Starpharma's SPL7013 Antiviral Takes On COVID-19

Summary

• SPL7013 is the active ingredient of antiviral VivaGel products which are registered and sold in Australia, UK, Europe, Canada, Japan and SE Asia.
• In lab tests SPL7013 performed (better?) than Gilead’s remdesivir in preventing SARS-CoV-2 viral infection.
• Starpharma’s SPL7013 might have an important role in preventing and treating early stage COVID-19.
• SPL7013 for COVID treatment isn’t the main game for those contemplating investment in Starpharma, but there is a possible significant role in addressing the pandemic and this has to have upside.

Starpharma VivaGel antiviral condom launched in Japan under Okamoto 003 brand

Last month I wrote an article suggesting that Starpharma’s (OTCQX:OTCQX:SPHRY) share price has been savaged by COVID-19 for no good reason. Now Starpharma is showing signs of fighting back against the coronavirus SARS-CoV-2 which causes COVID-19. Here I summarise my thoughts about the prospects for Starpharma’s SPL7013 antiviral having a role in the COVID-19 story. The possible COVID-19 treatment adds some sizzle to an already interesting opportunity.

It is tough for a non-technical investor to make sense of prospective treatments and vaccines for COVID-19. The New York Times has recently published a major article addressing how long it will take before a vaccine and/or treatment becomes available. The New York Times article provides a link to a BioWorld tabulation of 254 therapeutics and 95 vaccines under development. Making sense of what is “wish-and-a-prayer” and what is real, is time consuming and complicated. Most of the list is definitely in the category of highly speculative. To show just how tough it is for a non-technical investor to make sense of this, Starpharma’s therapeutic SPL7013 is in the Table, but it is cited as a vaccine rather than a therapeutic….so perhaps it isn’t surprising that it has been overlooked, notwithstanding the fact that it is one of a select group of antivirals which already has been approved for human use.

Remember that a vaccine is a way of getting people ready to fight off the disease before they have even been exposed. So the vaccine is about being able to stop the disease ahead of time. A therapeutic is about treating infection once you have it. SPL7013 is clearly a therapeutic, but curiously it also has some of the preventative features of a vaccine.

SPL7013 and SARS-CoV-2

SPL7013 is the active ingredient in a range of sexual infection products (VivaGel). It is used broadly in controlling/preventing reoccurrence of vaginal infections and also as a condom coating. It has broad global regulatory approval (e.g. Europe, Japan, Canada, Australia, South East Asia) except for the US, where there are ongoing discussions with the FDA.

SPL7013 is active against a wide range of viruses (e.g. HIV, herpes simplex, hepatitis B, human papilloma virus, Zika virus, adenovirus) which, like SARS-CoV-2, infect human cells via proteins on the surface of the virus which bind to receptor proteins on the surface of target human cells.

In laboratory studies SPL7013 has broad anti-SARS-CoV-2 activity, inhibiting infection of cells by the virus. These studies used Gilead’s (NASDAQ:GILD) remdesivir as a positive control and the SPL7013 was reported in as yet unpublished studies to be more active than remdesivir. Starpharma has patented the findings and is reviewing potential anti-SARS-CoV-2 products (see below). Note that existing licences for use of SPL7013 in VivaGel products do not include treatment of COVID-19, which would involve new licences. The SPL7013 testing was done by Melbourne-based 360Biolabs which has developed SARS-CoV-2 assays to support antiviral drug developments.

What kind of COVID-19 products might incorporate SPL7013?

Given that there are at least 254 drug candidates for controlling SARS-CoV-2 infection, it will be some time before a useful drug is found and means for successful treatment is worked out. The thing that spotlights Starpharma’s SPL7013 and Gilead’s remdesivir is that both of these products have regulatory approval for other anti-viral treatments in broad global markets. There is a lot of interest in remdesivir, which if it proves to be useful, will most likely have a role in treating late stage COVID-19. I plan to address remdesivir in a future article.

Starpharma’s SPL7013, which is approved in many countries (pending in the US), is a topical treatment which is relevant to sexually transmitted diseases (including against a number of human viruses that are problematic). In these applications the active ingredient is formulated for topical application in the vagina or as a condom coating. These uses for SPL7013 are as preventatives and also to stop early disease progression.

The way that SARS-CoV-2 gets into the body involves entry through the nose and eyes. The throat is another site of high viral concentration as the virus makes its way into the body. So formulating SPL7013 as a nasal spray, in eye drops and for inhalation to get into the throat, are 3 ways that prevention and an early barrier might work to stop COVID-19 in its tracks.

Starpharma has discussed these several possible means of delivering SPL7013 to counteract the SARS-CoV-2 virus. CEO Jackie Fairley indicated that the company is thinking about use of SPL7013 to help protect front line workers and individuals (e.g. people in a high risk category) seeking additional protection against infection by the SARS-CoV-2 virus which causes COVID-19. Starpharma will conduct short-term preclinical studies, looking at delivery as a nasal spray, through inhalation and via eye drops. These routes of topical administration involve well worn treatments for allergic rhinitis, asthma etc. So it is a matter of adopting tried and true delivery technologies.

Since SPL7013 is already approved in many countries as a condom coating and for vaginal delivery, it is likely that regulatory approval should be able to be fast tracked, especially given the COVID emergency.

An important aspect of SARS-CoV-2 infection is that viral load is highest shortly after infection when the virus is found in the nasal passages and throat. So a product containing SLP7013 could be used either to block infection or as a first line of defence before the virus becomes more systemically found throughout the body. It might also be possible for SPL7013 to be considered for use in an enhanced disinfectant (e.g. handwash agent).

Will there be other benefits of advancing SPL7013 for COVID-19 applications?

This just a personal speculation, but I think that a secondary outcome of moving to develop a COVID-19 treatment based on SPL7013 might be that the FDA may reconsider its current delay in approving use of SPL7013 in VivaGel for treating and preventing recurrence of bacterial vaginosis. Bacterial Vaginosis (NYSE:BV) is a major problem for US women (with an estimated 29% of women aged 14-49 suffering from BV). VivaGel has been licensed in more than 160 countries around the world (including in the US even though it is yet to be FDA approved) and sales are commencing in Europe, Asia and Australia/New Zealand.

How safe is an investment in Starpharma?

I’ve very recently given an update on Starpharma as it took a hit from the market downturn for no good reason. A key issue with biotech investing is the risk of dilution as emerging companies burn cash and, in troubled times, raise capital at huge discounts. As I’ve indicated in the prior article, Starpharma is that rare biotech with several years of cash and expectation of significant revenues arising from sale of its VivaGel products, which are just beginning sales. Starpharma also has a major business with a different class of dendrimer products that are effective drug delivery vehicles (DEP technology). A substantial partnership with AstraZeneca (NYSE:AZN) which involves AZN taking a new potential blockbuster drug into the clinic as a DEP-coupled version of the drug now in phase 1 trials. As well as being a powerful proof of concept for the DEP technology the AZN partnership involves $104 million milestone payments and royalties on sale of the product if/when it gets approved. Starpharma has 4 of its own DEP-coupled anticancer drugs in clinical trials and it is in discussion concerning partnerships on targeting drugs by coupling antibodies to the DEP vehicle (as well as the drug) and also for use in delivery of radiochemicals in radiation medicine. There were a lot of reasons for paying attention to this company before COVID came along.

Conclusion

The recent announcement concerning near term possibilities for making SPL7013 available as an effective antiviral therapeutic for COVID-19 is sizzle on an already very interesting story, and yet Starpharma remains invisible. All of the above is packaged in an ASX-listed vehicle (ASX:SPL) (with presence in the US via OTC listing) that is well funded and has a portfolio of projects and products. Starpharma comes at a market capitalisation of ~$US250 million as I write this article. Its share price (OTCQX:SPHRY) remains well below year high of $9.90, although it has shown some recovery from a year low of $3.68 to its current price of $6.60. Is this a microcap cap biotech for the risky end of your portfolio? If not why not?

I am not a financial advisor but I follow biotech closely. Please note that I am a long term investor in Starpharma. If my commentary helps alert you and your financial advisor to a company worth a closer look, please consider following me.

Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.

Analyst’s Disclosure: I am/we are long SPHRY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.