SUDA’s June Quarterly Report Out On ASX; A Look At Its Business And Technology

On 31 July 2019, SUDA Pharmaceuticals Ltd (ASX: SUD), an oro-mucosal drug delivery firm, has released its June quarterly updates on the ASX. SUDA mentioned that it witnessed several key developments during the quarter including restructuring of board, submission of Marketing Approval Authorisation with the Australian TGA for insomnia drug, ZolpiMist^TM, launch of a new website, capital raising of $3.9M via placement and rights issue, binding term sheet with Cann Pharmaceuticals, business development team expansion by engaging with a Hong Kong based and Illinois-based firm; and intimation from European Patent Office regarding its intention to grant Anagrelide patent.

The customer receipts for the year to June 30, 2019 of around $1,051,000 came from licencing of the Oromist® oro-mucosal spray technology. This is the first time that Suda’s revenue from Oromist has exceeded $1 million.

The company ended the June quarter with a cash balance of ~$4.31 million. SUDA spent $97k on research and development activities during the quarter and expects to spend $108k on the same in the next quarter.

The drug delivery firm, SUDA focuses on oro-mucosal administration. In order to reformulate the existing pharmaceuticals, SUDA develops low-risk oral sprays utilizing its OroMist® technology. The oro-mucosal administration of drugs offers many potential benefits like faster response time, lower dosage, fewer side effects and ease of use.

Benefits of Oro-Mucosal Spray Delivery Technology

Generally, when the patients take medications as tablets, capsules or pills, less than 25 per cent of the drug is actually absorbed into the bloodstream. This is due to various factors like first pass metabolism, drug metabolism, enzymatic degradation, food effect and others. With the development of drug delivery technology by the company, the absorption rate of the drug has reportedly improved from 25 per cent to around 95 per cent.

The oro-mucosal spray delivery is a highly effective drug delivery method through which the drugs are delivered directly into the blood, avoiding first-pass metabolism effects of the liver and gut wall. This is because the oral cavity, which includes the gums, palate, tongue and cheeks, is an attractive delivery site for the drugs. The oro-mucosal membrane or the mucous membrane of the oral cavity, which is readily accessible to patients/carers, has a high degree of vascularisation that can diminish or avoid the intestinal and hepatic degradation mechanisms and can promote a faster onset of action.

Classification of Drug Delivery within Oral Mucosal Cavity

The drug delivery inside the oral mucosal cavity can be categorized into the following forms:

• Local delivery - Drug delivery into the oral cavity;
• Buccal delivery - Drug delivery through the buccal mucosal (lining of the cheeks) membranes;
• Sublingual delivery - Systemic drug delivery through the mucosal (lining of the floor of the mouth) membranes;
• Gingival delivery - Drug delivery through the gums; and
• Lingual delivery - Drug delivery over the tongue.

As per the company, the oral mucosa’s permeability diminishes in the order of sublingual, buccal and palatal, with sublingual mucosa route being the superior one. This rank order is based on the degree of keratinization and relative thickness of these tissues. The sublingual mucosa is highly permeable and non-keratinised with a rich blood supply, allowing a rapid response rate and absorption of lipophilic drugs. As reported by the company in its annual report, the absorption of a drug through the sublingual mucosa route is three to ten times more than the oral route, only exceeded by intravenous injection. On the other hand, the buccal mucosa is non-keratinized and thicker with over forty cell layers while the palatal is keratinized but intermediate in thickness.

SUDA’s OroMist® Technology

Using its OroMist® Technology, SUDA has improved the bioavailability of administered drugs up to 95 per cent. It is a major step taken by the company in the evolution of drug delivery technology. Overcoming the factors affecting the bioavailability of administered drugs, SUDA’s OroMist® Technology ensures that the drug is directly absorbed into the blood stream by means of the oral mucosa.

The oral mucosa drug delivery technology reduces the dose variation linked with stomach emptying time, gastrointestinal tract motility, tablet/capsule disintegration, food effects and chemical degradation in the gut. The oral sprays have the potential to minimise the risk of adverse drug reactions as they allow the usage of a lesser dose of the active ingredient relative to the tablet formulations due to their higher absorption and decreased degradation characteristics.

Below is the graph depicting increase in bioavailability of administered drugs using SUDA’s OroMist® Technology:

SUDA’s OroMist® technology can deliver various drugs through either the floor of the mouth or via gums, tongue and cheeks. The OroMist® technology is patented for, and is compatible with, propellant-driven aerosol spray systems or air-activated pump spray systems. The technology can either be provided in unit or in multi-dose containers, depending upon the marketing and medical needs for each product.

As mentioned in the SUDA’s Annual Report, decreasing the time for the drug to act and increasing the bioavailability of the drug targets are the major challenges for the company’s OroMist® sprays. SUDA’s technologies address response time and bioavailability through a combination of existing and proven proprietary technologies to improve permeability, solubility, palatability and stability. The company has an in-depth knowledge of tested techniques to optimise solubility comprising particle size reduction, novel solvent systems, permeability enhancers, solid dispersions and taste masking.

SUDA’s Hydrotrope Technology

The class of compounds that have the potential to improve the aqueous solubility of sparingly soluble solutes are termed as hydrotropes. They can also be defined as the molecule containing the non-polar end and polar end, which can aggregate though cannot create micelles. The company’s permeation-enhancing hydrotropes technology is connected with the novel combinations of hydrotropes.

As few drugs are very bitter in taste, it is required that these drugs must be flavoured, and taste-masked in a way that their permeation and solubility are either enhanced or maintained. SUDA uses specific sweetener/ flavour/taste-mask combinations to make sure that the formulation is palatable to the patients while sustaining the response rate and bioavailability requirements. The company uses a logical sequence of easy to complex systems to support oro-mucosal permeation.

A drug can travel across the mucosal tissue through either the transcellular or paracellular permeation pathway, as shown in the below figure:

It has been observed in previous experiments that most compounds travel the oro-mucosa through the intercellular or transcellular path. In the transcellular pathway, the drug travels through the cells while in the paracellular pathway, the drug travels around the cells.

SUDA’s hydrotrope technology covers the particle, assuring a better passage via the mucosa into the bloodstream and accelerating the absorption rate. The company mentioned in its annual report that it was this hydrotrope technology due to which Pfizer Consumer Healthcare signed a feasibility agreement with the company in April 2017. SUDA got a financial benefit from the agreement that incorporated the potential for royalties, commercial licence fees and milestones, and included a fee-for-service. SUDA holds Intellectual property around its hydrotrope technology.

SUDA is moving along the growth path by staying informed about the developments in the pharmaceutical industry. Its drug delivery business is currently in different stages of development, and the company is progressing well by implementing a staged marketing and business strategy.

Stock Performance

SUDA’s stock settled the day’s trading at AUD 0.004 as on 1^st August 2019.