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Here's Why And How Oramed Pharmaceuticals Is Going After NASH

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Oramed Pharmaceuticals Inc. (ORMP) just announced that it has received regulatory approval from the US Food and Drug Administration (FDA) to conduct a clinical trial set up to investigate the potential safety and efficacy of its lead development asset as a treatment for patients with nonalcoholic steatohepatitis (NASH).

Oramed is primarily known for its oral insulin candidate ORMD-0801, designed based on a proprietary technology that allows it get oral insulin through the GI tract and to the liver.

Mid-stage Phase II studies have suggested that the company has been able to achieve its goal – improving disease progression in patients with type II diabetes – and Oramed is heading into what will be a pivotal trial during 2018. The trial is designed to underpin a registration application for this asset in the US on completion.

A focus on NASH, then, seems like a bit of a departure from its primary focus. However, it may be far more of a natural fit than it initially seems.

Here's why.

NASH is one of those conditions that has picked up quite a lot of media attention over the last couple of years, with a number of big pharmas trying to tackle the disease. it's still a pretty poorly understood condition. We don't really know what causes it or what makes it worse and the pathophysiology of NASH isn’t clear. This makes it difficult to treat and it is for this reason that there aren’t any treatments designed for NASH specifically.

What we do know, however, is that the primary symptom of the disease is liver inflammation caused by a buildup of fat in the liver and that this can increase the likelihood of cardiovascular or stroke risk in patients.

We also know that one of the elements of the pathophysiology of NASH is insulin resistance.

When you have a high degree of insulin resistance, it leads to fatty cell accumulation in the liver cells, followed by lipid peroxidation, production of reactive oxygen species, and consequent inflammation.

It would seem reasonable to suggest, then, that the introduction of an additional source of insulin could help to overcome some of the issues associated with insulin resistance and this could help reverse the buildup of fat in the liver and the subsequent inflammation that sits at the root of this disease. In other words, NASH may be a symptom of something similar to diabetes, though not exactly diabetes.

In some preclinical trials, as well as on the back of some of its clinical studies investigating ORMD-0801 in patients with type II diabetes, Oramed has seen signs that its drug can do this.

With its upcoming clinical study of oral insulin in this indication, Oramed is hoping that it can collect the data required to substantiate the potential treatment effect seen on the back of preclinical study and, in turn, can push forward towards a second primary indication for ORMD-0801 outside of its current lead target population – diabetes patients.

And if validated, this market could be a real winner for the company. According to the Financial Times, analysts are predicting the global market for NASH medicines will be worth as much as $35bn a year at its peak. Right now, there are an estimated 16 million sufferers in the US. The space is recognizing this of course and a number of companies are trying to advance their respective assets towards commercialization – many of which have gained strength on the back of data hinting at long-term efficacy. Allergan (NYSE: AGN) and Novartis AG (ADR) (NYSE: NVS) are two examples of big names with assets in this indication right now, both of which gained strength earlier this year on regulatory advance.

And all of this assumes the company decides to push the asset forward on its own. There is a chance that, if Oramed can get some early-stage validation of the efficacy of ORMD-0801 in this population (say, some phase I or phase II data) then the company could offload the drug for the NASH indication) to a big name or pick up a partner that will fund continued development based on an upfront payment/milestone and royalties type deal.

So what comes next?

The company wants to conduct the trial as soon as possible and we see initiation as being a near-term catalyst for Oramed. As per the release detailing the approval of the study, the company plans on initiating the study in the coming month and it's going to be a three-month duration study, meaning there is the potential for topline data to hit press at the end of the first quarter of next year.

Again, if we see these numbers support the efficacy thesis hinted at by the preclinical data, it could translate to some upside momentum for Oramed's share price. Endpoints will be rooted in reducing liver fat content, inflammation, and fibrosis.

At the end of May this year, the company had around $26 million in cash and short-term investments. This somewhat mitigates any potential for near-term dilution. With that said, however, past the upcoming NASH trial, we may see Oramed raise funds at some point during the middle of next year so as to lock-in the funds needed to complete its pivotal trial in diabetes.

All said, NASH isn't the company's lead program and, right now, the majority of Oramed's valuation is rooted in its potential for disrupting the diabetes market. However, with the initiation of a clinical NASH program, the company has served to bolster its attraction to an investor in this space and, if successful, has expanded its target population considerably.

Disclosure: the author has no positions in any of the stocks mentioned in this piece. 

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributor contributorsBiotech News FDA General


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