As well as Brainybull, I too, am heavily invested in PAB for many reasons. I paid for a subscription to "The Constant Investor" to listen to the interview and give you guys a copy of the transcript. James Campbell's tone throughout the interview is particularly upbeat and excited for the future of Patrys. Enjoy.
James, perhaps a bit on the history, if you don’t mind, of Patrys. It’s been around a while but at one point the shares were 50 cents or more than 50 cents, this is back in 2007. Then it just kind of dribbled away and then what happened? It was always about oncology and it was trying to come up with cancer treatments. Did they just not work, those earlier ones?
Well we wouldn’t say that, Alan, but you’re right. Patrys has been around, it listed first in 2007 and it’s always been a company that’s about antibodies and about trying to develop a new treatment for cancer. In its first incarnation Patrys was developing a class of antibodies called IGMs. That’s with some technology which came out of the University Wurzburg in Germany. Did it fail? No, I wouldn’t say it failed. Yes, the IPO price, and this was a long time before me, the IPO price was 50 cents. The company did what it should have done, it was progressing some pre-clinical research and working towards the clinical trial and unfortunately having done a raise at the end of 2013 to fund a clinical trial of one of the lead assets the manufacturing campaign had some issues, had some difficulties, around the separation or the purification of the product. That clinical trial never really started.
The prior CEO left at about that time and I came onboard in ’15, and I was half-time for about a year. At that stage we were looking at whether that manufacturing process could be reactivated and whether the trial could be restarted. Whilst we still believe very passionately in that class of assets, the IGM class of assets, and certainly we’ve partnered one of those assets we also thought it was important to build out a more robust portfolio. We did diligence on about 40 different assets from around the world and came up with one that we end licensed from Yale in 2016.
That was actually when you started as CEO, right? Around about March 2016 you licensed that from Yale.
That’s exactly right. You could say that I was a contract CEO I suppose for want of a better term for most of ’15 and I came on full time in 2016 at the same time we brought that asset in from Yale. That’s a really remarkable bit of technology that we’re very pleased with.
This was invented by Professor James Hansen, is he still involved in the business?
Absolutely. He is certainly not staff or anything like that but James is a clinician and a scientist at Yale, so he treats patients a few days a week and spends some time in the lab. He works very closely with us. We do a lot of research through his lab at Yale and he really gives us that great context of being a really good fundamental scientist but also having a great focus on the clinical outcome. The mantra, I suppose within the company, is how can we help this technology get into patients and help patients, so yes James is a critical part of our company.
Tell us what this technology is, what is it called and what does it do?
I’ll try not to get into too many proper nouns and too much jargon but we call this the Deoxymab platform and specifically I talk about something called DX1 which is the lead candidate from that platform. Unlike most antibodies which are in development for cancer Deoxymab has a really different mechanism of action. Most antibodies are specifically targeted against proteins that are expressed on the surfaces of cells and particularly on the surfaces of cells with cancer. You get an antibody that binds to those cancerous cells and that binding process triggers a range of cellular mechanisms which lead to the death of the cancer cells. That’s the traditional paradigm for antibodies and cancer. It works very well, the antibodies as cancer treatments have been around for about 20 years, the global market for them is of the order of US$33 billion and they’re approved for a range of different cancers, 20 or 30 different approvals there.
What we call Deoxymab, or DX1, is very different to way that current antibodies work. What’s really remarkable about this is it’s not specifically targeted to proteins on the outside of cells or the things that are expressed on the surface of cells. Deoxymabs are attracted to DNA and specifically the DNA that is released from cancer cells as they die. If you will, we talk about a tumour having a cloud of extra-cellular DNA and that’s the DNA that’s released from these dying cells. What’s interesting then is that Deoxymab will bind to that extracellular DNA and then move inside the cancer cells where they bind to the DNA inside the nucleus. I know this sounds a little esoteric but the really exciting thing about this is that when Deoxymabs are bound to the DNA inside the nucleus they stop the activity of the enzymes called DNA repair enzymes which basically are pivotal in – one of the reasons chemotherapies don’t work. A novel mechanism of action and a really interesting path forward clinically we believe.
Why does it work better than the other antibodies that bind to the proteins on the surface? As you say, those antibodies, they all work okay, don’t they?
They do work very well, Alan, but sometimes with these existing antibodies sometimes the surface markers change and for want of a better word the tumours become resistant to the antibodies. There are also a large number of tumours that don’t express these cell markers, these surface markers so we think the potential for the Deoxymabs is particularly around cancers that don’t express cell surface markers but also for cancers that have become resistant to the existing therapies.
What’s the proportion of cancers that do that, what niche are you aiming at?
So the proportion of cancers I can’t give you an exact number of that but if we go back a step and think of cancers that don’t respond to therapies particularly well, if you look at the cancers that have very poor prognoses we would think about something like glioblastoma, a brain cancer where the prognosis even with the current gold standard treatment of care is about 15 months from diagnosis to death. Pancreatic cancer is another one which has a particularly poor prognosis and there’s a form of breast cancer called triple negative breast cancer which doesn’t respond particularly well to any of the therapies. If you look at all of these very difficult to treat indications it would be hard to model them but the model would be of the order of billions of dollars in the market place.
Are you saying that your treatment, your platform, DX1, can treat those or you’re not sure, you think it will?
I’m saying that in pre-clinical studies we’ve certainly got very positive signals both in glioblastoma and in triple negative breast.
Right. Perhaps you’d better tell us about your pipeline, where exactly you’re at because obviously the two years you’ve licensed this stuff is a very short time in the world of biotechnology.
You’re right, Alan, and I’m really pleased with the work that the team has done over the last two years. The first thing we had to do was to humanise this antibody so the discovery as we licensed it in was originally an antibody that came from mice so we had to do a lot of elegant work to make it look like a human antibody to make it so that it was easier to manufacture and to do some tweaks in there to create some novel intellectual property. We are still a pre-clinical company, we are still of the order of two years away from getting into the clinic. The sorts of things that we have done have been work with academic collaborators and with commercial research providers to test our humanised version of Deoxymab and that’s the thing that we call DX1, to test that in a range of different cancers, as I said glioblastoma, triple negative breast cancer, some colon cancer. The results have all been very positive and very heartening and I think that’s really one of the reasons that we’ve seen a bit of investor interest over the last nine months or so.
Indeed, let’s just talk about that because you’ve announced a couple of things in recent times that have seen the share price go up quite a lot I think from 3.5 to 5 cents which is not many cents but it’s quite a big percentage. What exactly did you announce at the end of May?
At the end of May we had an interesting announcement around cancer stem cells. That was in glioblastoma. A lot of people talk about cancer stem cells and the general understanding is that when you treat a cancer you might remove an awful lot of the tumour but there will still be some key essence cells, some cells that aren’t killed by the therapy and remain in the tissue and then with the removal of therapy they will re-blossom into a tumour again. What we showed and talked about at the end of May was the fact that looking at some human glioblastoma stem cells, and they were cells that were originally isolated from a human brain, from a patient that had presented to Yale with brain cancer. Those cells were then grown in culture and put into a series of different experiments. We showed that DX1 was able to kill some of those cancer stem cells, also that it was very good at targeting those cancer stem cells. I think it in and of itself is a good announcement more importantly in the context of the range of announcements and the range of data we’ve put out over the last nine months which has seen the share price go from half a cent to five cents really is part of building a very strong foundation for going forward.
When do you think you’ll get into clinical trials?
As I said earlier I think we are about two years away from that and there are an awful lot of steps that go into clinical trials. One needs to get the manufacturing process under control and tightly defined, obviously you’ve got to do pre-clinical toxicology, that means putting it into a range of animals and showing that there aren’t side effects and then you’d go into a phase one trial. I would say of the order of two years.
What’s your intention with regard to monetising it? Do you think is there any plan to try to do any deals before the clinical trials based on the pre-clinical studies or not?
It’s a great question, Alan, and it’s something that we as a board spend a lot of time thinking about. I note that one of my non-executive directors, Susan Jones, was actually very senior in business development at Genentech, the very large Californian biotech company. The answer, of course, is it depends and it would depend on what sort of deals were around. There is clearly a path forward where we progress this to the clinic ourselves and I’m confident we have the people and the advisors and the support to progress that way. I also know that in this field, and I’ll be really specific here, when we talk about pre-clinical cancer antibodies there is an awful lot of commercial interest. Over the last four years or so you can see deals worth up to billions of dollars with upfront up to $250 million for preclinical assets. We are definitely a pre-clinical asset at the moment, one could certainly see a path forward where this asset might be taken away from us before it got to the clinic or perhaps we would entertain a model where we had a co-development path.
You’re not burning very much cash, how many staff have you got?
It is a virtual company, staff here in Australia there are three. We run research out of Yale, there are staff there obviously, and we have a whole heap of service providers in Europe and Asia that take care of it but generally essentially there are three staff.
At the end of the quarter you had 2.8 million but since then you’ve raised 4.6 million?
That’s right. 4.6 million raised in May and you said we had a low burn rate, if you look at our four Cs, if you look at what we’ve reported and what we’ve budgeted for the current quarter we’ll have gross burn of about 2.3 which I believe will be a net burn of about 1.8. If you look at 2.8 in the bank on the 31st of March and then a raise of 4.6 we’ve got a healthy balance and I run a very tight ship so financially we’re certainly not constrained.
That cash you’ve got in the bank will get you to the clinic, right?
It will certainly get us very close, yes.
You might even do some deals before then so you might get some cash in the door.
That would certainly be an aspiration for us and that’s one of the things that keeps us busy, yes.
Have you got anything else apart from DX1?
Sure. We talked about the history of the company and I have been talking about what we call the Deoxymab platform but we still have that IGM platform there. We believe very passionately in the science behind that platform and our position is very clear that we will look for non-dilutive cash to progress those assets and we were delighted about two years ago to announce that we partnered one of those IGM assets with a Chinese pharmaceutical company called Hefei Co-source Biopharma.
Well done, that was good.
Yes, and that’s a great relationship. We’ve got a joint development committee, they’re progressing that asset well, they’ll be in the clinic, I believe, again within two years. That’s ideal for Patrys because it’s a way of progressing that family of intellectual property that we believe in, the IGMs, obviously on a very cost effective basis because our partners wear all the costs associated with it. Yes, we’ve spent a lot of time and a lot of effort and a lot of our own money on the Deoxymabs but we do basically have this second asset class that we still believe in, it’s very interesting.
Yeah. Great to talk to you, James, thank you.
Great, thanks Alan.
That was James Campbell, the CEO of Patrys Ltd.
Expand
(20min delay)