Claritas Announces Letter of Intent to Acquire Exclusive Worldwide Rights to Develop R-107 for PAH
SAN FRANCISCO and TORONTO, April 14, 2021 (GLOBE NEWSWIRE) -- Claritas Pharmaceuticals, Inc. (TSX VENTURE: CLAS and OTC: KALTF) (the “Company” or “Claritas”) today announced that it has entered into a binding Letter of Intent (the “LOI”) with Salzman Group, Inc. (a Delaware corporation), Salzman Group, Ltd. (an Israeli corporation), and Salzman Group Pty. Ltd. (an Australian corporation), (collectively, the “Salzman Group”), under which Salzman Group will grant to Claritas an exclusive, worldwide license to develop and commercialize R-107 for the treatment of pulmonary arterial hypertension (“PAH”). The Company expects that definitive agreements will be executed by May 15, 2021. Closing of the transaction is subject to receipt of all regulatory approvals, including approval of the TSX Venture Exchange.
- Claritas is developing R-107 for the treatment of viral infections, and will now also develop R-107 for the treatment of PAH.
- PAH isa lethal condition, resulting from high blood pressure in the lungs.
- The worldwide market for treatment of PAH exceeds $6 billion per year and is projected to grow to $9.8 billion by 2027.
- R-107 is the first and only agent to demonstrate a durable reversal of established disease in a validated animal model of PAH.
- Claritas’ development strategy for R-107 in PAH is designed to expedite the potential monetization of this asset.
R-107 is a Nitric Oxide-Releasing Compound
R-107 is a liquid, nitric oxide-releasing compound with issued and pending composition of matter and method of use patents in approximately 40 countries, including the U.S., Australia, Brazil, China, Europe, India, Japan, Russia and South Korea.
Claritas initially licensed R-107 from Salzman Group for the treatment of COVID-19 and other viral infections. Claritas and Salzman Group will now enter into a separate License Agreement under which Salzman Group will grant to Claritas exclusive, worldwide rights to develop R-107 for the treatment of PAH.
Claritas Will Develop R-107 as a Nitric Oxide Therapy for Treatment of Both Viral Infections and PAH
“R-107 is a platform technology that transforms nitric oxide therapy from an impractical, expensive, and difficult to administer inhalation therapy, into a practical treatment that can simply be administered by capsule, injection, or nasal spray,” stated Robert Farrell, Claritas’ President and CEO. “It has been demonstrated that nitric oxide is a potent antiviral therapy, and for this reason, we are already developing R-107 as a nitric oxide therapy for treatment and prevention of coronavirus, vaccine-resistant COVID-19 infection, influenza, and the common cold. It has also been demonstrated that nitric oxide is clinically effective in the treatment of PAH.1 For this reason, we are now acquiring exclusive, worldwide rights to develop R-107 as a nitric oxide therapy for PAH.”
Mr. Farrell went on to say, “R-107 was evaluated in the same animal model of PAH in which the currently approved drugs for PAH were also tested. The results of this study were exceptional. R-107 was observed to be superior to all of the approved drugs in reducing pulmonary arterial blood pressure. R-107 was also seen to durably reverse disease severity after a short course of therapy. R-107 is the first and only drug to demonstrate the ability to reverse established disease. Based on these exceptionally positive and unique findings, we believe that R-107 could become a best-in-class, front-line therapy for PAH. If we can demonstrate similar data with R-107 in a Phase 2 clinical study in humans, we believe that R-107 will be viewed as a potentially valuable pharmaceutical asset that we might seek to out-license or sell. We will initiate and complete our Phase 1 clinical study this year, and we expect to complete a Phase 2 study of R-107 in the treatment of PAH in 2022.”
“With the addition of R-107 for treatment of PAH, Claritas will now have a two programs addressing large commercial markets. We are currently developing R-107 for treatment of viral infections, including vaccine-resistant COVID-19 infection, and now we will also have a potential breakthrough product that could provide unrivalled results in treatment of PAH.”
R-107 is Designed to Unlock the Potential of Nitric Oxide Therapy
Claritas is focusing on the therapeutic potential of nitric oxide because it is known to be safe and effective in the treatment of many diseases and disorders.
In 1992, Science magazine named nitric oxide molecule of the year; more than 130,000 peer reviewed articles have been published on nitric oxide; and nitric oxide was the subject of a 1998 Nobel Prize in medicine.
Claritas’ approach is to supplement the body’s natural nitric oxide with supplemental nitric oxide that will be delivered by the Company’s liquid, nitric oxide-releasing drug, R-107.
R-107 has several advantages over inhalable nitric oxide gas:
- Inhalable nitric oxide gas that is administered by inhalation therapy is quickly metabolized in the body, with a half-life of only 2-6 seconds. In contrast, R-107 delivers constant, sustained, therapeutic levels of nitric oxide throughout the body over a 24-hour period.
- Inhalable nitric oxide can only reach areas of the lungs with excellent ventilation. In patients with PAH, there are sections of the lungs that are poorly ventilated, which inhaled nitric oxide cannot reach. By contrast, R-107 delivers nitric oxide systemically, throughout the body and throughout the lungs, including areas of the lungs that are poorly ventilated.
- Inhalable nitric oxide gas is expensive and difficult to administer, requiring the use of specialized gas delivery systems that must be managed by trained respiratory therapists. In contrast, R-107 can simply and inexpensively be administered by injection or orally by capsule.
Pulmonary Arterial Hypertension (“PAH”)
PAH is a critical unmet medical need, presenting both as an acute condition in critically ill hospitalized patients and as a chronic disease managed on an out-patient basis. PAH is characterized by profound elevations in blood pressure that selectively present in the arteries of the lungs, without effect on systemic blood vessels so that peripheral blood pressure is normal. It is a serious condition that makes it difficult for blood to flow through the lungs, which, in turn, forces the right side of the heart to work harder than normal. In its acute manifestation, life-threatening PAH may appear abruptly, such as after an acute pulmonary embolus or in the perioperative setting following cardiac valve replacement. In the chronic setting, PAH is a progressive disease that limits physical activity and ultimately results in right heart failure and death, typically taking place within five years after the initial presentation of symptoms. There is currently no cure for PAH, although there are several approved drugs that can transiently ease the symptoms of the disease and slow its inexorable progression. No marketed agents nor drugs in development however have been shown to durably reverse disease severity. Moreover, all of the currently approved drugs exhibit significant side-effects that limit their acceptability and negatively impact quality of life. Despite the major shortcomings of existing pharmaceutical agents, the current market for such drugs exceeds $6 billion per year, and the market is projected to grow to $9.8 billion per year by 2027.2
R-107 is a Potentially Revolutionary New Treatment for PAH
R-107 was tested in a classic and well-validated animal model of PAH, induced by administration of monocrotaline (“MCT”) to rats. The data from this study were exceptionally positive. In an acute setting, a single dose of R-107 was able to reverse severe pulmonary arterial hypertension back to a normal level of blood pressure for more than 24 hours, constituting a profound correction that is unprecedented in the scientific literature. In a chronic setting, daily administration of R-107 was able to entirely prevent the increase in pulmonary arterial blood pressure that triples in untreated animals exposed to MCT. Most importantly, a 2-week course of daily R-107 initiated 28 days after the onset of MCT-induced PAH surprisingly showed a 50% reduction in pulmonary blood pressure that persisted after the cessation of the course of R-107 therapy. This durable amelioration of PAH, which constituted a true reversal of disease severity, has not been heretofore witnessed in this gold-standard PAH model system and represents therefore a potential paradigm shift in the management of PAH. Up to now, the objective of clinical PAH therapies is to slow progression of a terminal disease. These new data, evidencing a reversal of disease severity, are qualitatively different and will allow the company to focus on a fundamental correction of underlying disease. By comparison, in this same animal model, the currently approved drugs for PAH have been shown to slow the progression of the disease, but not the ability to completely block its progression nor to durably reverse disease severity. R-107 is in fact the first and only agent known to demonstrate a durable reversal of disease severity in the MCT-induced rodent model of PAH.
Claritas’ Development Plan for R-107 in PAH is Designed to Expedite the Monetization of this Asset by Year-End 2022.
Claritas expects to complete a Phase 1 clinical study of R-107 in 2021, and to complete a pilot Phase 2 clinical study of R-107 in hospitalized patients in 2022.
R-107 in the injectable formulation will be initially evaluated in a Phase 1a single ascending dose escalation study in healthy volunteers at CMAX in Adelaide, Australia this year. Thereafter, a Phase 2a study will evaluate 12 patients with chronic PAH undergoing route cardiac catheterization.
The Phase 2a clinical study of R-107 will be conducted at Royal Adelaide Hospital in Adelaide, Australia in order to establish proof-of-concept that the reduction in blood pressure is restricted to the pulmonary circulation, without a concomitant impact on peripheral hemodynamics. Due to the short period of observation of each study participant (24 hours) and the relatively small number of patients under examination, the Company believes that the Phase 2a clinical trial may be readily conducted at a single site and completed within several months.
Demonstration of proof-of-concept could provide the scientific foundation for an immediate sale or strategic out-licensing of R-107 on highly favorable terms. If Claritas is able to demonstrate a selective reduction in blood pressure of a magnitude similar to what was demonstrated in the MCT-induced rodent model of the disease, the Company believes that R-107 will be viewed as a significantly valuable pharmaceutical asset, given that achievement of the Phase 2a clinical trial endpoints should constitute a major inflection point in the value of the technology.
Speaking at a press conference today in San Francisco, Claritas’ CEO Mr. Robert Farrell commented that, “We are thrilled to acquire the rights to R-107 for treatment of PAH. This liquid nitric oxide donor has demonstrated extraordinary efficacy in a gold-standard animal model and thus is viewed by our team as a potential medical breakthrough opportunity in the field, targeting an orphan drug indication that is already established as a very significant global commercial opportunity. The Company will move forward aggressively to implement its development plan, advancing R-107 into a Phase 1 clinical safety trial in 2021 followed by a definitive proof-of-concept Phase 2a study to be completed next year.”
Terms of the LOI
The LOI which Claritas has entered into with the Salzman Group provides that which Salzman Group will grant to Claritas an exclusive, worldwide license to develop and commercialize R-107 for the treatment of PAH (the “PAH License”).
Under the terms of the LOI, Claritas has agreed to provide the following compensation to Salzman Group in consideration for the PAH License:
- Upon execution of the definitive PAH License Agreement, Claritas will issue 26 million shares of Claritas’ common stock to Salzman Group, Inc. Provided, however, that Claritas will not issue any common shares to Salzman Group, Inc. unless Salzman Group, Inc. and all affiliates certify that the issuance of such common shares will not cause Salzman Group, Inc. and its affiliates to beneficially own in excess of 19.99% of the Company’s outstanding shares of common stock;
- Claritas will pay cash license fees of USD $12,300 to Salzman Group Pty. Ltd. and USD $287,70 to Salzman Group Ltd. within 90 days of the execution of the definitive PAH License Agreement;
- Claritas will also pay the following cash milestone payments and royalties on net sales to Salzman Group, Inc. Pulmonary Hypertension Milestones & Royalties:
- USD $2 million on completion of Phase 3 registration study in the PAH indication
- USD $2 million on submission of NDA to FDA in PAH indication
- USD $5 million on FDA approval for the PAH indication
- USD $5 million on EMEA approval for the PAH indication
- USD $5 million on Japanese approval for the PAH indication
- During the applicable term of any patent covering R-107 in the treatment of PAH, Claritas will pay to Salzman Group, Inc. a royalty of eight percent (8%) of the net sales for all R-107 products for the treatment of PAH
About Claritas Pharmaceuticals
Claritas Pharmaceuticals, Inc. is a clinical stage biopharmaceutical company focused on developing and commercializing therapies for patients with significant unmet medical needs. Claritas leverages its expertise to find solutions that will improve health outcomes and dramatically improve people’s lives.
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This press release may contain certain forward-looking information and statements (“forward-looking information”) within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation in respect of its product candidate pipeline, planned clinical trials, regulatory approval prospects, intellectual property objectives, and other statements containing the words “believes”, “anticipates”, “plans”, “intends”, “will”, “should”, “expects”, “continue”, “estimate”, “forecasts” and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that future clinical studies may not proceed as expected or may produce unfavorable results. Claritasundertakes no obligation to comment on analyses, expectations or statements made by third parties, its securities, or financial or operating results (as applicable). Although Claritas believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond Claritas’ control. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is made as of the date hereof. Claritas disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
1 Nitric Oxide and Pulmonary Arterial Hypertension, Glob Cardiol Sci Pract. 2017 Jun 30; 2017(2): 14.: Adrian H. Chester, Magdi H. Yacoub, and Salvador Moncada
2 Pulmonary Arterial Hypertension Market Size Worth $9.8 Billion By 2027, Grand View Research, February 2020