Oragenics: Interview With CEO Bonfiglio

| About: Oragenics, Inc. (OGEN)


Oragenics is an emerging biopharmaceutical company listed on the NYSE MKT.

It is advancing the lantibiotic Mu1140 in collaboration with Intrexon, and anticipates IND filing in 2015.

In order to gain more insight on this opportunity, I conducted an interview with Dr. John Bonfiglio, CEO and Director of Oragenics.

In April I wrote a PRO article with a bull thesis stating that Oragenics' (NYSEMKT:OGEN) development of the lantibiotic Mu1140-S, using its patented organic chemistry synthesis platform, DPOLT (Differentially Protected Orthogonal Lanthionine Technology), could unlock significant shareholder value, which has effectively been trapped by the company's failed efforts to revamp sales of its oral care product, ProBiora3. I stated that such efforts have detracted from the true potential of the company, with the anticipation that management would shift more resources to Mu1140, as well as its collaborative probiotic program with Intrexon (NYSE:XON).

In order to gain more insight, I conducted a follow-up interview with Dr. John Bonfiglio, President, CEO and Director of Oragenics. Dr. John Bonfiglio holds an impressive resume, MBA and PhD. Before assuming the position of President, CEO and Director of Oragenics in May 2011, Dr. Bonfiglio was President, CEO and Director of Transdel Pharmaceuticals, Inc. His prior positions include President and CEO of Argos Therapeutics (NASDAQ:ARGS) and CEO of The Immune Response Corporation. He also was CEO of Peregrine Pharmaceuticals (NASDAQ:PPHM) and held senior management positions with Cypress Biosciences, Baxter Healthcare (NYSE:BAX) and Allergan, Inc. (NYSE:AGN). Dr. Bonfiglio earned his masters degree and a doctorate in synthetic organic chemistry from the University of California, San Diego, and later earned his masters in business administration from Pepperdine University. Following are excerpts from the interview.

I note IB-367 as an earlier lantibotic candidate which failed in Phase III, but not necessarily due to a lack of efficacy. What differentiates Oragenics' current pursuit from previous attempts such as IB-367?

We understand that IB-367 is an antimicrobial peptide from the protegrin family and is not a lantibiotic. So, the short answer to your question is that our lantibiotic compounds are differentiated by the fact that they are novel and have different structural, physico-chemical and pharmacological properties.

Another point of differentiation is that, unlike other prior attempts (e.g. IB-367), lantibiotic antimicrobials are already somewhat "proven" in that Nisin is a well-known lantibiotic used in the preservation of food.

Since a possible IND could be filed in 2015, what are your primary concerns (if any) with respect to successfully transitioning from preclinical to Phase 1 studies?

No real difference here from other biotech companies at this stage. Note, we are planning to file the IND in 2015. We expect to have a pre-IND meeting by the end of 2014.

Right now, our focus is firmly rooted in the first compound/first indication. We have several other molecules in our pipeline of lantibiotics, and several other indications may be contemplated when the time is right. Success in our first indication will greatly facilitate our ability to move other compounds/indications forward in parallel.

In my earlier report on Oragenics, I noted that over 590 peer-reviewed articles detail the great potential of lantibiotics as a viable therapeutic alternative to marketed antibiotics.

Yes, clearly, the field recognizes the immense potential of the currently known 50+ molecules in the class of lantibiotics, for therapeutic use. As you are probably aware, antimicrobial peptides in general are gaining significant interest due to their innate nature as host defense effector molecules in living organisms.

However, and please correct me if I'm wrong, no lantibiotic is currently on the market.

Actually, several of them are on the market as food additives (as previously mentioned, Nisin being the prime example), but you are correct in that no lantibiotic, to our knowledge, is currently on the market for the treatment of an infectious disease, so Oragenics continues to be a leader in that arena. It is noteworthy to mention that Novacta Biosystems (NASDAQ:UK) completed a Phase I trial against C. difficile at the end of 2012 after they were acquired by Cantab in 2011. The current status of this program is unknown.

Also, AOP Orphan Pharmaceutical appears to have initiated in 2009 a dose-finding study for the investigational product Lancovutide (Moli1901) in the exploratory phase IIb to establish minimum effective dose, optimal dose, and maximum safe dose in adolescent and adults for cystic fibrosis. Additionally, the tolerability of Moli1901 was to be investigated. The current status of this trial is also unknown.

With abundant scientific research, what are the primary reasons that no lantibiotic has successfully been developed through regulatory pathways?

As you indicate, the published data to this point suggest that this class of novel molecules has indeed extremely attractive properties as novel therapeutic agents. Historically, the inherent challenges with all antimicrobial peptides include high production costs (these peptides are typically lethal to the micro-organisms that produce them) and susceptibility to proteolytic degradation. Advances in biosynthesis, e.g. using recombinant DNA techniques, help make commercial-scale synthesis feasible.

You also noted in my last interview that you don't foresee antibiotic resistance to be an issue in the short term with respect to MU1140. Could you please specify how long of a period "short-term" indicates?

Resistance to contemporary drugs is already observed in the clinic for the frontline drugs of last resort (Daptomycin, Oritavancin, Lincosamide, Linezolid, etc.). What is noteworthy here is that lantibiotics as therapeutic agents are an entirely new class of antimicrobials, not just a new generation of "old" molecules. In other words, bacteria have not had a chance to develop resistance to these compounds since they have not been introduced in the clinical setting yet. Proper use in the clinic when they will finally be introduced may favor a longer lifespan of the molecule.

Interestingly, the target of lantibiotics is Lipid II, an ancestral molecule that is difficult to mutate without affecting its biological activity, so it is anticipated that the natural development of resistance in the hospital setting would be longer than what is observed with older classes of antibiotics. To support that statement, we need to point out that Nisin has been used in the food industry for over 30 years without the emergence of significant genetically-tractable resistance. There will be no definitive data that can answer your question or support the above statement until the investigational compound is in the clinics, but we anticipate that the characteristics of lantibiotics as a class will offer a clinical lifespan exceeding what is observed with other classes of antibiotics, affording this molecule a greater return on the long run.

Now I want to turn to Oragenics' other assets, beginning with Evora. Given that the sales of Evora are disappointing, do you have any plans to employ alternative marketing strategies to unlock its full potential?

The Company and the management team are reviewing how to maximize the Evora/ProBiora3 asset. Realizing that Probiora3 is the only patented blend of three strains of probiotics specifically designed to work in the oral cavity as opposed to the gut, we believe there are several potential opportunities to maximize the value of this asset.

Shifting gears to the weight loss molecule LPT3-04, could you please comment on where this program currently stands, as well as the market potential of this asset?

As previously reported, this program has been licensed to a third party to move its development forward. This arrangement allows Oragenics to focus on the development of its lantibiotics, and places the development costs for that program on the licensing partner, reducing the drain on Oragenics resources. Due to the significant market potential for the LPT3-04 weight loss product, the royalty driven model provides for a significant upside potential for Oragenics should the development be successful.

Where does the company stand with its SMaRT Replacement Therapy? Is Oragenics actively seeking a partner to advance this asset?

At this time we have not been actively marketing the SMaRT program. Since this program overlaps with our second collaboration with Intrexon , we have decided to hold on to it until we have completed our strategic plan for this area.

Where are most funds currently being allocated to?

Most funds are being allocated to the development of our first lantibiotic drug candidate with the focus on getting some human clinical experience in 2015.

I note that the stock price has fluctuated around the $2 range for quite some time, with very low liquidity. Could you please comment on what management is doing to increase awareness of Oragenics, as well as whether or not you believe the market fully appreciates the company's business developments at this time?

We currently are working with our IR group on an overall plan. Our plan will include conferences, roadshows and of course news releases when appropriate.

Thank you for your time.

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