Interview with DexTech Medical's CEO Anders R Holmberg
CYTO Consulting would like to share the latest developments of one of our clients: DexTech Medical. This interview was conducted by Mr. Patrik Olofsson, AG Equity Research AB, Riddargatan 35, 114 57 Stockholm Sweden
"It is important to remember that for the patient group concerned (mCRPC) there is no cure today and existing treatment aims to prolong survival with the best possible quality of life. One of the benefits of OsteoDex treatment is mild side effects."
For those who have not previously heard of DexTech Medical, can you tell us a little more about your business, what you do and what market you address?
DexTech Medical is a Swedish research company formed in 2004 by me, Anders R Holmberg, Med. Dr. and Chemical Engineer, and my colleague Sten Nilsson, physician and professor of oncology. We both have many years of experience as researchers, first at Uppsala University and during the last 20 years at the Karolinska Institute. DexTech as a company specializes in urological oncology, mainly prostate cancer, where we develop new drug candidates.
Regarding OsteoDex, which is one of your drug candidates, can you briefly summarize how the Phase 2b study progressed until today and which follow-up results you think would be most desirable to report during the month of May?
The study, which includes patients with advanced prostate cancer, so-called castration resistant prostate cancer with bone metastases (mCRPC), has been reported. The study report shows that OsteoDex has a strong inhibitory effect on the vicious cycle that drives the progression of the disease and thus also leads to shortened survival. More than 50% of the patients showed clearly reduced levels of markers related to bone metabolism and particularly marked reductions were noted in 67% of patients for the CTX marker that reflects osteoclast bone resorption. OsteoDex shows high tolerability with only few and mild side effects and no patient had to discontinue treatment due to side effects. Follow up ("FU") results so far show that patients who responded to treatment have significantly longer survival rates. Final results for FU will be presented in May.
In addition to OsteoDex, can you tell us a little more about your other drug candidates SomaDex, CatDex & GuaDex?
SomaDex is a drug candidate based on a natural hormone, somatostatin-14. Somatostatin acts, among other effects, as a natural "shut-off hormone" i.e. can turn off the secretion of the cells. Synthetic somatostatin is used clinically for the detection and treatment of hormone-secreting tumors. Natural somatostatin (sms14) is unstable with short half-life and therefore has limited clinical use. With our technology platform, we have been able to stabilize sms14 (SomaDex) yielding a half-life of 37 hours ( sms-14 T1/2 is 3 minutes). This with retained biological properties. The design of SomaDex was a major chemical challenge, i.e. being able to synthesize without destroying the receptor-binding properties of the hormone (sms14 gets its effect by binding to 5 different receptors).
CatDex & GuaDex is the most valuable asset we have in DexTech Medical. CatDex is based on previous research results that we obtained at Uppsala University (University Hospital) showing that a positively charged polymer could be enriched in the tumors through electrostatic interaction ("plus to minus"). From these results, GuaDex was developed, which in addition has tumor-killing properties. GuaDex is today the company's technology platform. We use the platform to design new drug candidates where OsteoDex is the prime example. The GuaDex platform is largely unexploited.
If you were to highlight something that is of particular interest for an investor monitoring DexTech Medical in 2020, what would it be?
In 2020, of course, the FU results are significant news and final data will be presented in May. It is important to remember that for the patient group concerned (mCRPC) there is no cure today and existing treatment aims to prolong survival with the best possible quality of life. One of the benefits of OsteoDex treatment are the mild side effects.
The company will announce progress on partnership discussions once definitive breakthroughs have been achieved. This work is both extensive and time-consuming, with each stakeholder having its questions that we answer as accurately as possible. Of course, we cannot communicate any details about ongoing dialogues, but intend to provide important steps in the process during the year.
News regarding our R&D may be announced. This work is ongoing and we are constantly looking at new potential opportunities.
Can you name three reasons why DexTech Medical is a good investment today?
Although I am of course biased, I will give a few objective factual arguments;
Through our partnership work, which is mainly conducted in the US, we have gained a good insight into small and medium-sized listed pharmaceutical companies that are operationally similar to DexTech Medical, but with varying research portfolios. Based on that insight, I dare say that if DexTech had been listed on the US stock exchange, given normal market conditions, we would have a market cap five to ten times higher than what we have today in Sweden. I say that shows the real potential of the stock.
Another important point of reference is that the mode of action that we use ("the electric force") is shared only with one (1) other company in the world. That company is Novocure, founded by the eminent Israeli professor Yoram Palti in 2001. Their approach differs from ours in that they use a device that generates electric fields locally/regionally over the tumor. The treatment thus becomes only a local treatment, unlike our treatment which is systemic where the drug is administered via the bloodstream. Both treatments disrupt the electrically charged structures of the tumor cell, which are vital to its survival. Novocure is currently an international company with over 600 employees with a market capitalization of USD >7 billion. The example of Novocure gives an indication of the value potential of DexTech's portfolio, which is mostly unexploited.
I would also like to highlight that DexTech Medical has great stamina. We have very low burn rates compared to other research companies. It is always a strength and especially in times like these. DexTech does not have to make any cuts and is largely (increasingly slower) unaffected by current conditions. Fortunately, we are finished with our clinical research, which could otherwise be hit hard.