Drugs intake in the form of pills, capsules, and tablets are not the most efficient ways of taking medicine, because only about 25% of the drug reaches where it should. Several factors including food affect, enzymatic degradation, drug metabolism, and first-pass metabolism are responsible for this low percentage. In an effort to increase the absorption of the drug into the bloodstream, Australia-based company, SUDA Pharmaceuticals Ltd (ASX: SUD) is reformulating the existing medications into an oral spray.
SUDA’s spray delivery OroMist® technology presents significant benefits including requirement of less drugs, faster onset of action, reduction in dose due to increased bioavailability, less adverse side effects, reduction of plasma level variability for drugs with food effect, avoidance of gastro-intestinal side effects, greater tolerability in patients with nausea and vomiting and high patient compliance.
The oro-mucosal drug delivery leader has recently released its preliminary final report for the 12 months ended 30 June 2019. Let us take a closer look at the company’s final report through its operational and financial performance below:
SUDA’s Operational Activities
The pharmaceutical giant witnessed significant developments during the 2018-19 financial year, driven by some considerable partnership agreements signed by the company.
Let us take a look at each of these developments in some detail below:
Binding Term Sheet with Cann Pharma Australia
In June this year, the company signed a binding term sheet with an Australian-based medical grade cannabis company, Cann Pharmaceutical Australia Ltd (CPA). The binding term sheet was signed with CPA for an exclusive licence to develop and supply an oral spray of cannabinoids for the treatment of melanoma, drug-resistant epilepsy and motion sickness. Both the companies are working on finalising the negotiations of the Definitive Agreement contingent on the terms of the binding term sheet.
SUDA received a TGA (Therapeutic Goods Administration) notice of denial for marketing approval of its sublingual spray formulation of Artemether, ArTiMist®, in May 2019. During the period, the company adopted a conservative approach and impaired its ArTiMist® project for ~AUD 6.27 million. The carrying value of ArTiMist® as on year end stood at ~AUD 5.34 million.
The company has recently lodged an appeal against the TGA decision and remains confident of a fruitful outcome of the appeal. The decision upon review by the Minister’s delegate is expected to come by 4th October 2019.
SUDA’s board went through a complete rejuvenation during the reported financial year, making the board structure more efficient and improving the company’s competitive advantage. The company strengthened its operational performance and made an excellent use of talent by repositioning its existing board members.
One of the most significant changes involved the appointment of Mr Paul Hopper as the Non-Executive Chairman. Mr Hopper is currently serving as Chairman of several companies including Imugene Ltd (ASX: IMU), Vaxinia Pty Ltd, Semexion Pty Ltd and BioScience Oncology Pty Ltd. Besides this, he is also currently the Non-Executive Director of Prescient Therapeutics Ltd (ASX: PTX).
SUDA also welcomed Mr David Phillips as an Executive Director and Mr David Simmonds as a Non-Executive Director as a part of company’s board restructuring process.
Supply and License Agreement with Mitsubishi Tanabe Singapore
The company entered into an exclusive fully-funded license agreement with MTPS (Mitsubishi Tanabe Pharma Singapore Pte Ltd), through its wholly owned subsidiary Strides Pharma Global Pte Limited, Singapore, in December 2018 for the supply of SUDA’s US FDA approved insomnia drug ZolpiMistTM in Malaysia, Singapore and Philippines, with options for Vietnam, Thailand, Myanmar, Indonesia, Laos, Cambodia and Brunei. The company received an upfront fee of USD 100,000 (~AUD 140,000) under the agreement.
Feasibility Agreement with Zelda Therapeutics
SUDA and an Australian-based medical grade cannabis company, Zelda Therapeutics Ltd entered into a fully funded feasibility and option agreement in December last year to develop an oral spray for delivering Zelda’s pharmaceutical-grade cannabis formulations. Under the terms of the Agreement, Zelda has by now paid an upfront fee of AUD 100,000 to SUDA. Zelda will finance the formulation work and will make a further AUD 100,000 amount in downstream milestone payments.
Development and Licence Agreement with Strides
In November 2018, SUDA and Strides Pharma Science Limited entered into an exclusive development, licence and supply agreement for the commercialisation and development of the company’s novel fast acting oral spray of sumatriptan, SUD-001H to treat migraine headache for the US. SUDA has so far received an upfront cash payment of USD 400,000 and will receive further payments of USD 600,000 on reaching certain milestones.
Appointment of Vice President, Business Development & Alliance Management
In October 2018, the company hired Mr Andrew Curtis to its management team as the Vice President, Business Development & Alliance Management in the US. He was appointed to introduce the company and its projects into the largest market of the world and direct the drive to secure new agreements.
SUDA’s Financial Performance
The company reported a significant rise of 186 per cent in its revenue from AUD 0.43 million in the prior corresponding period (pcp) to AUD 1.22 million in the reported financial year. SUDA also reported a loss of AUD 7.79 million for the period, attributable to the impairment of its ArTiMist® project. However, the company is confident of receiving a successful outcome from its appeal lodged with TGA for the reconsideration of ArTiMist®’s marketing approval.
The company’s cash and cash equivalents at the end of the year improved substantially from AUD 0.098 million in previous corresponding period to AUD 4.31 million in the 2018-19 financial year.
For the development of its projects and for supporting the general working capital requirements, the company undertook two oversubscribed rights issue during the period, raising ~AUD 10.69 million.
Events Subsequent to 2018-19 Financial Year
Let us now take a look at some major developments of the company reported subsequent to the 2018-19 financial year:
SUDA’s performance during the 2018-19 financial year clearly signals that the company has so far made considerable progress in its product pipeline. Continuing with its growth trajectory, SUDA is expected to further flourish in the pharmaceutical space.
Stock Performance: As on 4th September 2019, SUDA’s stock settled the day’s trading session at AUD 0.003.
READ MORE UPDATES ON SUDA PHARMACEUTICALS HERE
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