TENX: Imatinib IND Cleared & PK Study Near End

By John Vandermosten, CFA

NASDAQ:TENX

READ THE FULL TENX RESEARCH REPORT

Third Quarter 2021 Financial and Operational Review

Tenax Therapeutics, Inc. (NASDAQ:TENX) reported third quarter 2021 results on November 16, 2021 via the issuance of a press release and the filing of Form 10-Q to the SEC.

Highlights for the third quarter and to-date include:

➢ Christopher Giordano appointed CEO and Director – July 2021

➢ $10 million PIPE ATM offering – July 2021

➢ KOL webinar on levosimendan in PH-HFpEF – August 2021

Publication highlighting novel levosimendan MOA in PH-HFpEF – August 2021

Interview with Tenax CEO and CMO – October 2021

Clearance of Investigational New Drug (IND) application for imatinib in PAH – October 2021

➢ Alphanumeric designation given to company assets – October 2021

◦ TNX-201 for oral enteric coated imatinib

◦ TNX-103 for oral levosimendan

Tenax produced no revenues during 3Q:21 and incurred operating expenses of $3.8 million resulting in net loss of ($3.8) million, or ($0.15) per share.

For the quarter ending September 30, 2021 versus the quarter ending September 30, 2020:

➢ General and administrative expenses totaled $2.6 million, increasing 125% from $1.2 million driven primarily by a $1.2 million increase in personnel costs relating to the retirement of Tenax’ former CEO. Higher legal fees also contributed to the increase which were associated with the filing of registration statements and the CEO transition; the other material contributor to the year over year increase was board fees related to the addition of new directors;

➢ Research and development expenses were $1.2 million, increasing 10% from $1.0 million, largely attributed to personnel costs relating to the addition of the company’s Chief Medical Officer;

➢ Net loss was ($3.8) million versus ($2.2) million, or ($0.15) and ($0.18) per share, respectively.

At the end of the third quarter, cash, equivalents and marketable securities totaled $8.4 million, compared to $6.7 million at the end of 2020. Following forgiveness of the PPP, Tenax holds no debt on its balance sheet. Cash burn for the nine months ended totaled $8.1 million versus $7.3 million over the same period last year. During the quarter, Tenax raised gross proceeds of $10 million from a securities purchase agreement with an institutional investor. Management has guided that cash reserves, including the $10 million recently secured, are sufficient to sustain the firm through 2Q:22.

FDA Clears IND for Imatinib in PAH

See our April 9threport for background on imatinib. The asset was acquired as part of Tenax’ purchase of PH Precision Med (PHPM), completed on January 15, 2021 in a deal valued at approximately $21.6 million. Dr. Stuart Rich, a globally recognized expert in the field of pulmonary arterial hypertension (PAH), founded PHPM to support the development of imatinib. Imatinib, a tyrosine kinase inhibitor, offers a different mechanism of action in contrast to other failed pulmonary vasodilators. While the compound has only been clinically evaluated once in PAH, imatinib is a relatively mature TKI that has been approved in a number of indications with the first in chronic myeloid leukemia. The drug was originally discovered in 1992 by Brian Druker, who sought a drug that, rather than be nonspecifically cytotoxic, targeted the cancer itself.

In 20011 Novartis commercialized imatinib in leukemia as Gleevec, and in 2015 the drug generated $4.6 billion in sales before patent expiry in 2016. Novartis launched multiple trials for imatinib in PAH and by 2013, had advanced the candidate as far as Phase III, when unforeseen dropouts attributable to gastric intolerance sidetracked further advancement. Despite some favorable results, Novartis did not re-initiate studies in PAH, likely due to pending patent expiry, as imatinib was already a commercial success for Novartis in leukemia.

Imatinib is potentially the first disease modifying agent in PAH. Due to the GI issues observed in Novartis’ unsuccessful Phase III and prior to Tenax’ acquisition, a reformulation of oral imatinib was proposed to bypass the stomach and release the drug in the small intestine. A Phase I pharmacokinetic study is underway for the new formulation. Based on consultations with the FDA, only one successful Phase III trial will be necessary to obtain market approval.

Dr. Rich has guided toward completion of formulation work and Phase I pharmacokinetic study by the end of 2021, site selection and enrollment through 2022 and topline report a year or two later.

On October 6, 2021, Tenax announced that the FDA had cleared Tenax’ IND application for a novel (oral) formulation of imatinib, putting imatinib’s timeline in line with the guidance offered earlier in the year. In the announcement, Tenax updated that it intended to initiate the PK study in October, completing the trial by year-end 2021 with results expected in 4Q:21. Management guided toward a 2Q:22 start to Phase III. The PK study will compare the original formulation to the new oral formulation that is designed to address challenges that Novartis faced, bypassing the stomach and associated gastric discomfort.

$10 Million PIPE ATM Offer

In early July, Tenax entered into a definitive agreement with a single healthcare-focused institutional investor for issuance and sale of 4,773,269 units at $2.095 per unit, with each unit consisting of one unregistered, pre-funded warrant to purchase one share of common stock and one unregistered warrant to purchase one share of common stock for a total of 9,546,538 shares underlying the warrants. The unregistered pre-funded warrants are immediately exercisable, have an exercise price of $1.97 per share and will expire 5.5 years from date of issuance.

KOL Webinar on Levosimendan for PH-HFpEF

Tenax held a Key Opinion Leader (KOL) webinar on August 16. The event focused on the current treatment landscape and therapeutic potential of levosimendan in pulmonary hypertension with heart failure with preserved ejection fraction (PH-HFpEF). The webinar featured KOL Daniel Burkhoff, MD, Ph.D., member of Tenax’ Scientific Advisory Board, who discussed the unmet medical need in treating patients with PH-HFpEF and how Tenax’ levosimendan could become a new treatment option. Stuart Rich, M.D., Tenax’ Chief Medical Officer then discussed clinical development plans for levosimendan.

Dr. Burkhoff began with an overview of HFpEF, exercise hemodynamics, stressed blood volume and its role in exercise hemodynamics comparing between normal and HFpEF patients, and the effects of levosimendan in this context. Preserved ejection fraction includes patients with 50% ejection fraction and greater, which can include a variety of underlying pathophysiology. Symptoms for these patients include congestion, enlarged left atria, and exercise intolerance. Pulmonary hypertension is common in those with HFpEF, and for those with PH-HFpEF, prognosis is worse. Patients are diagnosed using an assessment of hemodynamic exercise test, namely supine bicycle while catheterized to measure a panel of pressure metrics. Measurement of patients during sustained exercise allows segmentation of the severity of PH-HFpEF. Those with PH-HFpEF show a distinct, dynamic increase in pulmonary wedge pressure under exercise. Central venous pressure is also increased, allowing insight into the underlying physiology. Some mechanistic theories have suggested the ventricle as a driver in the condition, including decrease in chamber size, abnormal stiffness, and other aspects directly related to the ventricles. More recently, potential tests shifted to peripheral factors such as the inability of arteries to vasodilate, decreased oxygen extraction from the muscle and venoconstriction. Venoconstriction represents a novel mechanism relating to levosimendan’s efficacy that had not been significantly studied due to technological limitations.

In particular, volume distribution and volume metabolism in the body may both be modulated with sympathetic activation. The acute effects of exercise, which is one form of sympathetic activation, results in rapid mobilization of venous reservoir, causing venoconstriction leading to increase in effective circulating blood volume, or stressed blood volume. The sympathetic nervous system and its interaction with venous system create conditions where relatively small changes in venous property can result in potent regulation of stressed blood volume. In PH-HFpEF, patients’ resting stressed blood volume is increased compared to normal, and they have a greater increase in stressed blood volume compared to normal during exercise. Among the many factors that change during exercise, heart rate, contractility and systemic vascular resistance are primarily responsible for increase in cardiac output and blood pressure observed during exercise. Keeping all factors constant, changing only venous compliance, changes in stressed blood volume account for almost all changes in central venous pressure (CVP) and wedge pressure, suggesting stressed blood volume as a therapeutic target. Tenax’ HELP trial, after six weeks, saw almost no change in placebo group in CVP or wedge pressure at rest or with legs up versus the treated group that had 5 mm reduction in CVP and wedge pressure at rest and with legs up. Analysis of stressed blood volume found no significant change in the placebo group whereas a 500 mL reduction in stressed blood volume was observed in the treated group. This was in line with expectations as results from a previous study2 (Fudim et al.) at Duke University which showed that splanchnic nerve block, which is responsible for venoconstriction, reduced resting and exercise-induced pulmonary arterial and wedge pressure.

Dr. Stuart Rich recapitulated many of the points that Dr. Burkhoff made. Rich emphasized that HFpEF, which is group 2 of pulmonary hypertension, is considered the largest unmet medical need in cardiovascular medicine at this time, and that PH-HFpEF is a distinct pathology. Every approved pulmonary vasodilator has been tried in PH-HFpEF and failed. Levosimendan is not only a calcium channel activator, as it was developed as an inotrope to treat systolic heart failure, but it is also a potent potassium channel activator of ATP type. And this was shown when levosimendan-treated patients displayed improvements in pressure metrics that translated to statistically significant exercise tolerance improvement, an important feature in securing market approval. Tenax is now in the process of transitioning intravenously-administered patients to an oral formulation that were in the open label extension. This process is expected to be complete by 4Q:21. We expect to see a 2022 start to a Phase III trial for levosimendan.

Novel Levosimendan MOA in PH-HFpEF

On August 12th, Tenax issued a press release announcing the publication of a new study identifying a novel mechanism of action behind the improved cardiovascular hemodynamics and exercise tolerance observed in Phase II HELP study. The publication, entitled “Changes in Stressed Blood Volume with Levosimendan in Pulmonary Hypertension from Heart Failure with Preserved Ejection Fraction: Insights Regarding Mechanism of Action,” was published in the Journal of Cardiac Failure. Through an in-depth analysis of data from the HELP Study, the authors elucidated the underlying mechanism and found that the reductions in pulmonary wedge pressure (PCWP) and central venous pressure (CVP) did not depend on any effect of the drug on the force or speed of contraction of cardiac muscle. Instead, the study concluded that the reduction in PCWP and CVP was attributable to levosimendan’s effect on K+ATP channel activation, lowering stressed blood volume (SBV), or the volume of blood that is being pushed by the heart. The work validated that dilating the splanchnic3 circulation will lower SBV and by extension CVP and PCWP in PH-HFpEF as observed in the HELP trial.

Interview with Tenax CEO and CMO

On October 7, 2021, Zacks’ analyst John Vandermosten interviewed Tenax’ Chief Executive Officer, Chris Giordano and Chief Medical Officer, Dr. Stuart Rich. The replay from the interview is available here. The interview discussed background on the pulmonary hypertension market, Tenax’ two candidates, levosimendan and imatinib, and longer term prospects for the programs.

Changes to Executive Management

Tenax announced in a July 7th press release that CEO Anthony DiTonno would retire, effective July 13, 2021. The Board appointed Christopher Giordano to serve as his successor, effective July 14, 2021. This followed the addition of Dr. Stuart Rich as Tenax’ CMO in January of 2021 concurrent with the acquisition of Dr. Rich’s company PH Precision Med. In October, Tenax’ CFO Michael Jebsen separated from the company and was replaced by interim CFO Eliot Lurier.

Milestones

➢ HELP Topline data – June 2020

➢ End of Phase II Meeting with FDA – October 2020

➢ Acquisition of PHPM – January 2021

➢ FDA clearance of IND for imatinib in PAH – October 2021

➢ Initiation of Phase I PK trial for imatinib in PAH – October 2021

➢ PK and formulation results for imatinib in PAH – 4Q:21

➢ Site selection and enrollment for imatinib PAH trial – 1H:22

➢ Launch Phase III imatinib in PAH – 2Q:22

➢ Launch Phase III levosimendan in PH-HFpEF – 2022

➢ Imatinib PH trial topline report – 2024

➢ Completion of Phase III in PH-HFpEF – 2024

Summary

Tenax’ third quarter was a busy one with the appointment of a new CEO, close of a $10 million PIPE ATM, a KOL webinar on levosimendan in PH-HFpEF, and FDA clearance of imatinib’s IND. We also conducted an interview featuring Tenax’ CEO and CMO highlighting the details of Tenax’ two programs.

With imatinib’s recent IND clearance, Tenax expects to start its Phase III registrational study early next year following the active PK study, with trial conclusion and results expected in 4Q:21. The Phase III trial for levosimendan is also expected to start in 2022.

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1. https://www.hcp.novartis.com/products/gleevec/gleevechcp/

2. Fudim M, et al. Splanchnic Nerve Block for Chronic Heart Failure. JACC Heart Fail. 2020 Sep;8(9):742-752. doi: 10.1016/j.jchf.2020.04.010. Epub 2020 Jun 10. PMID: 32535123.

3. Circulation that flows to the abdominal gastrointestinal organs including stomach, liver, spleen, pancreas, etc.

4. TENX Interview – YouTube

5. Source: Tenax Therapeutics October 2021 Corporate Presentation

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