Nuformix eyes big opportunity with new forms of fibrosis and cancer drugs

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You get the impression that Nuformix PLC (LON:NFX) chief executive Dr Anne Brindley is up for a good fight – in a business sense, that is.

Her last role, with Australia’s Advent Pharmaceuticals, was a turnaround situation, which ended successfully with the sale of the business.

“Who wants to go into a company and just maintain what’s been done before?” she asks.

Her challenge at Nuformix is to find a licensing partner for the company’s lead asset, NXP002, a potential novel inhaled treatment for idiopathic pulmonary fibrosis (IPF).

To torture the fight analogy a little more, she’s won the first round by recently raising £1.5mln that will enable the company to perform further preclinical studies to generate a more robust data package, with the goal of increasing the value of this asset and rendering it more attractive to licensing partners. Nuformix plans to do a pre-clinical deal for NXP002.

This goes against conventional wisdom as most ambitious life sciences groups tend to wait until the end of phase II trials before entering out-licensing talks. At this point, the risk, cost and reward calculation is finely balanced.

However, there has been a spate of preclinical deals, not least by the UK’s C4X Discovery, which has landed two separate partnerships – one with Indivior the other with Sanofi – worth a combined £580mln in upfront, milestone and royalty payments. More relevant and in the area of fibrosis (IPF), AIM-listed Redx Pharma inked a licensing agreement with AstraZeneca worth a headline US$377mln and upfront milestone; and another preclinical licensing agreement with Abbvie and Morphic Therapeutics was also done with an undisclosed headline value, again with upfront milestones.

In NXP002, Nuformix has eschewed traditional drug development by creating a new form of the original drug, tranilast, which has a long history of safe use as an oral drug for allergies in Asia but with evidence that supports its potential in fibrosis, including IPF.

Nuformix has generated its own IP, repurposing an existing drug and giving it a potential new lease of life with significant commercial potential.

NXP002 is differentiated because it’s a new form of tranilast and it will be formulated for delivery direct to the lungs by inhalation, a new route of administration for this drug.

There are two reasons why this change in route of administration is important.

The first is practical as it provides a targeted treatment with hopefully fewer side-effects.

The second is that by discovering novel forms of tranilast, Nuformix is able to generate IP and get patent protection from generics.

IPF itself is an area of high unmet medical need and an ‘orphan’ disease. It’s a severe and progressive disease that affects the lungs, where dust, smoke, gastric reflux acid, genetic predisposition or infection leads to scarring known as fibrosis.

The prognosis is as bleak as some aggressive forms of cancer with an average survival time of three to five years.

While there are treatments, they tend only to be partially effective and have significant side-effects that cause some patients to stop treatment.

Because of the rarity of the disease, any new drugs that show signs of potential efficacy are likely to receive orphan drug designation.

This regulatory classification expedites the clinical trial process, reduces costs and extends the exclusivity period of the end product.

Taking the re-purposing route with Tranilast, rather than developing and testing a totally new molecule, compound or cell therapy, may also help shorten the timeline to market.

For example, a lot is already known about the safety and the way a drug such as Tranilast interacts with the body.

So, in this regard, there is also a greater probability of success, while the development costs are likely also to be lower than they would be with an unknown new therapy.

As well as specialising in fibrosis, an area of drug discovery that has taken off in recent years, the company has two oncology asset candidates.

The first, NXP001, is a proprietary new form of the drug aprepitant, that is currently used to treat chemotherapy-induced nausea and vomiting. Phase I clinical trial data revealed bioavailability was improved with the Nuformix formulation compared to the original drug.

Last month, private pharmaceutical company Oxilio exercised an option to license NPX001 for development as a cancer drug.

The two sides are currently working to finalise a licence agreement. Once this is done it will trigger a second undisclosed upfront payment as well as milestones and royalties on future sales capped at £2mln a year.

A lesser part of the funds raised last month was set aside for the further development of NPX004, a new form of an established blockbuster oncology drug.

Improvements could extend the patent protection of the unnamed product out by a further 10 years to around 2040.

“We would look to go back to the originator of the drug and see if we could license our IP on the new form to them. If they took it on, it would give their product a longer patent-protected life,” explains Brindley of plans to commercialise the reformulated cancer drug.

While a deal for NPX004 would likely shift the needle, much of the near-term news flow will be generated by NPX002 as the company completes the pre-clinical work required to convince a larger pharma group of its potential.

There are three phases to this process. The first will assess the overall feasibility of the inhaled formulation of Tranilast; the second involves the compilation of non-GLP (good laboratory practice) data; while the third will see it pull together what’s called a phase I-ready package.

The completion of each piece of work, starting later this year out to the middle of next year, represents a licensing opportunity. 

“Positive news flow at this juncture is probably as important as cash to our development as it provides validation of the company and its approach,” says Brindley.

Brindley is supported by a strong non-executive team with a lot of industry experience and a network of highly experienced contractors to perform the necessary work. The business is lean with the R&D work outsourced.

“The goal now with a new leadership is to turn things around and actually get some credible results,” says Brindley.

The current valuation of £13mln at 2.2p a share reveals the credibility gap is yet to be bridged. This should change as Nuformix delivers.

The company’s broker, Allenby Capital, reckons the stock is worth 9p using a discounted cash flow analysis of the portfolio.

In a note, it points out: “Nuformix operates a relatively low risk and cost development model in which it is developing innovative forms of older drugs focused on high-value commercial markets.

“In our view, a successful development of a preclinical package for the lead programme in IPF can be a differentiated and attractive target for licensing or acquisition by larger pharma players, judging by deal flow, market metrics and unmet need.”

Brindley said she saw the potential of Nuformix as soon as she was approached for the role.

“I actually joined because of the pipeline and in particular NXP002, which is a disease area I know about having worked on an asset for IPF in one of my prior companies. I could see it was a great opportunity.”

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