Island Pharmaceuticals’ PROTECT clinical trial is delivering the goods!

Investors were evidently pleased with the results out of Island Pharmaceuticals‘ PROTECT clinical trial…at least if the company’s more than doubling in the past two months is anything to go by. The results don’t just offer hope to Island’s investors, but to people suffering from and vulnerable to Dengue fever, a virus that impacts 400m people annually and where there are no direct treatments.

Recap of Island Pharmaceuticals, ISLA-101 and its fight against Dengue

Island Pharmaceuticals was co-founded in 2017 by American biotech entrepreneurs William Garner and David Foster. The aim was to develop molecules for the prevention and treatment of mosquito infections, having observed the impact of Zika first-hand.

Island Pharmaceuticals’ flagship drug ISLA-101 was developed by Johnson and Johnson and initially purposed against cancer. After dozens of clinical trials, the biotech giant eventually retired the drug and donated the rights to the National Cancer Institute in the US. Pre-clinical work at Monash University identified the molecule’s potential to be an anti-viral drug, and then Island picked it up. ISLA-101 works by inhibiting the nuclear uptake (propagation) of flaviviruses that include dengue, among other mosquito diseases, such as Zika and yellow fever.

The PROTECT clinical trial

After some delays, the company commenced a Phase II study a couple of months ago, named PROTECT, short for PROphylactic and TrEatment Challenge Trial. The trial was designed with 2 cohorts: An A cohort with 4 subjects randomised 3:1 (Active:placebo) & the B cohort (Phase 2b) that will include 10 subjects randomised 8:2 (active:placebo). The A cohort is a prophylactic or preventative arm – meaning the analysis will be to see if ISLA-101 can prevent infections in the first place, whilst the B cohort will be an arm intended to see if ISLA-101 can treat active infections.

After this, the next step would be a Phase III study which would be the pivotal clinical study, the passage of which could see ILA apply for regulatory approval. In parallel, Island will test ISLA-101 against other mosquito-borne indications such as West Nile, Zika, Yellow Fever and Japanese encephalitis – although not malaria.

Dengue is the most prevalent flavivirus, infecting 400m people annually and ~500,000 of these are severe. A further three billion people – nearly 40% of the planet’s population – are deemed to be at risk. Both figures are expected to rise in the future due to climate change. Dengue has recently been observed in areas where it isn’t formally expected, such as in France. Even traditional hotspots have seen rising case numbers in the past couple of years.

It is also expensive to treat dengue fever. The typical hospitalisation cost in the US is US$7,040. Even then, no treatment is guaranteed to work, let alone a vaccine. There’s only a vaccine for secondary dengue infections – Sanofi Pasteur’s Dengvaxia. But it is never prescribed for primary infection, is only recommended for people between the ages of 9-45, doesn’t protect against all strains and there is some controversy with the clinical trial that led to its approval.

This is where Island Pharmaceuticals has been keen to make a difference.

Strong results to date

On 27 November 2024, Island announced the first data from the trial, with results from the Phase 2a cohort. The Safety Review Committee (SRC) observed that there had been a reduction in viral load in subjects treated with ISLA-101. There were no safety concerns that would necessitate implementing changes to the study. And so, the SRC recommended that the trial proceed to the Phase 2b cohort.

What’s next?

Island now has to make a submission to the FDA 30 days before starting, and this would support the commencement of Phase 2b in January 2025 – specifically in the second week of the month. And, barring unanticipated delays there should be results for the other cohort within Q1 of CY25. While Island is not the only biotech stock expecting results from a major clinical trial in 2025, it will be one of the first to receive results, and so investors should watch it closely.

Investors interested in finding out more should read recently published research on Island Pharmaceuticals from our friends at Pitt Street Research. It valued the company at $0.31 per share in a base case and $0.41 per share in an optimistic case scenario.

Island Pharmaceuticals is a research client of Pitt Street research.

What are the Best ASX Stocks to invest in right now?

Check our buy/sell tips