Your Questions Answered! Investor Q&A

Our recent investor webinar received a tremendous amount of interest (view a recording here) from some very smart people. The questions they asked at the end of the presentation is a testament to the level of technical knowledge in the field of proteomics and biopharmaceutical drug development that our investors possess.

Here are a few of the questions:

1. How did you enhance CYT-108 activity via genetic engineering? CYT-108 was developed off of the base A2M protein (the natural A2M found in the blood serum). A series of amino acid substitutions were made in the “bait region” of the protein, which is like a venus fly trap that is located within the core of the protein structure. When a protease (the destructive enzymes responsible for cartilage damage) is pulled into the bait region, the protein “collapses” like a trap, rendering the protease useless. The genetic modifications we made to CYT-108’s bait region increase its affinity for the specific proteases responsible for osteoarthritis, meaning that these proteases bind much more easily to the bait region, thereby increasing CYT-108’s ability to clear out the proteases compared to the natural A2M. Also, the modifications we made to CYT-108’s bait region increase its affinity for other, more general proteases that also contribute to the inflammatory response. Basically, we created a genetically engineered Swiss army-knife with multiple, potent functions!
2. What is the revenue on the APIC system currently? We make approximately $400,000 annually from APIC licensing royalties.
3. What's a potential timeline for each of the exit strategies, appreciating there are many variables that impact each one? We expect to begin our Phase 1 study in Q1 2023, and have preliminary data by Q3 2023. We will shop this data out to potential strategic partners (e.g., Johnson and Johnson, Pfizer) to gauge interest in either acquiring Cytonics’ entire intellectual property portfolio or in-licensing the development rights to CYT-108. We expect to have a deal in the works in early 2024. This strategic partner may be interested in funding a Phase 2 clinical trial before committing to purchasing Cytonics outright.
4. Have you explored other applications beyond osteoarthritis? We are planning to apply CYT-108 to inflammatory lung diseases, such as COVID or Acute Respiratory Distress Syndrome (ARDS), that are caused by hyperactive cytokine signaling. CYT-108 is also a “cytokine scavenger” in addition to being a potent protease inhibitor. Our drug is capable of vacuuming up these pro-inflammatory cytokines that cause lung inflammation in a number of diseases. The same genetic engineering process that we employed to create CYT-108 as a specific inhibitor of the specific proteases upregulated in arthritis joints can be applied to other diseases that are caused by cytokines and other proteases. We have built a platform technology that can be applied to many different inflammatory diseases. We have already designed the lung inflammation study and are exploring potential partnerships!
5. The company was established in 2009 (or earlier).? What's the reason it hasn't filed for IPO or hasn't been seeking other exit strategies for the past 10+ years? Cytonics made a fundamental shift from a medical device company to a biopharmaceutical research and development company in 2015. We have been working on our lead drug candidate, CYT-108, a genetically engineered variant of the natural A2M blood protein for the treatment of osteoarthritis, for the last 7 years. The real value of Cytonics lies with this drug (there is less interest from Big Pharma in medical devices). We are approaching the clinical phase of CYT-108’s development, which is the point at which Big Pharma will take interest in what we are doing. Once we have a convincing Phase 1 dataset we will be able to start soliciting interest in an acquisition or development licensing agreement. We may also consider an IPO if we license the development rights out to a Big Pharma partner. We expect to begin these negotiations in 2024.
6. In the animal study, was the wt-A2M treatment gotten via the APIC system? No, the wt-A2M was a commercially available recombinant A2M (the human protein).
7. Have you identified a CRO for the study? And how many sites are you planning on activating? Will this be a US only study? We have not yet begun the search for a CRO to conduct the Phase 1 trial. We are currently preparing the Investigational New Drug application and will soon turn our attention to the Phase 1 units. Ideally, we will conduct the entire study at a single site. We have not yet determined whether the study will be limited to the US alone.
8. What expression system is used? Formulation development is important. What progress has been made? We used a CHO expression system. We have finalized our upstream expression and downstream purification processes and the protocols for our qualification assays. Batch records were produced for the latest GMP manufacturing run.
9. What are the primary endpoints your team is looking for to indicate that CYT-108 can move forward from a Phase 1 to Phase 2 trial? The primary efficacy endpoint will always be a subjective pain score (using a system like the WOMAC index). However, we will also look at more quantitative “disease-modifying” effects, such as using MRI imaging to measure the changes in cartilage thickness and presence/absence of inflammatory biomarkers in the joint fluid, to support our efficacy claims. The Phase 1 study will mostly be concerned with safety, but we will also examine the efficacy of a single proposed dose of CYT-108 (0.5mg/kg, administered monthly for 3 months, follow-up at 6 months).
10. For the animal study, why didn't you use the APIC system on the animals? Do you want to show that CYT-108 is better or sustains action more than the naturally occurring A2M? Instead of using the APIC-purified A2M, we used a commercially available synthetic (recombinant) human A2M protein to adequately control the experiment. We needed to make sure that the dosing was exactly the same as with our CYT-108 variant - comparing apples to apples. The APIC-purified A2M varies in concentration since it is derived from a patient, and there is variability in A2M production from patient-to-patient.
11. What is used for potency test? Is it binding only or does it includes specific enzyme inactivation? We have designed a trypsin-inhibition assay (trypsin is a broad spectrum protease) to determine the relative activity of CYT-108 compared to the natural A2M (wt-A2M). We observed 100-200% increase in relative activity, implying that our CYT-108 is 2-3x more potent than the naturally occurring A2M protein. We are currently developing another protease-inhibition assay against the ADAMTS-5 protease that is heavily involved in osteoarthritis-related cartilage erosion.

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