DelMar Pharmaceuticals Inc
President and CEO: Jeffrey Bacha
WSA: Good day from Wall Street. This is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is Jeff Bacha, the CEO and Chairman of DelMar Pharmaceuticals. The company trades on the OTCQX. The ticker symbol is DMPI. Thanks for joining us today there, Jeff.
Jeff Bacha: Thanks, Juan. It’s a pleasure to be here again.
WSA: Certainly. So bring us up to speed on VAL-083 and the recent orphan drug designation — or the second one I should say.
Jeff Bacha: Yes, absolutely. We were very pleased to receive a second orphan designation for medulloblastoma, which is a common childhood brain tumor that is often quite difficult to treat. We believe that, based on our data, the VAL-083 may have an opportunity to help some of those kids.
Just a real quick background on the drug. As you may recall, VAL-083 had been previously studied at the United States National Cancer Institute. When we inherited the compound and all of that old data, we had phase II clinical activity that had been demonstrated in a number of tumor types, including medulloblastoma, as well as in our lead indication of glioblastoma, which is the most common and aggressive form of brain tumor in adults. But that data goes beyond brain tumors and into other solid tumors, including lung cancer and ovarian cancer.
So we’re starting with a drug that has strong evidence of clinical activity from prior human and clinical trials and what we do is backfill the basic science to understand the mechanism of how the drug works in a more robust, modern way compared to the science that was available in that original clinical timeframe. Now we can start to look at subsets of glioblastoma, subsets of medulloblastoma, and subsets of lung cancer, where there remain very significant unmet needs — subsets of those cancers that do not respond well even to today’s modern treatments — and use our understanding of the mechanism to point the drug where we believe it can make a difference for patients today. Of course, starting with the point that we already know the drug works against that tumor is a great way to get ahead and take risk out of the program and put us in a position to really help those patients in the most timely manner possible.
WSA: Right. So you mentioned the two applications there for brain cancer. What are some of the other applications of VAL-083?
Jeff Bacha: As you may have seen this morning, we announced several abstracts that have been accepted for presentation at the upcoming American Association of Cancer Research (AACR) meeting next month in April, and these are all moving into multiple tumor types based on historical clinical data and based on our understanding of the mechanism.
So glioblastoma has been our first indication. The second indication that we’ve been talking about and presenting data around is lung cancer, actually. Beyond that we presented some data in medulloblastoma as well as in ovarian cancer. This year we plan to expand our clinical development efforts from one glioblastoma study in late-stage cancer patients to also include earlier-stage glioblastoma patients, lung cancer patients, and eventually, probably beyond this year, into ovarian and medulloblastoma.
And really, this is leveraging that historical NCI data where the drug has been shown to work and identifying the types of patients that we believe we can assist, either by combining with today’s modern therapies or going into areas where there currently is no available treatment. So this is a year that’s very important for us. We go from being a company with one early stage clinical trial to a company that is going into a phase 3 pivotal trial in recurrent glioblastoma and multiple phase II trials in two other areas, earlier stage GBM (glioblastoma) and lung cancer.
WSA: What are some of the other key goals and milestones that you’re hoping to accomplish over the course of the next 6 to 12 months?
Jeff Bacha: Well in addition to expanding our clinical portfolio, one of the steps that’s important to us is making sure that we have access to the capital to do so. As you mentioned at the outset, we are currently listed on the OTCQX and so we have a strategy and plan in place to move our shares up to a national exchange, either the New York Stock Exchange or NASDAQ, which we believe will not only unlock liquidity and value for existing shareholders, but also increase our access to capital as we seek to go forward and build the company. That will enable us to fund the clinical trails that we’re looking for to the extent that we don’t have partner funding for them — and I’ll come back to that in a second — but also provide capital to bring in other compounds that we are interested in that have a similar profile with historical clinical activity, but under-appreciated to date, scientifically. And we believe that we can unlock some value there as well. So a major milestone in addition to expanding the clinical portfolio is uplisting and we’re pretty confident that we’ll be able to do that in a relatively near term.
WSA: Right. The last time we spoke we talked about the elusive blood-brain barrier. What are some of the things that make VAL-083 unique in the way that it attacks certain cancers?
Jeff Bacha: Well it’s actually quite interesting and some of the data that we’ll be presenting in AACR (American Association of Cancer Research) in a couple of weeks is going to go into this in some great detail and some new data and some things that we’re excited about. What’s unique about VAL-083 is that it’s a cytotoxic molecule, so it’s an anticancer therapy, but it’s based on the backbone of a sugar. As you mentioned, the drug VAL-083 does cross the blood-brain barrier, which most drugs can’t do. So the number of tools that are available to doctors to treat brain cancer are very limited because most drugs just simply can’t get easily into the central nervous system.
And if you think about it, around 70% of the sugar or glucose that our body uses is actually used in the brain and we believe that because VAL-083 is in fact a small sugar, it gets readily taken up into the brain. Even more advantageous is the fact that cancer cells, by their unique aggressive metabolism, burn more sugar and more glucose than normal cells. What’s been observed is that the drug VAL-083 actually gets concentrated in tumors up to a twenty-fold-higher concentration compared to normal tissue, which targets the drug to the cancer, reduces side effects to normal tissue, and really takes advantage of a cancer cell being a cancer cell.
This is a sugar which is readily taken up into the cell where it can do its job. Once they get into the cell, the job is somewhat unique. The drug forms a cross-link on DNA, so if you think of the tumor’s DNA as a sort of twisted ladder, what the drug does is it basically binds the legs of the ladder together so that when the DNA tries to copy itself so the tumor can divide and grow, the DNA breaks and that’s lethal to the tumor cell. That mechanism is distinct from other chemotherapies and that’s one of the reasons that we are able to treat cancers that are resistant to those other chemotherapies, because the resistance mechanisms against those chemotherapies do not apply to how our drug works. That’s very exciting.
So we can now, with that understanding, leverage the historical clinical data and basically show that the drug works the same way it did 20 years ago in patients that really need it today.
WSA: Certainly. So in terms of investors, the financial community, and members of your sector, what are some of the drivers that you wish perhaps they better understood about the company or about the way that the compound works?
Jeff Bacha: Well, I think the key thing that we want people to understand is that we’re probably the easiest biotech company to understand. Take a drug that worked 20 years ago that got left by the side of the road, understand how it works a little bit better than you could’ve understood then, and plug it in where it makes sense. We consider it a low-risk technical plan because we’re not wondering if the drug works against a particular type of cancer, we’re just trying to figure out where that matters today and then run it as quickly as possible, so that’s one thing.
The second thing is that in addition to all of that prior clinical validation, we have a team that’s done this before. The predecessor company to DelMar was called ChemGenics, which was the same exact business model and the same clinical development team, with a different compound targeted towards leukemia. Again, it was an older drug that had been studied at the National Cancer Institute, had been left by the side of the road, and the team at ChemGenics showed that it was active in a very important and underserved subset of a type of cancer called chronic myelogenous leukemia.
That company was acquired in 2011 for a little under a quarter of a billion dollars. That drug got approved by the FDA in 2012, is now sold by Teva Pharmaceuticals exactly for those patients, and is making a difference in those patients’ lives. So we’re just repeating that process with VAL-083, which we believe is a much, much bigger opportunity. We’ve done this before, we know that we can be successful, and we know that the drug has clinical activity in every area that we’re interested in.
And then thirdly, one of the other unique things about our company is that we have a collaboration to take advantage of a very near-term commercial opportunity, because while our primary interest in VAL-083 has been in glioblastoma, the drug is actually approved in China for lung cancer. We didn’t necessarily start out looking for a drug that was approved in China. That was kind of by luck. We were looking for a manufacturing partner and we found somebody who was already manufacturing it because it was approved. So we partnered with that company who has been our supplier for clinical trials in United States, which has helped us to manage costs, but we’ve also been educating them and the medical community in lung cancer about where this drug should be focused in terms of addressing unmet medical needs.
We have a clinical investigator who will be funded by our Chinese partner to really unlock that value. We’ll be presenting data, for example, at AACR in a couple weeks, really focusing on what those subsets of lung cancer are where there are significant unmet medical needs, where our modern data combined with the historical clinical data shows that we should be able to address that problem, how we’ll be able to move very quickly into clinical studies because of the Chinese approval, teach doctors — where the drug is already approved — how to use it to benefit patients today, and also use that as leverage to bring on a global development effort for the subsets of lung cancer.
And that’s very exciting because we can move into a major tumor area in lung cancer with the support of our manufacturing partner, with a leading investigator from China who is leveraging data that we’ve developed with leading researchers at MD Anderson, University of California, and the British Columbia Cancer Agency. So we’re able to leverage these incredible scientific minds and move forward to patients very quickly. So again, a third leg on our stool of uniqueness is the fact that we have a commercial opportunity here in the very near term.
WSA: Good to hear. Once again joining us today is Jeff Bacha, the CEO and Chairman of DelMar Pharmaceuticals, which trades on the OTCQX, ticker symbol DMPI, currently trading at 80 cents a share, and market cap is around $32 million. Before we conclude here, Jeff, to rehash some of our key points, why do you believe investors should consider the company as a good investment opportunity today?
Jeff Bacha: Well, besides the valuation that you just mentioned, it’s those three key points. We’ve got a drug that has been demonstrated to work in the areas that we’re interested in and we’re just narrowing that focus to a very personalized medicine approach to the patients that can benefit most today, number one. Number two, our team has done this before successfully. And number three, the near-term commercial opportunity by leveraging the existing approval outside of the US and then using that data to drive development around the world. So that’s why I’m excited, why I got involved in starting the company in the first place, and hopefully others will find that exciting as well.
WSA: Well we certainly look forward to continuing to track the company’s growth and report on your upcoming progress. We’d like to thank you for taking the time to join us today, Jeff, and update our investor audience on DMPI. It’s always good to have you on.
Jeff Bacha: Very good. Thank you, Juan. It was a pleasure.