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Algernon Pharmaceuticals Inc unlocking the value of medicine through repurposed drugs

  • Drug repurposing model reduces risk and capital required
  • Working to develop Ifenprodil for idiopathic pulmonary fibrosis and chronic cough
  • Experienced management team

What Algernon Pharmaceuticals does:

Algernon Pharmaceuticals Inc () () is a drug repurposing company. In simple terms this means it advances drugs that are safe and approved in one area but develops them for different indications/treatments.

So, the company may look again at a drug, which was tested for one disease, but maybe better used for another. It focuses on treatments for billion-dollar global disease markets.

The firm believes repurposed compounds have a much lower risk of failing in human trials on safety issues. It says over 90% of drugs fail before Phase II, while development costs have ballooned to nearly US$2.5 billion with an average timeline of 15 years.

The strategy goes as follows: The company identifies safe drugs which were never approved in the US or Europe for new uses and confirms efficacy in animal studies. It then files new IP rights for the drug and conducts a clinical trial in the compound’s country. If that is successful, the company then moves towards putting the drug into US clinical trials.

The firm says this is a capital-efficient business model and it is in the planning stages for four separate phase II clinical trials. These are for non–alcoholic steatohepatitis (NASH), chronic kidney disease (CKD), inflammatory bowel disease (IBD) and idiopathic pulmonary fibrosis (IPF).  All of these key compounds were identified using its drug repurposing strategy.

The firm’s lead program is looking at the drug NP-120, or Ifenprodil, for IPF and chronic cough – although the focus is currently on coronavirus (COVID-19) treatment. The IPF global market is expected to reach US$3.2 billion by 2025, while for chronic cough, the global market is put at US$1.8 billion by 2024.

How is it doing:

It has been a busy 2021 for Algernon thus far. At the beginning of July, the pharmaceutical firm reported reaching 70% of its enrollment target for its Phase II clinical study of its re-purposed drug NP-120 (Ifenprodil) for idiopathic pulmonary fibrosis (IPF) and chronic cough. 

The purpose of the 20-patient proof-of-concept Phase II human trial is to determine the efficacy of Ifenprodil in the preservation of lung function (including biomarkers of fibrosis), as well as the reduction of associated chronic cough frequency in IPF patients.

Each patient enrolled in the study will be treated for 12 weeks at one of the six sites participating in the study with four located in Australia and two in New Zealand.

Earlier in the year Algernon was examining the ability of Infeprodil to be repurposed to treat COVID-19, however, early in 3Q the company revealed that it will not be advancing Ifenprodil into a Phase 3 clinical trial for coronavirus (COVID-19). 

In the statement the company said the decision was based on several factors, including the findings of the Phase IIb COVID-19 study final data set, the global rate of vaccinations, and the projected trial size, costs and timelines needed.

In late June, Algernon received all the permits and licenses to manufacture its AP-188 (N, N-Dimethyltryptamine or DMT) drug. Moving ahead the company plans for its Phase I human study to be conducted at Hammersmith Medicines Research in the UK during 4Q 2021. 

Additionally, the company said it had awarded the contract to manufacture the active pharmaceutical ingredient and finished product for its formulation of DMT to Canada-based Dalton Pharma Services.

This followed the May announcement, regarding the receipt of positive feedback from the US Food and Drug Administration (FDA) on its plans to investigate the use of DMT in stroke treatment. 

Algernon is researching the potential AP-188 (N,N-Dimethyltryptamine, or DMT), a psychedelic compound that is part of the tryptamine family, has as part of a physical therapy program in the rehabilitation of stroke. 

Algernon submitted a pre-investigational new drug (IND) request for DMT in March 2021 to the FDA.

Inflection points:

  • Phase II trial of Ifenprodil for idiopathic pulmonary fibrosis and chronic cough
  • DMT Phase I trial for stroke by the end of October 2021
  • Phase II DMT trial in pancreatic cancer  Q1 2022

What the broker says:

Citing Algernon’s 3Q 2021 financial statement, Research Capital issued a “SPECULATIVE BUY” rating with a target price of $0.25 for the pharma company. 

The analysts noted the company’s switching gears from the repurposing of its Ifenprodil for COVID-19, to the advancement of its DMT drug for stroke rehabilitation as a positive catalyst. 

“We agree with management that the risk/benefit profile of the COVID-19 program does not justify its continuation – we view AGN’s move as wise. Investors should note we did not assume any revenues from the COVID-19 program in our model,” the Research Capital note reads. 

Algernon’s ability to continue pursuing other treatment models for Ifenprodil was also credited as justification for the “High Risk = Potentially High Reward investment opportunity” ranking the analysts gave.  

“Ifenprodil is in a Phase IIa trial in idiopathic pulmonary fibrosis (IPF)/chronic cough. Interim data from the chronic cough indication is expected in Q3, followed by final results of the study in Q4,” it states. 

The two Phase I DMT trials are another likely catalyst to growth.

DMT is expected to enter into a Phase 1 trial for stroke by the end of October 2021 and a Phase I trial in pancreatic cancer in Q1 2022.

What the boss says:

Commenting on the decision to not move ahead with an Ifenprodil Phase 3 clinical trial for COVID-19 Christopher J Moreau, CEO of Algernon Pharmaceuticals said the following in a statement: “As a small drug development company, we always need to consider the cost-benefit analysis of all of our research programs and be responsive to the realities of the marketplace as they continue to evolve.” 

Moreau went on to explain: “As a Canadian company, we tried to do our part to help in the fight against a global pandemic. Even though we are not moving Ifenprodil forward for COVID-19, I am very proud and thankful for all the work the entire Algernon team has accomplished and especially for the support of our many investors and stakeholders around the world.”


Contact the writer at georgia@proactiveinvestors.com

Follow her on Twitter @MissInformd

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