Cellceutix Corporation announced this morning that they have contracted acclaimed consulting firm, Destum Partners, to aggressively seek a partner to develop their compound, KM-133, for the treatment of psoriasis. Destum has a distinguished history of establishing partnerships in the biotechnology industry to meet the developmental needs for promising compounds.
Cellceutix has been receiving notoriety recently with a series of press releases regarding Kevetrin, their compound in development for multi-drug resistant cancers, and KM-391, their compound for the treatment of the core issues of autism. Kevetrin is approaching Phase I human trials and has displayed extremely promising results in pre-clinical studies. As a result, major pharma and financial institutions have recently contacted Cellceutix to learn more about the Company and the promising cancer compound that it possesses. In the area of autism research, Cellceutix stands amongst the top of industry leaders, big and small, as they have already conducted several pre-clinical studies on KM-391 with very promising data being compiled.
Interestingly, and also akin to the overall Cellceutix business philosophy, Cellceutix has maintained a very “low-key” approach to the development of their compound for psoriasis. While many small biotechs would be publishing news regularly on a compound of this nature and potential, the Cellceutix management team has been carefully deliberating over the most effective way to continue the development of KM-133 to support shareholder value and financial responsibility of the Cellceutix budget.
In a conversation with Leo Ehrlich, Chief Financial Officer of Cellceutix, we questioned what other options were available for the development of KM-133. Mr. Ehrlich explained that not only could Cellceutix develop the compound on their own, but that they had recently been contacted by officials from the Vietnamese government. The Vietnamese see extremely promising potential in KM-133 and as they wish to establish themselves as a world-leader in the area of medical tourism, they see value in the development of KM-133 in their country as a possible opportunity to launch this initiative. The Cellceutix management spent many hours in discussions about all avenues and decided that partnering for the development was the best course of action for its shareholders.
In a video that can be viewed on the Cellceutix website at www.cellceutix.com, CEO George Evans states that, “it is really an embarrassment of riches” as the Company knows the potential of KM-133, yet is focused heavily on the development of Kevetrin and KM-391. In the press release this morning, Mr. Evans explains, “This decision is ultimately a consequence of the strength of our pipeline.” He continued, “With our primary focus on the impending IND filing for Kevetrin™ and our work on KM-391 for autism, our board determined that this approach is the best way to increase value for our shareholders. We selected Destum because of their deep experience in the dermatology space and their excellent recent track record in concluding development deals.”
The data from results of testing already completed for KM-133 has been extremely promising. In a human xenograft animal model of psoriasis, KM-133 reduced psoriasis significantly more than controls. Psoriasis did not recur with KM-133 during the entire 180 day course of the experiment, whereas psoriasis reoccurred in the groups treated with methotrexate, a drug commonly used for the treatment of severe psoriasis, after an average of 61 days. The effectiveness demonstrated by KM-133 in these studies, if confirmed in human trials, would position the compound in a very large market.
According to a report published by Research and Markets, the psoriasis market for the seven major markets in 2008 was $2.5 billion and is projected to grow at a compound annual growth rate of 3.4% through 2018. According to the National Institutes of Health (NIH), as many as 7.5 million Americans (125 million worldwide) have psoriasis making it one of the most prevalent autoimmune diseases in the U.S. affecting all ages of both sexes.
In addition, KM-133 may be eligible for an abridged FDA approval process that would allow the compound to go directly into human trials. The rule, 505(b)(2), permits compounds with an active ingredient that has previously been approved by the Food and Drug Administration to forego pre-clinical testing. Knowing that this rule has saved companies millions of dollars and significant time, Cellceutix believes that this fact, coupled with the promising data already compiled, will make KM-133 very appealing for development with a partnering company.
Gareth Lugg, Managing Director and Co-Founder of Destum Partners commented, “We are very pleased that Cellceutix selected us for this project. Although Cellceutix is a small company, the strength of their compounds in development is extraordinary.” Mr. Lugg continued, “Our extensive experience in the dermatological industry has us very bullish on the partnership potential for this compound.”
Destum Partners has extensive advisory experience both in the dermatology and autoimmune therapeutic areas. They have worked with companies such as Collagenex and Pfizer specifically focused on dermatology. Most recently, Destum Partners completed a partnering agreement on behalf of Diamyd Medical AB with OMJPI a division of Johnson and Johnson for the treatment and prevention of Type I Diabetes — an autoimmune disease. Diamyd received an upfront payment of US $45 million, and has the potential to receive US $580 million in milestone payments.
Once again, this “under the radar” company has brought significant news to the table about another one of the eight compounds in their portfolio. More information about Cellceutix, their compounds and the investment opportunity that they possess can be found on their corporate website at www.cellceutix.com.
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