Access Pharmaceuticals (OTCQB:ACCP) is an emerging biopharmaceutical company leveraging its proprietary drug-delivery platforms to develop treatments in areas of oncology, cancer supportive care and diabetes. After hitting 52-week lows only months ago, its stock has spiked following a series of positive news releases.
The Dallas based company markets a product called MuGard (MuGard.com supplies additional information on the product) as a preventative and treatment of oral mucositis caused by radiation and chemotherapy in cancer patients. Oral mucositis is inflammation and ulceration of the mucosa (mucous membrane) of the mouth, with symptoms ranging from pain and discomfort to an inability to tolerate food or fluids. This condition affects approximately 90% of all patients undergoing radiation and 40% of chemotherapy patients, and nearly all patients receiving head and neck radiation treatment. It can become a debilitating condition, affecting eating and treatment compliance. In the severe cases, patients need to be hospitalized, be fed via a feeding tube, be given antibiotics to treat infections and have breaks or stoppages in their underlying cancer treatment.
There are very few therapies available for treating oral mucositis- most are simple mouth rinses that provide palliative pain relief and relief from dry mouth. The most commonly used agent is called “Magic Mouthwash” and is compounded by a pharmacist. It typically consists of saline with a liquid painkiller, such as viscous lidocaine, and may include other ingredients such as an anti-biotic or anti-fungal. The closest competitor to MuGard is Caphosol, which is also approved as a preventative oral rinse, though indicated only for the treatment of dry-mouth. It comes in a two-ampule liquid kit that needs to be mixed prior to use. Palifermin, or Keratinocyte Growth Factor (KGF), may actually help re-grow the damaged mucosa, and is also indicated as a preventative treatment. However, it is delivered through injection, and is limited to use in patients undergoing chemoablation prior to stem cell transplants. With limited options, oral mucositis prevention and treatment remains a high unmet need.
MuGard has the advantage by being a ready-to-use, safe-to-swallow oral rinse designed as a preventative treatment for oral mucositis. In clinical trials, 42% of patients using MuGard preventatively never exceeded an Oral Mucositis Assessment Scale (OMAS) score of 0.5 (or had no oral mucositis), compared to only 7% in matched historical controls. The total market for oral mucositis treatment is said by the company to be in excess of $1 billion. Zacks Research has projected peak MuGard sales of $300 million and has issued six-twelve monthprice target of $8 on the stock.
Access has been rolling out its product in Asia, Europe, and North America through multiple partnerships. It recently announced a $30 million supply agreement with its partner RHEI Pharmaceuticals in China, a European launch with SpePharm, and a distribution deal with BioScrip in the US. It has received its initial $700,000 US order and anticipates generating more as it begins converting participants in its “centers of excellence” program from receiving samples to writing scripts.
Aside from MuGard, Access also has two platform technologies. One, a polymer technology, conjugates approved-chemotherapy drugs to a polymer through a pH-cleavable linker to decrease the drug’s toxicity. The other is a Cobalamin-based platform, its oral drug delivery technology for large molecule (biologics) therapeutics.
ProLindac is its most advanced pipeline product and is in Phase II clinical trials. It consists of polymer bound diaminocyclohexane (DACH) Platinum molecules – designed to be released inside the tumor. Results from a Phase II trial in late-stage ovarian cancer have been encouraging, and the company is seeking a large pharma partner to take the compound forward in large combination trials. The total market for platinum-based drugs is approximately $3 billion, with about $2 billion of that going to Eloxatin from Sanofi Aventis, the only approved DACH Platinum drug. Access is positioning ProLindac as a safer alternative to Eloxatin.
Following closely behind ProLindac is Thiarabine, a nucleoside analog in-licensed from the Southern Research Institute. With the exception of a single substitution of a Sulfur atom in place of an Oxygen atom, it is an exact copy of Ara-C (Cytarabine), a commonly used treatment in leukemia and lymphoma. Thiarabine had previously been in two Phase I/II human trials in patients with solid tumors where myelosuppression (decrease in the production of blood cells), particularly lymphopenia (abnormally low white blood cell levels), was dose limiting. The decrease in blood cell levels correlates with a clinical response needed to treat hematologic malignancies, blood cancers. Access has now initiated a Phase I/II trial for the compound in hematologic malignancies. Along with Ara-C, Thiarabine will be contending with cladribine, fludarabine, and gemcitabine, other drugs in its class which are also used in similar indications.
An interesting, and perhaps undervalued portion of Access may be its CobOral/CobaCyte oral drug-delivery system - a Cobalamin-based platform. Cobalamin consists of drug molecules attached to a vitamin B12 analog, which is then actively absorbed through the intestinal walls. This technology is able to transport large molecule drugs including insulin, growth hormones, EPO, and has recently been validated in siRNA (or RNAi).
Pharmaceutical companies have shifted much of their focus toward the development of large molecule drugs due to their higher clinical success rate and improved patent protection. It is one of the fastest growing sectors in drug development.
One drawback of large molecule drugs is their need for parenteral (IV or injection) delivery, due to their inability to be taken orally. These drugs are simply too big to cross cell membranes and end up being degraded in the gut. While siRNA has generated great enthusiasm, a key limitation holding back its development is a robust delivery system. There is still no consensus on the best way to deliver these drugs in a safe and efficient manner.
An oral delivery system has been the “holy-grail” for the drug industry. Drugs in a non-invasive pill form have the potential to reduce systemic toxicity, increase patient compliance, and allow more outpatient therapy. Until recently, even with considerable effort, little progress has been made in finding a workable solution.
Not surprisingly, oral insulin has received the greatest amount of attention, as diabetes patients must endure daily needle pricks; a successful oral replacement will have significant market potential. Biocon is furthest along in this area, with a product in Phase III testing and Oramed has one in Phase 2b. Novo Nordisk is also working on an oral drug for diabetes, however, it has chosen to use the Glucagon-like peptide-1 (GLP-1) as the treatment; it is currently in Phase I.
Access has initiated an oral insulin program overseas including a first in-man trial, set to commence in the upcoming months. As a drug delivery technology, Cobalamin is not limited to the oral insulin market. The Cobalamin-based drug development program is still in the pre-clinical phase, but the technology shows significant promise. A couple others working in the field are Emisphere Technologies and Oramed. Already Access has signed and announced two deals with unnamed biotech/pharma companies to enable two injectable drugs for oral delivery. More such deals are expected.
Access runs a lean operation with only 10 full-time employees and a burn rate of roughly $3 million per year. According to the company, it has sufficient cash to operate into 2011. Investors can look forward to a host of upcoming catalysts:
- Additional MuGard partnerships
- Q4 report will provide important MuGard sales data
- Cobalamin pre-clinical data
- Additional Cobalamin partnerships or collaborations
- Launch Cobalamin oral insulin Phase I trial
- Initiate ProLindac Phase II Combination trial
- Announce partnership for ProLindac
At today’s price of US$2.90 and 25.3 million fully diluted shares outstanding, Access Pharmaceuticals has a market cap of $73.4 million. With potential for $300 million in product sales, even discounting its pipeline and technologies, this company continues to be well worth a look.
Disclosure: No position