Island Pharmaceuticals Ltd (ASX:ILA) could begin a Phase 2a PEACH clinical trial of its dengue prevention and treatment drug ISLA-101 as early as this month, according to MST Access Research.
ILA is finalising its Investigational New Drug (IND) application to the United States Food and Drug Administration (FDA) to allow the trial’s commencement with submission of this imminent.
The FDA will begin an ‘up to’ 30-day review of the application following submission.
The PEACH trial is a randomised, double-blind, placebo-controlled study for the prophylactic examination of an antiviral in a dengue challenge model, to be undertaken at SUNY Upstate University in New York.
ILA recently announced that its ISLA-101 (fenretinide) capsules had passed their critical accelerated stability milestone.
MST is of the view that the standing and experience of ILA’s clinical trial partners, including the US Army, will provide the validation the program needs and reduce the clinical trial risk from design and execution perspectives.
The research firm has valued ILA shares at $0.63, a significant upside from the $0.17 price they are trading at now.
The following are excerpts from the research report.
ILA strategy brings advantages
In comparison to the development of ‘first in human’ drugs, ILA’s strategy is to focus on repurposing drugs for viral illnesses. The strategy potentially brings advantages including lower development costs, faster timelines and lower risk.
ISLA-101 may have application in a number of viral illnesses. The first target is Dengue Fever. The selection is strategic, leveraging the advantages of its drug repurposing strategy. ISLA-101 also promises potential use in Yellow Fever virus, West Nile virus, Japanese encephalitis and Zika virus.
US Army Dengue Human Infection Model
One of ILA’s key partners for the Phase 2a trial is the US Army. It presents with the highest of credentials. In 2015, the US Army Medical Research and Materiel Command (USAMRMC) created its Dengue Human Infection Model (DHIM) in partnership with US State University New York (SUNY) Upstate Medical University.
The US Army’s experience spans some 45 exposure cycles with volunteers dating back to 1943. Under the Cooperative Research and Development Agreement (CRADA) agreement, ILA has been permitted to access data from a number of previous dengue fever trial subjects.
Phase 1 data from a challenge study conducted by the Walter Reed and SUNY Upstate forms the basis of the control data for the PEACH study.
The ability to include the existing data will reduce the total number of subjects for the trial. The data include the USAMMDA's Investigational New Drug (IND) filing with the FDA. Thereby, the agreement offers cost and time savings.
As a hospital-based study, in contrast to the more traditional ‘field’ trials, ILA’s clinical program offers less patient risk as the ‘active arm’ patients will be monitored daily in a clinical setting. The partnership brings a wealth of experience.
Valuation, Risks, Sensitivities
MST's valuation is based on the average market capitalisation of a cohort of ASX-listed biotechs in Phase 2 trials, a similar stage of development. "We account for ISLA-101’s strong safety profile and lower risk disease target with a 25% probability of approval versus industry average of 15%," it said.
"A 12-month forward valuation of $76.6 million (previously $112 million) reflects the current risk-averse sector investment trends.
"MST notes realisation of the valuation over the short term will be difficult but expects positive Phase 2a results in H2CY23 to see a re-rating of the stock. The valuation is subject to usual upside/downside risks of drug development."