Cynapsus Therapeutics Inc. is a specialty pharmaceutical company which
has the only oral (sublingual) delivery of the only rescue therapy for
Parkinsonís patients, who experience daily ďOFFĒ, or freezing episodes. The
potential market could grow to well beyond one billion per year. The
Companyís plan is to de-risk the project over the next two years, after
which a New Drug Application can be submitted, and execute an exit
transaction with a large pharmaceutical company.
Cynapsusí lead drug candidate, APL-130277, is an easy-to-administer,
fast-acting and oral reformulation of an existing approved drug (Apomorphine).
Apomorphine is currently only available as an injection, which is an
especially painful method often associated with injection site irritation,
inflammation, infection risk and scar nodules. This new formulation is a
sublingual thin-film strip of the approved drug which results in a more
convenient solid dosage form vs. syringe injection with fast dissolution,
fast absorption and a similar PK profile.
Parkinsonís disease is a chronic and progressive neurodegenerative disease
that impacts motor activity, and its prevalence is increasing with the aging
of the population.
The new oral reformulation
could be used by 35-50% Parkinsonís disease patients, creating an $890
million market worldwide, in the mid-term, to as much as $ 1.6 billion.
Three market surveys have been conducted by an independent, experienced,
medical survey company in the US and internationally confirming that an FDA
approved sublingual formulation of this drug would be widely used and useful
in the treatment of PD and would be readily accepted by payers.
President and Chief
experienced Biotech CEO with more than 18 years of experience in
international pharmaceutical drug development, private and public
financings, and M&A transactions. Prior to this he spent 16 combined years
in international corporate tax management, investment banking and private
equity. Mr. Giovinazzo has successfully managed Pre-IND, IND/CTA, end of
Phase 1-2, CTD/NDA submissions and negotiations with FDA, EMEA/CPMP. He has
identified, licensed, and overseen the development of eight (8) biotech drug
development candidates, pre-clinical to Phase 3, for the treatment of
Parkinsonís, Alzheimerís, anxiety, neuropathic pain, and nausea. Mr.
Giovinazzo led the sale of Nova Molecular Diagnostics to Variagenics Inc.
through the public listing of Variagenics that resulted in significant
above-average returns to investors. As CEO, he also led the acquisition of
Cita Neuropharmaceuticals by Vernalis Plc., which resulted in a substantial
multiple return to venture investors. He is a faculty member of The
Directorís College. He is also a business advisory board member of the
National Research Council of Canadaís Genomics funding program and is on the
Board and is Chair of the Audit Committee of Majescor Resources Inc (TSX-V:
MJX). He is one of the inventors of the original APL-130277 intellectual
property that was acquired by Cynapsus.
Trilingual in English, Italian and French. MBA (IMD); Chartered Director and
Audit Committee Certified, designations from. (McMaster & The Directors
College); Leadership and Strategy in Pharmaceutical & Biotech Companies
(Harvard Business School).
Cynapsus Therapeutics Inc.
828 Richmond Street West
Toronto ON Canada M6J 1C9
conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published Ė May 4,
Mr. Giovinazzo, what are the two or three
biggest milestones since you have taken over as CEO of Cynapsus?
I have been in the position for a little more than two years. I was
brought in to lead a turnaround and repositioning of the company. There are
four critical milestones that have been achieved. The first, is the
inlicensing and now acquisition of the underlying project technology that
relates to our single project, which is a reformulation of an approved drug
for what is called freezing or off-episodes in Parkinsonís disease. The
second, is that we were able to create a number of prototypes and optimize
them to what is now the clinical product which is a sublingual thin film
strip or a Listerine type strip, which is convenient, individually packaged
and easy to administer under the tongue. The third, would be the validation
of strip in both appropriate animal models and more recently in a human
pilot study or Phase I type study. The human study was done to determine if
the strip could deliver the right amount of drug and in the right period of
time, quite similar to the only other alternative formulation of the drug,
which is an injection that is very inconvenient and actually painful as
well. The fourth milestone was that we have been able to go out through an
American consulting firm and conduct a survey of 500 neurologists in various
countries, including the US, Europe and several other countries in the
world. These are actual doctors and neurologists who treat patients for
these symptoms or what is known as off-episodes or freezing episodes. They
have been able to feed back to us the fact that there is a substantial unmet
medical need in that many patients do not use the injection, but could and
would if there was a more convenient form of the drug. Therefore, we have
been able to corroborate the existence of a much larger need for this drug
in the form of sublingual thin film strip.
CEOCFO: Would you briefly explain the
Approximately one third to one half of Parkinsonís patients take a drug
called Levodopa, which for the past 50 or so years has been the gold
standard in treating Parkinsonís. In combination with certain other drugs it
is one of the best drugs for helping patients remain active and being able
to voluntarily move throughout various points in the day. Unfortunately, the
combination of the cells that die in the brain that attributes to
Parkinsonís and the use of this Levodopa drug, actually causes what is
called, ďfreezing episodesĒ or ďoff episodesĒ. This is where there is a
wearing off of that Levodopa drug or a slow time to on. This leaves these
patients with a gap of anywhere from a couple hours to several hours a day,
where they are not able to move at will. They are fairly rigid and must
remain where they are sitting down or laying down, because they just cannot
move easily. This is what we call off episodes or freezing.
CEOCFO: How does the drug work in
general and how does it work specifically sublingually as opposed to an
The drug itself is the only drug that is approved for what we call the acute
fast rescue of patients that are going into or are in this freezing episode
scenario. What it does is it provides for a very rapid conversion to
dopamine, which is a neurotransmitter in the brain that is used to be able
to signal to other cells and ultimately nerves in various parts of the body
to move and do things. Its mechanism of action is what it is called a
dopamine agonist. It is the only dopamine agonist that has these rescue
properties, because the mechanism kicks in very quickly and is able to for a
poorer choice of words, get patients unstuck very quickly. Therefore, it has
a very short half-life of approximately an hour. It allows patients to be
more mobile while they wait for their levodopa dose to take its time to
CEOCFO: Cynapsus is working with 500
neurologists worldwide; what is the market oppotunity?
Approximately one-third to 50% of Parkinsonís patients are the target
market. They are primarily divided up into mild to moderate to severe
patients. The moderate and severe groups are the more advanced type
patients. Currently, the injection is used in primarily in a small portion
of the severe category. What these neurologists have told us is that there
is a much larger group of patients that experience these off episodes or
freezing episodes at least once a day. They would benefit from the acute
(fast) rescue that this drug provides, but are not likely to use the
injection, because of the two aspects. One is that it is inconvenient.
Therefore, they would not want to be seen doing it at a party, in front of
their grandkids, at lunchtime or driving. Secondly, and more importantly, it
actually has in most instances what we call injection-site reactions. It
causes scarring, noduling, inflammation and pain that can last several days
to several months in some cases. That requires you to move the injection
around the body, so there is a large number of patients that do not do
anything or will take more of their Levodopa drug in the hope of trying to
bridge these gaps of inability. That becomes the market opportunity. When we
translate that into numbers of patients, we do it on a model basis that
looks at how many Parkinsonís patients are diagnosed and treated. For
example in the United States a number of public sources indicate there are
close to a million maybe slightly more than a million diagnosed and treated
Parkinsonís patients. When we did our calculations, we actually started from
410,000 Parkinsonís patients, which is a very conservative estimate of the
population in the United States. There would be a subset of that, which
would qualify and then within that subset, we have indicated you will never
get all those patients. We have also indicated that some patients require
the drug once a day, while others will require the drug two to three times a
day. Therefore, you have to be able to separate those subgroups. What this
translates into in a few years time after launch, is a potential market of
somewhere between $800 million and $1.6 billion a year of peak annual sales.
That is because there is also a much larger baby boomer generation that is
ageing rapidly over the next several years and it is contributing to a
larger number of Parkinsonís patients in the world. The World Health
Organization has indicated that there are approximately 4 to 6 million
diagnosed and treated Parkinsonís patients around the world today. They have
estimated that in the next eight years, by 2020 that number is expected to
be well beyond 10 million. Therefore, there will be a large increase of
patients as well that drives those market numbers.
CEOCFO: Are you able to use your drug
repeatedly, and is there any immune effect that would build up over time?
The answer is no, there is no wearing off effect. That is the beauty of this
particular drug and its purpose, which is that fast rescue. It can be taken
up to several times a day chronically for a number of years and it does not
wear off in terms of its ability to actually function.
CEOCFO: Where is Cynapsus today in the
As I indicated, we have optimized the clinical product. We have tested it in
vitro, in animal and more recently and appropriately, in a volunteer group
of healthy humans. We have demonstrated that we can obtain the right amount
of drug in the right period of time into the bloodstream. What we are doing
in 2012 is we are going to submit to the US FDA, an Initial New Drug
application, in the summer. Then we plan to run a larger healthy volunteer
bio equivalent study, which will should be finished by the November
timeframe. That is a clear and important de-risking event, because that is a
trial that the data of which would be presented to the FDA after completion.
Then if the data is acceptable, we would be running in 2013 the pivotal or
last trial, which is called the safety study. In the safety study we would
be required to treat Parkinsonís patients, approximately 150 or so, and
determine if our delivery method is as safe or safer than the injection.
Remember, this drug is approved in the United States and a number of
countries around the world. Therefore, its efficacy, safety and tolerability
are already known. What we are doing is delivering the same drug in a
different way. We have to prove that we can deliver it in the first study
(bio equivalence) by the end of 2012, within a set of parameters, which
measure the time as well as the appropriate amount of drug in the
bloodstream in comparison to the injection. If we meet those parameters,
which we have already in our pilot Phase 1 study, then we would be
continuing with the safety study in 2013. Therefore, 2012 is a critical
pivotal year. We think it is a breakout year for us, because the successful
completion of that study substantially de-risks the project quite
significantly and allows us then to move to the last study in 2013.
CEOCFO: Will cost be a factor for
We have not been able to get definitive numbers, but based on what we know,
we think the cost of the injectionís average wholesale price in the US, per
dose, is approximately $9-$10 US. Patients will take this injection anywhere
from one to three and in some cases four or five times a day, so it can add
up because it is on a daily basis. The sublingual thin filmstrip from what
we can tell, based on our conservative projections, will have an all-in cost
of approximately $1.60 per dose. That is the manufacturing and packaging
cost. What we believe is that we will not be the sellers of this final
product. It will be the large pharmaceutical companies who will also have
marketing education and various other costs that they have to add onto that.
They will likely sell it for something around $7.00 a dose, which is a
fairly significant drop from the injection. What it also provides is that in
not all instances, but in many instances, patients would be able to self
administer, compared to today, because it is an injection, they may have
their spouse or a caregiver, someone in an institution if that is where they
are, providing that service. The caregiver person usually has a cost to the
system associated with it. So there could be additional savings to the
system in addition to a lower price per dose.
CEOCFO: Cynapsus Therapeutics recently
announced a financing; how far will that take you?
It was really an interim short-term financing. It was a little more than a
$1million and it really is quite short-term. It helps us to complete some
work that we are currently doing to prepare for the bio equivalence study.
However, we do plan to raise additional capital in the not-too-distant
future, to allow us the additional time to prepare for and begin to execute
on the bio equivalent study.
CEOCFO: Has the investment community
been paying attention?
Not as much as we would have liked. The reason we think is that we ourselves
admit that we have only begun an investor awareness program in the last two
and a half months. Our understanding is that it does take some time for
people to read materials, then investigate the company and its proposition.
Where we have been somewhat lucky in that recently at the end of February
(2012), an independent Canadian investment bank research analyst with whom
we do not have a financial relationship, issued a very detailed positive
research report. They did their own due diligence to identify risks and
rewards. The financial community is now beginning to see that report, read
it and respond accordingly. Therefore, we are starting to see some reaction
from that point of view.
CEOCFO: Why should investors pay
attention to Cynapsus Therapeutics today?
We are substantially undervalued, we have a short timeline to an approvable
drug candidate, which is of lower risk as a new way to deliver an already
approved drug, which if approved would enter a potentially very large market
opportunity, with no direct competition. Our business model as a single
project focused company is to motivate a substantial exit transaction in 2
years time, in the several hundreds of millions of dollars total value. The
analyst in her research report on page ten, indicated that her very
conservative estimate of enterprise value before any transaction premiums,
two years from now, is $200 million. Our current market cap is approximately
$8-9 million, so there is a significant difference.
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