The expense, success rate and the time frame of bringing a new drug to market are constant topics of debate. Regarding costs, the pharmaceutical industry contests that it costs more than $1 billion from lab tests to final FDA approval. Opponents of big pharma argue that the cost is far less. For example, Donald W. Light of the University of Medicine and Dentistry of New Jersey and economist Rebecca Warburton of the University of Victoria say that it only costs about $55 million. Like many other estimates, the methods of calculating the costs can skew the figures about any direction that the researcher wants. Broadly speaking, the costs are significant and realistically range into the mid- to upper 9-figure dollar area.
What’s not as debatable is the length of time and probability rates of bringing a final Food and Drug Administration approval through traditional development. On average, it takes about 12 years to navigate the regulatory pathway and only about 9 percent of all drugs that start phase 1 trials ever make it to human usage. The number is, of course, far less when all of the drug candidates are factored-in where research was abandoned during the pre-clinical stage.
Taking a unique path that can eliminate years and millions of dollars from the development process, the strategy of Pacific Therapeutics Ltd. (CNSX:PT) includes reformulating approved drugs to increase efficacy and patient compliance, completing the further clinical testing, manufacturing and other regulatory requirements sufficient to seek marketing authorizations. The Vancouver-based company is initially concentrating on its lead drug candidate, PTL-202, a combination of FDA-approved drugs focused on treating fibrosis such as Idiopathic Pulmonary Fibrosis (IPF) and Liver Cirrhosis.
PTL-202 is a patent-pending cocktail using Pentoxifylline (PTX) and N-Acetyl-Cysteine (NAC). NAC is an amino acid and an extremely potent and important antioxidant. PTX is a pan-phosphodiesterase inhibitor that leads to vasodilation that has been successfully and safely used for treatment of vascular diseases such as intermittent claudication. Further, there is growing evidence that PTX, in addition to its hemorrheologic properties, has significant anti-inflammatory and anti-fibrogenic effects in lung tissue.
IPF, progressive scarring of the lung that prevents proper blood circulation to critical organs, represents a $2 billion market opportunity (with a 25% compounded annual growth rate) for Pacific and PTL-202 with more than 5 million patients globally suffering from the condition and a death rate that is higher than either breast or prostate cancer. Once diagnosed, IPF patients typically do not live past five years with most patients dying of respiratory failure.
Pacific's other product candidate, PTL-303, is a combination of drugs that have been approved for use in Japan. This combination has a wide range of uses including, treating, preventing and reducing disorders of progressive scarring in humans.
While there are many diseases in which scarring (fibrosis) occurs, chronic liver disease represents a large area of unmet medical need with more than 1.4 million deaths each year attributable to liver scarring. In fact, it’s a Top 10 global killer in the U.S. each year. Liver fibrosis, which is an outcome of persistent hepatic inflammation, if left unmanaged has serious long-term consequences for patient morbidity and mortality. This market alone is estimated to be $3.0 billion.
There are no approved antifibrotic agents available today as standards of care are primarily focused on underlying conditions, such as antivirals for hepatitis B/C viruses and lifestyle changes for metabolic disorders. Gilead’s $11 billion acquisition of Pharmasset in 2011 demonstrated the value of a Hep C drug, but also could be a useful proxy in the value of a new drug for liver fibrosis by Pacific.
While many companies are starting at ground zero developing small molecules or pursuing areas such as regenerative medicine that face many regulatory hurdles and scrutiny, Pacific is taking a path of least resistance by utilizing drugs that have already spent the hundreds of millions of dollars and decades to achieve marketing clearance. By extrapolating data and “seeing” potential new uses for approved active moieties, Pacific is in a prime position to quickly – and relatively inexpensively – shepherd their drugs through clinical stages to provide new drug candidates for indications desperately in need of new therapeutics. The company’s emergence could not come at a better time with government initiatives to expedite new drugs to market that are proven safe and effective. Yet, this little-known company trades at 13 cents per share and with a $2.74 million market capitalization that can only be viewed as grossly undervalued.
It is for these reasons, as well as the ones mentioned above, that we have decided to turn our latest Canadian spotlight on Pacific Therapeutics Ltd. (CNSX:PT) and encourage our members to perform their due diligence on the Company and add it to their watchlist.
