Canadian company Algernon Pharmaceuticals Inc. (AGN:CSE; AGNPF:OTCQB; AGW:FSE) thinks investors in the United States will understand and support its mission to repurpose already approved drugs for new disease indications.
The company listed on the Canadian Securities Exchange (CSE) has applied to list its common shares on the Nasdaq.
Algernon Chief Executive Officer Christopher J. Moreau said he thinks Nasdaq investors may be more knowledgeable and experienced in the pharmaceutical sector and will be more interested in what the company has to offer.
"The CSE is an excellent place for companies that need initial seed capital and for resource, mining and some tech deals," Moreau told Streetwise Reports. "But specifically, when it comes to pharmaceutical development, I don't personally believe it's that well understood [by] the Canadian investor community."
He said it "may take some time, but I believe we will slowly get to the valuation we deserve for all of our research programs" on the Nasdaq.
The company said there is no timeline for when its Nasdaq application could be approved, but a guide on the Nasdaq website said it usually takes four to six weeks for an initial application to be considered.
In anticipation of the application, the company consolidated its stock on a 100 to one basis in November. As a result of the move, technical analyst Clive Maund is rating the company's stock as an "attractive speculative buy."
"From the magnitude of the rollback, … one might suppose that Algernon had a gargantuan quantity of stock in issue," he said. "But here's the thing, it didn't. So after the rollback it only had, and has, a tiny 1.6 million shares in issue. This obviously means that any significant increase in buying interest can quickly drive the stock price higher. The reason that rollbacks have a poor reputation is because it opens up the possibility of the company engaging in further waves of stock dilution, but this doesn’t necessarily follow, at least not immediately. … The technical action in the stock suggests that it will soon head higher."
Algernon specializes in finding new applications for already approved drugs or naturally occurring compounds. Two of its current research programs include investigating Ifenprodil for idiopathic pulmonary fibrosis and chronic cough and a psychedelic compound called N,N-dimethyltryptamine (DMT) that may help repair the brain after a stroke.
"We're not focusing on identifying new chemical entities or new drugs, we're actually looking at certain specific compounds that are already approved," Moreau said. "They've been generic for a period of time, not globally available, but sold in a smaller regional market. And then we look to investigate the drug for new potential uses, which means that we can move [those drugs] into the clinic very, very quickly."
—Algernon Chief Executive Officer Christopher J. Moreau
Moreau said the repurposing of drugs like remdesivir and hydroxychloroquine during the COVID-19 pandemic has opened the public's eyes to what is essentially Algernon's business model.
"These were antiviral drugs that were originally developed for disease A, and now they're trying them out for disease B," Moreau said.
Because the drugs being investigated by Algernon have already been approved for other uses, most of the preclinical work and early stages of clinical trials don’t need to be repeated when you undertake to repurpose them.
"We're not focusing on identifying new chemical entities or new drugs, we're actually looking at certain specific compounds that are already approved," Moreau said. "They've been generic for a period of time, not globally available, but sold in a smaller regional market. And then we look to investigate the drug for new potential uses, which means that we can move [those drugs] into human trials very, very quickly."
The fact that the drugs are not genericized in the U.S or Europe makes it far easier when it comes to filing and policing new patents, he said.
Moreau said uplisting on the Nasdaq should also provide the company better access to capital for ongoing research and development programs. He pointed to another Canadian company, XORTX Therapeutics Inc. (XTRX:NASDAQ), as an example of a pharmaceutical company that successfully made the jump and reached a broader investor audience when it uplisted in October 2021.
XORTX, which develops therapies to treat progressive kidney disease, joined the Nasdaq in October and raised $12 million.
"They now have a meaningful war chest from which they can prosecute their research and development programs," Moreau told Streetwise.
Another company, DiaMedica Therapeutics Inc. (DMAC:NASDAQ), which is currently running a Phase 2/3 study for a different stroke drug, also uplisted in 2018 and recently raised $30 million.
"There are a number of examples of early-stage pharma [companies] that have uplisted to their benefit, so we're hoping that this will be a positive change for the company and its investors," said Moreau.
After pandemic delays, Algernon is projecting full enrollment in its trial of Ifenprodil in Australia by the end of December with a data readout in the second quarter of 2022. The drug has been shown to mediate anti-inflammatory responses and to reduce frequency and delay onset of cough in guinea pigs.
In its DMT research, the company recently announced it has manufactured enough of a clinical grade supply of the drug to start its Phase 1 and 2 trials in stroke patients. Phase 2 trials are planned to begin in in the United Kingdom in late 2022.
According to the Centers for Disease Control and Prevention, a stroke occurs when something, like a blood clot, blocks blood supply to part of the brain or when a brain blood vessel bursts and parts of the brain become damaged or die. Strokes can cause brain damage, long-term disability, or death. The CDC said nearly 800,000 people suffer a stroke every year.
A preclinical animal study has shown that DMT helps the brain form and reorganize the synaptic connections needed for healing after such a brain injury, Algernon said.
"The substance has been used ritually in South American cultures for centuries to evoke psychedelic responses for religious and spiritual reasons. But non-hallucinogenic doses may be all that's needed to get the desired results in treating a stroke," Moreau said.
"We may not need to send somebody on a psychedelic journey in order to see healing benefits in the brain," he said.
Algernon's niche in the industry positions it well to take advantage of more discoveries like DMT's use in stroke therapy. Big pharmaceutical partners are open to drug repurposing but want to see more advanced data for drugs, Moreau said.
That's where Algernon comes in.
"It can take many, many years off of preclinical [research] by being able to advance a drug that already has a known safety history," so the risk of a drug failure due to safety is very small, Moreau said. These are "elements of our business model that really make sense and should be attractive to investors."
1) Steve Sobek compiled this article for Streetwise Reports LLC. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.
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