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AdAlta Ltd (ASX:1AD): Growing a multi-product platform
An ASX-listed innovative biotech company supported by an internationally experienced leadership team and world class scientific advisory board, AdAlta Ltd uses novel i-body technology to generate new drugs in settings where traditional antibodies struggle.
Founded in 2006 and listed on the ASX (ASX:1AD) in 2016, AdAlta is a micro-cap which has a market cap of $18.85 million as of June 24th 2020. The company has pioneered a technology that mimics the shape and stability of a crucial antigen-binding domain found in sharks and now developed as a human protein, resulting in a range of unique compounds, known as i-bodies, for use in treating serious diseases. The Australian Business Executive spoke recently with CEO and MD Dr Tim Oldham to discuss AdAlta’s unique i-body technology, the Phase I clinical trials for its lead product, AD-214, which commenced in July 2020, and future plans to open up more revenue opportunities by using the i-body platform to create more drugs both alone and through partnerships.
Unique i-body technology
“AdAlta is what’s known as a drug discovery and development platform company,” Dr Oldham explains. “We use our proprietary i-body technology to discover drugs against biological targets which cause disease.”
After discovery, the company develops these drugs through pre-clinical development and into the early stages of clinical development, usually until Phase I or II, when it looks to partner them with larger pharmaceutical companies to complete development and commercialise the drug.
“We were founded in 2006, and the technology has been developing since then. We were listed in 2016, and we have a great mix of investors supporting us. They range from high net-worth individuals to institutions, such as Platinum Asset Management, and our founding venture capitalist, Yuuwa Capital.”
The pharmaceutical industry is constantly looking for new drugs against biological targets that are implicated in causing disease. Hundreds of these targets have proven very difficult to drug with traditional pharmaceutical methods.
“Our technology is specifically designed to engage the targets that traditional therapies are unable to handle effectively,” Dr Oldham says. “We can do this more selectively and more specifically and generate highly specific biological and physiological outcomes than other technologies.”
AdAlta’s lead product, AD-214, targets a biological receptor, CXCR4, which triggers cells of various types to move around the body, including blood stem cells, which generate red and white blood cells, and fibroblasts and fibrocytes, implicated in the scarring following injury, known as fibrosis.
As AdAlta is focused on the fibrosis side, it doesn’t want to mobilise stem cells. Traditional drugs against CXCR4 have been unable to distinguish between cell types. The only approved drug targeting CXCR4 engages other receptors as well, creating off-target effects, and isn’t specific in the different cell types it mobilises.
“Our drug, AD-214, is highly specific for CXCR4, so we don’t have those off-target effects, and we don’t mobilise stem cells, and this means AD-214 can be used for chronic treatment of fibrotic diseases, such as lung fibrosis.”
The process of creating drugs with these precise, selective effects comes down to the underlying i-body technology and how it was designed. There are many companies out there capable of discovering new antibody drugs, but there are not many that are utilising this kind of technology.
“Our i-bodies are part of a small group of antibodies known as single-domain antibodies, and there’s only a really small number of companies working on these around the world today. In our case, i-bodies were developed from the basic research into the shark immune system that had led to the founding of the company.”
AdAlta knew that sharks have a unique feature of their immune system which makes their antibodies smaller and with longer binding regions than humans, meaning they can access receptors or antigens in unique ways, leading to novel outcomes.
“We’ve managed to create a human version of that, by finding a human protein that maps onto the shark system, and that’s our i-body advantage – the unique structure of our i-bodies that can hit these receptors in ways that are useful and different to the way the traditional antibody approach works in a fully human format.”
Multiple product pipeline
The work AdAlta is doing represents a significant opportunity for investors, as the i-body technology is known as a platform technology, meaning it can support discovery and development of many drugs for a wide range of different diseases.
“There are hundreds of targets, just in the family that we’re particularly interested in, that haven’t yet been drugged or drugged effectively. So, we have this platform that’s got multi-drug potential, and yet today we’ve only got one product. Our lead product, AD-214, has just entered clinical trials for the first time.”
This approval is a major turning point for the company, as it is the first time it has demonstrated it can take a drug all the way from discovery into clinical trials. It is also the first time the complete data packages on this drug have been externally reviewed and the decision made that there is sufficient evidence to support it moving forward into human trials.
“These trials, importantly, validate the entire platform, not just the AD-214 product,” Dr Oldham says. “So what investors and our shareholders are looking at today is essentially a company that is being valued and looked at as a single product company, but with this enormous multiple product pipeline potential in front of it.”
On top of that, by moving into trials with AD-214, value is being added to that product specifically. The drug is being developed for a very serious disease called idiopathic pulmonary fibrosis (IPF), which is a scarring of the lungs that causes tissues to tighten and stiffen, making it difficult to breathe.
“Patients with IPF have about a four-year survival from diagnosis, and there are no good treatments today. The only two drugs approved slow the progression of the disease, but that’s it. So there is an enormous demand for new therapies. Big pharma companies are actively looking for products at Phase I, which is now where we’re up to with this product.”
The current COVID-19 pandemic is having a serious effect on these already vulnerable patients, as increased fibrosis in the lungs is one of the side effects of the virus, making it all the more timely that these treatments become available.
“We’ve achieved the most significant milestone that we’ve been aiming for, which is to transition AD-214 from pre-clinical to clinical development,” Dr Oldham says. “It’s wonderful to be able to describe AdAlta as a clinical-stage company now. This is a major inflection point in any company’s existence.”
The focus now turns to executing the trial, and there is still a fair bit of work to do in that process. The company is actively developing some new imaging agents to help get more information out of the trial once it moves to the patient stage.
“We’ve laid out in March this year a vision for where we want to take the company over the longer term. So in the near term there are a number of steps we need to take in order to get ourselves expansion ready.”
The company’s growth strategy is a simple one: to repeat multiple times over what it has already been doing. In order to do that it needs to scale its processes, and there are some continuous improvement initiatives in the platform that need to be implemented.
“We are working to select new targets for the i-body platform, to start experimental work to discover binders to these new targets, and to prove the ability to extend the indications of AD-214 to other fibrotic diseases beyond lung.”
The near-term for the company then will see results of the AD-214 clinical trial and a lot of preparatory work, with the aim of having five products in development in the internal pipeline and more indications and licensing partnerships for AD-214 by 2023. That will be just the start of the opportunity with the i-body platform, however.
“The other opportunity to develop drugs is to partner with other companies to co-develop drugs where they bring the target and the biological expertise. We have one of those in place today with GE Healthcare, and by 2023 I’d love to have three or four more of those, and that’s really a focus of our business development efforts over the timeframe.”
“Today, it’s all about AD-214,” Dr Oldham adds, “tomorrow it’s all about setting the groundwork for choosing indications and new product pipeline targets, and in the longer-term it’s about expanding the business that we do today multiple times over.”
Diversity of experience
The company is proud to have a diverse and experienced leadership team, including members who were involved in the design of the original technology, most importantly the company Chief Scientific Officer Mick Foley, who was one of its inventors.
“That’s backed up on the executive team by a Chief Operating Officer, Dallas Hartman, who’s responsible for protein development, and is deeply experienced in large protein therapeutic companies like CSL.”
New management strength has been added for the clinical stage, including Claudia Gregorio-King, who has worked in clinical research organisations and has been responsible for project managing numerous clinical trials, and Kevin Lynch, a former Vice-President of Clinical Development at Celgene and Novartis.
“Then on the board we have people like Robert Peach, who developed a single-domain antibody company called Receptos, was a founder of that and eventually sold it for a very large exit in the US, and brings both US location as well as the experience of building a company just like ours. We also recently welcomed David Fuller to the board, bringing extensive clinical research organisation, clinical and pre-clinical development and Asian expertise to our team.”
The company is also represented by the founding investors on the board, including Liddy McCall and her alternate, James Williams, from Yuuwa Capital, and Paul MacLeman, who is well-known in the Australian biotech industry, having led numerous biotech companies.
“We also have a scientific advisory board that’s drawn from former Novartis and Pfizer executives, two of the largest pharmaceutical companies in the world, [that] have led respiratory medicine and antibody discovery and development organisations within [these companies] all the way through to clinical development over their careers, and they provide us with access to people and expertise that we would struggle to find as quickly on our own.”
When Dr Oldham joined the company in October 2019, the biggest challenge was in realising the opportunity offered by the scope of the platform, while also moving forward with the important ongoing development of AD-214.
“That diversity of experience across our leadership brings more effective problem-solving expertise to all of the problems you meet to grow a biotech company that burns cash at potentially fearsome rates. We have access to capital markets and how to raise capital, we have expertise that helps us make the critical decisions to make sure our development programs are right first time.”
Dr Oldham admits that the company can’t eliminate the natural risk of working with biological variants, but it has the expertise to control design and sequencing to ensure the right experiments are being done in the right order to get quicker results and avoid wasting shareholder money on experiments that won’t produce useful data.
“I’ve been working in building new businesses in both larger companies, Mayne Pharma and Hospira in Europe and Asia, and then in smaller biotech companies, cell and gene therapy companies, antibody companies, for the last twenty odd years,” Dr Oldham says.
The challenge that exists for all of these company types is the staging of business growth, working out at which point it is wise to invest hard and when to have the confidence to take on a risk managed investment.
“The key to doing all of that, for me, has been when you’re choosing a product or designing a product, what’s the end market going to look like? You have to start with the end in mind. This is why we’re taking such a staged approach to the selection of our next targets.”
In respect of AD-214, the company may have selected it serendipitously, and Dr Oldham knows it must be more thoughtful in future to understand exactly what kind of product it is trying to develop and maximise investments along the way.
“I joined AdAlta eight months ago with an amazing opportunity to take a single-product company and turn it into a multi-product platform,” Dr Oldham says. “We’re in the process of realising that. The recent commencement of our first clinical trial is such a huge milestone for the company, and it really is the catalyst that I’ve been aiming for over the past eight months to enable us to unlock the amazing growth strategy we have ahead of us.”
With the unique potential of its i-body platform, an existing product for IPF in clinical trials, and a firm plan for long-term growth, AdAlta is only just beginning its exciting journey. Find out more about AdAlta by visiting adalta.com.au
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