Tonix Pharma: Interesting Molecule In Fibromyalgia, But Generic Availability Is A Concern

Summary

• TNX-102 SL is a new type of long-acting formulation of a common molecule available as generic.
• There are many studies, some from entities other than Tonix, showing its use and efficacy in fibromyalgia.
• Generic availability of a similar formulation is, therefore, a concern.
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Tonix Pharma (NASDAQ:TNXP) has been in business since 2007 and has a phase 3 ongoing trial in Fibromyalgia. It also has a phase 3 ready trial in PTSD-related sleep disturbance. Its pipeline looks like this:

Source

The phase 3 study is planned for completion by August 2021. What worries me though is if this is a registrational trial. If you see the list below:

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TNX-102 has a history of doing trial after trial; this company has been existing since 2007 so this seems to be what it has done. But these trials were not registrational trials (did not lead to an NDA), so as I begin my study of Tonix, this is the question I am asking myself right now.

TNX-102 in Fibromyalgia

From the Mayo Clinic:

Fibromyalgia is a disorder characterized by widespread musculoskeletal pain accompanied by fatigue, sleep, memory and mood issues. Researchers believe that fibromyalgia amplifies painful sensations by affecting the way your brain and spinal cord process painful and nonpainful signals.

Symptoms often begin after an event, such as physical trauma, surgery, infection or significant psychological stress. In other cases, symptoms gradually accumulate over time with no single triggering event.

Women are more likely to develop fibromyalgia than are men. Many people who have fibromyalgia also have tension headaches, temporomandibular joint (TMJ) disorders, irritable bowel syndrome, anxiety and depression.

While there is no cure for fibromyalgia, a variety of medications can help control symptoms. Exercise, relaxation and stress-reduction measures also may help.

TNX-102 SL targets the sleep disturbance mechanism of the disease, which the company believes may help relieve pain as well. TNX-102 is a sublingual product containing cyclobenzaprine HCl. Cyclobenzaprine (CBP) is a well-known muscle relaxant. It has been in use in the US since 1977, and it is available as a generic. The medicine has known side effects, with severe ones including tachycardia and cardiac arrest on long-term use. It has been studied for fibromyalgia as well. A 2004 literature study shows its benefit in patients - “Cyclobenzaprine‐treated patients were 3 times as likely to report overall improvement and to report moderate reductions in individual symptoms, particularly sleep.” Now, Tonix says that its formulation is unique because it “has been designed to optimize the delivery and absorption of cyclobenzaprine for the therapeutic benefit of improving sleep quality, while minimizing the potential residual effects of oral formulations of cyclobenzaprine.”

Cyclobenzaprine is already used to treat fibromyalgia off-label. Since the drug is available as a generic for other indications, there is no shortage of supply in the market. Two formulations, Zanaflex and Flexeril, are actively used to treat fibromyalgia. The second one is cyclobenzaprine. Here’s a simple chart for the drugs:

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On the other hand, here’s an old interview with Dr. Seth Lederman, CEO of Tonix Pharma, which sheds some light on their interest in, and rights to, cyclobenzaprine. The company discussed its patents in the latest 10-K, see page 24. The interview also says that Dr. Lederman was able to get the rights to CBP:

The molecule he is currently pursuing, cyclobenzaprine, was originally developed by Merck as a muscle relaxant. When that same molecule was later discovered to improve the sleep quality of fibromyalgia patients, he acquired the rights to it, starting a company called VELA Pharmaceuticals. When that company changed its focus and no longer wished to pursue the drug, he was able to retain the rights to it and start a new company called Krele, which later became Tonix Pharmaceuticals.

From their 10-K, I am not able to figure out how long their composition of matter patent lasts. They talk about this “Eutectic Technology” and certain compositions of CBP derived from that. These patents, if granted, have expiry dates to mid-2030s. However, whether generic CBP is good enough or not is a question we need to figure out.

Two critical statements from the company in that regard are:

TNX-102 SL is being developed for long-term use, in contrast to oral formulations of cyclobenzaprine which are only approved for 2-3 weeks of daily use. The proposed registration plan for TNX-102 SL for PTSD, agreed to by the FDA, does not require further assessment of abuse and drug dependency potential in clinical or nonclinical study.

Now, we know that current off-label CBP usage is only for short term, 2 week use, beyond which it is said to have little efficacy and some side effects. So, TNX-102 SLs USP could be this long-term use; also, that the FDA does not require those assessments is interesting.

Other points of difference are also discussed by the company, as follows:

Pharmacokinetic studies have shown that TNX-102 SL, after sublingual administration, is distinguished from oral formulations of cyclobenzaprine:

• Active drug is more rapidly absorbed into the blood, a desired feature for administration at bedtime, when a more rapid onset of action is believed to be beneficial.

• Sublingual administration avoids first-pass hepatic metabolism, and reduces the formation of the long-lived active metabolite, norcyclobenzaprine (nCBP).

  • In vitro studies have shown that nCBP is a norepinephrine-reuptake inhibitor (NRI),¹ and the clinical pharmacology of NRIs indicate that they have a risk of being anxiogenic⁵ and are associated with 'CNS activating' side-effects (insomnia, sweating, palpitations, tachycardia),^6,7 and may interfere with the desired pharmacological action of improved sleep quality. By avoiding first-pass metabolism, and reducing exposure to the long-lived active metabolite, nCBP, TNX-102 SL may mitigate the potential risk of pharmacological interference from nCBP.

The company also says that the basis for exclusivity is as follows:

TNX-102 SL is covered by a number of issued and pending worldwide patents which cover the eutectic composition of matter, method of use, and pharmacokinetic profile. These patents are owned outright by Tonix Pharmaceuticals, and no obligations are owed to another party.

The company has announced positive Phase 3 RELIEF study results for TNX-102 SL 5.6 mg in Fibromyalgia.

Financials

TNXP has a market cap of $372mn and a cash reserve of $77mn. The company has very, very little institution or fund ownership, and is heavily publicly owned. I am happy to note that insiders are purchasing, not selling, shares.

Source

In February, the company raised $70mn through an offering. The company in its latest earnings says it has raised a total of $110mn since the year-end. As to expenses, here’s what it says:

Research and development expenses for full year 2020 were $36.2 million, compared to $18.2 million for the same period in 2019. This increase is predominantly due to the timing of development milestones related to the Phase 3 RELIEF and RALLY studies in fibromyalgia in 2020, increased activities for the development of potential vaccine candidates, TNX-1800 and TNX-801 as well as the Trigemina asset acquisition.

General and administrative expenses for full year 2020 were $14.4 million, compared to $10.6 million for the same period in 2019. The increase is primarily due to an increase in legal fees, patent prosecution and maintenance costs, financial reporting expenses and increased employee headcount.

Bottom line

TNXP is an interesting company with a long pipeline and late-stage trial data. This review has only focused on one molecule in one indication; the same molecule has ongoing studies in multiple other indications. However, what worries me is the patent situation, and generic availability of CBP, and how differentiated sublingual CBP is to currently available oral CBP, and what sort of pricing power Tonix may have for its product given the generic availability of a similar formulation. I understand the importance of long-term use in fibromyalgia, so that is a positive for the company. So I am keeping a neutral stance right now while I wait for more information.

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