#27 ???? The Business of Biotech (3rd Edition): ??? Navigating the Minefield Of Clinical Trials

by Joey Bose and Gaetano Scuderi, MD

The FDA regulatory process is complex and rife with failures ?? Here’s what it takes to succeed and avoid mistakes that sink drug development programs

In our last edition of The Business of Biotech, we illuminated the FDA regulatory process. Now, let’s dive into the common mistakes that sink clinical trials and how we can avoid these pitfalls.

?? Striking Gold

No one in the industry will tell you that drug development is easy or that the approval process is smooth. It can take years to find out that your beloved drug candidate is a flop. However, each successive stage of clinical success “de-risks” the endeavor and makes approval more likely, increasing the valuation of the company and drug asset and bringing media attention to the development program. Biopharma M&A activity witnessed rebound in 2023, with total deal value up by 79% vs. 2022 to reach?~$152B for the full year, trend towards levels last seen in 2020 (reference ). This aggressive acquisition activity has continued in 2024, with ~$150B in total deal value transacted so far (as of 10/31/24), pacing the sector to beat the 2023 numbers handedly (reference ). The M&A trend over the last decade has been weighted towards preclinical and Phase 1 assets, but this trend has shifted to Phase 2 and 3 programs as the industry pulled back (late 2020) and investors became significantly more risk averse. We will likely see a return to earlier stage assets as the macroeconomic picture changes, patent expirations force Big Pharma to deploy their "dry powder", and investor enthusiasm renews (the pendulum always swings the other way!).

? Why Do Clinical Trials Fail?

Four out of five clinical-stage drugs fail in trials. The potential culprits are many, and some are unavoidable, but risk can be reduced by proper planning and understanding key drug development principles.?

These biological factors include:

• Lack of understanding of mechanism of the new drug. We understand the precise mechanism of action of CYT-108, which is protease inhibition.
• Lack of understanding of the pathophysiology of the disease. We pioneered research into the molecular pathogenesis of osteoarthritis, and deeply understand this multi-faceted disease.
• Lack of translatability between preclinical models of disease and the actual human. The clinical and commercial success of our FDA-cleared “APIC” therapy for osteoarthritis de-risks this translatibility because we already know that the core technology works in humans.

Beyond these biologic factors, study design and practical implementation of study protocols can affect clinical trial success.?

These non-biologic failures include:

• Inadequate study design (number of participants, primary and secondary endpoints). Our Phase 1 study is primarily examining safety, and we do not expect statistically significant efficacy results (although we will still measure effiacy to inform the Phase 2 study).
• Improper dose selection and time course. The proposed effective dose of CYT-108 is based on the A2M concentrations used in our APIC therapy, so we are more informed and not flying blind.
• Inappropriate efficacy metrics/endpoints. The safety and efficacy endpoints (WOMAC score) we are using are accepted as the gold standard for osteoarthritis clinical research.
• Inappropriate statistical analysis of data. We are not expecting statistical significance in the efficacy data. However, we will look for trends in the data to get a sense of the efficacy of CYT-108 in reducing cartilage damage.

??? Keys To Success?

Regulatory success can be optimized by paying extra attention to the following:

• Exclusion and inclusion patient recruitment criteria. We very carefully selected our inclusion/exclusion criteria to only recruit healthy patients with mild-to-moderate osteoarthritis of the knee.
• Number of participants to make the study highly powered (so that statistical significance can be determined). We are not concerned with statistical power in our Phase 1 study.
• Optimal dosing schedule based upon the pharmacokinetics (the way that the drug metabolizes and clears the drug from the body). Based on our preclinical research, we know that CYT-108 is not able to enter the bloodstream in meaningful concentrations due to the large size of the molecule.
• Possible food effects and drug interactions. Our inclusion/exclusion criteria prohibit the use of other therapies for osteoarthritis during the Phase 1 study.
• Selecting the appropriate efficacy measures/endpoints. We are using the gold standard for osteoarthritis research.
• The best endpoints translate directly to clinical benefit (For example, the rate of tumor growth is a great measurement to determine the efficacy of an anti-tumor drug in curbing cancer progression). We are using the gold standard for osteoarthritis research.
• Biomarkers can be used to quickly measure the effects of a drug (For example, a tumor growth biomarker circulating in the blood could be used to determine cancer progression with simple blood analysis). We are going to perform an assay to measure cartilage degradation from patient blood samples. This will give us a highly quantitative insight into CYT-108’s ability to stop cartilage damage.?

In our next edition of ???? The Business of Biotech, our CEO, Joey Bose , will give you a?peek into his day-to-day?of running a biotechnology research and development company.

Ready to become a shareholder? Visit?invest.cytonics.com .

Forward Looking Statements

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including statements regarding the progress of and plans related to the Company’s product candidates, clinical studies and preclinical research and development programs, the therapeutic and market potential of the Company’s research and development programs and product candidates, the Company’s clinical and product development strategy, and the Company’s expectations regarding progress and timelines. These and any other forward-looking statements in this release are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risk that the Company’s research and development programs and product candidates may not demonstrate the requisite safety, efficacy, or other attributes to warrant further development or to achieve regulatory approval, the risk that results observed in prior studies of the Company’s product candidates, including preclinical studies and clinical trials, will not be observed in ongoing or future studies involving these product candidates, the risk of a delay or difficulties in the manufacturing of the Company’s product candidates or in the initiation and conduct of, or enrollment of patients in, any clinical trials, the risk that the Company may cease or delay preclinical or clinical development of any of its product candidates for a variety of reasons (including requirements that may be imposed by regulatory authorities on the initiation or conduct of clinical trials, changes in the therapeutic, regulatory, or competitive landscape for which the Company’s product candidates are being developed, the amount and type of data to be generated or otherwise to support regulatory approval, difficulties or delays in patient enrollment and continuation in the Company’s ongoing and planned clinical trials, difficulties in manufacturing or supplying the Company’s product candidates for clinical testing, and any adverse events or other negative results that may be observed during preclinical or clinical development), the risk that its product candidates may not produce therapeutic benefits or may cause other unanticipated adverse effects, and the risk that the Company may incur operating expenses in amounts greater than anticipated. For a discussion of other risks and uncertainties, and other important factors, any of which could cause the Company’s actual results to differ from those contained in the forward-looking statements, see the risks and uncertainties detailed in the Company’s periodic filings with the Securities and Exchange Commission (https://www.sec.gov/edgar/browse/?CIK=0001421744 ), including but not limited to the Company’s most recently filed periodic report, and from time to time in the Company’s press releases and other investor communications. Cytonics Corporation is providing the information in this release as of this date and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.