Are Markets Finally Starting To See ITI Inc (NASDAQ:ITCI)’s Billion Dollar Potential?


ITI Inc (NASDAQ:ITCI) just announced that it has kicked off a phase 3 clinical trial for its lead neurological candidate, ITI-007-201. The company is up on the announcement, and looks set to gain further strength as the session matures on Wednesday. It’s no surprise, because the latest phase 3 initiation only serves to underline what was already a strong development pipeline – a pipeline that should garner further speculative attention as it matures towards commercialization in a number of areas. Here is a look at the latest announcement, and why ITI’s prospects are intriguing in the development stage biotech space.

The drug, as mentioned, is called ITI-007, with the 201 element of the name specifically relevant to this indication. It has a wide spectrum of indications, however, rooted in its composition. Essentially, it’s a cocktail of different neurological stimulants and depressors, or perhaps the more accurate term is agonists and antagonists, and this cocktail composition allows physicians to vary its efficacy and target indication by just altering its dosing regimen. We won’t go into too much detail about the science behind this one here, primarily because we would be here all day describing how each of the different elements interact with synaptic function (and also, much of the science that is believed to underlie ITI-007s mechanism of action is practically demonstrable but not fully understood).

What we will say, however, is that it has various implications for the way dopamine and serotonin transfer across synapses, and in turn, the rate of uptake of both. Dopamine and serotonin are linked to pretty much the full spectrum of neurological and psychological disorders – depression, psychosis, schizophrenia etc. – and through the aforementioned dosing alteration, the hope is that certain mechanisms that aren’t required for treatment can be avoided with, say, a lower dose, and implemented with a higher dose, depending on patient requirements.

It goes without saying, a catchall psychotherapy drug such as the one ITI is hoping to bring to market could be very lucrative for its creators, and therein lies the potential upside. In this indication alone, which is the agitation associated with Alzheimer’s disease (agitation refers to excessive motor activity, shouting, aggression, nervousness etc.) there are potentially tens of millions of patients in the US that would qualify for treatment. In 2013, studies estimated there are 44 million people with dementia worldwide, of which around 6 million live in the US. By 2050, this number is expected to rise to about 140 million, meaning with a concurrent rate of growth in the US as is expected globally, there should be around 15-20 million US patients. Around 60% of these experience agitation to the point that they require medication, but the currently available treatments are generally off label psychotics. There is no currently available drug targeted specifically (and approved by the FDA specifically) for an agitation indication, meaning ITI would have the whole market to go at, unencumbered by competition.

So what are we looking at going forward, and where will the near term milestones come from? Well, there are two primary ongoing trials for ITI-007 that are going to provide catalysts as we head into the latter half of this year and beyond, into next. These are the already discussed agitation phase III, and an ongoing schizophrenia trial, which is also a phase III. The former has a primary completion date (as of the trial’s formal submission) of August 2018, but it has a dosing regimen of four weeks, so we should see some interim reports as ITI collects data on efficacy across the 360 patient target population.

The second is set to complete this August (final completion) and so is a much nearer term driver from a catalyst importance perspective. We’re looking for a primary endpoint hit – the drug is competing with risperidone, an already approved SOC generic schizophrenia treatment – as an indicator of success come PDUFA, and in turn, commercialization.

The bottom line here is that if the company’s development pipeline matures to commercialization, it will be targeting what amounts to a multi billion-dollar market. There are plenty of hurdles to be cleared along the way, and therein lies the risk. However, with two late stage candidates targeting large scale indications, and a flurry of safety and efficacy data already in place, ITI is very much one to keep an eye on this year.

An ad to help with our costs