ACURA PHARMACEUTICALS, INC. This discussion and analysis should be read in conjunction with the Company's financial statements and accompanying notes included elsewhere in this Report. Historical operating results are not necessarily indicative of results in future periods.
Forward-Looking Statements
Certain statements in this "Management Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Quarterly Report on Form 10-Q that are not statements of historical fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "continue," "could," "estimate," "expect," "indicate," "intend," "look forward to," "may," "plan," "potential," "predict," "project," "seek", "should," "suggest," "target," "will," "would" and similar expressions that convey the uncertainty of future events or outcomes are used to identify forward-looking statements. Forward-looking statements include, but are not necessarily limited to, those relating to:
· our ability to obtain funding for our continuing operations, including the
development of our products utilizing our LIMITx™ and Impede® technologies;
· the expected results of clinical studies relating to LTX-03, a LIMITx
hydrocodone bitartrate and acetaminophen combination product, or any successor product candidate, the date by which such studies will be complete and the results will be available and whether LTX-03 will ultimately receive FDA approval;
· our business could be adversely affected by health epidemics in regions where
third parties for which we rely, as in CROs or CMOs, have concentrations of clinical trial sites or other business operations, and could cause significant disruption in the operations of third-party manufacturers and CROs upon whom we rely;
· whether LIMITx will retard the release of opioid active ingredients as dose
levels increase;
· whether the extent to which products formulated with the LIMITx Technology
deter abuse or overdose will be determined sufficient by the FDA to support
approval or labelling describing safety and/or abuse deterrent features;
· whether our LIMITx Technology can be expanded into extended-release
formulations;
· our and our licensee's ability to successfully launch and commercialize our
products and technologies, including Oxaydo® Tablets and our Nexafed® products;
· the pricing and price discounting that may be offered by Assertio Holdings Inc
for Oxaydo;
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· the results and timing of our development of our LIMITx Technology, including,
but not limited to, the submission of a New Drug Application;
· our or our licensees' ability to obtain necessary regulatory approvals and
commercialize products utilizing our technologies;
· the market acceptance of, timing of commercial launch and competitive
environment for any of our products;
· expectations regarding potential market share for our products;
· our ability to develop and enter into additional license agreements for our
product candidates using our technologies;
· our exposure to product liability and other lawsuits in connection with the
commercialization of our products;
· the increasing cost of insurance and the availability of product liability
insurance coverage;
· the ability to avoid infringement of patents, trademarks and other proprietary
rights of third parties;
· the ability of our patents to protect our products from generic competition and
our ability to protect and enforce our patent rights in any paragraph IV patent
infringement litigation;
· whether the FDA will agree with or accept the results of our studies for our
product candidates;
· the ability to fulfill the FDA requirements for approving our product
candidates for commercial manufacturing and distribution inthe United States , including, without limitation, the adequacy of the results of the laboratory and clinical studies completed to date, the results of laboratory and clinical studies we may complete in the future to support FDA approval of our product candidates and the sufficiency of our development process to meet over-the-counter ("OTC") Monograph standards, as applicable;
· the adequacy of the development program for our product candidates, including
whether additional clinical studies will be required to support FDA approval of
our product candidates;
· changes in regulatory requirements;
· adverse safety findings relating to our commercialized products or product
candidates in development;
· whether the FDA will agree with our analysis of our clinical and laboratory
studies;
· whether further studies of our product candidates will be required to support
FDA approval;
· whether or when we are able to obtain FDA approval of labeling for our product
candidates for the proposed indications and whether we will be able to promote
the features of our technologies; and
· whether Oxaydo or our Aversion, Impede and LIMITx products will ultimately
deter abuse in commercial settings and whether our Nexafed products and Impede Technology product candidates will disrupt the processing of pseudoephedrine into methamphetamine.
These forward-looking statements reflect our current views with respect to
future events and are based on assumptions and subject to known and unknown
risks and uncertainties. Such forward-looking statements are not guarantees of
future performance and are subject to risks, uncertainties and other factors,
some of which are beyond the control of Acura. In light of these risks,
uncertainties and assumptions, the forward-looking events and circumstances
discussed in this Quarterly Report on Form 10-Q may not occur and actual results
could differ materially and adversely from those anticipated or implied in the
forward-looking statements. Given these uncertainties, you should not place
undue reliance on these forward-looking statements Factors that could cause
actual results or conditions to differ from those anticipated by these and other
forward-looking statements include those more fully described and incorporated
by reference in the "RISK FACTORS" section and elsewhere in this Quarterly
Report on Form 10-Q and in our Annual Report of Form 10-K for the fiscal year
ended
Company Overview
We are an innovative drug delivery company engaged in the research, development
and commercialization of technologies and products intended to address safe use
of medications. We have discovered and developed three proprietary platform
technologies which can be used to develop multiple products. Our Limitx™
Technology is being developed to minimize the risk of overdose, our Aversion®
Technology is intended to address methods of abuse associated with opioid
analgesics while our Impede® Technology is directed at minimizing the extraction
and conversion of pseudoephedrine, or PSE, into methamphetamine. Oxaydo Tablets
(oxycodone HCl, CII), which utilizes the Aversion Technology, is the first
approved immediate-release oxycodone product in
F-24
Limitx, is designed to retard the release of active drug ingredients when too many tablets are accidentally or purposefully ingested by neutralizing stomach acid with buffer ingredients but deliver efficacious amounts of drug when taken as a single tablet with a nominal buffer dose. We have completed four clinical studies of various product formulations utilizing the Limitx Technology which have demonstrated proof-of-concept for the Limitx Technology and will allow us to advance a product to development for a New Drug Application, or NDA.
Studies AP-LTX-400, or Study 400, and Study AP-LTX-401, or Study 401, both
utilizing our LTX-04 hydromorphone formulation demonstrated the mean maximum
drug concentration in blood, or Cmax, was reduced in healthy adult fasted
subjects by 50% to 65% when excessive buffer levels were ingested or a situation
consistent with over-ingestion of tablets. Study AP-LTX-301, or Study 301
demonstrated drug Cmax from LTX-03, a Limitx hydrocodone bitartrate and
acetaminophen combination product, in healthy adult fasted subjects trended
toward bioequivalence in test formulations A through E and showed an increasing
reduction in Cmax for formulations F through H; in which formulations A though H
had increasing incremental amounts of buffer starting with no buffer in
formulation A. We believe the results of Study 301 demonstrated that LTX-03 is a
formulation that optimizes the balance between effective blood levels of drug
for pain relief at a single tablet dose while retarding bioavailability of drug
when multiple tablets are ingested. The FDA designated the development program
for LTX-04 as Fast Track, which is designed to facilitate the development, and
expedite the review of drugs to treat serious conditions and fill an unmet
medical need. However, we intend to advance LTX-03, which combines the
hydrocodone micro-particles, acetaminophen and buffer ingredients into a single
tablet, as our lead Limitx product candidate due to its larger market size and
its known prevalence of oral excessive tablet abuse and overdose, and we
voluntarily placed the Investigational New Drug Application, or IND, for LTX-04
on inactive status. We submitted an IND for LTX-03 to the FDA in the first
quarter of 2018 in order to advance to NDA development, which became effective
in
On
In
We launched our first Impede Technology product, Nexafed, into
F-25
According to the 2017
The
In 2014,
We conduct research, development, laboratory, manufacturing, and warehousing
activities at our operations facility in
Misuse or Abuse of Prescription Opioid Products and Development of Risk Mitigation Formulations
Prescription opioids drugs, such as morphine and oxycodone, have a long history
of use for the management of pain. Because they are highly effective, they are
one of the largest prescribed drug categories in the
· Oral Excessive Tablet Abuse (ETA). Generally recognized as the most prevalent
route of administration by abusers, the abuser simply orally ingests more tablets (or capsules) than is recommended for pain relief.
· Oral Manipulated Tablet Abuse (MTA). Extended-release tablets or patches are
sometimes crushed, chewed or otherwise physically or chemically manipulated to defeat the extended-release mechanism and provide an immediate-release of the opioid for oral ingestion.
· Nasal snorting. Crushed tablets are insufflated for absorption of the drug
through the nasal tissues.
· Injection. The opioid is physically or chemically removed from the dosage and
injected into the vein using a syringe.
· Poly-pharmacy. Opioids are sometimes used in conjunction with alcohol,
methamphetamine, or other drugs to accentuate the high.
· Overdose. Drug abusers may accidentally introduce excessive quantities of drugs
in their systems or combine drugs that may heighten the chance of adverse
effects of drugs. Some patients may over ingest drugs accidentally or with the
express intent of suicide. F-26
Safe use technology formulations incorporate physical and/or chemical barriers or functionality in the products to prevent or discourage a user from inappropriately administering the product. The extent and manner in which any of the features of these formulations may be described in the FDA approved label for our development products will be dependent on the results of and the acceptance by the FDA of our and our licensees' studies for each product.
Development of safe use products typically require one or more studies. These studies may include in vitro laboratory studies (which may include but not be limited to: syringeability of the formulation, extractability of the active ingredient, and particle size of the crushed product), animal studies (which may include but not be limited to: respiratory depression), and human clinical studies (which may include but not be limited to: human abuse liability, respiratory depression studies) comparing the benefits of our product candidates to currently marketed products.
Because our products use known active ingredients in approved dosage strengths, the safety and efficacy of the active ingredient(s) will need to be established by a series of pharmacokinetic studies demonstrating: (a) bioequivalence to an approved reference drug, (b) food effect of our formulations, (c) dose proportionality of our formulation, and (d) other external impacts to our unique formulations. A product candidate that does not achieve satisfactory pharmacokinetic results may require a phase III clinical efficacy study.
Further development will likely also entail additional safety and/or efficacy
assessment as may be identified by the FDA for each specific formulation during
the Investigational New Drug application, or IND, or NDA phase of development.
In accordance with the
Overdose Risk Mitigation - Products and Development
Any drug may initiate severe unwanted side effects when overdosed. For example, a known and FDA labelled side effect of the overdose of opioids is respiratory depression. High doses of opioids can affect the respiratory center of the brain resulting in a slowing and/or shallowing of the breathing which increases carbon dioxide (CO2) in the blood stream. Opioids also impact ancillary CO2 monitoring of the blood preventing the body from taking corrective action. The increased CO2 and resulting decrease in oxygen in the blood systematically shuts down body systems and may result in death.
Abusers as well as legitimate pain patients are at risk of overdose. In some cases, overdose is accidental but anecdotal reports indicate suicide rates among pain patient are increasing presumably due to their inability to access the pain medications they need to manage their condition.
In
LIMITx™ Technology
LIMITx Technology is intended to address the accidental or intentional
consumption of multiple tablets and provide a margin of safety against
respiratory depression. We believe these benefits for opioids are consistent
with
LIMITx Technology Products in Development
We have the following products in development utilizing our LIMITx Technology:
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LIMITx Technology Products StatusImmediate-release hydrocodone bitartrate Initial buffer dose ranging study with acetaminophen (LTX-03)
completed October 2017
Follow on dose ranging study
completed in January 2018
Manufacturing scale-up initiated.
Formulation and manufacturing process
optimized for commercial scale.
Ancillary manufacturing equipment
installed and initial commercial
scale manufacture in testing.Immediate-release oxycodone HCl (LTX-01) & Formulation development in process (LTX-02) Immediate-release non-opioid drug (LTX-09) Formulation development in process Immediate-release hydromorphone HCI Two Phase I exploratory (LTX-04)
pharmacokinetic studies completed.
IND no longer active.
Study 400
Study 400 was a two cohort, open label, crossover design pharmacokinetic study
of LTX-04 in healthy adult subjects. Study 400 measured the rate and extent of
absorption of the active drug ingredient into the bloodstream with the maximum
concentration, or Cmax, typically associated with an increase in drug abuse.
Cohort 1 enrolled 30 subjects who were randomized into three subgroups of 10
taking either 1, 2 or 3 tablets. Each subgroup subject orally swallowed the
planned number of tablets in a randomized manner taking single doses of two
different test formulations of LTX-04 (designated as LTX-04P and LTX-04S and
distinguished by their respective acid neutralizing capacity) and
Cohort 2 enrolled 30 subjects who were randomized into three subgroups of 10 taking either 4, 6 or 8 tablets. Each subgroup subject orally swallowed the planned number of tablets in a randomized manner taking single doses of LTX-04P and the marketed drug Dilaudid as a comparator. The 4, 6 and 8 tablets subgroups in Cohort 2 completed 8, 9 and 8 subjects, respectively.
All tablets contained 2mg of hydromorphone hydrochloride. All subjects received doses of naltrexone and there was a one week washout between doses. Blood samples were taken at pre-designated time-points after dosing and were subsequently analyzed for the concentration of hydromorphone contained in the sample. All subjects in Cohort 1 had continuous pH (a measure of acid concentration) monitoring of their gastric fluid. The objective of Cohort 1 was to determine if adequate active drug entered the blood stream when one or two LIMITx tablets were swallowed and to begin assessing the ability of the LIMITx Technology to start retarding the release of active ingredients when three tablets are ingested. The objective of Cohort 2 was to further explore the extent the release of the hydromorphone active ingredient from LTX-04P tablets is retarded as the dose level increases to abusive levels.
The topline results from Study 400 demonstrated that a single tablet dose delivered a Cmax of 45% and 50% lower than the reference drug for LTX-04S and LTX-04P, respectively. For an 8 tablet dose, the Cmax for LTX-04P was 59% lower than the reference drug. Doses between 1 and 8 tablets had similar reduction in Cmax compared to the reference. The extent of drug absorption, measure by area under the curve (AUC) was consistent between the LIMITx products and the reference.
On
F-28 Study 401
Study 401, completed in
All tablets contained 2 mg of hydromorphone hydrochloride. All subjects received dosages of naltrexone and/or naloxone and there was a one week washout between dosages. Blood samples were taken at pre-designated time-points after dosing and were subsequently analyzed for the concentration of hydromorphone contained in the sample. The objective of Cohort 1 was to determine if adequate active drug entered the bloodstream when one LIMITx tablet was swallowed. The objective of Cohort 2 was to explore the extent to which the release of the hydromorphone active ingredient from LTX-04 tablets is retarded at a seven tablet dose (oral excess abuse levels). A safety assessment of LIMITx hydromorphone would be made from both study cohorts.
The topline results from Study 401 demonstrated that Cmax for a one tablet LTX-04P3 dose was approximately 50% less than the active comparator. The Cmax for the 7 tablet LTX-04P3 dose was 65% below the comparator. Study 401 also included a 7 tablet dose of LTX-04P3 taken simultaneously with an agent known to increase gastric emptying time (i.e. increase retention time of the ingredients in the stomach) which demonstrated an increase in Tmax (time of Cmax) of over 1 hour compared to LTX-04P3 taken without this agent. Since the micro-particles used in Study 401 release drug much faster than the micro-particles used in Study 400, we have concluded that the buffer levels used in both studies were excessive and is retarding the release of drug even with a single dose. Also, given that manipulating the duration of stomach acidity with a gastric emptying agent produced a significant increase in Tmax which is indicative of a delayed release of drug from LTX-04P3, we concluded the LIMITx micro-particles are working as designed in that when we neutralize the stomach acid we are slowing the release of drug and subsequent absorption of drug into the blood stream.
We believe the results from Study 400 and 401 indicate the micro-particle are working as designed but that we used too much buffer for even a single tablet and did not achieve full release of the drug at a 1 tablet dose.
Study 301
Study 301 was an open-label, parallel design pharmacokinetic study testing our LIMITx formulation LTX-03 in 72 fasted healthy adult subjects randomized into 9 groups (8 subjects per group). One group swallowed a single Norco® 10/325mg tablet, the marketed comparator or reference drug. The remaining 8 groups swallowed a single LTX-03 tablet with increasing buffering amounts starting with no buffer, LTX-03 formulations A through H, respectively. All 72 subjects completed the study and the doses were generally well tolerated with no serious adverse events. One subject in the Formulation E group was not analyzed due to emesis. LTX-03 is a combination of hydrocodone bitartrate and acetaminophen.
In Study 301 bioequivalence (BE) was examined to generate information for future registration studies. Results demonstrated a trend toward BE for both active ingredients in LTX-03 formulations A through E. Formulation E had BE ratios (log transformed) for hydrocodone of 0.89 and 0.97 for Cmax and Area Under the Curve (AUC), respectively. In this small sample size study both hydrocodone BE confidence intervals were below the acceptable lower BE range of 0.80 at 0.74 and 0.79 for Cmax and AUC, respectively. For acetaminophen, Formulation E's BE Ratios were 1.15 and 1.03 for Cmax and AUC, respectively. While the acetaminophen AUC's met the BE standards, the Cmax upper confidence interval of 1.61 was above the acceptable upper BE range of 1.25. We believe that bioequivalence of this formulation may be achieved by reducing data variability that can be achieved through an adequately powered crossover study design with sufficient numbers of subjects in the study. For LTX-03 Formulations F though H, the higher buffer level tablets, Study 301 demonstrated a progressively increasing reduction in hydrocodone Cmax culminating in a 34% Cmax reduction associated with Formulation H, the highest level evaluated. The Cmax for acetaminophen did not decline in Formulations F through H in Study 301.
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We believe that Study 301 identified a formulation that optimizes the balance between providing therapeutic blood levels of drug for pain relief at a single tablet dose while retarding the bioavailability of drug when higher buffer levels are ingested.
Non-clinical Study APT-RDR-300
Study APT-RDR-300 was a non-clinical study of respiratory depression in which five groups of 11 Sprague-Dawley rats were orally administered doses of hydrocodone ranging from 100mg of drug per kg of body weight (mg/kg) up to 300 mg/kg and one group receiving placebo. 8 subjects in each group were measured for opioid induced respiratory depression (OIRD) assessing peripheral oxygen saturation (SpO2) of the blood over a 4 hour observation period. 36 subjects were analyzed as successfully completing the dosing. The additional 3 subjects in each group provided blood samples analyzed for hydrocodone at .5, 1, 2 and 4 hours post-dosing.
In Study APT-RDR-300 all doses above 100 mg/kg demonstrated with statistical significance (p<.05) SpO2 measured OIRD at all time points post-dosing. The 100 mg/kg dose was not statistically significant for OIRD at any time point post-dosing. The mortality rate was correlated with higher doses. In all animals exhibiting OIRD, OIRD was acutely evident within 30 minutes of dosing which was consistent with the Cmax of the hydrocodone dose. Increased Cmax was generally associated with an increased prevalence of acute OIRD (SpO2 ?70%). Approximately 50% of animals reaching this acute OIRD level resulted in death. Due to a high variability in the pharmacokinetics and pharmacodynamics observed in the study, no further associations were possible. Acura believes the results of this study generally support the development of opioid products with a reduction in Cmax in overdose situations.
We intend to advance LTX-03 to clinical development for a New Drug Application
(NDA). We submitted an Investigational New Drug Application, or IND with respect
to LTX-03, to the FDA in the first quarter of 2018, which became effective in
AD Pharma Agreement covering LTX-03
On
The Agreement grants AD Pharma exclusive commercialization rights in
F-30
AD Pharma may terminate the Agreement at any time. Additionally, if the NDA for
LTX-03 is not accepted by the FDA by
We also granted authority to
Aversion Technology
Aversion Technology incorporates gelling ingredients and irritants into tablets
to discourage abuse by snorting and provide barriers to abuse by injection. Our
Aversion Technology and related opioid products, like Oxaydo, are covered by
claims in six issued
Oxaydo Tablets
Oxaydo (oxycodone HCI tablets) is a Schedule II narcotic indicated for the
management of acute and chronic moderate to severe pain where the use of an
opioid analgesic is appropriate. On
The 2017 market for immediate-release oxycodone products was approximately 30
million dispensed prescriptions or 1.7 billion tablets. The current market is
predominately serviced by generic formulations that contain no abuse deterrent
features and sell for approximately
F-31
The safety and efficacy of Oxaydo 5mg and 7.5mg tablets was established by demonstrating bioequivalence to commercially available oxycodone immediate-release tablets in the fasted state. Oxaydo differs from oxycodone tablets when taken with a high fat meal though these differences are not considered clinically relevant, and Oxaydo can be taken without regard to food. The FDA-approved label for Oxaydo describes elements unique to our Aversion Technology, which differs from current commercially available oxycodone immediate-release tablets. The label for Oxaydo includes the results from a clinical study that evaluated the effects of nasally snorting crushed Oxaydo and commercially available oxycodone tablets, and limitations on exposing Oxaydo tablets to water and other solvents and administration through feeding tubes. The clinical study evaluated 40 non-dependent recreational opioid users, who self-administered the equivalent of 15mg of oxycodone. After accounting for a first sequence effect, the study demonstrated:
· 30% of subjects exposed to Oxaydo responded that they would not take the drug
again compared to 5% of subjects exposed to immediate-release oxycodone;
· subjects taking Oxaydo reported a higher incidence of nasopharyngeal and facial
adverse events compared to immediate-release oxycodone;
· a decreased ability to completely insufflate two crushed Oxaydo tablets within
a fixed time period (21 of 40 subjects), while all subjects were able to
completely insufflate the entire dose of immediate-release oxycodone; and
· small numeric differences in the median and mean drug liking scores, which were
lower in response to Oxaydo than immediate-release oxycodone.
Although we believe these abuse deterrent characteristics differentiate Oxaydo from immediate-release oxycodone products currently on the market, consistent with FDA guidance which requires epidemiology studies to support a claim of abuse deterrence, the clinical significance of the difference in drug liking and difference in response to taking the drug again in this study has not been established. There is no evidence that Oxaydo has a reduced abuse liability compared to immediate release oxycodone. We and Assertio have a post-approval commitment with the FDA to perform an epidemiology study to assess the actual impact on abuse of Oxaydo tablets.
Further, the Oxaydo product label guides patients not to crush and dissolve the tablets or pre-soak, lick or otherwise wet the tablets prior to administration. Similarly, caregivers are advised not to crush and dissolve the tablets or otherwise use Oxaydo for administration via nasogastric, gastric or other feeding tubes as it may cause an obstruction.
Assertio Agreement Covering Oxaydo
On
In accordance with the Assertio Agreement, we and Assertio formed a joint
steering committee to oversee commercialization strategies and the development
of product line extensions. Assertio pays a significant portion of the expenses
relating to (i) annual NDA PDUFA program fees, (ii) expenses of the FDA required
post-marketing study for Oxaydo and (iii) expenses of clinical studies for
product line extensions (additional strengths) of Oxaydo for
Assertio paid us an upfront payment of
F-32
The Assertio Agreement expires upon the expiration of Assertio's royalty payment
obligations in all countries. Either party may terminate the Assertio Agreement
in its entirety if the other party breaches a payment obligation, or otherwise
materially breaches the Assertio Agreement, subject to applicable cure periods,
or in the event the other party makes an assignment for the benefit of
creditors, files a petition in bankruptcy or otherwise seeks relief under
applicable bankruptcy laws. We also may terminate the Assertio Agreement with
respect to the
KemPharm Agreement Covering Opioid Prodrugs
On
Upon execution of the KemPharm Agreement, KemPharm paid us an upfront payment of
The KemPharm Agreement expires upon the expiration of KemPharm's royalty payment
obligations in all countries. Either party may terminate the KemPharm Agreement
in its entirety if the other party materially breaches the KemPharm Agreement,
subject to applicable cure periods. Acura or KemPharm may terminate the KemPharm
Agreement with respect to the
Aversion Technology Development Opioid Products
We have suspended further development of our Aversion hydrocodone/APAP product candidate, in order to focus our time and available resources on the development of our LIMITx Technology product candidates. We currently have 6 additional opioids at various stages of formulation development using the Aversion Technology which are not being actively developed.
Abuse of Pseudoephedrine Products
The chemical structure of pseudoephedrine, or PSE, is very similar to methamphetamine, facilitating a straight-forward chemical conversion to methamphetamine. OTC PSE products are sometimes purchased and used for this conversion. There are multiple known processes to convert PSE to methamphetamine, all of which are not complex and do not require specialized equipment; however, many do require readily available but uncommon ingredients. Two of the three most popular processes follow two general processing steps: (1) dissolving the PSE tablets in a solvent to isolate, by filtration, purified PSE and (2) a chemical reduction of the PSE into methamphetamine for drying into crystals. The third method, or the "one-pot" method, involves the direct chemical reduction of the PSE to methamphetamine in the presence of the tablet's inactive ingredients. All the solvents used are ultimately dried off or otherwise removed, so a wide range of solvents are amenable to the process.
F-33 Impede Technology Products
Our initial Impede 1.0 Technology being used in Nexafed Sinus Pressure + Pain contains a proprietary mixture of inactive ingredients, prevents the extraction of PSE from tablets using known extraction methods and disrupts the direct conversion of PSE from tablets into methamphetamine.
We have developed a next generation Impede 2.0 Technology with additional
inactive ingredients to improve the meth-resistance of our technology which is
currently used in Nexafed Tablets. One-pot, direct conversion meth testing
performed by our CRO on the following commercially available products resulted
in:
Meth Resistant
Product/Formulation Technology Meth Recovery1 Purity2
Sudafed® 30mg
Tablets None 67 % 62 %
Nexafed 30mg
Technology Impede® 1.0 38 % 65 %
Zephrex-D® 30mg
Pills Tarex® 28 % 51 %
Nexafed 120mg
Extended-release
tablets Impede® 2.0 17 % 34 %
1 Total methamphetamine HCl recovered from the equivalent of 100 PSE 30mg tablets divided by the maximum theoretical yield of 2.7 grams.
2 Total methamphetamine HCl recovered from the equivalent of 100 PSE 30mg tablets divided by the total weight of powder recovered.
We have previously demonstrated in a pilot clinical study the bioequivalence of a formulation of our Nexafed extended release tablets utilizing our Impede 2.0 Technology to Sudafed® 12-hour Tablets.
Nexafed Products and the MainPointe Agreement
Nexafed and Nexafed Sinus Pressure + Pain, consist of immediate release tablets. Nexafed is a 30mg pseudoephedrine tablet which until the third quarter of 2017 incorporated our patented Impede 1.0 Technology and commencing in such quarter incorporated our Impede 2.0 Technology. Nexafed Sinus Pressure + Pain is a 30/325mg pseudoephedrine and acetaminophen tablet which incorporates our Nexafed 1.0 Technology. PSE is a widely-used nasal decongestant available in many non-prescription and prescription cold, sinus and allergy products. While the 30mg PSE tablet is not the largest selling PSE product on the market, we believe it is the most often used product to make meth due to: (a) its relatively low selling price and (b) its simpler formulation provides better meth yields.
We have demonstrated that our Nexafed 30mg tablets are bioequivalent to Johnson & Johnson's Sudafed 30mg Tablets when a single 2 tablet dose is administered. Commencing in 2006, the CMEA, required all non-prescription PSE products to be held securely behind the pharmacy counter, has set monthly consumer purchase volume limits, and has necessitated consumer interaction with pharmacy personnel to purchase PSE-containing products.
On
F-34
On signing the MainPointe Agreement, MainPointe paid us an upfront licensing fee
of
MainPointe has the option to expand the licensed territory beyond
The MainPointe Agreement may be terminated by either party for a material breach of the other party, or by Acura if MainPointe challenges certain of its patents. Upon early termination of the MainPointe Agreement, MainPointe's licenses to the Impede Technology and all products will terminate. Upon termination, at Acura's request the parties will use commercially reasonable efforts to transition the Nexafed® and Nexafed® Sinus Pressure + Pain products back to Acura.
On
Other Impede Technology Products
Given the fragmented nature of the PSE market with products containing multiple active ingredients, we have developed additional products for our Nexafed franchise:
Impede Technology Products Status
Pilot pharmacokinetic testingExtended-release formulation utilizing demonstrated bioequivalence to Impede 2.0 Technology
Sudafed® 12-hour Tablets. Pre-IND
meeting held with the FDA
No imminent development planned
Extended-release combination products No imminent development planned Loratadine with pseudoephedrine
No imminent development planned
In
F-35
In
U.S. Market Opportunity for Impede PSE Products
PSE is a widely-used nasal decongestant available in many non-prescription and
prescription cold, sinus and allergy products. PSE is sold in products as the
only active ingredient in both immediate and extended-release products. In
addition, PSE is combined with other cold, sinus and allergy ingredients such as
pain relievers, cough suppressants and antihistamines. PSE also competes against
phenylephrine, an alternate nasal decongestant available in non-prescription
products. In 2014, a data service reported approximately
Active 2014 Retail Sales
Reference Brand1 Brand Company Ingredient(s) ($ Millions)
Claritin-D Bayer PSE & Loraditine2 $ 208.0
Allegra-D Chattem PSE & Fexofenadine2 $ 101.3
Zyrtec-D Pfizer PSE & Ceterizine2 $ 101.7
Advil Sinus Pfizer PSE & Ibuprofen $ 58.4
Sudafed 12 Hour J&J PSE2 $ 82.3
Sudafed 30mg J&J PSE $ 70.4
1 Branded product only. Does not include store brand sales.
2 Extended release PSE formulations
The 2014 market for 30mg PSE tablets, including store brands was approximately
470 million tablets or 19 million boxes of 24 tablets. MainPointe controls the
price of Nexafed and Nexafed Sinus under the terms of the MainPointe Agreement.
The market for cold, sinus and allergy products is highly competitive and many
products have strong consumer brand recognition and, in some cases, prescription
drug heritage. Category leading brands are often supported by national mass
marketing and promotional efforts. Consumers often have a choice to purchase a
less expensive store brand. Store brands contain the same active ingredients as
the more popular national brands but are not supported by large marketing
campaigns and are offered at a lower price. Non-prescription products are
typically distributed through retail outlets including drug store chains, food
store chains, independent pharmacies and mass merchandisers. The distribution
outlets for PSE products are highly consolidated. According to Chain Drug
Review, the top 50 drug, food and mass merchandising chains operate
approximately 40,000 pharmacies in the
Product Labeling for Impede Technology Products
Nexafed and Nexafed Sinus Pressure + Pain products are marketed pursuant to the
We expect that any of our other Impede Technology products that are marketed pursuant to an NDA or ANDA will be subject to a label approved by the FDA. We expect that such a label will require submission of our scientifically derived abuse liability data and we intend to seek descriptions of our abuse liability studies in the FDA approved product label, although there can be no assurance that this will be the case.
U.S. Market Opportunity for Opioid Analgesic Products
The misuse and abuse of opioid analgesics continues to constitute a dynamic and
challenging threat to
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It is estimated that more than 75 million people in
We expect our Aversion and LIMITx Technology opioid products, to compete
primarily in the IR opioid product segment of
IR Opioid %
Products(1) 2016 US Prescriptions (Millions)(2) of Total
Hydrocodone 90 43 %
Oxycodone 55 26 %
Tramadol 43 21 %
Codeine 15 7 %
4 Others 5 3 %
Total 208 100 %
1 Includes all salts and esters of the opioid and opioids in combination with other active ingredients such as acetaminophen.
2
Despite considerable publicity regarding the abuse of OxyContin®
extended-release tablets and other ER opioid products,
Product Labeling for Products Using Our Technologies
We or our licensee may seek to include descriptions of studies that characterize
the safety features of our technologies in the label for our products in
development. Assertio has committed to undertake FDA required epidemiological
studies to assess the actual consequences of abuse of Oxaydo in the market for
which we share a minority portion of appropriate fees and expenses. The extent
to which a description of the results of epidemiological or other studies will
be added to or included in the FDA approved product label for our products in
development will be the subject of our discussions with the FDA as part of the
NDA review process. Further, because the FDA closely regulates promotional
materials, even if FDA initially approves labeling that includes a description
of the properties of the product, the
In
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Patents and Patent Applications
We have the following issued patents covering, among other things, our LIMITx Technology: Patent No. (Jurisdiction) Subject matter Issued Expires
9,101,636 (US) Abuse deterrent products wherein the Aug. 2015 Nov. 2033
release of active ingredient is retarded
when 3 or more doses are consumed
9,320,796 (US) Abuse deterrent products wherein the Apr. 2016 Nov. 2033
release of active ingredient is retarded
when 3 or more doses are consumed
9,662,393 (US) Abuse deterrent products wherein the May 2017 Nov. 2033
release of active ingredient is retarded
when 3 or more doses are consumed
10,441,657 (US) Abuse deterrent products wherein the Sept. 2019 Nov. 2033
release of active ingredient is retarded
when 3 or more doses are consumed
2,892,908 (CAN) Abuse deterrent products wherein the Apr. 2016 Nov. 2033
release of active ingredient is retarded
when excessive doses are consumed
5,922,851 (JAPAN) Abuse deterrent products wherein the Apr. 2016 Nov. 2033
release of active ingredient is retarded
when excessive doses are consumed
ZL201380062421.0 (CHN) Abuse deterrent products wherein the Jul. 2018 Nov. 2033
release of active ingredient is retarded
when excessive doses are consumed
2,925,304 (EUR) Abuse deterrent products wherein the Sept. 2018 Nov. 2033
release of active ingredient is retarded
when excessive doses are consumed
2015124694 (RUS) Abuse deterrent products wherein the Nov. 2018 Nov. 2033
release of active ingredient is retarded
when excessive doses are consumed
2013352162 (AUS) Abuse deterrent products wherein the Dec. 2018 Nov. 2033
release of active ingredient is retarded
when excessive doses are consumed
366159 (MEX) Abuse deterrent products wherein the Jul. 2019 Nov. 2033
release of active ingredient is retarded
when excessive doses are consumed
238713 (ISR) Abuse deterrent products wherein the Jul. 2019 Nov. 2033
release of active ingredient is retarded
when excessive doses are consumed
We have the following issued patents covering, among other things, Oxaydo and
our Aversion Technology:
Patent No. (Jurisdiction) Subject Matter Issued Expires
7,201,920 (US) Pharmaceutical compositions including a Apr. 2007 Mar. 2025
mixture of functional inactive ingredients
and specific opioid analgesics
7,510,726 (US) A wider range of compositions than those Mar. 2009 Nov. 2023
described in the 7,201,920 Patent
7,981,439 (US) Pharmaceutical compositions including any Jul. 2011 Aug. 2024
water soluble drug susceptible to abuse
8,409,616 (US) Pharmaceutical compositions of Apr. 2013 Nov. 2023
immediate-release abuse deterrent dosage
forms
8,637,540 (US) Pharmaceutical compositions of Jan. 2014 Nov. 2023
immediate-release abuse deterrent opioid
products
9,492,443 (US) Pharmaceutical compositions of Nov. 2016 Nov. 2023
immediate-release abuse deterrent opioid
products
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We have the following additional issued patents relating to our Aversion
Technology:
Patent No. (Jurisdiction) Subject Matter Issued Expires
8,822,489 (US) Pharmaceutical compositions of certain Jul. 2014 Nov. 2023
abuse deterrent products that contain
polymers, surfactant and polysorb 80
2,004,294,953 (AUS) Abuse deterrent pharmaceuticals Apr. 2010 Nov. 2024
2,010,200,979 (AUS) Abuse deterrent pharmaceuticals Aug. 2010 Nov. 2024
2,547,334 (CAN) Abuse deterrent pharmaceuticals Aug. 2010 Nov. 2024
2,647,360 (CAN) Abuse deterrent pharmaceuticals May 2012 Apr. 2027
175,863 (ISR) Abuse deterrent pharmaceuticals Nov. 2004 Nov. 2024
221,018 (ISR) Abuse deterrent pharmaceuticals Nov. 2004 Nov. 2024
1694260 (EUR) Abuse deterrent pharmaceuticals Nov. 2004 Nov. 2024
We have the following issued patents covering, among other things, our Nexafed product line and Impede 1.0 and 2.0 technologies:
Patent No. (Jurisdiction) Subject Matter Issued Expires
8,901,113 (US) Pharmaceutical compositions suitable for Dec. 2014 Feb. 2032
reducing the chemical conversion of
precursor compounds
9,757,466 (US) Pharmaceutical compositions suitable for Sept. 2017 Feb. 2032
reducing the chemical conversion of
precursor compounds
10,004,699 (US) Methods and compositions for interfering Jun. 2018 Dec. 2035
with extraction or conversion of a drug
susceptible to abuse
10,155,044 (US) Pharmaceutical compositions suitable for Dec. 2018 Feb. 2032
reducing the chemical conversion of
precursor compounds
2010300641 (AUS) Pharmaceutical compositions suitable for Jun. 2016 Sept. 2030
reducing the chemical conversion of
precursor compounds
2,775,890 (CAN) Pharmaceutical compositions suitable for Jun. 2016 Sept. 2030
reducing the chemical conversion of
precursor compounds
2,488,029 (EUR) Pharmaceutical compositions suitable for Mar. 2016 Sept. 2030
reducing the chemical conversion of
precursor compounds
218533 (ISR) Pharmaceutical compositions suitable for Jan. 2016 Sept. 2030
reducing the chemical conversion of
precursor compounds
2015274936 (AUS) Methods and compositions for interfering Sept. 2018 Jun. 2035
with extraction or conversion of a drug
susceptible to abuse
13102020.5 (HK) Pharmaceutical compositions suitable for Oct. 2016 Sept. 2030
reducing the chemical conversion of
precursor compounds
In addition to our issued patents listed above and additional unlisted issued
patents, we have filed multiple
Between October, 2013 and May, 2014 we settled on an individual basis, patent
infringement suits we brought against generic manufacturers
On
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Reference is made to the Risk Factors contained in our Annual Report on
Form 10-K for the year ended
Company's Present Financial Condition
As of
Additionally, the License, Development and Commercialization Agreement dated
Also included in the AD Pharma Agreement is the requirement that the NDA for
LTX-03 be accepted by the FDA by
In view of the matters described above, management has concluded that substantial doubt exists with respect to the Company's ability to continue as a going concern within one year after the date the financial statements are issued and our independent registered public accounting firm have included in their report relating to our 2019 financial statements a "going concern" explanatory paragraph as to substantial doubt of our ability to continue as a going concern.
In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the Company's accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements on a continuous basis, to maintain existing financing and to succeed in its future operations. The Company's financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
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Our future sources of revenue, if any, will be derived from licensing fees, milestone payments and royalties under the AD Pharma Agreement, the Assertio Agreement, the KemPharm Agreement, the MainPointe Agreement and similar agreements which we may enter into for our LIMITx products in development with other pharmaceutical company partners, for which there can be no assurance.
The amount and timing of our future cash requirements will depend on regulatory and market acceptance of our product candidates and the resources we devote to the development and commercialization of our product candidates.
Six months Ended
June 30
2020 2019 Increase (decrease)
Revenues: $000 's Percent
Royalties $ 67 $ 113 $ (46 ) (41 )%
Collaboration 52 - 52 -
License fees 2,100 - 2,100 -
Product sales, net 223 - 223 -
Total revenues 2,442 113 2,329 2,061
Expenses:
Research and development 832 575 257 45
General and administrative 1,672 843 829 98
Total operating expenses 2,504 1,418 1,086 77
Operating loss (62 ) (1,305 ) (1,243 ) (95 )
Loss on debt extinguishment - (2,600 ) (2,600 ) (100 )
Interest expense - related party (225 ) (224 ) 1 -
Loss before income taxes (287 ) (4,129 ) (3,842 ) (93 )
Provision for income taxes - - - -
Net loss $ (287 ) $ (4,129 ) $ (3,842 ) (93 )%
License Fees
Under our license and development agreement with
Collaboration Revenue
Collaboration revenue is derived from research and development services we
perform under the license and development agreement with AD Pharma for LTX-03.
We recognized
Royalty Revenue
In connection with our license agreement with Assertio for Oxaydo Tablets, we
earn a royalty based on product net sales. We recognized
In connection with our license agreement with MainPointe for our Nexafed product
line, we earn a royalty based on product net sales. We recognized
Product Sales, net
Nexafed was launched in
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Operating Expenses
Research and Development
Research and development expense is primarily associated with our Limitx
Technology LTX-03 development activity under the AD Pharma agreement. Included
in
General and Administrative
Our general and administrative expenses primarily consisted of legal, audit and
other professional services, corporate insurance, and payroll. Included in the
2020 and 2019 six month expenses are share-based compensation expenses of
approximately
Non-Operating Expense Interest Expense
During the six months ended
Income Taxes
Our results for the six months ended
Three months Ended
June 30
2020 2019 Increase (decrease)
Revenues: $000 's Percent
Royalties $ 34 $ 46 $ (12 ) (26 )%
Collaboration 44 - 44 -
License fees 1,050 - 1,050 -
Product sales, net 223 - 223 -
Total revenues 1,351 46 1,305 2,837
Expenses:
Research and development 445 262 183 70
General and administrative 485 406 79 20
Total operating expenses 930 668 262 39
Operating income (loss) 421 (622 ) (1,043 ) (168 )
Loss on debt extinguishment - (2,600 ) (2,600 ) (100 )
Interest expense - related party (113 ) (119 ) (6 ) (5 )
Income (loss) before income taxes 308 (3,341 ) (3,649 ) (109 )
Provision for income taxes - - - -
Net income (loss) $ 308 $ (3,341 ) $ (3,649 ) (109 )%
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License Fees
Under our license and development agreement with
Collaboration Revenue
Collaboration revenue is derived from research and development services we
perform under the license and development agreement with AD Pharma for LTX-03.
We recognized
Royalty Revenue
In connection with our license agreement with Assertio for Oxaydo Tablets, we
earn a royalty based on product net sales. We recognized
In connection with our license agreement with MainPointe for our Nexafed product
line, we earn a royalty based on product net sales. We recognized
Product Sales, net
Nexafed was launched in
Operating Expenses Research and Development
Research and development expense is primarily associated with our Limitx
Technology LTX-03 development activity under the AD Pharma agreement. Included
in
General and Administrative
Our general and administrative expenses primarily consisted of legal, audit and
other professional services, corporate insurance, and payroll. Included in the
2020 and 2019 quarterly results are share-based compensation expenses of
approximately
Non-Operating Expense Interest Expense
During the three months ended
Income Taxes
Our results for the three months ended
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Liquidity and Capital Resources
At
However, the Agreement allows AD Pharma to terminate the Agreement for "convenience on 30 days prior written notice". Should AD Pharma exercise their right to terminate the Agreement, we would need to raise additional financing or enter into license or collaboration agreements with third parties relating to our technologies. No assurance can be given that we will be successful in obtaining any such financing or in securing license or collaboration agreements with third parties on acceptable terms, if at all, or if secured, that such financing or license or collaboration agreements will provide payments to the Company sufficient to fund continued operations. In the absence of such financing or third-party license or collaboration agreements, the Company will be required to scale back or terminate operations and/or seek protection under applicable bankruptcy laws. An extended delay or cessation of the Company's continuing product development efforts will have a material adverse effect on the Company's financial condition and results of operations. In light of AD Pharma's right to terminate the Agreement for "convenience on 30 days prior written notice", our independent auditors have included in their report relating to our 2018 financial statements a "going concern" explanatory paragraph as to substantial doubt of our ability to continue as a going concern.
Also, the required monthly license payments by AD Pharma cease at
Also included in the AD Pharma Agreement is the requirement that the NDA for
LTX-03 be accepted by the FDA by
In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the Company's accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements on a continuous basis, to maintain existing financing and to succeed in its future operations. The Company's financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
Our future sources of revenue, if any, will be derived from licensing fees, milestone payments and royalties under the AD Pharma Agreement, the Assertio Agreement, the KemPharm Agreement, the MainPointe Agreement and similar agreements which we may enter into for our Limitx products in development with other pharmaceutical company partners, for which there can be no assurance.
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The amount and timing of our future cash requirements will depend on regulatory and market acceptance of our product candidates and the resources we devote to the development and commercialization of our product candidates.
Critical Accounting Policies
Note 1 of the Notes to Consolidated Financial Statements, in the Company's 2019 Annual Report on Form 10-K, includes a summary of the Company's significant accounting policies and methods used in the preparation of the financial statements. The application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. The Company's critical accounting policies described in the 2019 Annual Report are also applicable to 2020.
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