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To: Cal Gary who wrote (7640)	8/21/2001 8:16:19 PM
From: Montana Wildhack	Respond to of 14101

I'm copying a post on Stockhouse from di7026 which I believe is very worthwhile reading: When I first evaluated DMX as a potential investment a year and a half ago, one thing that struck me the most was that the company had not accumulated major debts while completing the clinical development of Pennsaid. Almost all biotechs I know of have either gone out to get a big brother partner to finance the substantial costs early in the development cycle, or they would have heavily diluted their share base to obtain enough funding to pay for the trials. DMX, on the other hand, had not really done either but yet it managed to reach marketing status for Pennsaid and now we are awaiting WF10 approval and the commencement of the antifungal trial. The big question is how did DMX do it? I believe that besides the fact that REK has been prudent, persistent and frugal in her approach, the very nature of the DMSO-based carrier also has a lot to do with this rather amazing phenomenon. There are indeed a lot of similarities between Pennsaid and the upcoming antifungal drug in terms of how they both fit into this "low budget" approach to drug development: (1) Using off-patent drugs: the carrier platform allows DMX to use off-patent drugs and reformulate them into patentable entities. That saves a lot of research time, efforts and costs. It also simplies preclinical works such as Ames test, animal tox, Pks and metabolism studies. These off-patent drugs can be obtained inexpensively at both GLP and GMP standards and greatly facility the IND application. (2) Topical drugs: Due to the nature of the carrier, both Pennsaid and the antifungal drugs are/will be topically or superficially applied, and thus do not incur great expenses at the trials. Other drugs may require i.v., infusion pumps, surgical implants, inhalers, injections and would cost significantly more. (3) Clinical end-point evaluations: Both OA and nail fungal infections require simple observations for drug efficacy evaluations. OA patients only need to answer the WOMAC questionaires, and nail fungal infections can be evaluated by visual exams. There is no complicated, sophiscated or costly tests like PCR, RTPCR, blood tests, enzyme tests, ELISA, radioactive isotopes etc. (4) Manufacturing: DMX is and will be manufacturing Pennsaid and the antifungal drug at its Varennes plant. Not only will it save money, it also allows DMX to closely monitor both the quality and quantity of the products. The current expansion of the plant will add both production capacity and experience to the Quebec team. (5) Selection of diseases with existing symptoms: this may sound trivial at first. For both OA and the fungal disease, patients selected for the clinical trials all have the symptoms and thus 100% of the recruits can be used in the evaluation process at the end of the trial. For drugs such as those tested for heart attacks and strokes, normally patients with high risks are selected for the trials, but only a small % of the patients may develop the diseases during the trial even in the placebo group. So in order to obtain sufficient data points, a large # of patients have to be recruited, normally in the thousands. Then you hope that at the end of the trials, you will have enough data to generate statistically significant results. While in the case of Pennsaid, only hundreds of patients were needed in phase III, and I expect the same for the antifungal. All these factors above contribute greatly in lowering the costs of developing Pennsaid and the antifungal drug for DMX. Instead of the average cost of $300-500M for a single drug candidate to go through all the required trials, I think the cost for Pennsaid and the antifungal would not exceed the $50M each. And that's why I think there is brilliance behind the DMX approach. di7026