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Small-Cap Pharma Fast-Tracking Repurposed Drug for Covid-19

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Algernon Pharmaceuticals is quickly moving ahead with a multinational Phase 2b/3 trial for Ifenprodil.

Algernon Pharmaceuticals Inc. (AGN:CSE; AGNPF:OTCQB; AGW:FSE), a Canada-based clinical stage drug development company that focuses on drug repurposing, believes it may have an effective treatment for Covid-19 and is moving ahead with human trials for Ifenprodil, named by Algernon NP-120, in South Korea, Canada, Australia and the U.S.

Drug repurposing takes an approved drug and finds new diseases that the drug could treat.

Before the coronavirus pandemic hit, Algernon was studying Ifenprodil, which was developed in the 1970s for intermittent claudication, a circulatory disorder of the legs. "It started its life as a vasal dilator, but ended up approved in Japan and South Korea as a neurological drug treating vertigo and dizziness," Algernon CEO Christopher J. Moreau told Streetwise Reports. "It's an NMDA-receptor antagonist that binds to a receptor on cells in the brain. Our chief scientist looked at it and said those receptors are in lung tissue as well; his theory was that Ifenprodil would also be active in the lung and could reduce scarring of lung tissue as a result of an infection."

"We ran an animal study for a serious lung disease called idiopathic pulmonary fibrosis (IPF) and compared the drug to those of the two leading companies with drugs for the indication, Roche and Boehringer Ingelheim, and it outperformed both drugs," Moreau explained. "Then our chief scientist believed it would also work on chronic cough—a persistent cough that lasts more than eight weeks—so we ran another animal study and went up against Merck's Phase 3 drug and beat it by 110%. So we were working on starting a Phase 2 human trial for IPF and chronic cough."

But three months ago the world turned upside down for Algernon. "Our lead scientist came across a research paper by an independent group of Chinese scientists who were investigating Ifenprodil for a very serious avian flu called H5N1 that has a 60% mortality rate, but fortunately for humanity it's not highly contagious. Only about 500 people have been infected with it," Moreau said. "The scientists took H5N1-infected mice and gave them Ifenprodil and it had stunning effects; it reduced mortality by 40%, reduced acute lung injury in the mice and reduced inflammation."

Because Ifenprodil worked so well in an animal model for H5N1, Algernon's chief scientist expects similar results in a human study for Covid-19. "As a result, as a company we started to believe that Ifenprodil could dramatically reduce the severity and duration of a Covid infection," Moreau stated. "Since then, we've been working around the clock to create a clinical program for Covid-19 and start testing our lead drug in people."

The first place Algernon reached out to was South Korea. With a repurposed drug, a company can move it into a human trial immediately in the country where it is already being sold because it's already been proven safe. This is called an off-label trial and as a result, the company does not need to re-do the preclinical phase trials.

Algernon received approval on April 23 from South Korea's Ministry of Food and Drug Safety for a Phase 2 Covid-19 clinical study. The 40-patient, four-week trial will test Covid-19 infected patients with severe pneumonia. They will receive either standard of care or standard of care plus Ifenprodil. "The primary endpoint will be the rate at which their lung function improves by measuring oxygen levels in the blood (Pa02/Fi02). Secondary endpoints will include mortality, rate of mechanical ventilation, and patient reported effects on cough and breathlessness (dyspnea)," the company stated.

The company is also planning a multinational Phase 2b/3 trial of Ifenprodil for Covid-19, and has already had clearance from Health Canada. Algernon also recently applied for ethics approval from Princess Alexandra Hospital in Brisbane, Australia, and just filed an Investigational New Drug (IND) application for the U.S. Food and Drug Administration on May 22, 2020. If approved, all three countries would participate in the multinational trial.

"The study is an adaptive pilot to pivotal trial design based on guidance documents from the World Health Organization to determine if Ifenprodil can improve clinical symptoms of COVID-19 by reducing the number of COVID-19 diagnosed patients from progressing to mechanical ventilation with intubation and death," said Dr. Mark Williams, Algernon's chief scientific officer. The company is also reformulating the drug into an IV solution because it's more practical in a hospital setting.

The company stated that the trial will begin as a Phase 2b study and "after an interim analysis is performed on the first 100 patients, the data will determine the number of expected patients needed to reach statistical significance in a Phase 3 trial. With positive preliminary data, the clinical trial will move directly from a Phase 2b into a Phase 3."

"We have taken a drug that has not been known before and within seven, eight weeks, we have approval in Canada for a Phase 2b/3 trial," Moreau stated. "What's exciting about a Phase 2b/3 study is we start with 100 patients and get interim data. If the data is positive, we can move it seamlessly to Phase 3 and then go for marketing approval."

"We are one of approximately 15 companies globally advancing into a Phase 2b/3 study," Moreau explained. "It's a short study, and if the preliminary Phase 2 data is positive, we can quickly pivot it into a Phase 3, and if that data is positive, we would then seek approval."

"A Phase 2 study is typically the period of greatest value creation for a company like Algernon. If the data is positive, and it's typically binary—the drug either works or it doesn't—in a very short time period your company's value can increase into multiple hundreds of millions," Moreau said.

AlphaNorth Asset Management is a major investor in Algernon. Steven Palmer, AlphaNorth's founding partner and chief investment officer, said that the firm first became involved with Algernon when it offered a very attractive private placement with a full warrant; at that time the company was valued in the single digit millions.

"After the coronavirus hit, Algernon made its initial announcement that the drug candidate it was targeting for a trial for IPF and chronic cough could have an impact on Covid-19 patients. We became very intrigued at that time and we've been aggressively buying in the market. We did go over 10% ownership in April," Steve Palmer told Streetwise Reports. "The firm now has a market cap of around $45 million, but as a comparison, BELLUS Health is trading at a greater than $600 million market cap, and its chronic cough drug is in Phase 2 trials, but it doesn't have results yet."

"But what's getting everyone excited now about Algernon is the whole prospect of potentially being able to treat Covid-19. The treatment period is very short, only a few weeks, not like a typical biotech trial, and the trial can transition quickly from Phase 2 to 3," Palmer said.


1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Algernon Pharmaceuticals. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Algernon Pharmaceuticals. Please click here for more information.
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