2004 - WallStreetReporter - Dated September 3, 2004
Interview With:
Paul Freiman
President and
Chief Executive Officer
Dated September 3, 2004
WSR: Could you start with an overview of the company?
NTII: In a nutshell, we develop products that we licensed-in or acquired through merger and acquisition in the central nervous system area. To that effect, we have three compounds that are well along the way. The first one is called Memantine, the trademark is Namenda®, and it is currently being marketed by Forest Laboratories for Alzheimer’s disease. We receive a 1% passive income stream for that condition. That is not inconsequential as Forest, in its first six months of sales this fiscal year, has sold over $80 million and they are growing nicely. So, we feel this is going to be a great source of revenue to our company.
The same drug is also being developed by Forest Laboratories for neuropathic pain -- a very, very difficult condition to treat, it is associated primarily with diabetic patients, and it is the pain in their limbs. There is not much in the way of treatment out there, and we have high hopes since we’ve had one very good clinical trial and one questionable trial, but a new trial program, which is underway, will underpin that.
The second product that we have is called XERECEPT™; it’s an orphan drug for the swelling around brain cancers. Today, patients with brain cancers develop a swelling and the fluid has no place to go in the brain; it’s trapped between the brain and the skull, and it causes pressure on the central stem, causing terrible painful side effects. It is treated today with a steroid called dexamethasone. The drug works extremely well, but like most steroids it causes side effects of its own.
So, our role is to decrease the amount of steroids used or eliminate them completely. Our drug is now in a Phase III trial, and the second one will start within 60 days. So, we are well along on this one.
The third product represents the acquisition of a small company called Empire Pharmaceuticals. Their product is called Viprinex™, an extract of the Malayan pit viper snake. This particular brand of snake kills its victims by, of course, biting and injecting the venom. The venom causes the blood to thin out, and the victim bleeds to death internally. Now, when you think about the condition of stroke, which we are all familiar with, blood thickens, clots form, and you want to break the clots up and reduce the thickness of the blood -- that is something called fibrinogen.
That product, which we call Viprinex, is well along entering Phase III in a new dosage regimen. The product had been in Phase III trials with its predecessor company, which was Knoll Pharmaceuticals, now part of Abbott Laboratories, and we obtained this through a license.
We are heading into two substantial Phase III trials in the second half of 2005, and we would hope to complete these trials somewhere around 2007 and submit to the FDA for the acute treatment of ischemic stroke.
WSR: What should we note about the Alzheimer’s disease market and what are the prospects for growth there for the company in gaining market share?
NTII: Well, unfortunately, the demographics are in our favor. With an aging population, you are going to see more people with dementia leading to Alzheimer’s. The current therapies, prior to the release of our drug Namenda, were drugs, what’s called acetylcholinesterase inhibitors, and they were approved for mild-to-moderate cases of Alzheimer’s. It’s tough to diagnose Alzheimer’s in the beginning, and don’t forget you are on a slippery slope, so the mild becomes moderate, the moderate becomes severe, and there are no drugs out there that actually cure the disease.
So, what you want to do to the slippery slope is to raise the angle of the decline, the patients quality of life will last longer and better, if you will. Memantine is the only drug approved for moderate-to-severe Alzheimer’s where the bulk of the patients are, and run an actual combination trial with one of these acetylcholinesterase inhibitors. We’ve seen a flattening over 26 weeks of the disease. So, again this is not a home run in the world of Alzheimer’s, but there are none, and it’s at least a triple play. So, while I put this in those crude terms, that’s where we stand with Alzheimer’s.
WSR: And looking at XERECEPT and the prospect for market there, describe the landscape that you are competing in?
NTII: It’s a small market but such a necessary market to deal with. When you look at a patient with brain cancer, they have three strikes against them. They have the cancer, the swelling around the cancer caused by the radiation and surgery, and then the treatment -- this dexamethasone, a steroid, brings its own side effect.
So, we are going to interject on both the swelling and on the side effects from dexamethasone as that’s where the trials are aimed at. We don’t affect the cancer itself.
The market is small in the sense that there are 120,000 metastatic brain cancer cases a year in the US, and 30,000 primary brain cancers, makes for a small market. But, it’s our intent to do good on this one, and also by doing good, I believe that we can show a substantial profit.
We can show that by forming our own sales force of approximately ten people, and calling on 2,000 neurooncologists in the United States. And it is our intent to initiate a marketing program with this product.
So, while the sales probably in the US would be in the $50 million range, it will be quite profitable to the company.
WSR: In looking at the prospects for Viprinex and its standing in the clinic, tell us about the company’s present momentum in hiring the key personnel to move this forward?
NTII: The interesting thing is the drug was developed by a German company, Knoll, which is now part of Abbott, and they developed a series of clinical trials. In the process, I’ve rarely seen a group of people associated with a drug that are so positive about the drug. So, after the fact, after we obtained the drug, we hired the former head of clinical programs for Viprinex from Knoll, who started with us on September 1, Dr. David Levy. There are a number of people who were associated with Knoll, who are providing help to us in the form of consulting work, and some may become members of our staff. So, there is a lot of experience behind this. This company, Knoll, spent about a $150 million on the project over a period of some 15 years. So, we have tons of data, we have people with experience, we have folks who know how to manufacture it, and we are taking advantage of all that expertise.
WSR: Is the acquisition with Empire Pharmaceuticals naturally fully integrated now, and can we see possibly more acquisitions of this type to accomplish expanding the pipeline?
NTII: I am a great believer in chewing what you put in your mouth before you swallow it, so, while we’d never say no to a good deal, it’s my intent to -- at least for six months to a year -- not be actively going out looking at new things. I think the most important thing we can do for our shareholders is to integrate it well, and get the product into the clinical trial program quickly.
WSR: How would you characterize this period of time for the company and its evolution?
NTII: This is really an inflection point period of time in the sense that in the case of Memantine, we received passive income from its sale. We don’t control its final sales. In terms of XERECEPT, we are very bullish. On the other hand, it’s a small drug -- not a potential blockbuster by any means, just a needed drug. But, all of a sudden we’ve obtained this drug Viprinex which has a very large potential for sale, and the one which could change the character of this company, both from the standpoint of an end game, should the company be sold. This certainly makes it more attractive both from the standpoint of being able to generate enough cash to acquire other products and expand the company in a more rapid fashion.
WSR: And in closing, what would you highlight to shareholders regarding the opportunities for growth, both today and long term?
NTII: That falls into a couple of areas. The first is that the biotech industry is littered with ruins of drugs that didn’t make it, and it’s possible that this could happen to us, but we are in a very advanced stage of development. These products aren’t a wild guess anymore, which kind of distinguishes us from 90%-plus of the biotech industry.
Secondly, we are in a solid financial position, we’ve got a couple of years of cash; we have no debt; we are receiving income from Forest on a quarterly basis. And that’s in our next check which is due October 31, the cash from both Forest and from our European partners will total close to $700,000 in that quarter, and that’s growing. So, it’s becoming substantial. And third, I am an old war horse. I used to be the CEO of the company called Syntex, and we have a very, very experienced and successful leadership group within the company. And I think we are on firm ground; if you liken us to a three-leg stool, there is no one leg missing.
END
wallstreetreporter.com |
