TNXP: Monkeypox Cases Push TNX-801 Into the Spotlight…

By David Bautz, PhD

NASDAQ:TNXP

READ THE FULL TNXP RESEARCH REPORT

Business Update

Monkeypox Outbreak Puts Focus on TNX-801

More than 300 cases of monkeypox have been reported recently around the world. Monkeypox is a virus that originates in rodents and primates in West and Central Africa. It occasionally jumps to humans, but cases outside of Africa are rare except for infected travelers and imported animals. Authorities are still unsure what is behind the recent uptick in cases, however it has thrust the potential need for a monkeypox vaccine into the spotlight.

Tonix Pharmaceuticals Holding Corp. TNXP is developing TNX-801, a live form of the horsepox virus, as a preventative for smallpox and monkeypox infection. In January 2020, the company announced the presentation of preclinical results of TNX-801 in non-human primates that were challenged with monkeypox. In that study, the safety of TNX-801 was exhibited by stable body weights and body temperatures for all treated animals. No animals immunized with TNX-801 developed lesions following challenge with monkeypox virus. Please see our previous report for a full analysis of the data.

Insight into the origin of the smallpox vaccine that was developed by Edward Jenner was explored in a 2017 publication (Shrick et al., 2017). The group analyzed a smallpox vaccine manufactured in 1902 that was stored in glycerol. Following genetic analysis, it was determined that the core genome of the virus had the highest degree of similarity (99.7%) to horsepox virus. Thus, TNX-801 is likely closer to the original smallpox vaccine that was developed by Edward Jenner than the currently available smallpox vaccines based on vaccinia viruses (which are also protective against monkeypox). This is important because from a regulatory perspective, the current smallpox/monkeypox vaccines are suboptimal and thus support an accelerated development of TNX-801.

Phase 2 Trial of TNX-102 SL to Initiate in Long COVID in 2Q22

Tonix is expected to initiate a Phase 2 clinical trial of TNX-102 SL in patients with Long COVID, a heterogeneous condition that involves nociplastic pain following infection with and recovery from SARS-CoV-2, the virus that causes COVID-19 (Bierle et al., 2021). Interestingly, a number of Long COVID symptoms (multi-site pain, fatigue, sleep disorders, and cognitive dysfunction) overlap with key symptoms of fibromyalgia, and it is these patients that the company will be focusing on.

Research continues to advance in the study of musculoskeletal pain, and recently a new descriptor has been proposed to describe pain that is neither nociceptive (due to the activation of nociceptors from actual or threatened damage to non-neural tissue) or neuropathic (caused by a lesion or disease of the somatosensory nervous system) (Trouvin et al., 2019). Nociplastic pain is used to describe pain that arises from altered pain sensation despite no clear evidence of actual or threatened tissue damage, or for disease or lesion of the somatosensory system. Patients suffering from fibromyalgia-like Long COVID fit into the description of those suffering from nociplastic pain.

Central sensitization (amplified neural signaling within the central nervous system that causes hypersensitivity to pain) is a complementary explanation why patients suffer from chronic non-specific pain, particularly in conditions such as fibromyalgia, chronic fatigue syndrome, and irritable bowel syndrome (Woolf et al., 2011). The Central Sensitization Inventory (CSI) is a screening tool to identify patients with central sensitization (Neblett et al., 2013). A survey of 491 Long COVID patients showed that 70% had symptoms of central sensitization (CSI≥40/100) and 65% had severe central sensitization symptoms (Goudman et al., 2021).

https://pubmed.ncbi.nlm.nih.gov/34007978/Approximately 50% of patients who contract SARS-CoV-2 experience Long COVID symptoms up to a month after infection. Even after six months, 30% of patients continue to experience Long COVID symptoms. Patients who are hospitalized and those with severe symptoms following SARS-CoV-2 infection are most likely to suffer from Long COVID (Hirschtick et al., 2021).

To better understand the potential size of the Long COVID market, a retrospective, observational database study was performed to identify the number of Long COVID patients from approximately 75 million patients from a network of inpatient and outpatient electronic medical records from 48 U.S. healthcare organizations. The results showed that of 1 million patients diagnosed with COVID, approximately 52,000 had Long COVID symptoms that lasted between 3 and 6 months. In addition, of the patients with Long COVID, 41% had multi-site pain. These patients took a variety of medications, include benzodiazepines, opioids, and antidepressants. The rate of opioid use was 50% for patients that had multi-site pain and insomnia, with or without fatigue. This is especially concerning since approximately 25% of patients prescribed opioids long term will struggle with opioid addiction (U.S. Department of Labor). The results of this study clearly show that there is a large patient population suffering from Long COVID that need additional treatment options.

Tonix has received IND clearance to initiate a Phase 2 clinical trial of TNX-102 SL in patients with Long COVID. The company will be focusing on patients whose symptoms overlap with fibromyalgia. We anticipate the trial initiating in the second quarter of 2022.

Phase 3 RESILIENT Trial for TNX-102 SL Underway

In April 2022, Tonix initiated the RESILIENT study, a randomized, double blind, placebo controlled potentially pivotal Phase 3 trial of TNX-102 SL for the treatment of fibromyalgia. It is expected to enroll approximately 470 participants in the U.S. The results of a planned interim analysis are expected in the first quarter of 2023.

In March 2022, Tonix announced that, as expected based on a previously reported pre-specified interim analysis, TNX-102 SL did not achieve the primary endpoint of reducing fibromyalgia (FM) daily pain at Week 14 in the Phase 3 RALLY trial (P=0.115).

In December 2020, Tonix announced positive topline results for the Phase 3 RELIEF study of TNX-102 SL 5.6 mg (primary endpoint, P=0.010). Thus, since Tonix already has already conducted one positive trial in fibromyalgia, positive results from the RESILIENT study could put the company in position to file a new drug application (NDA) for TNX-102 SL for the treatment of fibromyalgia.

Multiple Clinical Trials to Initiate Over the Next Year

Tonix has built a diverse pipeline that includes development candidates for COVID, biodefense, immunology, and multiple central nervous system (CNS) diseases. In addition to the aforementioned trials getting underway, we anticipate multiple other trials initiating for other development candidates over the next year:

• TNX-1300: Phase 2 study: Initiation – 2Q22

• TNX-102 SL: Phase 2 trial in PTSD (in Kenya): Initiation – 2Q22

• TNX-1500: Phase 1 trial for prevention of allograft rejection: Initiation – 2H22

• TNX-1900: Phase 2 trial for chronic migraine: Initiation – 2H22

• TNX-601 CR: Phase 2 trial in Major Depressive Disorder: Initiation – 1Q23

Financial Update

On May 9, 2022, Tonix announced financial results for the first quarter of 2022. As expected, the company did not report any revenues for the first quarter of 2022. Net loss available to common shareholders for the first quarter of 2022 was $26.4 million, or $1.62 per share, compared to a net loss available to common shareholders of $20.7 million, or $2.28 per share, for the first quarter of 2021. The weighted average common shares outstanding for the first quarter of 2022 were approximately 16.3 million compared to approximately 9.1 million in the first quarter of 2021.

R&D expenses for the first quarter of 2022 were $18.4 million, compared to $15.3 million for the first quarter of 2021. The increase was primarily due to employee-related expenses and non-clinical expenses. G&A expenses for the first quarter of 2022 were $8.0 million, compared to $5.4 million for the first quarter of 2021. The increase was primarily due to employee-related expenses.

As of March 31, 2022, Tonix had approximately $140.4 million in cash and cash equivalents. Subsequent to the end of the quarter, Tonix sold approximately 33.9 million shares in at-the-market (ATM) offerings for net proceeds of approximately $6.8 million. In addition, the company sold 13.0 million shares under the Purchase Agreement with Lincoln Park for net proceeds of approximately $2.0 million. On May 16, 2022, Tonix announced a 1-for-32 reverse stock split. Thus, we estimate that the company currently has approximately 18.7 million common shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 20.8 million.

Conclusion

The monkeypox outbreak has brought renewed interest in TNX-801, as both current smallpox vaccines have shortcomings that may support its accelerated development. We look forward to updates from the company on its development. Tonix has a large number of programs that will be entering the clinic over the rest of 2022, and we are particularly excited about the Long COVID program since the company will be focusing on those patients whose symptoms overlap with fibromyalgia. We are glad to see Tonix has initiated a new fibromyalgia Phase 3 trial and we look forward to results from the interim analysis of the RESILIENT study in the first quarter of 2023. Tonix has discontinued TNX-2100 (COVID skin test) and we have removed the COVID vaccine from our model, which combined with the increased share count from the ATM and Purchase Agreement sales and after adjusting for the reverse stock split, has resulted in our valuation decreasing to $16.00 per share.

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