Posted on September 5th, 2014
by John Holliman
Capstone Therapeutics Corp. (OTCQB: CAPS) is a “fallen angel,” reflected by the Company’s current market cap of $10 million. Sometimes that spells opportunity: Capstone recently reported data from a double-blinded, placebo-controlled Phase 1a trial and will be reporting data from a Phase 2a trial in late 2014, testing in humans a new class of cardiovascular drug.
In August 2012, Capstone entered a development joint venture with Boston-based LipimetiX Development, LLC, to develop a family of Apo-E mimetic peptides for cardiovascular indications. Capstone agreed to contribute $6 million in cash for 60% ownership in LipimetiX in order to fund a 27-month development program from pre-clinical stage to Phase 2a human proof-of-concept. The project is led by Dennis Goldberg, Ph.D. and two Ph.D. colleagues in a virtual office in Boston with our current clinical trial work being conducted at a hospital-based clinical site in Perth, Australia.
The lead molecule, AEM-28, has received Orphan designation from FDA for a rare disease indication, called homozygous familial hypercholesterolemia (HoFH). This is a very small global population of individuals who are born with no LDL receptors on the liver and are unable to clear LDL (the “bad” cholesterol) through a natural pathway. Historically, these patients have experienced cardiovascular complications in their teens and twenties often leading to early death. Standard of care therapy was a process called apheresis, which is a mechanical filtering of the lipid fat from the patient’s entire blood volume, akin to kidney dialysis. In 2013, two pharmaceutical therapies were approved in the U.S., Aegerion’s Juxtapid and Sanofi-Genzyme’s Kynamro. Juxtapid has proven the market with an impressive revenue ramp in 2013 while revenue data for Kynamro is not publicly available. We believe that AEM-28, if approved, could compete favorably with these other drugs.
In extensive preclinical studies, AEM-28 has shown statistically significant results in reducing LDL cholesterol, non-HDL cholesterol, VLDL and triglycerides. These attributes make it an ideal candidate for the HoFH indication. Additionally, we have observed statistically significant regression of atherosclerotic lesions in the artery walls of animals in validated preclinical models. This mechanistic attribute may open up much larger markets in heart attack and acute coronary syndrome therapy. Other major markets such as type 2 diabetes and peripheral artery disease may also be appropriate targets for AEM-28 and its family of analogs.
Capstone has adequate cash resources to fund LipimetiX through the primary Phase 2a program, but will need to raise additional capital if we choose to carry AEM-28 forward into later stage trials. The current plan is to explore a strategic joint venture or licensing approach with pharma partners, some of whom have expressed preliminary interest in our programs. Depending upon results of the current trials, we may choose to raise additional capital directly from the equity markets to strengthen our balance sheet.
Capstone has historically tested peptide drugs in fresh fracture healing, dermal scar reduction and anti-fibrotic indications, but has yet to bring a commercial candidate to NDA status. As additional disclosure, Capstone was named in a qui tam lawsuit in 2009 resulting from a prior legal entity’s operation of an orthopedic medical device business. Capstone believes it was in full compliance with the laws of that period and will continue to defend itself vigorously in this case.
AEM-28 has now completed its Phase 1a study showing an acceptable safety profile that has allowed initiation of the Phase 2a Multiple Ascending Dose trial in refractory hypercholesterolemic patients. Safety remains the primary clinical and regulatory endpoint in all human studies, but we are fortunate to have a primary efficacy endpoint that is a simple blood based biomarker test quantifying reduction in cholesterol. As such, any efficacy outcomes should be easily measurable when these data are un-blinded.
Thanks for reading and listening to this first chapter of our new story. Capstone has near-term valuation events in the HoFH pathway and broader potential in significant, highly- valued cardiovascular indications. We look forward to sharing top line data with the market as it becomes available this Fall. I will be writing to you from time to time with additional updates and we certainly encourage your questions/dialogue.
Capstone Therapeutics Corp.
Forward Looking Statements
Statements in this blog post or otherwise attributable to Capstone regarding our business that are not historical facts are forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from predicted results. These risks include the factors discussed in our Form 10-K for the fiscal year ended December 31, 2014, and other documents we file with the U.S. Securities and Exchange Commission.