The biopharmaceutical industry is a high-risk, high-reward industry where stocks soar and plummet with the approval or rejection of drugs. In addition, a strict regulatory framework must govern this sector in order to prevent scams and ineffective or harmful treatments, so most companies have to undertake years of research and extended trials to get a product approved for commercial production. As a result, investors willing to invest in this sector must be wary of many factors such as research parameters, market catalysts, future prospects and competitive edge.
Today, a majority of the listed development-stage biopharma players (essentially zero-revenue companies) have a single product focus which could either make or destroy the fortunes of the company as well as the investors overnight. Hence, companies with a diversified pipeline of drug candidates catering to a large addressable market usually deserve a premium as they have a lower risk of failure and a higher diversification of drugs.
In this article, we will take a look at one such highly diversified biopharma player known as Hoth Therapeutics (HOTH, Financial), which has a couple of very interesting drug candidates going through clinical trials.
Company overview
Hoth Therapeutics was founded in 2017 and is headquartered in New York. It is a clinical-stage biopharmaceutical company dedicated to developing next-generation therapies that cater to a wide variety of ailments. It has nine drugs in its pipeline which are being developed to treat a variety of diseases like atopic dermatitis, skin toxicities related to cancer therapy psoriasis, chronic wounds, asthma, pneumonia and acne.
The company has also entered into agreements to advance the development of two therapeutics prospects for preventing or treating Covid-19. The management looks to forge partnerships with medium and large-sized pharma to help out in their research as well as post-trials licensing of its drug candidates. It currently has license agreements with the George Washington University, University of Maryland, Isoprene Pharmaceuticals, North Carolina State University, Chelexa BioSciences, the University of Cincinnati and others.
The BioLexa offering
BioLexa is Hoth Therapeutics’ proprietary antimicrobial topical formulation for treating diseases mediated by Staphylococcal biofilms. The bacterial biofilms are specialized communities consisting of bacteria that stick to biotic or abiotic surfaces and other bacteria with a protective extracellular matrix. However, when these bacterial biofilms continuously mature, it results in chronic and recurring infections that are hard to treat because of the biofilm’s barrier effect, which facilitates antibiotic resistance and avoids immune system mechanisms.
Hoth Therapeutics’ BioLexa formulation is a mixture of two formerly approved compounds targeting the core Staphylococcus Aureus infection that is hypothesized to potentiate Atopic Dermatitis (AD) or eczema flares. Out of the two compounds, one compound prevents biofilm development which protects from underlying disease and enables the second compound, which is an antibiotic, to treat the underlying conditions with more effectiveness. Paediatric and adult mild to moderate AD populations are the target market for this non-corticosteroid treatment.
The relevant regulatory approvals to conduct the Phase 1b clinical trial for BioLexa Lotion in Australia were received on Dec. 9, 2020. The site recruitment has been completed, and the dosing of Cohort 1 has also been completed. BioLexa's interim safety review shows that it was well tolerated with no serious adverse effects, and neither drug-related nor treatment-emergent adverse events were observed. In addition, BioLexa's Cohort 2 submission and screening are expected to start in the coming months. The company conducted a study to assess the safety, tolerability, pharmacokinetics and efficacy of twice daily application of BioLexa in healthy adult subjects and patients with mild to moderate atopic dermatitis. According to the study results, a combination of gentamicin and Ca-DTPA is more effective in minimizing bacterial growth and inhibiting biofilms formation than each compound individually. Moreover, the company expects the atopic dermatitis market to nearly triple from $6.4 billion in 2017 to $18.3 billion by the end of 2027 indicating a lot of potential sales of BioLexa assuming it is approved.
Progress of HT-001
The second core drug candidate of Hoth Therapeutics is known as HT-001, which looks to treat cancer patients suffering from cutaneous toxicities (in the skin, nails and scalp) because of EGFR inhibitor therapies. HT-001 was developed by Hoth Therapeutics in conjunction with Scientific Advisor Board Members Dr. Jonathan Zippin, Dr. Mario Lacouture and Dr. Adam Friedman to ensure the key inputs in developing formulation were patient-focused attributes. This formulation has a proprietary excipient blend that boosts skin barrier function after application.
The pre-IND (Investigational New Drug) meeting submission was completed by the company in December 2020, and the company received pre-IND WRO from the U.S. FDA in February 2021. IND-enabling studies were initiated in Q2 2021, and Hoth Therapeutics has an IND application/clinical trial target for early 2022. As per the 12-week study conducted by the company, the topical application of HT-001 majorly minimizes erlotinib-induced cutaneous toxicities (71% reduction compared to control). Thus, the study further supports HT-001's use as a topical intervention for the treatment of EGFR inhibitor-induced cutaneous toxicity. The animal studies conducted to investigate the efficacy, safety and tolerability of topical HT-001 for treating EGFR inhibitors related to skin toxicities suggested that the administration of HT-001, either oral or via topical application, had been effective in majorly reducing EGFR inhibitor-induced skin toxicities in rats. In addition, the transepidermal water loss test model's preliminary data showed effective skin protection for up to 24-hours after application. The in-vitro permeation testing of the drug using human skin also indicated high permeation and retention of API after applying the selected HT-001 formulation.
It is worth highlighting that EGFR inhibitor cutaneous toxicities occur in up to 90% of patients undergoing EGFR inhibitor therapy, but currently, there is no other approved product in the market to treat it. As per the management, the market for EGFR inhibitor skin toxicity is expected to multiply more than seven times from $52 million in 2018 to $391 million by the end of 2030, which makes HT-001 a high-potential drug.
Final thoughts
As we can see in the above chart, Hoth Therapeutics’ stock price movement has been slow. While it is difficult to value zero-revenue companies like Hoth, the company does have a huge pipeline, and the BioLexa Lotion and HT-001 formulations are both highly promising treatments addressing multi-billion-dollar market opportunities. The company has a diverse and solid pipeline of pre-clinical candidates such as HT-002 and VaxCelerate (Covid-19), HT-003 (acne and psoriasis), HT-004 (asthma and allergies), HT-KIT (cell-derived cancers and anaphylaxis) and HT-005 (cutaneous lupus).
After recent fundraising efforts, the company has sufficient cash to take itself through the clinical and pre-clinical programs for the next couple of years. While Hoth Therapeutics may have all the standard risks associated with a typical clinical-stage biopharma company, its highly diversified pipeline and large addressable market make it an interesting pick for biotech investors with a high risk appetite.
