My annual stockholders' meeting notes:
A sizable audience was present and the Q&A at the end was lively. There was lots of concern (understandable) about the very low stock price and low market price.
I came away very enthusiastic (OK, I’ve been there before). First, I’ll give you what for me were the two most important “new” pieces of information. Then I’ll post my raw notes (unproofed and unedited) from the meeting (I brought my laptop again and was typing furiously most of the time).
First, the something new that I learned about Xerecept. Before the meeting, I had heard that the results from the Xerecept trial weren’t looking that impressive. I came away with just the opposite impression (see below for more detail). From Paul’s perspective, the problem with public perception is that the recent press release about the open label trial was much more conservative in what it stated that it needed to be. But there is a reason for that. Celtic, not NTII, controls press releases, and Celtic doesn’t give a damn about NTII’s stock price, but they do care about their credibility among practitioners in the field and so they feel that they will do better with them by using understatement. As explained in more detail below, there is lots of reason to be hopeful about some excellent data on Xerecept from the Phase III trial.
Second, we were told (in response to my question) the author of the recent report concerning the failed German trial of Ancrod, the report that concluded that Ancrod’s window of opportunity is the same as Tpa’s – just 3 hours and not 6 – is a crackpot who ignored a large amount of data that contradicted his conclusions. Both Paul and an investigator from that failed trial have submitted scathing letters to the Lancet, pointing this out. Hopefully the Lancet will publish them or a response to them. Paul stated categorically that the clinical evidence of Ancrod’s 6-hour efficacy window was “overwhelming” and that NTII’s new stroke advisory panel of experts uniformly debunked the crackpot’s report in the Lancet.
Paul gave the opening presentation, then let Lisa Carr give us the overview on the Xerecept trials, then she let Dr. Brushnev, MD, give us a report on one patient that he monitored for a year in the Open Label trial. Then Paul gave the updates on Viprinex and Xerecept. What follows are my unedited and unproofed notes:
Clearly everyone is disappointed in the stock price. But from an operational standpoint, the company continues to make progress and that will lead, if the company is successful, a very hefty increase in the stock price.
Xerecept
· Because the clinical trials are double-blinded, we don’t know what is happening with the two pending clinical trials
· At the end of the two trials, patients are forced to go back onto Dexamethasone. FDA is allowing patients to elect to continue on Xerecept on an open label basis. Because of those results, Paul is excited about the product.
· Lisa Carr stepped in to give the details on Xerecept:
o Out of the two trials (one acute and the other chronic), patients are allowed to go onto extended-use protocol.
o A couple months ago, went to the Society of Neuro-Oncology meeting and presented a poster that was on display at the meeting.
o Most of the patients in the open label study came from the chronic protocol.
o Guest speaker from the Florida Hospital
o Looked at first 20 patients to complete at least one month. Range was 4 to 48 weeks. Findings: 2/3ds of patients could reduce or eliminate steroid use (this includes patients at risk and patient of older age). Steroid side effects were reduced, including reductions in cushingoid appearance or “squirrel face” or “buffalo hump,” myopathy (muscle wasting), insomnia and weight gain.
o Long-term treatment appears safe and well tolerated.
o We do not know whether the patients participating in the open label trial had received Xerecept or not, because of the blinding.
o The press release announcing these results did not give much of an indication that this was particularly good news. A question was asked about this. Paul replied. This product belongs to Celtic so all press releases come from Celtic. In the scientific community, 20 patients don’t count for much. There are now 50 patients in the open label trial, so there will be more information soon.
· Dr. Brushnev, MD, presented a case study.
o There are 20,000 new primary brain cancers per year in the USA. Primary meaning that the cancer originates in the brain.
o More than 20,000 new cases of metastatic brain cancer per year in the US. No one is keeping track of these numbers in the US.
o Up to 40% of patients with systemic cancers will have a brain involvement.
o Over 9 million people in USA are living with brain cancer.
o So the market for brain cancer treatment could be 2,000,000 people.
o Brain tumors excrete chemicals that make tissues leaky and this leads to edema. If left untreated, patients will die from the edema. So the edema must be treated. Up to now, the only drug you can use has been Dexamethasone. There is a mixed love-hate relationship between oncologists and this drug. It works but it causes so many side effects. Some studies are asking whether the side effects are worse than the edema.
o Florida Hospital has enrolled several patients in the chronic protocol. Recruitment was difficult. But lately, accrual is picking up and he is excited to be able to track the efficacy and effects of the drug in the open label study.
o Case study of a 42 year old with anaplastic astrocytoma. In remissions for his brain. However, from his first days on chemotherapy he required treatment for edema. He did not take the Dexamethasone well. Started gaining weight, developed “moon face,” muscle weakness (couldn’t walk), frequent urination, insomnia, tremor, skin breakdown (skin lesions and he bruised easily), abnormal blood tests, and foot edema (could not put his shoes on). He had been very self-sufficient before the disease – an outdoorsman. He was suicidal from the Dex side effects. Each time they tried to decrease the Dex, he failed. When he got suicidal, the hospital offered participation in the Xerecept trial. He was reluctant because he couldn’t be promised that he would be receiving the Xerecept and not the placebo.
o In November 2005, started him on the open label trial. Today, he still has tremor and striae (skin breakdown) have resolved. That is remarkable. Even the striae has improved. These results were very very exciting. His weight reduced from 260 to about 212.
o The photographic comparison between Nov. 2005 and Nov. 2006 was remarkable. He looks pretty normal today.
o Side effects: eyelid swelling, local skin reaction at the injection site, nausea, and systemic flush.
o The patient is on a chemo break and Xerecept is the only drug he is taking. He self-injects.
o He is completely off Dexamethasone. He has improved dramatically neurologically. His quality of life has improved dramatically. He is enjoying hunting again.
o The doctor is very excited about the drug.
o As medicine has made progress in extending the life of brain cancer patients, the need for Xerecept will increase.
o New forms of radiation therapy make edema worse and that creates more need for a drug like Xerecept.
· Paul resumed giving the presentation
Viprinex
· Stroke has been like the elephants graveyard for drug therapy, but the need keeps increasing.
· Tpa is the only approved drug.
· It only has a 3-hour time window. Hope to extend the time window to 6 hours.
· Also, tpa causes some bleeding in the brain --- 6-7%. Patients on placebo will bleed at 2-3%. Hoping that Viprinex will have a bleed rate as low as placebo.
· AZN and Renovis had a drug that recently failed in the clinic. It was a neuroprotectant.
· An unnamed Japanese company just suspended a trial of a neuroprotectant.
· NUVO had a drug fail. It was a recombinant form of bat venom.
· Virtually all of the failures were with neuroprotectant agents.
· The three drugs that have succeeded: tpa, proeurokinase (spelling?) and Ancrod. Proeurokinase succeeded in a clinical trial, but needed to be given intra-arterial, so the sponsor abandoned it.
· All snakes have different venom. A failure of one snake’s venom has no implications for another snake’s venom.
· Thrombin tends to know off the alpha chains and beta chains of a fibrin molecule, transforming the fibrin molecule into fibrinogen. The fibrinogen molecules then tend to attach to each other and form a clot.
· Viprinex cleaves off only the alpha and not the beta chains. The repelling effect of the remaining beta chains prevents side-by-side deposition of fribin molecules.
· Viprinex – Plasminogen pathway: it stimulates breaking up clots when plasminogen converts into plasmin. We don’t yet know (but hope to find out during the coming year) how Viprinex stimulates the conversion of plasminogen into plasmin, which dissolves fibrin clots. Plasmin is a gentler lysing of the clots.
· Third activity of Viprinex: blood gets thicker during a stroke; Viprinex tends to thin the blood.
· The drug safety monitoring board has access to unblended data. Monthly they let NTII know if there are any untoward side effects. So far so good.
· NTII has formed an advisory board of 8 of the top stroke specialists in the USA. They have all volunteered to stay on to be advisors to NTII.
· The bugaboo has been slow patient recruitment. Could have done a better job to get more trial sites. But the company has turned the corner and now there is a lot of activity going on and a lot of excitement. But until data can be shown, the market will show skepticism.
· Hope to have interim analysis in 2007.
· In German trial, they allowed patients with higher blood pressure to participate. In the German trial, most of the patients in the Viprinex arm of the trial were older and the younger set was younger.
· Interim analysis would cover 325 patients.
· Contrary to the recently published report on the German trial, claiming that Ancrod does not work beyond the 3-hour time window, there is overwhelming evidence from that trial that Ancrod works within a 6-hour time window. For whatever reason, that scientist chose not to publish data from that study that contradicted his conclusions. Another researcher has sent a very critical letter to the publisher, as has Paul. The 8 experts that NTII has all concurred that the 6-hour time window is supported by the past data.
· Outlicensing the drug for Europe. In active discussions with three companies, but so far no hits. Barrier is the lack of data on the new dosing regimen and skepticism about the failed German trial. (After the meeting I overheard Paul saying that the failure of the AZN-Renovis trial brought a quick end to a promising negotiation he had been developing. The Pharma company told Paul, at that time, that they’d rather pay a lot more money later, once the results of the Phase III trial are in, rather than take a chance on the Phase III trial failing.)
· We have enough money to get through June of next near.
· It may be possible to monetize the Memantine cash flow.
· Market opportunity for Viprinex is $500M worldwide. Tpa generated $80M per year, but that is because of its problems with the short window and bleeding.
· There are $15M in progress payments left for Xerecept, based on approvals for US, Europe, and Japan.
Memantine
· Namenda is doing well in the market place.
· For diabetic neuropathy, the drug seems to be no more effective than Neurontin. For that reason, Forrest passed on developing the product. The product has reverted back to Merz. The parties (NTII, Merz, and the hospital holding the patent) are in negotiation regarding next steps.
Marc |
