In light of the COVID-19 crisis and a failure to meet endpoints on its atopic dermatitis trial, Botanix Pharma has decided to reorganize priorities moving forward.
Botanix Pharmaceuticals Limited (ASX: BOT) today provided investors with an update on its suite of cannabis-derived clinical trials that target dermatological and antimicrobial conditions. In addition to this, the company has provided its roadmap, outlining how Botanix will be moving forward amid the COVID-19 crisis.
The first change for BOT moving forward is the suspension of the BTX 1204 trial, which is a cannabinoid formula designed to treat atopic dermatitis. Despite showing minor improvements in patients atopic dermatitis, the recent phase 2 study did not achieve statistically significant results or meet its primary endpoints, and so Botanix has decided to place further trials of BTX 1204 on the backburner.
Instead, Botanix will be placing focus upon its antimicrobial platform BTX 1801, in addition to progressing key assets from the dermatology platform in a "clinically constrained" manner. The company advises that lockdowns occurring on the border of Western Australia, as well as between Australia and New Zealand are limiting access to clinical trial materials, while also preventing Botanix's staff to travel to these sites. The company states that these COVID-19 lockdowns have "greatly influenced the Company's near-term plans to conduct clinical studies."
The company went on to provide an outline of which trials would continue moving forward in light of the change in business priorities during the COVID-19 crisis:
- BTX 1503 (acne): the end of Phase 2 meeting will proceed as planned to gain guidance from the FDA as to the path required to support an NDA submission. Subject to any disruptions caused by the current Covid-19 situation, this meeting is targeted for the end of this quarter. Following that meeting, the Company will review the feedback from FDA and decide how to progress the development of BTX 1503;
- BTX 1204 (atopic dermatitis): clinical development will be suspended;
- BTX 1702 (rosacea): clinical development on hold until recruitment may begin again with an expectation of enrolling the study in a timely and consistent fashion;
- BTX 1308 (psoriasis): clinical development will be suspended;
- BTX 1801 (antimicrobial): proceeding and will be re-focused to be conducted wholly within Western Australia, and will resume recruitment as travel requirements within Western Australian regions are eased; and
- Permetrex: opportunities and partnerships will continue to be sought, both for the development of new products that can be rapidly brought to market for dermatology or antimicrobial applications.
In addition to the reshuffling of clinical trials, Botanix Pharma will be cutting costs where possible in order to maximize the company's cash runway, which will include reducing staff and consultant headcount and reducing directors' fees, with all board members agreeing to a reduction in base fees of 25% for a 12-month period, with the balance of director contract terms remaining the same.
In order to maintain operations despite a reduced headcount and fees, Botanix has agreed to issue options to remaining directors and staff, in consideration of this additional workload in order to compensate key players within the company. Option grants to Directors will be made under the Company's existing employee securities incentive plan and will be subject to shareholder approval, at a general meeting to be announced in the future.
A summary of the planned option grants is set out below:
• Vince Ippolito – 17,994,914 options
• Michael Thurn – 11,186,028 options
• Bill Bosch – 4,863,490 options
• Stewart Washer – 4,863,490 options
Options will be priced at a 34% premium to the 7-day VWAP up to and including 15 April 2020, vesting after 12 months and exercisable within 24 months of grant.
As of the 31st of December 2019, Botanix had A$27.2m cash, not including the ~A$7.6m R&D tax refund received in January 2020.
A further R&D tax incentive claim for a refund of ~A$5m to ~A$7m is expected to be lodged in respect of R&D activities for the year ended 30 June 2020.
The company has stated that its cash reserve is expected to be more than sufficient to fund the planned BTX 1801 (antimicrobial) and BTX 1702 (rosacea) programs and support Company costs over the coming 24 months.
Botanix's President and Executive Chairman Vince Ippolito, said: "The Company is extremely grateful to our team for the work that they have done to build Botanix to where it is today."
"As we chart a new course forward in these uncertain times, today we need to focus our expenditures and programs on activities that are highly meaningful to patients and that will create value for shareholders."
To learn more about Botanix Pharma, visit the company HQ here.
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