Bionovo, Inc. (BNVI-NASDAQ)

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May 29, 2009 Issue

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With Two Drugs Poised To Enter Late-Stage Development, Bionovo Is Advancing In Its Vision To Bring Safe And Effective Drugs To Women’s Health And Cancer Patients Through The Integration Of Traditional Herbal Remedies And Modern Technology

Company Profile:

Bionovo, Inc. is a pharmaceutical company focused on the discovery and development of safe and effective treatments for women's health and cancer, markets with significant unmet needs and billions in potential annual revenue. The company applies its expertise in the biology of menopause and cancer to design new, botanically-derived drugs which have novel mechanisms of action. Based on the results of early and mid-stage clinical trials, Bionovo believes they have discovered new classes of drug candidates within their rich pipeline with the potential to be leaders in their markets. Bionovo is headquartered in Emeryville, California and is traded on the NASDAQ Capital Market under the symbol, "BNVI".

Dr. Isaac Cohen L.Ac., O.M.D.
Co-Founder, Chairman and CEO
Isaac Cohen is a co-founder of Bionovo Pharmaceuticals, Inc. (“Bionovo Pharmaceuticals”), and has served as its Chairman, President, Chief Executive Officer and Chief Scientific Officer and a Director since February 2002. He became the Company’s Chairman, Chief Executive Officer and Chief Scientific Officer and a Director in April 2005. Mr. Cohen has been a Guest Scientist at the University of California, San Francisco (UCSF) Cancer Research Center and UCSF Center for Reproductive Endocrinology since 1996. Mr. Cohen was in private practice at The American Acupuncture Center, located in Berkeley, California from 1989-2005.


 

Healthcare
Pharmaceutical
(BNVI-NASDAQ)

Bionovo, Inc.
5858 Horton Street, Suite 400
Emeryville, CA 94608
Phone: 510-601-2000

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – May 29, 2009

CEOCFO: Dr. Cohen, what was your vision when you founded Bionovo, and where are you today?

Dr. Cohen: “Our vision was to develop safe and effective drugs for women’s health and cancer. We chose these two particular areas of medicine because they are replete with poorly effective drugs that have very high untoward side effects. We set out to revolutionize the way these conditions are treated and to that end, we took very seriously the restructuring of our model of the drugs to make sure that they are both really safe and really provide the effect that is relevant for the patient. Where we are today is that we have two drugs in advanced clinical development. One of these drugs is a replacement for hormone therapy for the treatment of menopausal hot flashes, but unlike hormone therapy, instead of causing or increasing the risk for cancer, it can actually prevent it while treating the hot flashes. With our cancer drug, which is entering Phase II, we have a drug that for the first time in history is selectively killing cancer cells rather than killing normal cells at the same time. Bionovo has really carried through the vision to create what are potentially very safe and very effective drugs.”

CEOCFO: What is it that you have learned that allows you to do this safely?

Dr. Cohen: “In a way we were lucky because we were able to carefully study sixty years of mistakes, which allowed us to first reconstruct how things work in the body and then try to find ways to correct those mistakes. It is very nice to have 20/20 vision of sixty years of information that of course, people years ago did not have. What we have accomplished is the ability to identify and utilize more effectively some of the modern molecular and genetic information that allows you to first develop models and then from those models develop drugs that are relevant to specific targets. So, we can account for the safety and efficacy of our drugs in the indications that we are going after.”

CEOCFO: How do herbs and botanicals fit in?

Dr. Cohen: “When we set out to develop these drugs, we tried to do several things that would give us an advantage. One of the things was to try to understand the modern biological and pharmacological information that we had. The second thing is that botanicals have been used for centuries, if not millenniums, on humans, and for the most part, they have been used very safely. This led us to use them as a starting point to discover potential drugs. We decided to try and gain some insight from the centuries of human use and at least have an idea of what the herbs had been used for. The attempt was to mix knowledge of traditional medicine with modern knowledge. This gave us an important advantage when looking for early safety profiles. When you synthesize a compound you have no clue what the potential toxicology outcomes will be, but with our compounds, we were quite certain that at least from a toxicological point of view, because of the long history of human use, we would not find many problems. The third thing is that this is something that industry has to some extent abandoned because of the nature of the industry. Many early drugs that are still considered some of the best selling drugs come from botanical sources. What people forget is that for example, aspirin was originally discovered in willow bark. Many cancer products were also originally discovered from plant sources, the most recent one being Taxol. So what happened is that unfortunately the industry is very much a chemical industry doing some health products, rather than a health industry looking for products no matter where and how they find the materials, and develop them to be safe and effective therapies. What we try to do is go back to the botanical sources using the human information and harness modern technology to find activity with specific therapeutic benefits.”

CEOCFO:  Has the medical community been receptive to you?

Dr. Cohen: “Interestingly enough the medical community has been very receptive. Most physicians don’t care what sources the drugs come from, their main concern is whether they are safe and effective. When they look at our data they get excited, and it is exciting for us to see that kind of enthusiasm from such an important segment of our audience. The second thing is that physicians are very much influenced by their patients. The structure of the physician-patient relationship is no longer, ‘I tell you what to do’, because nowadays patients are very well educated. Patients are very much interested in drugs or therapies that come from natural sources, mainly from botanicals. They are showing that interest with their own pocketbooks and buying billions of dollars of herbal remedies off the shelf, with no proof of safety or efficacy. Physicians are embracing the idea that we are developing these botanicals under FDA guidance with the same rigor that is required of any other drug. Therefore, physicians can provide their patients with something that is both safe and effective, has the seal of approval from the FDA, and is appealing to the patients because it is something that they are interested in buying. These qualities are what make the medical community so receptive to our approach. The group that has not been as receptive is the pharmaceutical industry and that is mainly because what they do is manufacture synthetic compounds, which is not what we do. We actually extract our drugs.”

CEOCFO: What is the financial picture like for you today, and what has changed under the current environment?

Dr. Cohen: “Right now we have a little over a year’s worth of cash on hand at our current burn rate. Like any development stage company we need more cash in order to complete the development of our drugs. Right now, we are looking and hoping that the market will turn around a little, so we will be able to get some more financial resources. We are not in dire straights like many other companies that have far less cash flow than their current burn, but when we are ready to accelerate the programs again, we will definitely need more cash.”

CEOCFO: Would you touch on your pipeline?
Dr. Cohen: “Our lead drug is Menerba, formerly known as MF101, and it has completed Phase II clinical studies in the indication of menopausal hot flashes. In this Phase II we determined a dose that was both safe and effective for the treatment of hot flashes. We are currently in the final discussions with the FDA as to the design of the development path for Menerba to go into Phase III clinical testing. This is a new drug with a novel mechanism of action that we believe could be the first drug that will not only treat menopausal hot flashes, but avoid the untoward effects of hormone therapy, which increases the risks of cancer and clotting. Our product does not do that based on both our clinical studies to date and the mechanistic data we have achieved in the lab.

The second drug BZL101 is ready for Phase II clinical studies, as soon as we secure funding for it. The way this drug works is by inhibiting the energy production of the cancer cell, energy that is required for cell replication. In cancer cells, energy production is dependent on a process called glycolysis, which utilizes sugar to produce the energy that is required in the cell. What our drug does is it inhibits this process and results in cell death. Since normal cells don’t depend on this glycolysis process, they depend on a different process called oxidative phosphorylation, which just uses oxygen to create energy, the normal cells do not die. This is how our drug differentiates between the sick cancer cells and the body’s normal cells, and therefore results in far less toxicity than any other cancer therapy on the market today. In addition, we are very excited about BZL101, because it is an orally administered drug, and not only can we use it for the treatment of advanced breast cancer, but we believe it can actually prevent the recurrence of breast cancer in a subset of women that currently does not have any other option.  BZL101 can provide that option of prevention of recurrence in this subset of women.

The third drug that we have is VG101, which we hope will enter Phase I clinical testing later this year. It is a novel drug for menopausal vaginal atrophy, and because of its novel mechanism of action, it will not increase the risk of uterine cancer like estrogen products do. The indication is a known, well-established indication. The one caveat about this market is that even though there are currently about 40 million women of menopausal age and about 50% of them have vaginal dryness, in the last decade, medicine has provided the men of this age with erectile dysfunction drugs, but has left women with no safe alternative to make sure that they can also participate and enjoy sexual activity. So we think that between the success of the erectile dysfunction drugs and providing women with this opportunity, this will be an enormous drug for women’s quality of life.”

CEOCFO: In closing, please address potential investors and why Bionovo should stand out from the crowd?

Dr. Cohen: “There are several reasons; one is that we have multiple drugs in the pipeline for enormous indications. These are proven indications, and if the drugs continue to proceed through development with clean safety profiles, they will address problems that patients have spent billions and billions of dollars on in the past, like hot flashes, breast cancer and vaginal dryness. Since our drugs show far better safety and efficacy, we think it is just a matter of time before investors will realize their value. Right now we are at $0.20 a share, which completely underestimates the value of this proposition, but it will not be too long before we have a multi-billion dollar drug in Phase II, and a multi-billion dollar drug in Phase III and people will realize the value. We will then follow through with what we have said we would do and the company will have the value that it is supposed to have which is not a $20 million market cap, but maybe a hundred times that. The other thing is that we have been very careful with shareholder money. To date Bionovo has invested about $40 million of shareholder funds to reach these milestones, having a drug that is ready for Phase III, an additional drug ready for Phase II, and a huge pipeline in the background. Investors should see that we are not just sitting around. We are actually very carefully developing our drugs with meager resources, and being very frugal and careful about how we do it. We believe that we are going to get to the goalpost before others that spend far more resources.”

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“Patients are very much interested in drugs or therapies that come from natural sources, mainly from botanicals. They are showing that interest with their own pocketbooks and buying billions of dollars of herbal remedies off the shelf, with no proof of safety or efficacy. Physicians are embracing the idea that we are developing these botanicals under FDA guidance with the same rigor that is required of any other drug. Therefore, physicians can provide their patients with something that is both safe and effective, has the seal of approval from the FDA, and is appealing to the patients because it is something that they are interested in buying. These qualities are what make the medical community so receptive to our approach.” - Dr. Isaac Cohen L.Ac., O.M.D.