SMALL CAP IDEA: Why Investors Should Add Hemogenyx Pharmaceuticals to Their Watchlist

In a recent article, I said that at least two dozen microcap life sciences stocks were waiting to rise once interest in the sector returned.

Investors can add now Hemogenyx pharmaceutical products on the watchlist after doing the near impossible by raising $4.2 million at a time when investors have largely gone into hibernation.

This feat of ingenuity, which will fund the early phases of a first-in-human study of HEMO-CAR-T, the drug developer’s key asset, only tells part of the story.

The pedigree of the scientific team supporting Hemogenyx’s efforts is impressive.

At the same time, interest among major pharmaceutical companies in next-generation CAR-T – the type of therapy Hemogenyx is developing – has pushed companies like AstraZeneca, Johnson & Johnson, Abbvie and Novartis past the billion-dollar threshold. and royalty payments.

Upfront payments, usually a good litmus test of the ‘real’ interest of these titans of the drug world, are mouth-watering; in some cases up to $100 million.

The reason? CAR-T offers something the healthcare industry rarely comes up with: a healing treatment, showing that the world has truly left behind the era of me-too, once-a-day pills like statins.

Anyway, before we get into the nitty gritty of the Hemogenyx investment case, it’s probably worth explaining what exactly CAR-T therapy is and how it could revolutionize the treatment of cancers like acute myeloid leukemia (AML), which is the specific treatment. area of ​​interest of this British biotech.

CAR-T, or chimeric antigen receptor T-cell therapy, is redefining the fight against the disease by reprogramming the body’s natural defenses, called T cells, to recognize and kill cancer cells.

This advanced form of immunotherapy involves extracting T cells from a patient, genetically engineering them to target cancer cells, and then reintroducing these enhanced cells into the patient’s bloodstream.

CAR-T has achieved notable success in targeting certain blood cancers and offers new avenues for combating previously untreatable cancers.

Despite its potential, much of the research is now focused on the significant side effects of CAR-T therapy, while expanding its applicability to a broader range of cancer types.

Hemogenyx will use the newly raised funds to bring HEMO-CAR-T to the clinic later this year to treat AML.

The open-label study will test for possible side effects of treating people with blood-borne diseases and assess how the therapy works on the body.

A secondary goal or “endpoint” will be whether any of the critically ill AML patients chosen for the trial respond to the CAR-T infusion.

Under strict U.S. Food & Drug Administration guidelines, patients will be dosed individually one month apart, recognizing that people are receiving potentially toxic cells.

Hemogenyx hopes to have results from “two or even three patients” in time for the American Society of Hematology conference in early December.

Success at this stage would yield a 30% response rate, says Dr. Vladislav Sandler, CEO and co-founder of Hemogenyx.

The research work will be carried out by a team from the University of Pennsylvania, led by Professor Nolle Frey, who has led a number of important CAR-T clinical trials.

The content was provided by Professor Carl June, the ‘father’ of CAR-T, and his colleague, Dr. Saar Gill, who was involved in the preclinical research into HEMO-CAR-T.

Regarding the university’s involvement, Sandler said, “This is not a situation where we paid (UPenn) to do the work. They don’t work that way. It has always been data-driven.”

While it is no guarantee of success, it does provide validation for the science behind Hemogenyx’s efforts.

The process of creating individual CAR-T treatments is so expensive that the money raised in February could be enough to dose three patients.

Hemogenyx will look to seek further non-dilutive funding to assess a cohort of approximately 18 AML patients, which will move it into the Phase II phase of clinical evaluation.

This is crucial because this is the point that the big pharmaceutical companies in the sector have gotten involved with the deals mentioned above.

If all this indicates that Hemogenyx is a one-trick pony, then that would be misleading.

Before venturing into the field of CAR-T, the team worked with Eli Lilly to develop a breakthrough that improves bone marrow and stem cell transplant procedures.

The approach focuses on the first critical stages of eradicating diseased cells and replacing them with healthy cells, using a CDX bi-specific antibody that is both safer and more effective than traditional chemotherapy.

“We decided to do something that other people wouldn’t think of at the time,” Sandler says. This has been a theme in all of Hemogenyx’s research: trying the hard.

As such, the company has created and is a leader in the field of chimeric bait receptors. Simply put, CBRs are designed to attract and capture harmful cells, such as cancer cells, by pretending to be something the harmful cells want to attach to.

Once the bad cells attach to these bait receptors, the immune system can easily find and destroy them.

The research is being used to combat brain cancers such as glioblastoma and neurodegenerative diseases, where delivering therapies across the blood-brain barrier has long been problematic.

At the same time, it is working on intranasal delivery of CBRs to tackle airborne viral infections, an area of ​​research relevant to the civilian defense industry and the military.

While Sandler doesn’t know exactly who he’s talking to, discussions are underway with parties interested in helping develop defenses against viral infections, the CEO confirmed.

“We talk to institutions and agencies,” says Sandler. “There’s a lot of interest and we’re driving these conversations forward.”

The ice age-like big freeze on Britain’s small-cap market means that none of the company’s potential is captured in its current share price, which values ​​Hemogenyx at a bargain £21m.

If we accept that this is a cyclical anomaly, the recovery could be dramatic – not just for the sector, but also for individual stocks like Hemogenyx.