safer, with amphotericin B usually being a last resort. If Matinas successfully assuages the safety issue with CAMB, then its version of amphotericin B could take over much of those blockbuster drugs' markets, potentially propelling Matinas higher by orders of magnitude over its current $50M valuation.
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