The road to a pivotal Phase 3 trial usually takes years following an initial public offering, but Therapix Biosciences Ltd. (NASDAQ: TRPX) may reach that stage in just a few months’ time. The company priced its late March IPO midpoint at $6 a share, but it quickly broke through this target and is now trading at around $8, close to a 33% premium on the IPO target.
Though it is technically a marijuana stock, it does not grow or even use any plant-derived compounds. Instead, it uses already approved cannabinoid-based medications like dronabinol, but enhances them with other already-approved compounds.
Lead asset THX-TS01 is what markets are primarily looking at right now as the primary driver behind any near-term jump. The indication is Tourette’s syndrome, a somewhat bizarre disorder that has become something of a counterculture icon of a disease. Sufferers often have uncontrollable tics, which might include twitching, shouting profanity or other sounds, eye blinking, coughing and throat clearing. It’s actually a surprisingly common neurological condition. Studies suggest that the prevalence of Tourette’s in the overall population at any time is 0.1% for impairing cases and 0.6% for all cases.
Of the more common treatment options, medications associated with depression are probably the most widely used. These are off label, however, and bring with them a range of undesirable side effects. These side effects, for many Tourette’s sufferers, are not worth putting up with for the sake of easing their often manageable though admittedly strange symptoms, and so many will just get on with life without seeking treatment.
That’s the unmet need that Therapix is going after — the treatment of Tourette’s patients with a drug that doesn’t bring about unwanted side effects.
The company has taken and repurposed dronabinol, the same active ingredient used in Marinol, a THC-based drug designed to treat nausea and vomiting caused by cancer chemotherapy. Marinol has side effects associated with it, as it is basically THC, the psychoactive component of cannabis.
With THX-TS01, Therapix has taken Marinol’s active ingredient and reduced the dosage to a level at which it isn’t expected to induce any psychoactive effects. To this low dosage, Therapix has added a compound called PEA, a naturally-occurring potency enhancer. It boosts the interaction between the dronabinol and its receptors in the body, which are key receptors in the central nervous system, but doesn’t increase the drug’s interaction with the brain. The basic idea is to lower the dose without lowering potency, so as to eliminate the side effects while maintaining the efficacy of the higher dose.
THX-TS01 is currently under investigation as part of a Phase 2a study, and data from this study are expected to hit press at some point during early third quarter this year. If the efficacy data are positive, then Therapix plans to kick off a Phase 2b/3 study, which the company believes will be sufficient to underpin a new drug application (NDA) with the FDA before the end of the year.
The key point with this approach is the speed with which the company can get a drug from preclinical to commercial. The two active ingredients, dronabinol and PEA, are already regarded as safe by the FDA, and so the standard necessity for preclinical and phase 1 testing doesn’t apply here.
The Phase 2a trial then is the first step of what should be limited to a two-step process, with the second being the phase 2b/3 that’s set to kick off before the end of the year, assuming Phase 2a succeeds. In other words, the company is looking at a development pathway of less than two years, as opposed to the 10 years that it can take to bring a traditional new molecular entity (NME) drug asset to market. A shorter path means less cash, and less cash reduces the potential for dilution for shareholders as pipeline drugs mature.