FSD Pharma throws resources behind legacy anti-inflammatory drug as potential coronavirus therapy

Focused on lead anti-inflammatory drug FSD-201 Launched Phase 2 study of drug known as micro PEA in December 2020 Developing drugs to treat gastrointestinal diseases in dogs and cats What FSD Pharma does: FSD Pharma Inc (NASDAQ:HUGE) (CSE:HUGE) is a publicly-traded holding company that owns subsidiary FSD Pharma BioSciences Inc, a specialty biotech pharmaceutical R&D firm focused on developing multiple applications of its lead anti-inflammatory drug FSD-201. The drug is now one of several therapeutics being advanced that could help reduce severe and deadly lung infection in coronavirus (COVID-19) patients. Known as ultra-micronized PEA, the drug is a naturally occurring fatty acid similar to an endocannabinoid, one of a suite of molecules found in cannabis that targets endocannabinoid (CB2) receptors in the human body. The company holds exclusive worldwide rights to the drug that has been used for 40 years to fight respiratory infections - except in Italy and Spain, where PEA is prescribed as a medical-food supplement to treat chronic inflammation.  FSD-201 works by reducing lung inflammation caused by small proteins called cytokines that are central to the “cytokine storm” phenomenon, where the body attacks its own cells rather than just fighting off the COVID-19 disease caused by the SARS-CoV-2 virus. This so-called storm of an "over-exuberant" inflammatory response causes acute lung injury in hospitalized patients and is a leading cause of death for those infected. Toronto-based FSD Pharma, which in 2020 began liquidating its cannabis-production operations in Canada to focus all its energies and resources on developing FSD-201, has had several successes in advancing the drug toward potential commercialization.  In fact, the US Food and Drug Administration (FDA) has authorized the initiation of a Phase 2 study of FSD-201 on COVID-19 patients. The company has also successfully completed a Phase 1 first-in-human safety and tolerability study for FSD201 in Australia.  How is it doing: FSD Pharma has launched its Phase 2 clinical trial of FSD201 for the treatment of hospitalized patients with COVID-19 after building up a capital runway of C$56.2 million.  The trial, which started in December 2020, is a randomized, controlled, double-blind, multicenter study with 352 patients to assess the effectiveness and safety of the drug. Patients are dosed at 600 milligrams (mg) or 1,200 mg twice daily, together with the standard of care (SOC), versus SOC alone in hospitalized patients with documented COVID-19. Patients in the study have symptoms consistent with influenza and/or coronavirus signs like fever, dry cough, and difficulty breathing. The primary objective of the trial is to determine whether FSD-201 plus SOC provides a “significant improvement” in the clinical status of patients which includes shorter time to symptom relief. Secondary objectives include determining whether FSD-201 plus SOC demonstrates additional benefit in terms of safety, help in bringing down fever, length of time to improve oxygen saturation, and length of time to clinical progression, including time to mechanical ventilation or hospitalization, and length of hospital stay. The company said the endpoint is "cytokine clearance" as measured by the Enzyme-Linked Immunosorbent Assay, or ELISA test. The treatment period for patients in the FSD-201 trial is 14 days and the primary endpoint will be determined at 28 days. Meanwhile, the company on March 17, 2021, entered into a license agreement with Innovet Italia SRL to develop FDA-approved veterinary drugs for the treatment of gastrointestinal diseases in dogs and cats. The agreement grants FSD Pharm an exclusive, worldwide license (excluding Italy and subject to a first refusal right maintained by Innovet) to research, manufacture, and commercialize products using certain proprietary formulations of ultra-micro PEA to treat the animals. FSD Pharma will develop the licensed products with a view to submitting an Investigational Animal Drug Application with the FDA within 36 months of the date of the agreement and will submit a New Animal Drug Application within 60 months of the effective date of the agreement. In addition, FSD Pharma will pay Innovet US $750,000 during the first year of the agreement. And within 30 business days of the first notification of approval of a New Animal Drug Application by the FDA of the first licensed product to receive such approval in the US, FSD Pharma will pay an additional non-refundable sum of US$750,000 to Innovet. The agreement also specifies certain royalty payments. FSD Pharma is required to pay Innovet 14% of any one-off lump-sum payments it receives as consideration for granting a sub-license to a third party with respect to a licensed product. In addition, the company is required to pay 5% of net sales of the licensed products. Inflection points: Release results of Phase 2 study of FSD-201 Further study of drug to treat osteoarthritis in the knee, endometriosis, and chronic pain (non-opioid) Exploring M&A and licensing opportunities to expand drug development pipeline What the boss says: “Commencing a phase 2 clinical trial to treat hospitalized COVID-19 patients is a major milestone achieved by our pharmaceutical team led by Dr Edward Brennan and a huge step forward for FSD Pharma,” the company's CEO Dr Raza Bokhari said in a recent statement. "We are joining the global fight against the deadly SARS-CoV-2 virus with a hope to demonstrate down-regulation of the over-expressed immune response in COVID-19 patients leading to better treatment outcome. FSD201 is formulated as a tablet for oral dosing and is a safe compound with no known serious adverse side effects. Numerous studies over the past 40 years have validated micronized PEA for its efficacy and safety in the treatment of, and prophylactic effects with respect to, other respiratory infections.” Contact the author: patrick@proactiveinvestors.com Follow him on Twitter @PatrickMGraham