NEW YORK, NY / ACCESSWIRE / June 2, 2016 / Lupus - invisible, silent; an autoimmune disease where the body's defenses mistakenly attack its own cells and living with lupus is never ending. Up to 5 million people, mainly women of childbearing age, suffer progression of this disorder because of diagnostic confusion. Most present with fever, malaise and facial skin rash suggesting to internists other unrelated health problems. A capricious disease, lupus strikes in skin, joints, kidney, heart, pancreas, colon, eyes, blood…the list continues and flare-ups are sporadic. If organ damage is severe, lupus can be fatal.
XTL Biopharmaceuticals Ltd. (NASDAQ: XTLB) poses a potential solution with its drug hCDR1 designed to battle systemic lupus erythematosus (SLE), accounting for 70% of lupus cases and intended to treat not just lupus' manifestations, but the disease itself. If approved, sales would commence into a market projected to $4 billion by 2022, only six years away.
Its drug works by correcting what lupus does: improper regulation of immunology-aids cytokines, B-cells and T-cells. hCDR1 is a short chain of amino acids that stimulates regulatory T-cells, reducing inflammation and bringing the immune system into needed balance. XTL acquired rights to hCDR1 two years ago from Yeda Research and Development Co. in Israel, after Teva Pharmaceuticals (NYSE: TEVA) gave licensing rights back to Yeda after Teva's expansive, 340-patient Phase II PRELUDE study on hCDR1 was discontinued due to lack of achieving a primary endpoint of lowered lupus disease activity.
So why would XTL find interest in the drug? Simply (and luckily) because FDA changed its measurement of endpoint results. Teva's study used the traditional SLE Disease Activity Index that rates all organs with one score. FDA found this not sufficient to evaluate lupus drugs and adopted the British Isles Lupus Activity Group score, more accurate by rating each organ independently. XTL saw that PRELUDE's results, measured under BILAG, were better with a certain dosage showing meaningful impact. Hence, a new trial under a different rule.
Working efficiently and effectively with the FDA, XTL completed its Phase II trial design for hCDR1 set to start after a New Drug Application is filed, with hopes to begin enrollment this year. BILAG measurement of organ improvement, the trial's primary endpoint, must occur in at least one organ, according to agency feedback. A global study, double-blind and placebo controlled lasting for 26 weeks, both safety and efficacy will be evaluated.
Dose escalation will also be determined, even though PRELUDE found 0.5 mg to be optimal. When speaking to CEO Josh Levine as to why alternate doses are used, he replied there might be better data at a lower dose. Also veering from PRELUDE's trial design, steroids will be limited.
Only a handful of FDA-approved drugs for lupus are marketed. Anti-inflammatory, immunosuppressant corticosteroid Prednisone is one, typically used for milder cases of SLE, first introduced over 60 years ago. Its biggest drawback is, naturally, a compromised immune response where exposure to infection becomes more dangerous. Patients are at higher risk for osteoporosis and Kaposi's sarcoma.
More severe SLE is treated with anti-cancer compound methotrexate although again, the ability to fight infection is lessened and chemotherapy-like side effects are common. Lupus is not cancer, yet doctors often opt for anti-cancer remedies when other methods are lacking and nothing better exists. Another chemotherapy, Cytoxan usually reserved for blood cancers or rheumatoid arthritis, is an immunosuppressant to relieve lupus sufferers from kidney inflammation. Side effects include skin rash, decline in immunity-necessary white blood cells, risk of shingles, and infertility. Prolonged use at high doses has been linked to bladder cancer
Not much better, an immunosuppressant known as CellCept synthesized years ago by Roche Holding (OTC: RHHBY), is claimed in medical circles to act as an effective first-line defense for lupus patients with inflamed kidneys who need to reduce treatment with steroids. Side effects can be detrimental to quality of life, such as shakiness, abdominal pain and peripheral limb swelling. Birth defects have been observed.
Most recent is GlaxoSmithKline's (NYSE: GSK) monoclonal antibody Benlysta, with 2015 sales of USD340 million, up 25% from the prior year despite a host of adverse effects similar to anti-cancer drugs: nausea, vomiting and low white blood cell count. Mental health issues like depression and thoughts of suicide have also been observed. Regardless, growth in Benlysta sales should be positively impacted by the current rise in lupus interest.
Recent data shows lupus can lead to dementia, pegged to steroid use. Over 1,000 lupus patients followed for seven years were twice as likely to sink into cognitive disability. Lupus is now viewed an even greater public health risk, one that could lead to lifelong disability.
XTL's drug has shown time and again its good effect on lupus by suppressing wayward immune system components to prevent inflammation. By using hCDR1, cytokines that would otherwise contribute to inflammation are rendered ineffective and helpful cytokines take over. This is a truly novel approach to fight SLE. Other studies, of the 40 extant, proved a drop in production of bad cytokines (certain interferons and interleukins) and an increase in production of cells that cause a beneficial effect in this often silent disease. Many of these studies have been done in the Weismann Institute in Israel, renowned for innovative medical technologies.
Offering a stream of benefits to emerging companies, the European Medicines Agency's Small or Medium Sized Business Enterprise status was granted to XTL, who will then enjoy lower fees for phased clinical trials (including post-marketing studies, if required), lots of free advice, and grant eligibility.
Lupus, recognized as a 'cruel mystery' by advocate groups, grabbed public attention in May as the first annual Lupus Awareness Month. Almost two-thirds of the world's population has no clue what lupus is, or whether it's a disease, and almost 50% considered it contagious. A groundswell of help is emerging: petitions aimed at the World Health Organization, dedicated to global health issues, urge inclusion of lupus in its chronic disease programs and better education and support of this misunderstood and often lethal disease.
Following designation as lupus awareness month, the World Lupus Federation was launched, creating a global string of patient groups in 16 countries aimed to enhance education of lupus as a worldwide public health problem.
XTL is serious about its commitment to lupus: last January, management was invited and accepted a position on Lupus Foundation of America's corporate advisory council, where its role will be to bring forward and support better lupus treatment. In March, top lupus specialist Daphna Paran, MD, joined as Medical Director with the belief that hCDR1 has good potential, a strong testimony for someone of her background.
XTL had approximately $3.8 million in the bank as of December 31, 2015. Like most clinical-stage biotechs embarking on advanced studies, research and development spending doubled from 2014, to $578,000 while cost-containment in general and administrative moderated 17%, to $1.4 million. Net loss was higher at $4.3 million, but reflected an intangible asset impairment charge from abandoning other clinical projects for hCDR1 in favor of devoting time to SLE.
I view XTL as a company with a lower risk profile than other firms at a similar stage of life. Teva's work with hCDR1, particularly safety data, is recognized by FDA officials. A new endpoint measure has been established. Still, standard risks are present: inability to replicate Teva's low side effect results; regulatory glitches; slower-than-expected enrollment; and the need for more cash. More specifically, shares are very thinly traded.
This company is one where investment should be considered. Lupus is a large market and growing. Attention for education and call for better drugs is mounting. XTL's clinical advisors have vast experience with lupus and its management team holds impressive, relevant pedigrees. Former studies yielded good results, and the upcoming Phase II will mimic its design. Most rewarding, hCDR1 offers rheumatologists a shift from current, suboptimal treatments for debilitating and sometimes fatal lupus, to a promising and life-changing solution.
About Small Cap Forecasting, Inc.
Sharon di Stefano has spent 20 years as an analyst, beginning her career at Smith Barney, Harris Upham & Co. specializing in medical devices, pharmaceuticals, healthcare information technology, and bio-pharmacology. Ms. di Stefano had also served as Senior Venture Officer for the Edison Innovation Fund, implemented through the New Jersey Economic Development Authority that provided funding for early-stage life sciences companies. Industry experience includes laboratory research for Johns Hopkins Hospital and the Department of Defense. Ms. di Stefano received a Master's of Science degree, in Business, from Johns Hopkins University in 1986, and a Bachelor of Arts from the University of Delaware in 1984 with a minor in biology.
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Jackie Rodriguez
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SOURCE: Small Cap Forecasting, Inc.
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