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July 27, 2015 Issue

The Most Powerful Name In Corporate News and Information


Proprietary Neutrophil Modulation Platform offering hope in Preserving Lung Function in Cystic Fibrosis Patients



Greg Duncan

President & CEO


Celtaxsys Inc.



Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – July 27, 2015


CEOCFO: Mr. Duncan, your website indicates that you are transforming inflammatory science and medicine. Would you tell us how Celtaxsys is doing this?

Mr. Duncan: Celtaxys is privileged to own a proprietary neutrophil modulation platform. In simple terms, this platform of medicines dampens the over-activation and migration of immune system response without progressing a patient to immuno-supression. There are a number of different diseases where the very immune system that is supposed to protect a patient, becomes overheated, including diseases like rheumatoid arthritis and cystic fibrosis. This is the opposite of well-known diseases where the immune system becomes completely down regulated, such as with HIV, where the immune system can no longer protect a patient. Our platform, includes a series of anti-inflammatory medicines. Our lead candidate is a medicine we are studying to preserve lung function in cystic fibrosis and for reducing the number of lesions in patients diagnosed with acne vulgaris, in both cases dampening a patient’s over-activated immune response. Hopefully, over time this will lead to a more normal immune response in patients that are suffering from diseases like cystic fibrosis, acne vulgaris, COPD and the like.


CEOCFO: Would you tell us a bit about the science and what is happening in the body?

Mr. Duncan: Inherent in a patient’s immune response, is a signaling pathway that starts with arachidonic acid. It effectively works like a signaling tower. When you have an infection like a cut on your finger, the signal process that stimulates neutrophils to be become activated and migrate to the site of the infection. Those neutrophils effectively swarm to the site of infection, the cut on your finger for example, and they make sure they clear up any bacteria that is a challenge to your healthy immune system. In the case of our medicine, effectively what we do is down regulate that response. In a disease like cystic fibrosis you have an overactive immune response and effectively what you have is a swarming of neutrophils that fill the lungs of cystic fibrosis patients. When you fill the lungs of cystic fibrosis patients, you have clogging or reduced breathing capacity. Part of the neutrophil’s response is to release a substance called elastase, which is what helps clear out the bacteria. If it gets over stimulated, elastase, the very thing that is supposed to clear out that bacteria, begins to indiscriminately attack normal healthy cell structure. In the case of cystic fibrosis, not only will you have neutrophilic lung clogging but you will also have a degradation of healthy lung tissue because of the over expression of elastase. What our medicine does is tune down that system and hopefully reduce the damage that is caused by the over-activated immune response and bring the patient to a more healthy status.


CEOCFO: Were you looking for a specific answer to a problem or did you come upon the platform or indication and then realize what it could do?

Mr. Duncan: I think it would be safe to say that the scientists at Celtaxys were out scouting different molecules and platforms and they came across this Leukotriene A4 Hydrolase inhibition platform and realized that it could have utility across a number of different diseases. We started with the medicine and then worked towards different disease areas. We are fortunate in that the over-activation of neutrophils is germane to a host of different diseases like COPD, cystic fibrosis, acne vulgaris and a litany of dermatologic neutrophil mediated diseases. There are some metabolic and GI disorders, like gout for example or ulcerative colitis that also exhibit an over-active immune response and we think there is potential utility for this platform in those specific diseases as well.


CEOCFO: How did you decide what diseases to look at first?

Mr. Duncan: It is a combination of accessing where there is high unmet medical need and where you think the technology, primarily based on prior scientific work, might actually have the most utility. It is marrying up the unmet medical need with the potential value proposition or efficacy of the platform. In the case of Celtaxys, we chose cystic fibrosis because it is an area of extremely high unmet medical need. There is a very well documented highly activated neutrophil response in these patients. It is a combination of the high unmet need and the scientific history in the disease area that gives us great confidence that the medicine can do some good for CF patients who need it. In the case of acne, we are looking at expanding our “shots on goal” from a research prospective. In this case with another neutrophil mediated disease in an area where we can do a relatively efficient twelve-week study. This study will be done in patients diagnosed with moderately severe acne that can be completed within twelve months, and give us a second “shot on goal” or a second experiment to access the value of the platform. One disease target was predicated on extremely unmet medical need and a very well documented neutrophilic pathology. The second indication is chosen for high unmet medical need, its tie in with neutrophilic mediation and for the efficiency of progressing the program.


CEOCFO: Where are you in the development process?

Mr. Duncan: We have just been fortunate enough to complete a $40 million Series D financing, a private raise led by Domain Associates. The investors in this financing include Masters Capital Management, Rusnano Medical Investments, Lumira Partners, as well as the Georgia Research Alliance Venture Fund. In addition to the $40 million raise, we have been fortunate enough to receive a research grant from the Cystic Fibrosis Foundation, all of which will be focused on our CF program. We hope to kick off this program towards the end of this year. We filed what is known as an investigational new drug application with the FDA, which is effectively where you register your plans for the study with the FDA and you gain their approval to progress the study. We hope to get feedback from them within the next thirty days or so to progress that study in a Phase II program of cystic fibrosis. The focus of the study will be to access the ability of our lead medicine to preserve lung function and potentially improve lung function in patients with cystic fibrosis. The other major study we are doing is a twelve-week Phase II study in acne vulgaris. That study is being done outside of the US in Australia and New Zealand.


CEOCFO: Are the members of the medical community aware of what you are working on or is it too early?

Mr. Duncan: I think it would be safe to say that in cystic fibrosis and acne, the world’s top experts and researchers are aware of our plans. We use their consultation to help us design what we think will be state-of-the-art trials to assess the value of our new therapy. In the case of cystic fibrosis, for example, there are probably somewhere between forty and fifty key opinion leaders, top researchers, who really move science forward and can be counted on to help you design the latest and greatest trials to access a medicine’s potential for patients. I would say in the cystic fibrosis community most, if not all, of the “key opinion leaders” are aware of the technology and many will in fact participate in our Phase II program. Similarly, in the acne space, we have consulted with experts in the US and Asia to design the study and to execute the study. I think it would be safe to say that in the cases of cystic fibrosis and in acne the top researchers in the field not only know about the program, but also helped us design the program and in some cases will help us execute the program.


CEOCFO: What have you learned so far that has changed your approach and what surprised you?

Mr. Duncan: A few things worked well. You always hope you are going to have a well-behaved medicine. We are pleased to tell you that our once daily medicine is convenient for patients, was actually very well tolerated in the normal healthy volunteer studies where you access a compound’s safety. This is Phase I of drug research. We did a second study in Phase I in cystic fibrosis patients. It was a two-week study accessing the pharmacokinetics and pharmacodynamics of how the drug behaves in the cystic fibrosis patient population. The reason being is these patients have substantial GI absorption issues related to high mucous loads in the gut. We went to study the medicine in the Cystic Fibrosis Foundation patients to make sure that the dosages were similar in the CF patients as compared to healthy volunteers. In this two-week study what we saw was that the drug worked to actually reduce the levels of certain important CF biomarkers. These CF biomarkers are basically measures of disease progression and can be counted on to predict and portend how a patient is from a health status today and how they might actually progress with their disease. We saw a few interesting things that were pleasant surprises. We saw that in only two weeks, the drug was able to reduce the amount of neutrophils in the patients’ lungs and that is very important because you can increase the breathing capacity of patients by reducing the amount of lung based neutrophils and/or lung clogging. Secondly, we found a substantial reduction in a biomarker called elastase. Elastase is important because it is well documented as the single best predictor of lung function over time for cystic fibrosis patients. If you have high level of elastase that will portend that you generally have higher levels of inflammatory response and can predict higher levels of lung degradation over time. Although the experts told us it would probably take something along the order of eight to ten or possible twelve weeks to “ move the needle” on these biomarkers, we saw that in only two weeks that our lead medicine CTX-4430 actually reduced elastase in CF patients. We think this is a great predictor of potential utility for the medicine moving forward. We believe it was the elastase reduction data and the reduction in the content of neutrophils in the CF patient’s sputum that led the CF Foundation to be so excited about our program, to partner with us and to extend Celtaxsys a research grant of $5 million to help us fund the Phase II study. It was a very pleasant surprise very early on in the research process.


CEOCFO: Is your approach unique?

Mr. Duncan: The interesting thing about our platform is that there are drugs that have been shown to work on different parameters of cystic fibrosis. For example, with cystic fibrosis you have drugs that repair a defective gene which can lead to cystic fibrosis. This is a gene that is responsible for the hydration in CF patient lungs. There are antibiotics that are used to fight infection that are used chronically for CF patients. There are pancreatic enzyme replacement therapies, which attack a different component of the disease. Right now, to the best of our knowledge, we are the most advanced anti-inflammatory program in the CF area. We are privileged to be in that position as there is not a lot of competition in the space and we are actually fundamentally attacking the very thing that leads to the morbidity and the mortality associated with the CF disease. That is lung inflammation. There is a lot of energy and good news about research into cystic fibrosis but none of the current programs really attack specific lung inflammation. We are pleased to be moving our program forward because we think we can make a meaningful difference in the progression of these patients by decreasing the lung inflammation and the subsequent lung damage. The therapy is complimentary to the other therapies.  As a result, we are not in direct competition with the other medicines that are used on a regular basis by these patients. The challenge that precedes us is that some prior research medicines have gone down this pathway and they were not able to dampen the system but in fact they shut the system off. We do not want to do that and feel confident based on current data that this will not be the case. The beauty of our technology is that is dampens the system, we turn it down but we do not turn it off. We engage the target and dampen the over-active immune response but we never progress to the point where we convert patients into immune-suppression. What we have seen in the earlier research studies is that we do not see any increase in bacterial lode in healthy or CF patients who have been administered the medicine. This is very important because when CTX-4430 dampens the immune response, we do not want to dampen it too much such that you reduce patients’ ability to fight infection and subsequently increase bacterial load. We found we do not see any increase in bacterial load in our studies so we are navigating that sweet spot where we are turning down the anti-inflammatory response but not turning it off and hopefully that will confer a benefit of homeostasis in the immune response of these patients.


CEOCFO: What should people remember about Celtaxys?
Mr. Duncan:
We have an exciting program. We have a program that can fundamentally alter the course of this disease if our hypothesis proves correct. By dampening the over-activated immune response, by reducing lung clogging, by reducing elastase that damages CF patients’ lungs, we can fundamentally alter the morbidity and mortality projections for these patients and I think that is not a small thing. The average life span for a patient diagnosed with CF today is somewhere between thirty and forty years of age. These patients unfortunately, even with all the current research advances, are dying at one-half the age of their parents and that is just not an acceptable standard for these patients. I think the most exciting thing about our platform is if our lead CF program proves successful, we can fundamentally alter the course of the lives of these patients.


“The average life span for a patient diagnosed with CF today is somewhere between thirty and forty years of age. These patients unfortunately, even with all current research advances, are dying at one-half the age of their parents and that is just not an acceptable standard for CF patients. I think the most exciting thing about our platform is if our lead CF program proves successful, we can fundamentally alter the course of the lives of these patients.”- Greg Duncan


Celtaxsys Inc.




Greg Duncan








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