A Closer Look At Tonix's Pending PTSD Data

| About: Tonix Pharmaceuticals (TNXP)


Tonix Pharmaceuticals is developing TNX-102 SL for the treatment of posttraumatic stress disorder (PTSD) currently in a Phase 2 trial of a population with military-related PTSD.

There are currently very few effective treatments for PTSD, with only two FDA approved pharmaceutical agents.

An estimated 14% of all veterans of Operation Iraqi Freedom and Operation Enduring Freedom suffer from PTSD.

Data from the trial is expected in the second half of May 2016, and represents a potential inflection point for the stock.

Tonix Pharmaceuticals (NASDAQ:TNXP) is developing TNX-102 SL for the treatment of fibromyalgia and posttraumatic stress disorder (PTSD). The compound is currently in a Phase 3 clinical trial for fibromyalgia and a Phase 2 clinical trial in PTSD. In this article, we provide an overview of PTSD and the potential for treatment of the condition with TNX-102 SL. We believe this represents a significant opportunity for the company due to the fact that few effective treatment options currently exist for patients who suffer from PTSD.

Posttraumatic Stress Disorder

PTSD is a psychiatric disorder that occurs from exposure to a wide variety of extreme stressors. One of the most common is war and combat. The Diagnostic and Statistical Manual of Mental Disorders (DSM) of the American Psychiatric Association (APA) first defined PTSD in DSM-III in 1980. The definition has changed three times since then: in 1987 in DSM-III-R, in 1994 in DSM-IV, and in 2013 in DSM-5. In contrast to the DSM-IV definition, PTSD is no longer considered an anxiety disorder but is included in a chapter on stress- and trauma-related disorders.

In order to be diagnosed with PTSD, a patient must meet a certain set of criteria related to exposure to a traumatic event, four sets of symptom clusters, two subtypes, the duration of symptoms, the impact on an individual's ability to function, and the lack of substance abuse and other medical illnesses that could account for the symptoms.

Criterion A: Traumatic Event (one required)

The trigger to PTSD is defined as exposure to actual or threatened death, serious injury, or sexual violation. The exposure must result from one or more of the following:

  • An individual directly experiences the traumatic event
  • An individual witnesses the traumatic event in person
  • An individual learns that the traumatic event occurred to a family member or close friend (with the actual or threatened death being either violent or accidental)
  • An individual experiences first-hand repeated or extreme exposure to aversive details of the traumatic event

Criterion B: Intrusion or Re-experience (one required)

A patient constantly re-experiences the traumatic event in one of the following ways:

  • Intrusive thoughts or memories
  • Nightmares related to the traumatic event
  • Flashbacks and feeling as if the traumatic event is occurring again
  • Prolonged distress after any reminders of the traumatic event
  • Physiologic reactivity after exposure to trauma-related stimuli

Criterion C: Avoidance (one required)

These are ways in which a patient may try to avoid any memory of the event, such as:

  • Avoiding any thoughts or feelings connected with the traumatic event
  • Avoiding people or situations connected to the traumatic event

Criterion D: Negative Alterations in Mood or Cognitions (two required)

A decline in a person's mood or thoughts, including:

  • Memory problems surrounding the traumatic event
  • Negative beliefs about oneself or the world
  • Persistently blaming oneself or others for causing the traumatic event or resulting consequences
  • Persistent negative emotions related to the traumatic event
  • A significantly diminished interest in activities done prior to the traumatic event
  • Feeling detached or removed from others
  • Persistent inability to experience positive emotions

Criterion E: Alterations in Arousal and Reactivity (two required)

These are ways in which the brain remains "on edge" and wary of any additional threats, including:

  • An inability to concentrate
  • Aggressive behavior
  • Hypervigilance
  • Heightened startle response
  • Reckless behavior
  • Disturbances in sleep

Criterion F: Duration

The persistence of the symptoms described in Criteria B, C, D, and E must have been ongoing for at least a month.

Criterion G: Functional Significance

The symptoms need to be accompanied by significant distress or the inability to function.

Criterion H: Exclusion

The symptoms cannot be due to substance abuse, medication, or other illness.

Specify the presence of dissociative symptoms

In addition to meeting the criteria for diagnosis of PTSD, whether a person experiences dissociation can be specified if they meet one of the following:

Depersonalization, or feeling disconnected from oneself, and derealization, a feeling that a person's experience is not real.

Treatment of PTSD

Treatments available for PTSD include a number of different pharmacologic and psychotherapeutic modalities. However, while there are a number of different pharmacological treatments that are currently utilized, very few of them have shown efficacy in randomized controlled clinical trials and only two have ever been approved by the FDA for the treatment of PTSD.


Alpha-adrenergic blockers: Prazosin is an anti-hypertensive medication that is proposed to reduce nightmares and improve sleep in patients with PTSD. It is believed to work by blocking noradrenergic arousal during sleep. Side effects for prazosin include dizziness, drowsiness, headache, and nausea.

Anticonvulsants: Lamotrigine and topiramate are anticonvulsants used to treat PTSD. Drugs from this class are used to control seizures, prevent migraines, and treat various other brain disorders. Lamotrigine is FDA approved for the treatment of seizures and bipolar disorder while topiramate is FDA approved to treat seizures and migraines. Side effects of anticonvulsants include dizziness, drowsiness, fatigue, and nausea.

Atypical antipsychotics: Olanzapine and risperidone are both used for the treatment of PTSD. Both compounds are hypothesized to work by blocking selected dopamine and serotonin receptors. Olanzapine is FDA approved to treat bipolar disorder while risperidone is FDA approved for the treatment of schizophrenia and symptoms of bipolar disorder. Side effects for olanzapine include agitation, restlessness, and trembling. Side effects for risperidone include dizziness, hyperactivity, and nausea.

Benzodiazepines: These compounds are used for the treatment of anxiety, insomnia, and irritability and are sometimes used for the treatment of PTSD. However, their use is limited by a known risk of dependency and withdrawal after abrupt discontinuation.

Monoamine oxidase inhibitors (MAOIs): Phenelzine is an MAOI used for the treatment of PTSD. This class of compounds works by inhibiting monoamine oxidase, which is responsible for degrading serotonin and related molecules in the central nervous system. Side effects of MAOIs include dizziness, weakness, insomnia, and upset stomach.

Selective Serotonin Reuptake Inhibitors (SSRIs): Paroxetine, sertraline, fluoxetine, and citalopram are examples of SSRIs used to treat PTSD. They are believed to work by blocking the reuptake of serotonin at certain synapses in the brain. Sertraline and paroxetine are the only pharmacologic agents approved by the FDA to treat PTSD. Common side effects of SSRIs include nausea, sexual dysfunction, headache, and weight gain. In addition, stopping treatment abruptly can lead to withdrawal symptoms.

The American Psychiatric Association group's recommendations into three categories: I) recommended with substantial clinical confidence; II) recommended with moderate clinical confidence; III) may be recommended on the basis of individual circumstances. SSRIs are the only pharmacologic treatment to be rated as category I while MAOIs were rated category II, and benzodiazepines, anticonvulsants, antipsychotics, and adrenergic inhibitors were rated category III.

The VA/Department of Defense (DOD) Clinical Practice Guidelines only lists SSRIs as being of significant benefit to patients with PTSD, MAOIs are listed as having some benefit, anticonvulsants and atypical antipsychotics and identified as having unknown benefit, and benzodiazepines are listed as having no benefit or possibly causing harm.


There are a number of different psychotherapies used in the treatment of PTSD, occasionally in concert with medication. These interventions are designed to reduce the intrusion, avoidance, and hyperarousal symptoms of PTSD through a combination of re-experiencing and working through trauma-related memories and emotions, and teaching how to cope with trauma-related stressors. Behavioral therapy includes approaches such as systematic desensitization, biofeedback, and relaxation.

The APA assigned cognitive-based therapy and other exposure-based therapies as category I while the VA/DOD classified four psychotherapy treatments as being of significant benefit: cognitive therapy, exposure therapy, stress inoculation therapy, and eye movement desensitization and reprocessing.

PTSD in the Military

Military personnel appear to be at especially high risk for developing PTSD due to the necessity of being in potentially traumatic scenarios involving armed combat and war. There have been multiple studies examining the prevalence of combat-related PTSD in military personnel (Richardson et al., 2011). There is a wide range reported for PTSD prevalence for veterans of wars from the past 50 years (2.2-15.2% for Vietnam War veterans and 4-17.1% for veterans of the recent conflicts in the Middle East). Compared to the civilian population, U.S. combat veterans have a higher prevalence of PTSD, as the lifetime prevalence among all U.S. adults is estimate at 7.8% (Kessler et al., 1995).

PTSD is now the third most common disability for which veterans receive disability benefits, behind tinnitus and hearing loss (McNally et al., 2013). The number of veterans receiving PTSD-related disability benefits increased by 80% from 1999 to 2004 (Frueh et al., 2007). For veterans receiving benefits for mental health disorders, 58% are for PTSD, with that percentage increasing to 75% for veterans of Operation Iraqi Freedom/Operation Enduring Freedom (OIF/OEF). In 2012, the total number of veterans diagnosed with PTSD in the VA system was 638,451 (Bowe et al., 2015).

Whether due to stigma are lack of awareness, approximately 50% of military veterans do not seek treatment for PTSD. Of those that do seek treatment, only half get "minimally adequate" treatment (RAND study). Four double-blind clinical trials in U.S. veterans using SSRIs, including one with the FDA-approved SSRI sertraline, failed to demonstrate any effect whatsoever (Davidson et al., 2015). In addition, many of the beneficial psychotherapies are not available to a large majority of military veterans due to a lack of qualified personnel and financial resources. The unfortunate consequence to this is that the suicide rate among military veterans is quite high, with as many as five to eight thousand suicides a year (2012 VA Suicide Data Report). Clearly, PTSD is a significant problem with military veterans, and more treatment options are clearly warranted to combat the issue in this underserved population.

TNX-102 SL for the Treatment of PTSD

Tonix is developing TNX-102 SL for the treatment of PTSD. TNX-102 SL is a small, rapidly disintegrating tablet containing 2.8 mg cyclobenzaprine (CBP) for sublingual administration and transmucosal absorption. CBP is the active ingredient of two products that are FDA approved in the U.S. for the treatment of muscle spasms. These products are sold as immediate-release tablets and extended-release capsules. The sublingual formulation has a differentiated pharmacokinetic profile from the oral immediate-release CBP tablet as exemplified by the following:

  • TNX-102 SL rapidly delivers CBP across the mucosal membrane and into the plasma, resulting in 12X faster onset of absorption relative to the CBP immediate release tablet
  • The plasma levels of CBP were 338% higher during the first hour and 83% higher during the first two hours following dosing with TNX-102 SL compared to the oral CBP tablet. The following figure shows the plasma level of CBP over 48 hours (below left) and a detailed look at the first hour after dosing showing a clear separation between TNX-102 SL and oral CBP.

  • The bioavailability of CBP is 154% higher with TNX-102 SL compared to the CBP tablet.

The rationale for developing TNX-102 SL as a treatment for PTSD is multi-faceted, and includes the following:

1) TNX-102 SL is a serotonin 2A and alpha-1 adrenergic receptor antagonist. In addition, it inhibits the reuptake of serotonin and norepinephrine. Paroxetine and sertraline, the only two compounds approved by the FDA to treat PTSD, are believed to exert their clinical benefit by blocking serotonin reuptake.

2) In the Phase 2b BESTFIT clinical trial of TNX-102 SL in fibromyalgia patients, there was a statistically significant improvement in all measures of sleep quality, including the Patient Reported Outcomes Measurement Information System (PROMIS) sleep instrument (P=0.004), the daily sleep diary (P<0.001), and the Fibromyalgia Impact Questionnaire-Revised (FIQ-R) sleep item ( P<0.001). This could prove to be beneficial for PTSD patients, as sleep disturbance is one of the most commonly cited symptoms of PTSD patients (DSM-5), sleep disturbance following a traumatic event is linked to the development of PTSD (Koren et al., 2002), and sleep disturbance has been linked to suicide ideation in those with PTSD (Betts et al., 2013).

3) CBP has potent antagonist activity against the 5-HT 2A, α 1A, and H1 receptors (Daugherty et al., 2015). Trazodone, which is occasionally used off-label for sleep disturbance in PTSD (Warner et al., 2001), is a 5-HT 2A antagonist, however, it can also cause panic attacks and flashbacks in PTSD patients due to its 5-HT 2C agonist activity. Prazosin is a α 1A antagonist that is commonly used to treat nightmares and sleep disturbance in PTSD (Kung et al., 2012). Low-dose doxepin specifically blocks the H1 receptor and is effective at treating insomnia, a common symptom of PTSD (Goforth et al., 2009).

AtEase Study of TNX-102 SL in PTSD

Tonix is currently conducting a Phase 2 clinical trial (the AtEase Study) of TNX-102 SL in patients with military-related post-traumatic stress disorder (PTSD). The AtEase study is a randomized, double-blind, placebo-controlled trial to evaluate the efficacy and safety of TNX-102 SL in people with military-related PTSD and related conditions (NCT02277704). The three-arm trial enrolled over 240 participants, who were randomized to receive either 2.8 mg or 5.6 mg of TNX-102 SL or placebo taken sublingually at bedtime daily for 12 weeks. We are anticipating data in the second half of May 2016.

The primary endpoint of the trial is the week 12 mean change from baseline in the total CAPS-5 (Clinician- Administered PTSD Scale) score in participants who received 2.8 mg of TNX-102 SL as compared to those who received placebo only. Safety will also be evaluated. The CAPS is a structured interview designed to make a categorical PTSD diagnosis and provide a total PTSD symptom severity score, and is considered the "gold standard" in PTSD assessment and corresponds to the DSM-5 diagnosis for PTSD. The assessor combines information on frequency and intensity of an item into a single severity rating (0-4) for the 20 DSM-5 PTSD symptoms, thus patients are assigned a score with a maximum of 80 points possible. A higher score corresponds to more severe PTSD and patients are categorized as follows:

Tonix's Phase 2 study is 80% powered to detect an effect size of 0.5, which translates to approximately a 10-point difference in total CAPS-5 score at the group level between subjects taking 2.8 mg TNX-102 SL and placebo.

We feel it's important for investors to understand that even if the trial does not hit statistical significance that does not mean it was a failure. A trend toward significance would be incredibly important and something that would certainly justify continuing the program. The reason for this is the AtEase study could be considered a "proof-of-concept" study as there was no prior data to use in order to make the proper powering assumptions in terms of number of patients necessary to see a statistically significant difference. A trend toward significance would allow for proper powering assumptions in future studies and the opportunity to apply for accelerated approval from the FDA (only one pivotal study necessary for approval) along with breakthrough designation due to the fact there are no treatments currently available for military-related PTSD. In addition to lowering CAPS-5 score, positive treatment outcomes could also be represented by moving from a more severe to less severe CAPS-5 category (i.e., from severe PTSD to moderate PTSD) and/or a loss of diagnostic status (as mentioned above, patients must have a requisite number of symptoms in each of four sets of symptom categories, thus not meeting PTSD diagnosis anymore if any category falls under that number).

Conversely, if the study does hit statistical significance it is even possible that the company could approach the FDA to request the AtEase study be the basis for approval. However, we will have to wait and see what the data shows before we know more about the next steps in the PTSD program.

Conclusion and Recommendation

Tonix's stock is down considerably thus far in 2016 due to a combination of the overall downturn in the biotechnology sector (particularly in January 2016) and the negative clinical trial results for TNX-201 and the discontinuation of its development. We believe investors overreacted to the TNX-201 results, as the company was not all that heavily invested in that program (approximately $7 million all-in) and its discontinuation means that financial resources can now be directed solely to the development of TNX-102 SL.

We believe it is now time for investors to turn their attention to the potential for TNX-102 SL in PTSD and fibromyalgia. At a market cap of only $50 million, there is very little value assigned to TNX-102 SL for either indication. If successful, we believe sales in fibromyalgia could peak at approximately $775 million. For PTSD, we forecast peak sales of approximately $450 million, however, with positive results, that number will likely be adjusted upward due to the fact there are so few effective treatment options for military-related PTSD. In addition, there is very little work being done in PTSD as "Big Pharma" has essentially vacated the space as it waits for smaller companies to get a compound through early to mid-stage testing. This means that a successful drug is likely to command a premium in terms of an acquisition or partnership following positive results in a PTSD trial.

Our target price is currently $10, and with clinical data from both PTSD and fibromyalgia studies ahead in 2016, an investment in Tonix has the potential for significant gains by the end of the year.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: I work as a Consultant Analyst for Zacks Investment Research. The article is written by me and is 100% my opinion. I receive compensation from Zacks for writing equity research reports and providing valuation analysis on this company’s stock and expect to do so in the future. Zacks receives compensation from the company. Please see the Zacks Disclaimer for further information: http://scr.zacks.com/Disclaimer/default.aspx

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