Oxford Cannabinoid Technologies: Clinical objectives confirmed for 2023
Oxford Cannabinoid Technologies (OCT) develops non-opioid pain pharmaceuticals. The lead product, OCT461201 (“201”), is an oral product to relieve peripheral nerve pain caused by cancer chemotherapy (CIPN). In a trading update (12 December 2022), management indicates that 201 will enter the clinical phase from January 2023. The scientific work on this is being done by Aptuit (Verona), a subsidiary of Evotec, so we expect this to be high quality. Once Aptuit has supplied the full report (including manufacturing information) by the end of December, OTC will be able to submit an application to the UK regulator, the Medicines and Healthcare products Regulatory Agency (MHRA), to gain approval for clinical studies, a Clinical Trial Authorisation (CTA). OTC's management expects this to complete during January. Aptuit will also deliver formulated oral 201 for clinical use around mid Q1. The Phase 1 volunteer study, run by a CRO, might then start by late March 2023. The Phase 1 should be fast to run and initial data might be available from mid-2023. It will involve 4 cohorts of 8 volunteers to assess dose and safety. A Phase 2 patient programme could then be run from Q4 2023, if funds allow, to evaluate efficacy.
The second project, OCT130401 (“401”), a fast relief inhaled therapy for a sudden onset, facial-pain condition (trigeminal neuralgia, or TN), will be suspended to save cash once the current preclinical work is completed in early 2023.
Two research stage projects (Projects 3 and 4) might respectively enter preclinical testing and lead identification in Q2 2023. This indicates possible clinical stages from 2024 and 2025.
Pharmaceuticals derived from cannabinoids
The H1 FY23 cash balance (31 October 2022) was about £5mln, down from £9.3mln on 30 April 2022. A large part of the £3.1mln R&D H1 expenditure was the £2.6mln Aptuit contract; this appears to conclude during Q1 2023. As the 401 project will be suspended, this will reduce cash use. Management now estimates that OCT has cash till Q4 2023 (FY22 operating cash outflow was £5.4mln). Hence, further funding will be needed ideally by mid-2023. OCT is now a virtual company with no offices or labs.
The market capitalisation of about £6mln reflects the weak market for earlier-stage biotechnology stocks and the need for further funding. In our view, OCT remains an interesting opportunity since the major lead project, 201, should enter the clinical development phase from January 2023. The indication, CIPN, has no effective current treatment. With clinical data, this novel product aiming for an underserved and accessible market could be an attractive partnering opportunity.
OCT has seen recent management changes with Clarissa Sowemimo-Coker stepping up in December from COO to become interim CEO and a new CFO in Paul Smalley from October.
Investment conclusion
Year end Apr 30 · 2020 · 2021
Operating profit (£,000s) · (3,346) · (5,503)
Net Cash · 14,630.0 · 9,266.0
Exhibit 1 shows the pain pipeline with 201 entering the clinical phase from January 2023. The 201 Phase 1 (first-in-human, randomised, double-blind, placebo-controlled, single ascending oral dose safety, tolerability and pharmacokinetics study of OCT461201 in Healthy Volunteers) will assess dose, safety and behaviour of 201 in the body. The 401 project will be put on hold as a clinic-ready project from Q1 2023.
Lead project now 201
Exhibit 1 - OCT Pipeline July 2022
Source: OCT
201 was originally developed by Pfizer and licensed by OCT from AskAt. It activates the Cannabinoid Receptor 2 (CB2). CB2 is mainly found outside the brain. 201 has no psychoactive effects. Independent literature evidence (Lin et al 2022) indicates that CB2 activation can overcome the peripheral nerve sensitisation and lower pain toxic effects of chemotherapy.
Exhibit 2 shows rat data and indicates a possible human dose of 3mg/kg according to OCT. The baseline is the untreated rat. The vehicle means the rats had paclitaxel chemotherapy, so had a fast pain response.
Exhibit 2 - 201 preclinical
Source: OCT
Pregabalin (Lyrica) is an anti-epileptic drug also indicated for peripheral and central neuropathic pain. In this experiment it is given at a very high dose.
This is a mix of synthetic cannabis molecules: THC (psychoactive) and CBD (non-psychoactive) in a 1:1 ratio. 401 will be delivered to the deep lung by an off-the-shelf, metered-dose, pressurised inhaler to give fast absorption. This aims to give fast pain relief from the sudden onset, stabbing pain of TN. The project will be put on hold once the current preclinical work concludes in early 2023. Current TN therapy is 60-80% effective but requires chronic dosing of carbamazepine, an old epilepsy drug with side effects.
Exhibit 3 - 401
Source: OCT