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Drug Re-Purposing Co. Pursues Novel Stroke Therapies

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Drug re-purposing co. Algernon Pharmaceuticals Inc. is actively reinventing itself. The firm's leading therapeutic candidate NP-120 (Ifenprodil) is currently being evaluated in a Phase 2 trial for IPF and chronic cough, and the company is now moving forward with a revolutionary new use for DMT to treat ischemic stroke.

Clinical-stage drug re-purposing company Algernon Pharmaceuticals Inc. (AGN:CSE; AGNPF:OTCQB; AGW:FSE) has been increasingly active in seeking out new groundbreaking opportunities to address unmet medical needs.

One of Canada's top-rated hedge funds, AlphaNorth Asset Management, advised in a call with Streetwise Reports that it was quite active in adding to its equity position in the company near the end of 2021.

AlphaNorth commented that Algernon Pharmaceuticals' shares had fallen in price due in part to an aggressive 1:100 share rollback and the cancellation of an investigative clinical trial for a potential COVID-19 treatment, along with some year-end tax loss selling by investors. When the shares dipped below CA$4.00 per share, AlphaNorth believed that they had become significantly undervalued and began adding aggressively to the position.

Steven Palmer, CIO and President of AlphaNorth, noted that the company's exciting product candidates in its development pipeline, together with the reduction in the total number of Algernon's outstanding common shares to just around 1.7 million, created a compelling investment opportunity. The company's total market cap had decreased to around CA$8.5 million and could be considered as very cheap as they hold about CA$2 million in cash on their balance sheet, have a product for chronic cough and idiopathic pulmonary fibrosis (IPF) in Phase 2 clinical trials, and have another product going into the clinic to evaluate N,N-dimethyltryptamine (DMT) for a new indication as a treatment for ischemic stroke.

The company's shares have rebounded a bit in recent weeks raising the company's current market cap to approximately CA$13 million, which Palmer remarked is still an attractive valuation when all factors are taken into account.

Having firmed up its financial structure, the company is now highly focused on advancing its drug development efforts. AlphaNorth's Steven Palmer stated that he expects the company to announce additional new drug candidates in the next few months as well as plans for additional clinical trials.

Algernon Pharmaceuticals is now evaluating Ifenprodil in Phase 2 clinical trials in Australia and New Zealand for chronic cough and IPF. The trials have completed enrollments, and the company expects to receive the results during Q2/22.

Palmer noted that Algernon's preclinical data suggests that its drug offers superior initial results compared to the Merck & Co. Inc. (MRK:NYSE) Phase III drug candidate. Palmer commented that another competitor, BELLUS Health Inc. (BLU:TSX; BLUSF:OTCPK), has also been successful in moving a drug to treat chronic cough through Phase 2 trials, which in turn has helped raise that company's market cap to nearly CA$800 million on the back of that one single clinical study for chronic cough.

Palmer pointed out that Algernon's preclinical data not only appears to be better than that of the Bellus Health product, but, unlike the other studies, the Algernon trial is also targeting IPF.

The company is also now moving forward with testing a second drug candidate called DMT, which is being considered for treatment of stroke. According to Palmer, some well-known, notable scientific advisors have agreed to help with the investigation.

The underlying premise is that DMT, a psychedelic medicine, could help in the treatment of stroke patients, so this will be the first ever attempt to clinically test this compound in stroke patients.

It is expected that DMT will be administered intravenously to patients in several different concentrations and adjusted for body weight. Though DMT is classified as a highly regulated Schedule 1 hallucinogenic drug, the firm anticipates that study participants will receive only sub-psychedelic dosing levels.

There are two main classes of stroke. The first and most prominent form is called ischemic stroke, which occurs when arteries to the brain become blocked by blood clots that restrict the flow of blood and oxygen to the brain. The second group is referred to as hemorrhagic stroke, which occurs when an artery in the brain leaks blood or ruptures. Hemorrhagic strokes may be caused by high blood pressure and aneurysms that cause arteries to stretch and burst. As DMT is known to raise blood pressure, Algernon is only addressing its potential use in ischemic stroke to target and potentially heal damaged brain cells.

An important aspect of Algernon's business model is that the company concentrates its research efforts on existing off-patent drugs that 1) have either been used previously for other indications or in other countries and 2) have already gone through a medical and regulatory approval process.

Therefore, as the drugs are well documented to be safe, the firm looks for ways to repurpose them for other medical conditions. Palmer referenced the classic example of Pfizer Inc.'s (PFE:NYSE) Viagra that was originally created as a treatment for hypertension and angina pectoris, a form of cardiovascular disease. Palmer noted that, "a major benefit of this strategy is that it effectively shortens the time required for clinical trials, because clinicians can generally skip the Phase 1 since they already know that the drug is safe, and they can get right into the Phase 2 to identify whether it works or not."

This approach also reduces investment risk and may also offer a longer active patent life.

In talking about the future outlook for Algernon's business plans, Steven Palmer stated that the firm does have about CA$2 million in cash to fund its present operations; but, as the proposed clinical trials move forward, it is expected that Algernon will need to raise another round of funding.

Palmer mentioned that the primary objective of the company's share rollback was to aid in getting the firm's share price above US$4.00/share, which would allow Algernon to list its shares on the NASDAQ and perhaps do a coincident capital raise at that time. AlphaNorth believes the company is on a solid path toward this end and is hopeful that this goal will be accomplished this year.

Algernon is a drug re-purposing company that is engaged in discovering new applications for already approved drugs and other naturally occurring compounds. The company endeavors to select compounds for advancement that have never been approved previously in either the U.S. or Europe as this helps prevent the possibility of off-label prescription writing.

Algernon Pharmaceuticals shares trade under the ticker symbol "AGN" on the Canadian Securities Exchange and last closed for trading at CA$7.31 per share on Thursday, February 3, 2022. In addition, the firm's shares trade under the symbol "AGNPF" on the OTCQB Exchange and "AGW" on the Frankfurt Stock Exchange.

Steven Palmer, CFA is the CIO, President and Co-Founder of AlphaNorth Asset Management, which oversees the management of the AlphaNorth Partners Fund. The AlphaNorth Partners Fund is a diversified, Canada-focused, long-biased small cap equity hedge fund. The firm was recently recognized as the top-rated equity hedge fund in Canada at the 2021 Alternative IQ Canadian Hedge Fund Awards for equity funds based upon its five-year annualized return rate of 40.35%.

The AlphaNorth Partners Fund makes investments across all sectors with the goal of getting in early on situations where the fund can earn multiples on its money. AlphaNorth invests in biotech, technology, precious metals, and other special situations including consumer product companies.



1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his 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 Inc. Click here for important disclosures about sponsor fees. An affiliate of Streetwise Reports is conducting a digital media marketing campaign for this article on behalf of Algernon Pharmaceuticals Inc. Please click here for more information.

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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Algernon Pharmaceuticals Inc., a company mentioned in this article.

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