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Pharmaust (ASX:PAA) interview with CEO Dr. Michael Thurn

September 1, 2023

PAA, Pharmaust


Pharmaust (ASX:PAA) interview with CEO Dr. Michael Thurn

We spoke to Dr. Michael Thurn, the new CEO of Pharmaust (ASX:PAA), about the company’s preclinical and clinical success with its flagship Monepantel drug, its potential use in cancer due to its MTOR inhibition and, importantly, the pre-clinical evidence that it will be useful in Motor Neurone Disease, which could prompt a FDA approval after Phase 2.

Full transcription below.


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Stuart: Hello, and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m one of the co-founders of our service. And joining me today on the afternoon of Tuesday, the 29th of August, 2023, is Mr. Michael Thurn, who’s the new CEO of PharmAust, ASX:PAA. Michael, good afternoon.

Michael: Good afternoon, Stuart. Thanks for having me.

Stuart: In this globalized world, you can run pharma companies from anywhere. You are based near Orange in central New South Wales.

Michael: I am. I’m based in a small outer suburb of Orange called Kangaroobie, which is a very lovely part of the central West of New South Wales surrounded by vineyards, as a matter of fact.

Stuart: Right. You’re lucky, man. Well, there’ll be a few reasons to break open some of a local product in the near future.

Michael: That’s nice.

Stuart: [inaudible 00:01:00] on the market for a while. But its flagship product, Monepantel is now showing signs of life as potential therapy for ALS. Tell us how a formerly anti-helminthic drug turns out to be good in that most tragic of central nervous system disorders.

Michael: So, it’s a great question. And so, as you mentioned, ALS, Amyotrophic Lateral Sclerosis is a form of motor neuron disease. And research that’s been conducted by PharmAust has been able to show that its mechanism of action, which is through mTOR inhibition, which is a kinase that plays a very important part in cell progression, cell maturation, potentially has a role to play in motor neuron disease. One aspect of mTOR inhibition is that it prevents the cell from going on and actually dying. And one of the actual aspects of that is a process called autophagy. And autophagy is a term which is associated with a process of recycling cellular nutrients. And what the, you know, the opinion leaders are postulating is that what happens in these nerves that are associated with motor neuron disease is that there’s an overproduction of cellular nutrients in the axons. And that overproduction of cellular nutrients causes ultimately the death of that neuron. So, if you’ve got a drug that potentially promotes recycling of cellular nutrients, you’re going to go a long way towards preventing the progression of ALS or motor neuron disease. So, the chief function here is that Monepantel, or MPL as we call it, prevents or takes away, sorry, that inhibition around autophagy. So, it promotes the process of recycling cellular nutrients in the axon of that nerve cell. So, we’re, you know, very encouraged by that.

Obviously, the phase-one study that’s been occurring, has been conducted here in Australia, both in Melbourne and Sydney, has produced some results that we’ve announced to the market. We’ve announced some interim results around various endpoints, surrogate endpoints that all show that one, the drug is getting into the blood at the required levels to release that mTOR inhibition to cause potentially autophagy, that recycling of cellular nutrients in the axon in the nerve cells. So, we’re very encouraged by the results that we’ve been getting.

Stuart: Right. So, early days, obviously. And we’ll need to translate that into some endpoints that relate to, you know, better patient outcomes. The good news is, at least from a drug delivery perspective, is because there’s really no treatment options for any of the motor neuron diseases, agencies could clear you at the end of phase two into a…particularly an orphan drug market, which would be worth billions of dollars.

Michael: Exactly. So, rare diseases that often get orphan drug status with the FDA, for example, there’s been a real renaissance in companies going after rare disease drugs. And over the last five years, I think the statistics are that they’re on in parallel with all other drug approvals. So, the FDA are approving rare disease applications at the same rate as they approve normal drugs, which is interesting.

Stuart: If you’re gonna get sick, get a rare disease, not a conventional disease, because you might get treated faster.

Michael: Well, that’s right. And obviously, that translates into some of the big mergers and acquisitions that have been occurring recently. So, as recent as June, Novartis snapped up Chinook Therapeutics for $3.2 billion, and they had a couple of late-stage candidates for rare kidney disorders. But, you know, even bigger than that was, you know, the biggest deal that was done in 2022 was by Amgen who picked up Horizon Therapeutics back in December for $27.8 billion. And that company, as in Horizon Therapeutics, had a number of late-stage rare disease opportunities. So, for us, that, you know, opens up a massive advantage as we move forward out of this phase-one study into a phase-two scenario. And as you pointed out earlier, if we’re able to get an orphan drug disease status, if we look at the drugs that were recently approved for motor neuron disease, those data that they presented to the FDA to get that approval under the Orphan Drug Disease Act, was only phase-two data.

So, the most recent company that had their drug approved for motor neuron disease or ALS was Amylyx Pharmaceuticals. And Amylyx Pharmaceuticals went to the FDA with phase-two data, data that, you know, contains similar endpoints to what we’re capturing out of our phase-one study. They went to the FDA, the FDA allowed them to have an accelerated approval. That drug is out there in the marketplace. And that drug sells for the list price, for an annual prescription of that drug, which is called Relyvrio, is over 160,000 U.S. So, it’s a, you know, for drug companies, big pharma, they see rare diseases as a major opportunity for growth, particularly because, you know, over 40% of these rare disease drugs, their list price are over a hundred thousand USE.

So, we’ve got that ability, you know, quite soon to start talking to these big pharma companies about our drug, about our results, and, you know, potentially look at a partnership. But more importantly, the results that we’re gathering out of this phase-one study is going to be used to start discussions with the FDA. So, as you know, the U.S., 65% of the market, worldwide market for any drug is really in the U.S. And we need to get in front of the FDA as soon as we can to one, obviously, look at what our next phase-two study is going to be, get their approval, but also to sign off on an orphan drug status for Monepantel.

Stuart: Take us back in time. When PharmAust was first taken public, it had some IP developed by Professor David Morris at the University of New South Wales around the use of Monepantel in mainly blood cancers. I think. It’s been tried out in canine cancers with for T-cell lymphoma, with some success. Again, this action on the mTOR pathway. How do we then pivot from having Monepantel as a cancer drug to going into MND?

Michael: It’s all to do with the pathway. So, as I mentioned before, the mTOR pathway, inhibition of the mTOR pathway, you know, leads to, you know, cell progression. You know, autophagy is also linked into that. It’s one way that cancer cells are killed, is by this autophagy process.

Stuart: Who made the link, is what I’m saying, what is useful in cancer could also be useful in MND?

Michael: It was more through the interactions with key opinion leaders. So, as you know, the phase-one study for motor neuron disease is through FightMND. So, FightMND is a non-for-profit organization that has been looking at, you know, potential drugs that may be useful in MND. And it was through the link with those key opinion leaders that the, you know, the hypothesis around mTOR inhibitors may be useful for motor neuron disease. So, that’s, you know, essentially how that whole process of setting up the MND trial with FightMND through the grant application came about.

Stuart: Right. It’s fair to say that in the upcoming studies, if they work, time-wise is gonna be worth a lot more than the current market cap, which is sub 30 million, and that’s obviously attracted you to come and join this company. Tell us about your background.

Michael: It has, yes. No. That was one of the things that I felt that, you know, I could potentially add to…was to explain the science, bring on my regulatory background to help push this next phase through the FDA. And that’s where I really saw the opportunity. It was around creating awareness for the company and the science behind, the very foundation that has been built by the company, not only in the AND [SP] Cancer space, but obviously now in the, you know, central nervous system, the MND space. So, to me, it was a great opportunity to get out there, talk about the company, educate investors about what we’re doing and about the near-term catalysts that the company is capable of achieving.

Stuart: Right. We’ve met a couple of times previously to this, you with a privately held company called Mimetica. For a while, you were Chief Operating Officer at Botanix. Tell us about some of the other companies you’ve worked with before you arrived here.

Michael: So, yeah. Before that, I guess my regulatory path started with working at the Therapeutic Goods Administration. I was a senior toxin evaluator. So, I got to evaluate all the big packages that were coming in from various companies, various pharmaceutical companies for marketing here in Australia. So, that was very good experience and gave me the confidence that, you know, I could become an expert in drug development. So, I’ve taken those skills that I’ve learned at the TGA. I moved into the private biotech space with a company called Xenome. Xenome was developing a pain therapeutic based on a natural product, a toxin from the cone snail from the Great Barrier Reef. From there, I went on to a company called, Cytopia. I was Chief Operating Officer there. And I think to this day that I hold, you know, somewhat of a record of being able to get an IND for an anti-cancer drug called CYT997. So, I was able to put that drug through the FDA, through the IND process within a six-month period.

Stuart: And we saw with Insight, ultimately ending up with a billion-dollar JAK inhibitor market. Cytopia was a pretty good effort to try and get into that billion-dollar space.

Michael: It was. And when I was there, I think at the time, it was the biggest deal that was done by a biotech company. So, it was a JAK inhibitor. They signed a deal, a licensing development deal with Novartis back in, you know, 2005. And then from there, I was encouraged to join a company called, as founding MD, by the name of Spinifex Pharmaceuticals. And Spinifex Pharmaceuticals was developing like Xenome, a pain drug. This one was an oral pain drug as opposed to something that was put into the intrathecal space like the Cono Peptide from Xenome. But Spinifex was able to raise a bit of money for…Spinifex was able to get a commercial-ready grant, you know, basically built the foundation for the development of the drug for neuropathic pain. And I left, moved on to Mimetica, but Spinifex was very successful. It was acquired by Novartis for 700 million U.S.

Stuart: How does it feel to have been responsible for all that shareholder value?

Michael: Well, I mean, I helped start it. I wasn’t there to cash in on the Novartis check, but, yeah. I mean, I think it just underpins what I like doing, which is taking, you know, early-stage companies and pushing them through primarily into that phase-two space. And as you’re probably aware, a lot of deals with big pharma or, you know, even acquisitions outside of licensing are done in that phase-two space. So, moving back to the attractiveness of being the CEO of PharmAust, you know, this is the time where you rapidly add value is from that phase two, sorry, phase one to phase-two interface. So, expecting big things at PharmAust. And obviously, as I mentioned before, there’s some near-term catalysts. The final results from the phase-one study is gonna be one of those catalysts. But then having the interaction with the FDA, clearing up an orphan drug disease status, but more importantly, getting sign-off around a phase-two study that could be potentially our registration study.

Stuart: Right. And it’s fair to say most of that can take place in 2024, and then we’re within spitting distance of that endpoint you were describing.

Michael: Exactly. So, if I’m doing my job, I’d like to think that, you know, we’ll be able to start interacting with the FDA very quickly. A lot of that interaction is going to be dependent upon the results, the final results that come out of the phase-one study. But, you know, plans are underway to start that communication process with the FDA, which will then act as a springboard to start that phase-two study. And who knows, I mean, when the phase-one data comes out for MND, it could well be that there’s, you know, the potential to do a partnership with one of these companies that have been, you know, in the rare disease space.

Stuart: Right. Well, Michael Thurn, well done on joining this excellent company, and the opportunity. Good luck on what comes in the next year or so. And we look forward to some progress as you create the next big thing for patients who’ve got ALS/MND.

Michael: Thanks, Stuart.