In a report modelled by Rand Europe and KPMG, and presented to the UK government at the end of 2014, analysts expect that by 2050, superbugs will kill more patients globally than cancer. Not something that is currently in the public consciousness, but a terrifying statistic nonetheless.
There is a huge unmet need in effectively battling superbugs, and as the research shows, it is expanding rapidly. But there is a very interesting catch to this market. That is, the biggest problem in finding effective therapeutics against these types of infections may not necessarily be developing them per se, but overcoming the increasingly devastating side effects of increasingly stronger antibacterials and antifungals. While many a company is developing new antiinfectives, few are developing ways to shield patients from their extreme consequences, which in some cases even include death.
The skeleton key to this market then would not necessarily by the next antibiotic, but rather a product that can universally shield patients from the side effects of these increasingly necessary and deadly drugs. Matinas BioPharma Holdings, Inc. (OTCMKTS:MTNB), a small biotech out of New Jersey, may hold that key. The company has developed a proprietary drug delivery system – one that could be at the root of infectious disease treatment going forward. Here’s why.
The delivery system is what’s called Cochleate Technology. Many of the so-called superbugs that are around today are theoretically treatable, meaning physicians could use currently available drugs to counter the infection, but the doses required to do so are so high that the treatment would be toxic to the patient. The reason that high doses are required is rooted in targeting. Current administration is limited to two methods – oral or intravenous. With oral administration, bioavailability is low as much of the drug is not absorbed into systemic circulation. With IV administration, adverse side effects are common because the drug goes everywhere. In order to counter the low bioavailability of oral therapies, these drugs usually contain a far higher level of the active compound than would be required at higher levels.
With superbugs, however, it’s not possible to increase dosage to the level required due to the toxicity issue. With IV administration, the 100% bioavailability also makes it dangerous to increase the strength of an IV administration to the level required to treat the infection. This is where Cochleate technology comes in.
Matinas wraps what would otherwise be a highly toxic formulation of a drug in a phospholipid bilayer particle shaped like a croissant, or a cochlea, much like the cochlea of the ear is shaped. This particle is solid and highly stable. The cochlea also contains calcium. A patient takes the drug orally while it is encapsulated in these nanoshells, and because of their tiny size they get absorbed in the GI tract and passes into the lymphatic system. These particles are then recognized as foreign by macrophages, which are the cells in the immune system responsible for swallowing pathogens, and engulfed. Macrophages and other cells purposefully contain very little calcium, so the calcium is sucked out of the cochlea, opening it like a scroll inside the macrophage. Think of this like high pressure rushing into an area of low pressure. At this stage, we’ve got a macrophage full of high potency drug, which then travels to the area of infection, something that the cell is naturally designed to do anyway. Once it arrives at the infection, it swallows the pathogens there while armed with the drug inside itself. The beauty is, at no time is any active drug in the bloodstream, as it is all encapsulated in the protected cochlea envelopes until swallowed by macrophages. This drastically lowers the side effect profile.
If it works in human trials the same way it has in its preclinical studies, it could become the go-to method of delivering targeted drugs to not just superbugs, but a host of other conditions. Autoimmune deficiency disorders, antiviral therapies, bacterial infections – to name just a few.
So where do things stand on a developmental level?
Matinas is running a Phase 2 trial to study safety and efficacy of MAT2203, an encochleated formulation of amphotericin B, in a mucocutaneous candidiasis infection indication. Amphotericin B is an extremely powerful antifungal used only in emergency life-and-death situations, known for severe side effects that can even lead to death. Mucocutaneous candidiasis is an immune T-cell disorder caused by candida, a type of fungus, the lead cause of fungal infections globally. The trial should yield data in 2016, meaning we could see the commencement of Phase 3 pivotal trial as soon as the first quarter of next year.
Since the conchlea envelope uses GRAS compounds, or Generally Recognized As Safe by the FDA, it’s really efficacy we should be keeping an eye on for this one. Safety is not expected to be an issue, a remarkable feature of the trial given the side effects of amphotericin B on its own, though of course safety should still be monitored by investors just the same as surprises are always possible.
The company just got the green light from the FDA to kick off a Phase 1 in a second indication – non-tuberculous microbacterium infection – with MAT2501, an encochleated formulation of amikacin, which is an SOC bacterial infection drug. This one is set to kick off this year as well.
Matinas may be a young and small company with no approved therapies, a pretty unstable financial standing ($4.4 million cash on hand at last count, September 30, 2015) and just two early stage trials likely to complete across the next twelve months. However, it’s targeting a large global unmet need that is getting much larger by the year, and may hold the skeleton key to the market. If encochleated amphotericin B can maintain efficacy in the ongoing trials due later this year, and perhaps pick up a big pharma partner or two along the way, it could be serving a large market before the end of the decade.
Two companies that come to mind as potential partners are Johnson & Johnson (NYSE:JNJ), which recently developed a drug for resistant tuberculosis, and GlaxoSmithKline plc (NYSE:GSK), which is developing new antibiotics for resistant staph, gonorrhea and E. coli. Both have recently spearheaded a petition together with Merck and Co. (NYSE:MRK), signed by a total of 85 companies for international governmental support for new antibiotic research
If Phase 2 trials show efficacy for encochleated amphotericin B this June, the possibility that Matinas will attract the attention of these major players increases substantially, and potential upside in the stock skyrockets.
Competitors or Stepping Stones?
Matinas is by no means the only biotech pursuing new anti-infective solutions. What makes it unique is that the approach it’s taking turns would-be competitors into possible future stepping stones for itself. One notable example is Cidara Therapeutics Inc. (NASDAQ:CDTX).
Cidara is a promising company with both a new echinocandin antifungal called CD101 now in Phase 1 trials, as well as a novel discovery platform for new antifungals called CloudBreak™. CD101 aims to treat candidiasis infections, the same type targeted by Matinas’s encochleated amphotericin B. The potential advantages of CD101 stem from its improved half life over comparable antifungals in its class, potentially allowing a once weekly treatment regimen with outpatient potential instead of daily and inpatient, potentially cutting down significantly on hospital and treatment costs. In that sense Cidara could be considered one of Matinas’s competitors.
Looked at a different way though, Cidara’s technology could just as easily complement Matinas’s. Keep in mind that Matinas is not in the business of discovering new antifungals as much as new and better ways of delivering them. Assuming Cidara succeeds with CD101 in eventually getting FDA approval, it could end up helping Matinas by giving its encochleates new antifungal ammunition.
Let’s say for instance that both encochleated amphotericin B and CD101 are proven to work on candidasis infections while lessening side effect profiles. Would the two products compete for market share in that case? At first, probably yes. In that event, encochleated amphotericin B may still have a market advantage because it would be making use of a more established and recognized antifungal against a new and unrecognized one. Cidara could even end up teaming up with Matinas to further enhance CD101 by encochleating it as well, potentially benefiting both companies.
Aside from that, the risks of modifying the delivery mechanism of proven anti-infectives are generally much lower than developing new and unproven ones. Investors who follow the space are well aware of the failure of Chimerix Inc. (NASDAQ:CMRX) flagship antiviral candidate Brincidofovir back in December, evaporating over 80% of the company’s valuation overnight. Brincidofovir is a new antiviral that aims to prevent cytomegalovirus infections in patients undergoing blood stem cell transplants. In fact, the phase 3 trial backfired with more deaths in the Brincidofovir arm than the control arm despite initial evidence that the drug does help lower the risk of CMV infection as long as the treatment regimen is continued. This is not to say that the situations with Chimerix and Cidara are the same or even similar. It only illustrates the risks and danger inherent in testing new drug molecules over improved delivery methods for existing approved drugs.
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