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Cyclopharm (ASX:CYC) is expecting FDA approval for Technegas by September 2023!
April 4, 2023
Cyclopharm is nearly there!
We spoke with Cyclopharm CEO James McBrayer about the company’s resubmission for FDA approval of Technegas for use in the US, the market opportunity in Pulmonary Embolism and beyond, and the growth the company is enjoying as a result of its acqusition of various distributors of its products.
See transcription below.
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Stuart: Hello, and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m the one of the co-founders of our service. Joining me from Sydney on Friday, the 31st of March, 2023 is Mr. James McBrayer, CEO of Cyclopharm ASX:CYC. James, good morning.
James: Good morning, Stuart.
Stuart: It’s a great morning for you because you’ve just been able to announce the resubmission for Technegas with the FDA, and that’s after something like 21 months in which you have been working to bring all of the relevant data that FDA would be interested in looking at ahead of a resubmission event that could happen sometime in the next six months.
James: That’s right, Stuart. You know, the company put forward our new drug application, the FDA came back and said with a very finite list saying they wanted additional information, and we’ve been diligently working towards satisfying their additional request and clarifications for information over the last year and a bit. So no, we went in yesterday and we’re very pleased about that.
Stuart: Right. You must have some workers with a lot of muscles because there would’ve been thousands and thousands of pages that had to be shipped to the FDA. I hope they took it all in digital form.
James Well, you know, in fact, that was some of the delay. We had our submission ready several weeks ago, but it’s putting it into that digital form with all the hyperlinks, that’s what’s taken, you know, several weeks to actually, you know, get done and put forward. We had some 145 documents in support of the actual submission itself, and every one of those documents, you know, you have to think about it like the tip of the iceberg. There’s, you know, several standard operating procedures and, you know, system reports and the like that go along with each one of those 145 documents submitted.
Stuart: Right. Now, there are any number of tasks that you had to complete between June 2021 and the present time. The one that interests me the most is the FDA were, if I could put it that way, concerned about some of the equipment. Now, concern is a loaded word. Basically, there were equipment that was specialist to making Technegas that the agency had not seen before. They erred on the side of caution wanting to inspect those machines. Is that a good summary of one of the things that you’ve had to do?
James: Yeah, that’s right. I think, you know, we do have legacy pieces of equipment, they’re bespoke, there’s nothing like them anywhere in the world, and they’re purpose-built for our product. We maintain them here, we’ve built them, we’ve developed them, and so they’re quite unique, and the product is quite unique as well. Some of those pieces of equipment have been running for over 20 years and, you know, when the FDA comes in, they want to see, you know, today’s standard. So we’ve had to go back and, you know, bring those pieces of equipment, not from a production point of view, but just from a documentation point of view to today’s standards.
From a product point of view, you know, we inspect 100% of all of our products and always have, so there was never an issue with that, it was just the information that was taken in process, if you will.
Stuart: Right. So, the agency has committed to coming back with their response within six months or so. It’s not a hard deadline, they can start and stop the clock, I’m assuming, and it could be sooner than six months.
James: And, you know, as part of their published review dates, six months when they receive a response to what they issued to us was a complete response letter, and complete is an important part of that statement there. They’ve done a fulsome review and they wanted to find a little bit more about it. So they do have six months to review. I imagine that there will be Q&A along the way, Stuart. And, you know, we’re welcoming that interaction with them, but we believe that the information that we provided is exactly what they were looking for.
Stuart: Right. Now, what excites me about Technegas, and you and I have had this discussion previously on camera, it’s what I call a product within a pipeline. Your initial indication that you’re going for FDA approval for is for the diagnosis of pulmonary embolism.
James: That’s right.
Stuart: You’ve got the industry standard for the rest of the world except the United States for the diagnosis of pulmonary embolism. After that, there are multiple other indications that you expect to go after that can markedly increase the potential market value for Technegas.
James: That’s right, Stuart. You know, people misunderstand us a little bit. They think that the U.S., it’s a binary, either you get it or you don’t. Well, it’s not just that. I mean, Technegas itself is a functional lung ventilation imaging agent. Anywhere that oxygen goes into the lung, our product is delivered there, and the clinicians can understand how well that organ has been functioning. So, you know, at its base case, we’ve been best known for diagnosing pulmonary embolism, but if you think about the product itself, every respiratory condition actually can be applied with this technology. And we saw it in our clinical trial that we did in the States, 200 patients, there were 14 different indications used for it. It wasn’t just pulmonary embolism.
And more and more we’re seeing with the advent of improved technology, three-dimensional imaging, hybrid imaging with low-dose CT, and then AI on top of that, we’re starting to see our technology being used in not only, you know, baseline diagnosis, but also response to therapy and quantification of disease states. So that’s leading us to applications in COPD, asthma. We’ve even had some papers that we’ve supported in looking at long COVID, for example. So there’s a whole different world out there that we’ve not even penetrated yet in the potential for our product.
Stuart: Right. Calendar 2022 was a good year for you. You came with about $22 million in revenue and that was up 30% on the previous year.
James: That’s right.
Stuart: COVID obviously was part of that, but I like to think that a lot of it as well was indications outside the sort of stuff that has occupied everyone’s concerns for the last couple of years, just continuing growth across the board of Technegas, not just in the Canadian market, not just in Europe, not just here, but globally, everywhere except the all-important U.S. market.
James: So, we did grow with Technegas absolutely year on year. We’ve also diversified, and this sort of plays into our beyond pulmonary embolism application. We had always recognized that for us to actually drive this beyond PE technology or concepts for indication expansion, we needed to be closer to our customers. And so about six or seven years ago, Stuart, we started to put our own people in key markets around the world. And now when you look at 64 countries around the world, we’re dealing directly to 17 of those. So with our own people on the ground, we were then able to leverage our existing infrastructure in service and sales, and because of that capabilities, operationally, we’ve actually attracted some partnerships along the way and where other parties, other companies, much larger than us, and many examples, have come in for us to actually distribute those products.
So, of that $23 million, actually, just over $9 million is third-party products that are leveraging off of our infrastructure. That allows us to pay for the salespeople, to integrate the interactions that we’re getting with our respiratory people. So it’s been a long cycle, we’re playing the long game here, but we’re starting to see the benefits of that strategy paying off now.
Stuart: And derisk the company in a serious way. This is not a one-hit-wonder if it ever was.
James: No, no. I think, you know, our goal and expansion and bringing these other products on, you know, we’re partnering with other people, they’re opening up other opportunities as well, we’re able to get in front of our customers like we’ve never been able to present our product before. So, you know, everything’s kind of coming together all at the same time for us, Stuart. We’re very, very happy.
Stuart: Well, James, I advise you, hold onto that Cyclopharm stock because it’s headed up from a fundamental point of view. And of course, there’ll be a few sleepless nights, I suspect, between now and when you hear a complete response back from the agency. It’s a reasonable bet it’s a yes because you’ve had 20 months’ worth of work, but the agency’s gotta put patients first and patient safety first. So we can’t say with absolute certainty that it’ll be a yes.
James: Well, you know, Stuart, we have… You know, maybe it’s a war of attrition here, but we have absolutely given the FDA everything that they’ve requested and then some. You know, the one thing that we have learned and people have asked, what have you learned about all this last? I think the thing that we’ve learned is it’s just not what we’ve learned because we actually haven’t learned anything new, you know, Technegas has been well established, it’s well known, you know, over 4.6 million patient studies done throughout the world, we’re in 64 countries. But what it did confirm for us, Stuart, is just the reproducibility and the stability of our product.
And it’s amazing to see that the results that we’ve had with these onerous testing that the FDA required us to do in addition to what we’ve done in the past, it just confirms everything that we’ve seen over the last three decades. So I guess that’s the biggest learnings of it all that what an amazing technology and unique technology Technegas is.
Stuart: All right. Well, I advise you, make room there on that shelf on your left-hand shoulder for the trophy that comes in the day the FDA says yes. James McBrayer, keep up the good work and let’s talk again very soon.
James: Thanks, Stuart. Appreciate it.