Cyclopharm (ASX:CYC) results of US FDA meeting
Cyclopharm Limited (ASX:CYC) Managing Director and CEO, James McBrayer talks about the company’s meeting with the US FDA for approval of TECHNEGASTM, timelines and next steps in the process.
Jessica Amir: Welcome to the Finance News Network, I’m Jessica Amir. Today I’m joined by Cyclopharm Limited (ASX:CYC) CEO and Managing Director, James McBrayer. James, welcome back.
James McBrayer: Thanks Jessica.
Jessica Amir: First up, you’ve just announced a successful US FDA meeting regarding your product, TECHNEGASTM. But for those who aren’t familiar, let’s just pause and you could give us a quick introduction to TECHNEGASTM?
James McBrayer: TECHNEGASTM is a nuclear medicine product, it’s a lung ventilation-imaging agent. It’s an Australian invention, it was invented here about 30 years ago. We have commercial sales around the world in about 57 countries and to date, we’ve clocked about four million patient studies.
Jessica Amir: Now let’s talk about that successful meeting. What came out of the meeting, and what does it really mean for Cyclopharm?
James McBrayer: I’d categorise the outcomes in two categories, one clarity and certainly opportunity clarity. We garnered the view that our product, whilst a combination product, it will actually be approved in totality as a system. Which on a long-term basis will protect the product in the marketplace. The opportunities, we were able to engage with the FDA in a manner, in which we believe that we’d be able to shorten the speed at which we’ll be able to recruit the patients, in our current clinical trial. The second and probably the most exciting aspect about the meeting was their approval, or endorsement of our proposed pathway to an expedited approval, outside of our current clinical trial. And that’s through a pathway called the 505 (b)2.
Jessica Amir: In terms of the next steps, what are the next steps and the key dates for the FDA trial?
James McBrayer: In mid-November, we will be submitting our special protocol assessment modification to their clinical trial. Towards the end of November, we’ll be putting forward our protocol plan for the literature search, for our 505 (b)2 pathway. Now the FDA will respond to those. But we believe, given the timing that they’re required to respond by and the information that we have in hand, it should place us in a position to actually lodge our new drug application in the first half of 2019, which we hope to have commercial sales by the end of 2019.
Jessica Amir: Given your confidence and if the US FDA approval is granted, what is CYC’s go-to market strategy and what’s required?
James McBrayer: At this stage we’re planning on going it alone. We have a tremendous amount of experience over the years, 57 countries. In Canada specifically, we were able to take nearly 100 per cent of the marketplace. That being said, we’re in discussions with other third parties that are very eager to work with us in the US. But at this stage, we are focused on an independent strategy.
Jessica Amir: Can you tell us what investors can expect in terms of US sales, given US FDA approval, if that’s successful? And can you tell us what investors should be looking out for to deem success?
James McBrayer: The US market in which we plan to enter into is worth $US90 million, compared to our current global sales of around 13 to 14, so a sustainable increase over our current position.
So how can shareholders measure us? Well I think speed to market, we’re targeting a total of about 1,800 nuclear medicine departments. We believe about 20 per cent of those will deliver about 50 per cent of the overall market, and those are the ones that we’re going to be targeting initially.
Jessica Amir: Looking at the big picture for Cyclopharm. What other opportunities are really presenting themselves, and how is CYC planning to execute those?
James McBrayer: We’re best known for pulmonary embolism, that’s what we’re seeking US FDA approval for in the US. However, our product is a functional ventilation imaging agent and it can be used in a whole host of different disease states. For example, COPD and asthma, half a billion people suffer from that disease. We’re looking at expanding our applications into those indications. We’re running about five trials around the world right now. The first of which, the Hunter Regional Medical Institute looking at severe asthma, should be ready for publication by mid next year. So by the time that we reach US FDA approval, we won’t be just about pulmonary embolism anymore.
Jessica Amir: Lastly James. How has the business been performing, and how has trading been in the second half?
James McBrayer: TECHNEGASTM is like an annuity stream; we have recurring revenue. Second half revenues are always stronger than the first half. We’re seeing that again this year and that’s largely due to a northern hemisphere winter. In major markets like France, we’ve seen higher volumes, we’ve seen orders coming from China that weren’t there in 2017. So we’re happy to see that return. Germany will be lower as a result of restructuring, but we’ll expect those volumes to return back in 2019. And in 2019, we’re looking forward to some sales from the US.
We have the cash reserves to deliver on our short to medium term objectives. And we’re one of those few companies, that when you peel back some of the infrastructure that we’re investing in the US FDA, we’re a profitable biotech that’s delivering on dividends for our shareholders.
Jessica Amir: Wonderful and so much to look forward to. James McBrayer, thank you so much.
James McBrayer: Thank you Jessica.