Tonix Pharmaceutical Holdings Corp. (NASDAQ:TNXP) has undergone a transformation over the past year as it has built up a robust pipeline of clinical stage assets focused on the treatment of central nervous system (CNS) and immunological diseases. In addition, the company’s balance sheet has never been stronger. As of March 31, 2021, Tonix had approximately $164.2 million in cash and cash equivalents along with no debt, no preferred shares, and a very limited number of warrants. Investors can look for the following milestones to occur over the next 6-12 months (all trials in U.S. unless otherwise noted):
TNX-102 SL: Phase 3 RALLY Trial in Fibromyalgia: Interim Analysis – 3Q21
Phase 3 RALLY Trial in Fibromyalgia: Topline Data – 1Q22
Phase 3 trial in PTSD (in Kenya): Initiation – 3Q21
TNX-1300: Phase 2 trial in Cocaine Intoxication: Initiation – 3Q21
TNX-1900: Phase 2 trial in Chronic Migraine: Initiation – 3Q21
TNX-601 CR: Phase 2 trial in Major Depressive Disorder: Initiation – 4Q21
TNX-2100: Skin Test for COVID-19: Initiation – 4Q21
TNX-1800: Phase 1 trial for COVID-19 Vaccine: Initiation – 1H22
Interim Analysis for RALLY Trial in 3Q21; Topline Results in 1Q22
Tonix is currently conducting the Phase 3 RALLY trial, a double blind, randomized, placebo controlled trial designed to evaluate the safety and efficacy of TNX-102 SL in patients with fibromyalgia (FM) (NCT04508621). It is similar in design to the Phase 3 RELIEF trial, which the company announced positive results for in December 2020, but with an additional 200 patients. The RELIEF trial showed that the 5.6 mg dose of TNX-102 SL achieved statistically significant pain reduction over placebo at Week 14 (P=0.01). For an overview of those results, see our report here.
In March 2021, Tonix announced that 50 percent of the planned total number of participants had been randomized in the RALLY trial and an interim analysis will take place after the 14-week treatment period has been completed. There are four potential outcomes from the interim analysis:
1) Stop the study early for success
2) Continue to enroll the study as planned
3) Continue to enroll the study but increase the total number of participants
4) Stop the study for futility
We estimate the result of the interim analysis will be available in the third quarter of 2021 and topline results for the full trial will be available in the first quarter of 2022. Positive results for the RALLY trial would put Tonix in a position to potentially file an NDA in 2022.
Treating FM represents a substantial potential market opportunity. There are currently three FDA approved FM treatments; Lyrica®, Cymbalta®, and Savella®. Peak sales for both Lyrica and Cymbalta were $5 billion each for all indications (estimated approximately $1 billion each for FM), while Savella had peak sales in FM of approximately $100 million (EvaluatePharma). Lyrica and Cymbalta are both off patent, and Savella will lose patent protection in January 2023, however with each of those therapies having undesirable side effects and a lack of efficacy for a number of patients (50% of FM patients switch or discontinue therapy after 12 months), an effective therapy with a tolerable side effect profile is likely to take significant market share.
We anticipate Tonix initiating a Phase 2 clinical trial of TNX-1300, a double mutant cocaine esterase, for the treatment of cocaine intoxication before the end of the third quarter of 2021. Tonix licensed the asset in May 2019 from Columbia University, which has breakthrough therapy designation from the U.S. FDA.
TNX-1300 is a recombinant enzyme derived from the cocE gene of a Rhodococcus species that utilizes cocaine as a sole source of carbon and nitrogen (Bresler et al., 2000). The degradation of cocaine by the enzyme is shown in the following figure.
The CocE enzyme was tested in a rat model of cocaine toxicity to determine if it could protect the animals from cocaine-induced lethality (Cooper et al., 2006). The following chart shows that administration of increasing concentrations of CocE (CE) 1 minute before a lethal 180 mg/kg IP dose of cocaine results in increasing protection from cocaine-induced lethality (shown as “percent affected”). In fact, it required a 1000 mg/kg dose of cocaine to overcome the protective effects of 1 mg CocE (LD50 for IP dose is 70 mg/kg cocaine). BChe (butyrylcholinesterase) is an endogenous human esterase that also degrades cocaine into benzoic acid and ecgonine methyl ester, however its catalytic efficiency is much lower than CocE (Xie et al., 1999), and as shown in the following figure it is not nearly as efficient at protecting animals from a lethal dose of cocaine.
One of the issues with the native CocE enzyme is that its half-life is only a few minutes at physiological temperature (37ºC) (Cooper et al., 2006). Thus, a study was performed to develop thermostable variants of CocE using a computational approach along with in vitro and in vivo studies (Gao et al., 2009). A variant was identified with two amino acid substitutions (T172R/G173Q) that resulted in increased stability at 37ºC. The following figure shows that the double mutant CocE enzyme retains more of its activity at 37ºC for a longer period of time compared to the wild-type enzyme or the enzymes with one or the other mutations.
The double mutant CocE enzyme (then called RBP-8000, now TNX-1300) was evaluated in a Phase 2 clinical trial conducted by Reckitt Benckiser Pharmaceuticals, the previous licensee to the product (NCT01846481). It was a double blind, placebo controlled, randomized, four-sequence, two-period cross-over study. Subjects were non-treatment seekers with a DSM-IV diagnosis of cocaine abuse. During the study period, subjects were given an IV infusion of 50 mg of cocaine over 10 minutes followed by TNX-1300 (100 mg or 200 mg) or matching placebo one minute after completion of the cocaine infusion. Outcomes included pharmacokinetics of both cocaine and TNX-1300 along with any effect by TNX-1300 on cocaine-induced physiological changes (Nasser et al., 2014).
A total of 29 subjects were randomized in the trial. Safety results showed that no anti-TNX-1300 antibodies were detected in any of the subjects at any time point. In addition, there were no clinically significant abnormalities in vital signs, clinical laboratory markers, or physical examinations. A total of seven subjects reported treatment-emergent adverse events that were considered related to treatment with any study drug, with most being assessed as mild in severity. Of note, vital signs of subjects treated with TNX-1300 returned to or below baseline earlier than subjects that received placebo, as shown in the following figure.
Plasma cocaine rapidly decreased following administration of TNX-1300, with a 90% drop of peak plasma cocaine concentrations within two minutes and a 95% decline in plasma cocaine exposure. The 200 mg dose of TNX-1300 produced a longer-lasting effect on cocaine pharmacokinetics compared to the 100 mg dose. These preliminary results fully support the continued develop of TNX-1300 as a treatment for cocaine intoxication.
Tonix licensed TNX-1900, a proprietary, patented enhanced formulation of intranasally administered oxytocin for the treatment of chronic migraine and craniofacial pain, in June 2020. We anticipate the company initiating a Phase 2 clinical trial for the prophylactic treatment of chronic migraine in the third quarter of 2021.
A migraine is a headache that can cause severe pain, can last up to 72 hours, has a pulsing quality, and may be associated with nausea, vomiting, phonophobia, or photophobia. Approximately one billion individuals in the world suffer from migraine headaches (GBD 2016 Headache Collaborators). In the U.S., migraines affect approximately 72 million individuals (Gooch et al., 2017). Chronic migraines, which are defined as having a headache at least 15 times a month for three months, are less common (1-5% of migraine sufferers). While not a fatal condition, migraines still contribute to a significant decrease in quality of life and the total estimated cost of all migraine headaches is approximately $78 billion per year (Gooch et al., 2017).
Migraine treatments are classified as abortive (intended to stop a migraine once it begins) or prophylactic (decrease the frequency and/or severity of migraines). Abortive treatments include triptans and ditans (which specifically target serotonin receptors), over the counter medications (that typically include some combination of a nonsteroidal anti-inflammatory drug (NSAID), acetaminophen, and/or caffeine), ergots, and small molecule calcitonin gene-related peptide (CGRP) antagonists.
Antibodies that target the interaction of CGRP with its receptor represent the newest class of prophylactic treatments and include Aimovig (erenumab), which targets the CGRP receptor, and Ajovy (fremanezumab), Emgality (galcanezumab), and Vyepti (eptinezumab), which each target CGRP itself. These drugs generated approximately $1 billion in sales in 2020, and are estimated to generate 2026 sales of $4 billion (EvaluatePharma). A summary of their results in Phase 3 clinical trials is shown in the following table.
Each of the CGRP-directed antibody treatments are administered as subcutaneous injections or infusions on a monthly or once every three months schedule. Side effects associated with CGRP antibodies are generally mild or moderate, with redness and/or pain at injection site the most common, although due to a number of core systems that CGRP is involved in there are a number of theoretical long-term adverse effects that may arise once the data (≥10 years) is available, including CGRP’s role in hypertension, wound healing, and insulin levels (Robbins, 2020).
Oxytocin in Migraine
While the exact cause of migraines remains to be elucidated, it appears to be associated with the hypothalamus and its communication with the spinal trigeminal nuclei and sensory trigeminovascular system, thus neuromodulators that target the trigeminal pathway could prove effective in migraines.
Oxytocin is a nine amino acid peptide hormone that is involved in a wide array of biological processes, including learning and memory, anxiety, addiction, feeding behavior, maternal behavior, and processing of social information (Cilz et al., 2019). A review of the available literature showed that in 29/33 animal studies oxytocin increased “pain” tolerance (Rash et al., 2014), which suggests it may act as an analgesic. Circumstantial evidence shows that oxytocin may be an effective migraine treatment based on the fact that increased oxytocin levels in pregnancy and during breastfeeding correlates with decreased migraine occurrence (Hoshiyama et al., 2012) and women who suffer from migraines report that sex (which results in a surge in oxytocin levels) provides at least temporary relief from the condition (Evans et al., 2001).
While the potential for oxytocin as a treatment for migraine headaches appears promising, getting oxytocin to the trigeminal system is challenging due to the fact that: 1) oxytocin is a small peptide that is broken down almost immediately in the gastrointestinal system; and 2) its half-life in the blood stream is very short (3-5 min) with only limited ability to cross the blood-brain barrier, thus eliminating the availability of oral or parenteral administration. But delivered intranasally, oxytocin permeates the nasal mucosa and is transported along the trigeminal nerve pathway to the trigeminal ganglion where it can inhibit release along trigeminal neurons that synapse within the lining of the dura mater and inhibit CGRP release. Additionally, the most direct way to bypass the blood brain barrier and gain access to the CNS could be nasal administration along olfactory and trigeminal pathways to the brain (Dhuria et al., 2010).
Multiple preclinical studies have examined the potential for oxytocin as a migraine treatment. Oxytocin receptors are present in rat trigeminal neurons, and the vast majority of neurons that express oxytocin receptors also express CGRP (Tzabazis et al., 2016). Intranasal administration of radiolabeled oxytocin in rats results in a very high concentration of oxytocin in all three branches of the trigeminal nerve and trigeminal ganglion (Tzabazis et al., 2017). Administration of nitroglycerin triggers migraine headaches in patients (Sances et al., 2004), thus intraperitoneal injection of nitroglycerin is utilized in a rat model of migraine (Ma et al., 2008). This model results in expression of C-fos in multiple trigeminal neurons (a marker for trigeminal nerve activation), however pre-treatment with intranasal oxytocin markedly reduces the expression of C-fos, thus pointing to a potential role of oxytocin in preventing pain transmission.
A Phase 2 clinical trial of intranasal oxytocin was previously conducted by Trigemina, Inc., from which Tonix acquired TNX-1900 in June 2020. This was a double blind, placebo controlled trial in 218 mostly female migraine sufferers (143 on oxytocin; 75 on placebo) and was conducted in Chile, Australia, and New Zealand (NCT01839149). The trial consisted of a 28-day “run-in” period to establish a baseline of migraine days followed by 56 days of “as needed” dosing with either intranasal oxytocin or placebo. Results showed that while intranasal oxytocin was well tolerated, the study did not meet the primary endpoint of a reduction in migraine headache days from baseline. This was mostly due to an extremely high placebo response rate at the clinical sites in Chile, which was 74%, while subjects from New Zealand and Australia experienced a normal placebo response and showed a statistically significant difference between active and placebo groups (Tzabazis et al., 2017).
Based on results of preclinical studies demonstrating enhanced analgesic activity of oxytocin mediated by the oxytocin receptor in the presence of magnesium, Trigemina developed a proprietary, potentiated formulation of oxytocin containing magnesium. Tonix acquired the intellectual property for this formulation and plans to advance it first in the study of chronic migraine.
To follow up on the results of the prior Phase 2 trial, we anticipate Tonix conducting a classic preventative migraine Phase 2 trial of TNX-1900, which is the potentiated formulation of intranasal oxytocin, for the prophylactic treatment of chronic migraine. We expect the trial to be similarly designed to the previous Phase 2 trial with a 28-day baseline period followed by 84 days of dosing.
The market opportunity in treating chronic migraine is large. We estimate approximately two million Americans suffer from chronic migraine and even taking a single digit percentage of this population could result in peak revenue of approximately $500 million.
Licenses Anti-Viral Compound as Potential COVID-19 Treatment
In April 2021, Tonix announced an exclusive worldwide license agreement with OyaGen, Inc. for an antiviral compound, TNX-3500 (sangivamycin, formerly OYA1), for the treatment of COVID-19 and possibly other viral diseases. Sangivamycin is a natural product that was originally isolated from Streptomyces rimosus and studied in the 1960’s by the National Cancer Institute (NCI) as a potential cancer therapeutic. Due to lack of efficacy the drug did not advance as an anti-cancer therapy but it did show good safety and tolerability in those trials.
A recent study identified sangivamycin as an inhibitor of Ebola virus replication, and surprisingly it also inhibited the replication of Marburg virus, Lassa virus, cowpox virus, and vaccinia virus (Bennett et al., 2020). OyaGen followed up these results with a collaborative research project with the National Institutes of Allergy and Infectious Diseases Integrated Research Facility (NIAID-IRF) to study the effect of sangivamycin on the replication of SARS-CoV-2. Unpublished results show that the compound has strong dose-dependent antiviral activity against SARS-CoV-2 and was approximately 65 times more potent than remdesivir (Veklury®). In addition, combination treatment with sangivamycin and remdesivir show additive activity against SARS-CoV-2.
Tonix will be conducting further preclinical studies to test the safety and efficacy of sangivamycin as a treatment for COVID-19 and we anticipate an update on this program later this year.
On May 10, 2021, Tonix announced financial results for the first quarter of 2021. As expected, the company did not report any revenues for the first quarter of 2021. Net loss available to common shareholders for the first quarter of 2021 was $20.7 million, or $0.07 per share, compared to a net loss available to common shareholders of $9.0 million, or $0.37 per share, for the first quarter of 2020. The weighted average common shares outstanding for the first quarter of 2021 were approximately 290.1 million compared to approximately 24.0 million in the first quarter of 2020.
R&D expenses for the first quarter of 2021 were $15.3 million, compared to $4.7 million for the first quarter of 2020. The increase was primarily due to the timing of milestones related to the Phase 3 RELIEF trial along with preparative activities for the initiation of Phase 2 trials of TNX-1300, TNX-1900, and TNX-601 CR. G&A expenses for the first quarter of 2021 were $5.4 million, compared to $2.6 million for the first quarter of 2020. The increase was primarily due to increased reporting expenses, patent prosecution and maintenance costs, and an increase in salaries.
As of March 31, 2021, Tonix had approximately $164.2 million in cash and cash equivalents. This was due in part to the company raising approximately $110 million from previously announced securities purchase agreements during the first quarter of 2021. As of May 7, 2021, Tonix had approximately 326.5 million common shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 350.1 million.
Tonix is in a very strong financial position with $164.2 million in cash and cash equivalents, which will help the company advance the multiple pipeline candidates into and through the clinic. The most immediate inflection point will be the interim analysis for the RALLY trial, which we anticipate in the third quarter of 2021. Topline results for that trial should be announced in the first quarter of 2022, and if positive will allow for the company to file an NDA likely in 2022. In addition, the company will be initiating another Phase 3 trial for TNX-102 SL in PTSD in police in Kenya in the third quarter of 2021 and potentially three Phase 2 trials for TNX-1300, TNX-1900, and TNX-601 CR before the end of 2021. Since it will be entering the clinic in the third quarter of 2021, we have incorporated TNX-1900 into our model, which has increased our valuation to $4.50 per share.
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