The Future of Prescient?

I have to admit that Prescient Therapeutics (ASX : PTX) hasn’t particularly been on my radar, never really looked at it. With a market cap of $3m, I could probably be forgiven for this except for the fact that this forum is supposed to be about the Long Tail of the ASX, and PTX is pretty much at the end of the tail. To be honest, I probably wouldn’t have bothered poking around the company if it wasn’t for the recent announcement that CEO Rob Crombie was stepping down. I’ve always liked Rob – bright guy, and a very nice person. As such it sort of prompted me to take another look.

Frankly, at first blush, PTX has a bunch of black marks against it. It’s the usual reverse-merger “special”, which a lot of investors are rightly wary of. That doesn’t mean that there aren’t (or can’t be) good opportunities that elect to back-door into an existing shell, but they are the exception rather than the norm. With a $3m market cap and not a lot of trading volume, it’s obviously a bit of a challenging stock to get stuck into … and plenty of volatility to boot. It also doesn’t have a lot of cash but has a huge execution story in the form of a big pipeline and multiple clinical trials, which sort of leaves the average Joe scratching his head, wondering how much of the company is just fabrication. Obviously with a pittance of cash, nobody is going be running any serious clinical studies – and with the current market cap, raising any meaningful $s is going to be painful from a dilution vantage.

That’s the basic problem with PTX – it’s doesn’t pass the initial “sniff test” very well. Presumably that’s the reason why it’s trading below six cents.

But digging around under the bonnet, there is ample evidence that there might be something to PTX. For a starters, the science behind their two clinical candidates is not half bad if you can be bothered to dig out a few publications around Ras/Ral/Rho pathways – particularly Ras-like (Ral) signalling (PTX100). Unfortunately, the company does very little to help investors to understand the science behind the individual programs and the website and investor materials are pretty underwhelming. But this is a serious target space for cancer drugs and although there are plenty of competing initiatives in the overall MAP Kinase domain, drugs with multiple modes of action are still interesting and are worth studying in the clinical setting – decent academic cancer centres like Moffitt and Albert Einstein certainly seem to think so. The AKT program (PTX200) is probably a little less interesting because PI3K/AKT went through a huge phase of attention but has had some mixed outcomes, mainly because of practical issues concerning the design of clinical trials, potential toxicities and the fairly low likelihood of finding a therapeutic index when targeting such a fundamental cellular pathway. For the uninitiated, PI3K/AKT is a key cell survival pathway and is ridiculously complex.

So the science – and scientific collaborators – passes cursory assessment. And even if targeting AKT is a drug development challenge (the PTX200 program), a quick search on clinicaltrials.gov reveals that there is already an NIH-funded Phase I/II program evaluating PTX200 (triciribine phosphate monohydrate) along with fairly standard “chemo”. It’s a bog standard academic-looking open-label safety study, but as a shareholder this is exactly what you want to see happen before the company spends any real $s on the program. In fact both of PTX’s programs appear to have a fair amount of NIH money behind them, which is sort of interesting to me and the company would do well to explain this instead of spruiking a pipeline of clinical trials in such a way as to convince the reader that all that activity is happening under the company’s command, and with the current pitiful balance sheet.

It isn’t.

And that’s probably a good thing, because as far as I can tell – the company doesn’t have much by way of execution resources, especially now that Rob has left. Paul Hopper is a very talented guy but he isn’t going to be rolling-up his sleeves and running a clinical development program any time soon, Terrence Chow is essentially a hired gun, and Professor Said Sebti is basically an academic stakeholder in the core technology. So a big part of getting Prescient to the next level is going to be articulating the basis of a team that really can deliver on the clinical development needs of the company, particularly if INDs are going to be moved from small physician-sponsored studies, to company-sponsored studies (i.e. a bit more rigorous, extensive and multi-centre).

By the way, I like the fact that Steve Clarke is on the board. He has a highly evolved (we’re talking pico-molar sensitivity) bullshit detector…

To me, it’s pretty amazing that you can have a company with basically two Phase II programs, manufactured drug (clearly, because they are running studies), luminary US academic stakeholders, reasonable IP, not completely shonky science, and have a $3m market cap. Only in the Land Down Under. Quite frankly, if Novogen (ASX : NRT) had this company’s assets and scientific “articulation” (as woeful as it is) I would probably just leave it alone, and wouldn’t have much to say. The market cap probably wouldn’t be too far out of line either. As such, the whole situation really suggests that the company is doing something fundamentally wrong, and in the interest of being an added-value commentator, I am going to throw in my 2c worth:

1) The company needs a CEO ASAP. But the CEO is going to need to have more than a Crombie-esq caliber of scientific competence (i.e. robust), that person is going to need to have some star power to push hard on a series of programs that are a tough call in a competitive space. I would prefer someone who knows how to raise money, than someone who can talk science – Prof. Sebti can do that in spades. That person is also going to need to have some support because running 5 clinical programs is ridiculous. I think as soon as people can really see a team delivering, and not just another financial engineering exercise coupled with a smidgin of a clinical story, it will build confidence.

2) The company’s articulation of the technology is woeful. It lacks substance, it doesn’t draw upon the scientific pedigree of the programs and it doesn’t elucidate the significant amount of NIH backing these programs have enjoyed. It’s bland, it’s generic, and it’s undifferentiated. It doesn’t have to be like that because it’s a potentially very good story. Oh, and the company name and logo sucks too. I’m slightly embarrassed to admit that I didn’t really even know what the word “prescient” meant until I looked it up in the dictionary. As for the logo, it’s so generic, it’s basically the same as half a dozen other ASX-listed companies (I note that both TIS and PNV also have 4 “molecule blobs” as logos – equally unexciting). The company just feels vanilla all the way around. An afterthought.

3) The company appears unfocused. Too many indications. Even pipeline is competing with each other in the same disease areas. It just doesn’t make sense. The academic studies should be articulated as academic studies and the (valuable!) de-risk to shareholders explained, not implied to be “internal” initiatives. If I were PTX I would choose one major indication and build an image around that – say, AML or something where there is still a huge unmet need for effective drugs. These days if you are developing a drug for breast cancer, you need to have a pretty robust articulation of why it’s a good idea and what little “niche” you are going to occupy.

In summary – there is quite a bit to like about PTX, especially the price. It will be interesting to see how the company moves itself ahead, as there are some genuinely bright people involved who must surely have the prescience to to see some of the same positioning flaws as I do?

PTX has some good irons in the fire and now Hopper et. al. need to transition it from a story, to a company…


The futuristic mind-bending beauty is taken from the cover of a 1952 Science Fiction Quarterly magazine. (v2 #1, November 1952).

 

11 thoughts on “The Future of Prescient?

  1. I spent an hour or so last night reading up on PTX’s story and their new drug hopefuls. I thought, ” yes, sounds like a bargain: buying these drug candidates in phase 1 or 2 created by this esteemed scientist for just $300,000 and some cheap shares – – and having the US government through NIH and the military fund these early trials.

    And then there are all the ASX cancer drug hopefuls — VLA, PRR, BLT, OSL, etc –at their various stages of development and having different challenges and indications, etc. The market assigns a value to all of them, but is that value logical?

    It’s hard for an uninitiated like me to work out fair value. But wouldn’t it be wonderful if a valid assessment service existed ( a bit like a NIH panel + Moody’s rating service) that you could pay to give companies like PTX a blinded and fair valuation score from 1 to 10, or something. Companies such as PTX could submit their “anonymous” drug candidates for assessment, on the guarantee that the score, whatever it is, gets publicly announced.

    Companies such as NRT may not want to subject their drug candidates to an expert panel’s scrutiny because the score may not justify the high value the market is presently awarding their drug hopefuls. But that is telling the market something too: if this expert service existed and was well used, then companies not using it might be telling the market they’re scared to see the result.

    I know this is fanciful stuff, but such a service if it did exist and was valid enough, sure would help direct the limited funds to the more deserving candidates.

    Like

    • It’s a very nice idea – Anne.

      I think if you look at the US market, the presence of sophisticated buy-side analysts solves this problem. They build medical advisory boards and use extensive clinical networks to really dig into the science. Companies that don’t explain their science ultimately wither on the vine.

      Australia needs to get there. We need more than just an interest in investing in biopharma, we need sophisticated and high quality coverage that objectively helps the retail investor base to understand what might – or might not – be a good investment (or a higher risk investment) and why.

      Like

  2. Hi Chris,

    Very interesting post and this company seems like it is definitely under the radar at the moment (even Hot Copper).

    I noticed that they are carrying out a CR with Patersons underwriting up to $1.03m with the funds to focus on lead drug PTX-200 with trials in breast, ovarian & AML. I agree with your comment that they should be focusing on AML where there is still an unmet need for effective drugs rather than competing in the breast and ovarian space which appears to be overcrowded with many global trials at the advanced stage ie: phases 2 & 3. It always amazes me that so many of the biotech companies seem to believe that having multiple shots is a plus factor when in fact all that they are demonstrating is poor financial management of their limited capital.

    Like

  3. Thanks for bringing this company to our attention. I applaud any Australian biotech trying to tackle oncology with targeted small molecules but the problem here is prosecution. Triciribine is highly unlikely to be a selective Akt agent – the structure just screams multikinase activity and is listed in Pubchem as having mutliple activities and patents. In addition, focusing on the Akt activity may make things sound sexier but there are many agents targeting the PI3K/mTOR/Akt axis (both selective within these families and not) in clinical trial and at least one, idelalisib, has been approved. So they are a long way behind the pack.

    In theory there’s nothing wrong with repurposing an old agent (it worked fro Chemgenex) but it has to be a good agent in a space where there’s clear need and validation for its activity – Prescient need to articulate why PTX200 is such a compound. Indeed a quick search of the literature throws up this from Oncogene 2005, 24, 7482: ‘A number of phase I and II clinical trials of TCN/API-2’ [i.e. PTX-200] ‘have been conducted in patients with advanced tumors, including carcinomas of the breast, colon, bladder, ovary, pancreas and lung (Cobb et al., 1983; Mittelman et al., 1983; Feun et al., 1984, 1993; Powis et al., 1986; Schilcher et al., 1986; Hoffman et al., 1996). Owing to the fact that TCN-p was used as a cytotoxic drug, the majority of clinical trials were carried out with high doses of the drug in order to achieve maximal clinical efficacy. While it exhibited antitumor activity in some patients, TCN/API-2 had significant side effects at high doses, including hepatotoxicity, hypertriglyceridemia, thrombocytopenia, and hyperglycemia, which hampers its application in the clinic.’

    Like

    • Great comment “Appalled Medchemist”,

      I agree with most of what you have written – and I saw that Oncogene paper too. There are two things I don’t fully agree with:

      1) While I don’t have your chops for medicinal chemistry, multi-kinase activity isn’t necessarily a problem. It can be an advantage if properly characterised. The functional assay space for PI3K/mTOR/Akt has transformed in the last decade, and so a second look may be worthwhile. But do agree that it is far behind the pack.

      2) As for small-molecule side-effects / cytotoxicity, just about everything at high doses has hepatotoxicity, hypertriglyceridemia, thrombocytopenia, and hyperglycemia. But multi-agent strategies are the “norm” in chemo in order to balance toxicity, right? Unfortunately for Prescient – multi-agent chemo is probably what it it needs to beat and very few drugs manage to do it, especially in late-stage patients. That’s why I also think they should focus on AML and nothing else.

      Like

      • I agree with that (especially the bit about my ‘chops’) – AML is probably an appropriate area of focus. The problem with multi-kinase activity is that you bring along a lot of tox with the other activities, as well as (perhaps) some additional efficacy. If they lower the dose, sure you’ll get less tox, but probably less efficacy. However if they can show, in suitable AML preclinical models, that at lower dose in combination with standard of care agents (e.g. azacitidine) that they see synergy, then that may be of interest. Until then, this compound and company will always be at the thin end of the longtail.

        Like

    • Dear MedChemist
      Thank you for your interest and comments on PTX
      see my answers and comments below – hope this helps you understand why we are so excited about the company’s prospects..

      Thanks for bringing this company to our attention. I applaud any Australian biotech trying to tackle oncology with targeted small molecules but the problem here is prosecution. Triciribine is highly unlikely to be a selective Akt agent – the structure just screams multikinase activity and is listed in Pubchem as having mutliple activities and patents.

      “TCN-P is not an ATP mimic and is not a direct kinase inhibitor (see our Cancer research manuscript). in fact in a test tube TCN-P does not inhibit the kinase activity of Akt (see Cancer Research manuscript). We have also tested the activity of TCN-P against many kinases and it does not have any kinase inhibitory activity (se Cancer Research manuscript). therefore the above statement that “the structure just screams multikinase activity” is simply incorrect. TCN-P has a unique mechanism of action in that it inhibits Akt activation by binding to Akt PH domain and preventing Akt from binding to the membrane, a step required for Akt activation (see our CDD manuscript). Therefore, unlike other Akt inhibitors that bind to the ATP pocket of Akt and inhibit its kinase activity, TCN-P has a unique mechanism of action that allows it to inhibit AKt with out inhibiting Akt kinase activity directly. This is a huge advantage over the other Akt inhibitors that bind the ATP pocket of many other kinases and therefore are much more likely to have off targets effects resulting in side effects to the patients. ”

      In addition, focusing on the Akt activity may make things sound sexier but there are many agents targeting the PI3K/mTOR/Akt axis (both selective within these families and not) in clinical trial and at least one, idelalisib, has been approved. So they are a long way behind the pack.

      “PTX-200 is selective for Akt and does not inhibit PI3k and mTOR.

      Targeting Akt is better than PI3K: Pi3K inhibitors only can kill tumors addicted to PI3K (mutations), AKt inhibitors can inhibit aberrant signal coming from PI3K as well as PTEN deletion/mutation, RTK Over expression

      Targeting Akt is better than mTOR: while mTOR inhibitors can only inhibit protein translation and metabolism, Akt inhibitors can inhibit mTOR as well as BAD and IKK-NFKB(resist apoptosis) , inactivate FOXO1 (Tumor suppressor), GSK3b (inhibit Glycogen synthesis less energy for tumor to feed and survive, also inhibits GSK3b increased in Cyclin D1 –inhibits cell cycle proliferation)”

      •In theory there’s nothing wrong with repurposing an old agent (it worked fro Chemgenex) but it has to be a good agent in a space where there’s clear need and validation for its activity – Prescient need to articulate why PTX200 is such a compound. Indeed a quick search of the literature throws up this from Oncogene 2005, 24, 7482: ‘A number of phase I and II clinical trials of TCN/API-2’ [i.e. PTX-200] ‘have been conducted in patients with advanced tumors, including carcinomas of the breast, colon, bladder, ovary, pancreas and lung (Cobb et al., 1983; Mittelman et al., 1983; Feun et al., 1984, 1993; Powis et al., 1986; Schilcher et al., 1986; Hoffman et al., 1996).

      “These trials were performed with heavily pre-treated patients where no Akt inhibitor is anticipated to work alone. we believe that in these setting, combination therapy is more likely to work. There is ample pre-clinical and clinical data that supports the fact that often tumors escape chemotherapy such as taxanes and platins by hyper-activating Akt, and that inhibiting this hyper activation with agents such as TCN-P will overcome this resistance and broaden the spectrum of patients that respond to chemo. In fact our 2 ongoing trial in breast (TCN-P + Paclitaxel) and ovarian (TCN-P + Carboplatin) as well as our soon to begin AML trial (TCN-P + AraC) are predicted to do just that.”

      Owing to the fact that TCN-p was used as a cytotoxic drug, the majority of clinical trials were carried out with high doses of the drug in order to achieve maximal clinical efficacy.

      “Our above trials are precision medicine based, and are designed based on the effective biological dose and not MTD and DLT. While it exhibited antitumor activity in some patients, TCN/API-2 had significant side effects at high doses, including hepatotoxicity, hypertriglyceridemia, thrombocytopenia, and hyperglycemia, which hampers its application in the clinic.’

      These toxicities were observed in the trials that were performed in the late 80s and early 90s when TCN-P was not yet known to be an AKt activation inhibitor. With our 2 recently published trial designed based on our Akt inhibition discovery, we did not see much of these toxicities (please see our Leukemia Research and IND journal publications)”

      Paul Hopper

      Liked by 1 person

      • Great answer and thanks for taking the time. I am going to hook you guys up. “Apalled Medchemist” should really be called “super-talented medchemist” and might be of value.

        Good dialogue, guys…. Made my day. Paul, thanks for taking the time to respond in detail.

        Like

Say something useful (or at least interesting)...

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s