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Nyrada (ASX:NYR) CEO James Bonner presenting at Meet the CEO
March 9, 2022
NYR, Nyrada, video
On 3 March James Bonnar, CEO, talked at our Meet the CEO event about the potential of its drugs in cholesterol reduction and in stroke recovery. Cholesterol reduction made Lipitor the world’s best selling drug. Nyrada may have the Next Big Thing after Lipitor.
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Stuart: If you know Graham Kelly, Graham’s has been a fixture of the life sciences sector in Australia since the 1990s. His company, Noxopharm, probably finally cracked the puzzle of how to harness radiation therapy with some other stuff for the treatment of various conditions such as prostate cancer. He also had a whole lot of other ideas which got packaged up and separately financed into Nyrada.
I sat down with James about three years ago and he talked me through his clinical programs, and I thought, “This is amazing.” You’ve got a PCSK9 inhibitor that you can actually make a decent money out of, and he’ll explain what PCSK9 is a little later. More importantly, he’s got potentially the next big thing in stroke prevention. And if you’ve known what it’s like for people to have to recover from a stroke, anything that could prevent brain function from declining post the stroke has got to be enjoying at least a $3 or $4 billion market globally, so I’m very much looking forward to that.
James tells me that he’s from Invercargill. You can’t go much further south than Invercargill until you hit a really miserable place called Bluff. But, you know, it’s a nice part of New Zealand. That’s where Sir Bill English came from, and he’s the guy they should have kept as their prime minister rather than the lady that got in charge now, is my personal opinion. You might care to disagree on that. We can talk about that later on. But to return to life sciences, here to talk about what the next stage of the release from Nyrada, please welcome James Bonnar.
James: Thanks, Stuart. And I see Sydney’s turned on some weather that, kind of, reminds me a bit of home. Thanks to Openmarkets and Stocks Down Under for putting this event on. It’s a pleasure to be here, and thanks in particular for all those who’ve come along today and joined online. So, here’s a copy of our statement of disclaimer. So, Nyrada is a drug discovery and early-stage development biotech company. We are focused at this stage on two therapeutic areas. The first is a cholesterol-lowering drug. And this is an interesting area to get involved in. The drug that we’re developing seeks to address a significant gap in a very large market.
So, I’ll talk about how that works and what stage that project is at, and also cover our second program which is a drug that we’re developing in conjunction with the U.S. Department of Defense and University of New South Wales here in Sydney. And it’s a drug designed to prevent secondary brain injury. And this is the sort of injury that you can get immediately following a stroke or a traumatic brain injury.
The company has a very commercially focused business model. And as I said, our focus is on discovery and early-stage development. I’ll explain how that fits into our strategy shortly. But I want to first of all talk about the team that’s involved in this effort. We have a dedicated team of researchers based here in Sydney, and a board assembled of international caliber. It’s led by John Moore based in New York. And John is a successful entrepreneur who’s very well-connected in the life sciences space.
And alongside John, he’s assembled a really impressive team based here in Australia, but also in the U.S. and in Germany. And just to give you a flavor of the quality of the people that are behind the effort, on our board we have a gentleman called Chris Cox, and Chris has a long, distinguished career as a merger and acquisitions lawyer.
If you google his bio, you’ll see that he’s been involved in many large, successful pharma deals, the most recent of which was a sale of The Medicines Company drug, inclisiran, to Novartis. And this is an injectable PCSK9 inhibitor, and I’ll talk a little bit more about that soon, but that was the largest single drug deal at the time in pharma history. It was a 9.7 billion USD deal. So Chris has a lot of experience in the space that we’re operating with our cholesterol-lowering drug.
We also have a lot of experience on board in capital markets, Marcus Frampton. He is the chief investment officer for the Alaska Permanent Fund, and he oversees funds valuing a total of 80 billion USD. In addition, Dr. Ruediger Weseloh, who’s a neuroscientist, he’s PhD in Neuroscience. He is also a senior business development director for Merck KGaA in Germany. So I think you’ll agree we’ve got a very high-caliber board with a good track record in commercializing bioscience.
So, what motivates us? We’ve got a vision. Through our technology, we can improve the lives of patients. And we’ve really gotta focus on novel treatments. So these are new drugs that have never been made before. And we’re focused on areas where there’s unmet clinical need, and where the current treatments that are available are perhaps sub-optimal. And you’ll see what I mean by that as we go through the two programs.
I think one of the things that differentiates us from other biotechs is that we’re looking at more medium-term timeframes to commercialize this technology. We’re looking at completing phase 1 studies where we show that the drug is safe and it works. Then we’ll take it into the target population, show that it works in that population. And then what we’re looking to do is to out-license. And the strategy is that by out-licensing, it’ll generate cash for the company, and that’ll enable us to invest in new programs, and that’ll drive growth and return profit to the shareholders.
So, I’ll talk about the cholesterol-lowering program first. I’ll give you a little bit of a background about how our drug works, what stage it’s at, and where it fits into the current market landscape. So, a cholesterol drug, as you probably all know, is designed to lower blood levels of cholesterol. And LDL cholesterol, or bad cholesterol, is the leading risk factor for cardiovascular disease. And, so what it leads to is a buildup of plaque on the interior of your arteries, and that can lead to stroke and coronary heart attack. It’s a massive problem worldwide. It’s responsible for one in four deaths, and it places a huge burden on healthcare system.
So, the go-to treatment up until this point has been statin drugs. And I’m sure you’ll be familiar with statins and how they work. Statins really dominate the market. And, in fact, here in Australia, the number one and two most prescribed drugs are statins, and the most well-known of those statins is Lipitor, a Pfizer drug. And in the lifetime of that product…it’s now off-patent, but it generated 164 billion USD in sales. So it’s a true blockbuster drug. In fact, it’s the bestselling drug of all time.
But there is an issue with statins. And that really became apparent following research in the last decade where they showed that although statins reduce cholesterol, they don’t reduce it sufficiently to fully protect you from cardiovascular disease. In fact, if you look at the data, somewhere between 50% and 70% of people who take statins are unable to meet their target cholesterol level, which is quite a shocking figure.
In terms of numbers of patients affected, I’ve got some U.S. data on the slide here. Around 27 million U.S. adults take statins. So that’s a huge number of patients who, despite taking this treatment, are unable to meet their target cholesterol level. The numbers here in Australia, to give it some local context, about 2.8 million Australians take statin, and that corresponds to about 25 million prescriptions. So they’re a widely used drug.
So, given the sub-optimal performance of statins, pharma looked at other options. And in the early 2000s, there was a protein discovered called PCSK9. And it was found that this plays a key role in the metabolism of cholesterol. And this finding lead to the development of a new family of drugs. And these are the PCSK9 inhibitors.
The problem with PCSK9 inhibitors that they’ve yet to overcome, and this where our program fits in, is that they’ve only been able to make a biologic form. So these PCSK9 inhibitors, they are injectable drugs, and they’re also very expensive to produce. They also have to be stored in a special way. They’re delivered in a device similar to an EpiPen, and they have to be given every two to four weeks for life, on top of a statin.
So, what are Nyrada doing about that? Well, we’ve seen that as an opportunity, and we’re developing a small molecule form of a PCSK9 inhibitor. And this a drug that can be taken orally. And, in fact, it can even be combined into a single pill with the statin. Being a small molecule inhibitor that can be taken in an oral form, it means that it’s much cheaper to produce, and it’ll lead to higher patient compliance because it’s convenient.
Just briefly how these PCSK9 inhibitors work. So, what PCSK9 does in the bloodstream is that it’s involved in a process that degrades these special receptors in your liver. And these receptors are like the body’s recycling bins. They take cholesterol out of the bloodstream and they lower the risk of atherosclerosis, or buildup of plaque on the arteries. And by inhibiting that process with the drug, you can attenuate or stop that happening.
In terms of where the program is at, we listed in early 2020. And the first set of experiments we did was with the first-generation molecule that we designed. And what we looked to do was to compare its efficacy versus the two injectable drugs that are currently on the market. So, if there’s anyone who takes an injectable PCSK9 inhibitor, they’re probably taking Repatha, which is an Amgen drug.
That’s a drug that is very expensive. It’s about $7,000 per year to take. As I said, you have to take it every fortnight or every month. And what we wanted to do is compare our drug versus that drug. And we ran some experiments in a human cell line, and we showed equivalence with not only that drug, but also the other drug that’s available on the market, a drug called Praluent.
We then worked on fine-tuning that drug, and we then ran it in a specialized mouse model. And this a model where the mouse was genetically engineered to metabolize cholesterol much like you and I do. And in that trial, we showed that with treatment with our drug, we were able to halve cholesterol levels. And for reasons of biology, which I won’t go into, PCSK9 inhibitors work very well when combined with the statin. So, when we combined our drug with Lipitor, we saw a reduction in cholesterol of around two-thirds.
So, where the program is at, we are just about to embark on preclinical testing following scale-up of manufacture. And then we’re looking to get that drug into a phase 1 first in human study in the second half of the year. And we’ve employed Charles River Laboratories, one of the leading recognized contract research organizations to do that work for us.
Turning now to the brain injury program. And as Stuart mentioned, this an area that’s, sort of, dear to my heart because it’s an indication that I worked on in my previous role before joining Nyrada. What we’re looking to achieve here is a drug that prevents what’s called secondary brain injury. And that’s a process that occurs immediately following a stroke or a traumatic brain injury. And what it does is it leads to cell death. And that leads to poorer outcomes for the patient, longer recovery times, and, you know, a higher level of disability.
And if you look on the right there, you can see, you know, the numbers look pretty bad. If you get a traumatic brain injury, for example, you’ve got a more than 50% chance of either being worse or dying within the first 5 years post-injury. So it’s a serious and life-threatening condition.
What’s attractive about it is a market, is that currently there are no drugs approved by FDA to treat secondary brain injury. Just in terms of the size of the market for traumatic brain injury, around 2.8 million TBIs occur, or brain injuries occur in the U.S. every year, and about 4.1 million occur if you include the U.S., UK, Europe, and Japan. So it’s a very large unserved market.
The pathology or the disease process behind traumatic brain injury, when I’m referring to secondary brain injury, also occurs in stroke. So we’re developing a drug that can be used not only for traumatic brain injury, but for stroke. And that market is also very large. Eight hundred thousand strokes occur in the U.S. every year. And there is one drug available to treat stroke. But because it has to be given in such a narrow time window after the event, otherwise it can be dangerous, it’s only applicable to about 15% of patients. So, again, a very large unmet clinical need there.
So, I mentioned that this drug attenuates a process that occurs following injury to reduce neuron death. And you can see in this graph here, following the primary injury, which is shown in blue, you get the secondary injury occurring. And what we’re looking to do is to depress that green line down to the green dotted line. And what that does is it reduces the size of the injury in the brain, and that directly correlates to how the patient feels, functions, and how they recover.
So, I’ve got some figures here for the size of the market. The stroke market’s estimated to be around $3.5 billion, and it’s growing, as is the traumatic brain injury market, which is estimated to be worth around $6.7 billion, and it’s, again, growing at a fast rate. Traumatic brain injury is of particular interest to the military, and hence the interest from the U.S. Department of Defense. And so we’ve got research that’s being done in conjunction with them at the Walter Reed Army Institute of Research in the U.S.
Just in terms of program milestones. So, we spent quite a bit of time at the outset developing a drug that, first of all, is potent, and second of all, can get to where it needs to be. And some of you may have heard of the blood-brain barrier. It’s a protective shield around the brain. It keeps everything that shouldn’t be there out. We’ve developed a drug, and this, I guess, makes us unique from other programs that I’m aware of, that this drug has been shown even in a healthy brain to get to where it needs to be at high concentrations.
So we’ve got a potent drug. It gets into the brain. And we’re just about to run it in a model of stroke, and also at the Walter Reed Army Institute into two specialized models that they’ve set up. One is a model that mimics a cortical controlled impact, so an external trauma force injury to the head, and also a penetrating ballistic brain injury model, which is something that’s very relevant to the military because of bullet and shrapnel wounds. Again, with this program, we’re looking to complete preclinical testing in the first half of this year, and then take it into the clinic in the second half of the year.
Just in terms of the company and where we’re tracking with funding and so on, the company has a very healthy cash position. We had $11.1 million at the end of the last quarter, and those funds were boosted subsequent to that with an R&D tax rebate of $1.3 million. And that’s sufficient funding to take these drugs through phase 1 development. And we see phase 1 as being important inflection points for these programs, particularly for the cholesterol drug, because with a cholesterol drug, even in a healthy volunteer, you’re able to measure cholesterol levels. So we’ll get a read on not only, is it safe? But also, is it working?
Yeah. So, we completed the cap raise in the middle of last year. And that was very well-supported, including by everybody who’s on our board, who I showed you before. So we’re in a good position financially. We’ve also spent a lot of effort building out our patent portfolio. We have a patent granted for our cholesterol-lowering candidates, and we’ve just processed a second one through to PCT stage. And these are patents that cover the molecule itself, not just indication patterns. So we own the technology. There’s also a provisional patent that we’re currently putting together, and we hope to have that submitted by the end of this month.
Just in terms of some key metrics and timings. As I mentioned, we’re looking to get the cholesterol-lowering and brain injury drugs into the clinic as soon as possible. That’ll occur in the second half of the year. Our market cap is just a shade under $30 million, and our share price has taken a little bit of a hit recently, I guess, for a lot of reasons outside of our control. But…yeah.
Okay. So, look, I didn’t get a chance to go into the detail on the science behind the programs, but we’ve put a couple of animations together. So if you’re interested, you can use these QR codes and it’ll take you to our website, and you can play those through. So, just in summary, we’ve got novel drugs that are in, you know, particularly attractive therapeutic areas, not just from a medical science point of view, but also from a commercial perspective. We’ve got plenty of cash to execute on what we plan to do in 2022, and we’ve got the right people assembled to drive the company forward. So, look, I’d like to end there, and happy to take any questions that you may have.
Male Speaker 1: [Inaudible 00:23:00]?
James: NYR. Thank you.
Male Speaker 1: There are actually a couple of questions that have come through online.
Male Speaker 1: So, Jeremy said, “Does the drug show any possibility of helping with CTE? So, are you looking to produce a product to help sufferers of CTE?”
James: That’s a great question. I guess a lot of the research around CTE is still being done. And, you know, that’s a chronic condition that develops over a period of years, decades. But I think what’s becoming obvious is that repeated concussions contribute to that. And we see that with sports players, you know, developing CTE later in life.
Concussion is a focus for us. And I mentioned before that our drug really gets into the brain. It crosses the blood-brain barrier. And we designed it on purpose for that reason, so that we could use this drug for stroke. A lot of other drugs in development, they rely on a compromised blood-brain barrier to get in. We don’t see that as being an issue for our drug. And it’s certainly an area that we’re looking to work in, and it’s an area I’ve had previous experience in. When I was at Neuren, we ran a concussion study with the Department of Defense. So it’s certainly an area of interest.
Male Speaker 1: And, sorry, just one more from the online viewers, as well. “Great presentation so far. Just curious to see what your cash burn rate is at the moment.”
James: So, the cash burn rate per quarter is about $1.4 million. I think it’s about $340k, $350k per month. We have a very high percentage of our spend dedicated directly to R&D costs, and we run a very lean operation. We have a small team based here in Sydney, as I mentioned. We all work virtually, and we subcontract out all of our project work. So, the burn rate for a biotech is really small. So, you know, it’s all about smart allocation of capital.
And, again, I’d also say that, you know, we’re not a company that has half a dozen different indications, and we’re not taking a shotgun approach to this. We’ve been very selective about the areas that we’re working in and the approach we’re taking. So, yeah.
Male Speaker 1: Fantastic. Thank you.
Male Speaker 2: Your cholesterol-lowering drug is being taken in oral form. Are there competitions or competitors in the world who’ve already gotten another form for the same type of drug? And does your drug also increase HDL or reduce [inaudible 00:26:01]?
James: I’ll address the last first because that’s easy. No, it doesn’t affect HDL from our tests. And I’ll just add to that, that, you know, we’re still learning a lot about PCSK9, but we know that it doesn’t really form or perform any positive effect or benefit in the body. It’s just the bad guy. I think it’s a hangover from how we evolved. So it’s a safe target.
Going back to the other question, are there other companies developing PCSK9 inhibitors? There are. I mean, good ideas travel around. So we’ve got two credible other programs in development. The first one is a Merck program, and they’ve just completed a phase 1 study. It’s a little bit different than our molecule. It’s quite a large molecule which looks quite expensive to produce. There are some downsides with the approach that they’re taking. They’re subject to poor absorption, food effect, that kind of thing. So we think with our small molecule, we’re on the right track.
There’s another program that’s being run by AstraZeneca, another big player in the cholesterol-lowering market. They produce the other main statin, the second-biggest selling statin in Australia. So they’ve also got a program. They acquired an early-stage preclinical development company called Dogma Therapeutics. I don’t know what the size of that deal was, but that occurred about a year and a bit ago. So…
Male Speaker 2: You’re also saying you’re having [inaudible 00:27:48]?
James: Yeah. Well…
Male Speaker 2: You would hope to be looking at whether these large [inaudible 00:27:55] companies to [inaudible 00:27:57]?
James: Well, there’s a lot of interest in the area. And I guess if you look at statins, it’s a large enough market to accommodate numerous players. You know, there are probably 20 different statins that you can buy. They’ve all been profitable drugs. So we don’t see that as an issue.
I mentioned the injectable drugs. I mean, the uptake for those is actually increasing. I think the sales volume for Repatha last year, it grew 40%. So…
Male Speaker 2: But they had many side effects, the injectables then?
James: Just injection site reactions. But I think the number has been quite small. But in terms of safety, there have been some large, you know, post-approval studies done with those drugs, Praluent and Repatha. And they’ve been shown to reduce the incidence of cardiovascular events, and they’ve also been shown to be safe. So it’s, kind of, nice following another company in a way with something that’s better, with, you know, the same biological target because you know it’s been validated and it’s safe. Well, we managed to reduce cholesterol by two-thirds when combined with a statin, Lipitor, in the mouse model. Lipitor on its own, that was also given in one of the treatment arms, that only reduced cholesterol by 25%. So we got an additive effect when we combine the two together. And you can do that with a pill. You can basically put two drugs together in one pill.
So, I think convenience is a big thing, but also cost. I mean, you know, for something like cholesterol where otherwise you feel okay and your problems lie in the future, when faced with an annual cost of $7,000, and bi-weekly or monthly injections, you know, I think patients are a bit weary of that.
Stuart: I’ll give you the bill later.
Stuart: Appreciate James Bonnar.
James: All right.
Stuart: Thank you.