Interim results from Kalytera Therapeutics Inc.'s phase II open-label study of multiple doses of cannabidiol (CBD) in preventing acute graft-vs.-host disease (GVHD) were positive enough to persuade the company to skip enrolling the high-dose cohort and move directly to a phase III registration study.

"We believe the data to date in our phase II study exceed what will be required in a phase III registration study to demonstrate the efficacy of CBD in prevention of acute GVHD, and leave little or no room for improvement with the high dose," said Robert Farrell, Kalytera's president and CEO. "For this reason, and because these results are consistent with results from two previous clinical studies conducted in Israel, we have decided to halt the ongoing phase II clinical study without enrolling the high-dose cohort, and proceed directly to initiate a phase III clinical registration study."

The news catapulted the San Rafael, Calif.-based company (OTCQB: KALTF) shares upward 25% to 3.9 cents on Monday.

GVHD is life threatening condition that can follow bone marrow transplants. In late May, the FDA approved Incyte Corp.'s Jakafi (ruxolitinib) for steroid-refractory acute GVHD for patients 12 and older.

Changing landscape

The CBD regulatory landscape has shifted just in the past year, allowing startups and small biopharmas to capitalize on endogenous cannabinoid compounds and not follow the traditional combinatorial chemistry path used by pharmaceutical companies to develop synthetic compounds, according to Money in the Pot, a report from Derwent, a unit of Clarivate Analytics, parent of BioWorld. Though Roche Holding AG, Boehringer Ingelheim GmbH and Abbvie Inc. have the strongest CBD portfolios, big pharma CBD fillings have dropped in recent years, the report noted.

In June 2018, GW Pharmaceuticals plc advanced Epidiolex, which had fast track and orphan drug designations so that it received priority review and approval with a rare pediatric disease voucher for treating Dravet and Lennox Gastaut syndromes. (See BioWorld, June 26, 2018.)

Then in November, Revive Therapeutics Ltd. secured FDA orphan drug designation for CBD to prevent hepatic ischemia and reperfusion injury resulting from solid organ transplantation. Revive also is investigating REV-200, a cannabinoid CB1/CB2 receptor modulator for treating liver diseases such as autoimmune hepatitis and nonalcoholic steatohepatitis. (See BioWorld, Nov. 8, 2018.)

Phase III design

The GVHD study is Kalytera's lead program, along with four orphan drug designations for treating and preventing GVHD in the U.S. and Europe. It also has a candidate for treating acute and chronic pain that consists of a cannabinoid conjugated with naproxen, an NSAID, with the goal of combining both molecules into a single drug intended to maximize activation of the alpha3 glycine receptor pathway.

Patients in the Kalytera study included those receiving bone marrow transplants from unrelated donors. The three-armed study included twice-daily doses of 75 mg, 150 mg and 300 mg oral CBD plus standard acute GVHD prophylaxis calcineurin inhibitor (cyclosporine or tacrolimus) plus methotrexate.

Incidence of grades 2-4 acute GVHD observed in the low-dose and medium-dose cohorts were found to be lower than historic norms. One of 12 patients in the low-dose cohort (8%) developed grade 2-4 acute GVHD after 180 days of observation. In the medium-dose cohort, no patients developed grades 2-4 acute GVHD. Data showed a reduction in the incidence of acute GVHD from a historic norm of 60% to 70% in patients receiving bone marrow transplants from matched unrelated donors to less than 10%.

The upcoming phase III, multicenter, multinational, randomized, double-blind, placebo-controlled study can be powered with a two-tailed "p" value of less than 0.01 and a statistical power of 90% with no more than 50 subjects, allowing it to be completed within one year and at a lower cost than anticipated. Patients will receive either 150 mg of CBD or a placebo twice daily for about 100 days.

Should the study be successful, Kalytera plans to commercialize the drug first in Australia and Israel, expanding later to the U.S. and the EU.

In March 2018, Kalytera began developing a cannabinoid-based compound for treating acute and chronic pain. Patents have been filed in the U.S. and other jurisdictions, and Kalytera has obtained an exclusive, worldwide license for that compound from Beetlebung Pharma Ltd., of Tel Aviv, Israel. Kalytera's compound consists of a cannabinoid conjugated with naproxen.

Kalytera signed an agreement with Echelon Wealth Partners Inc. in November 2017 to lead a brokered best efforts private placement of up to $5 million of convertible debenture units at a price of $1,000 per unit. The company said it would use some of the net proceeds to advance the phase II GVHD study.

The company closed the second and final tranche of a brokered private placement offering, consisting of 3.5 million shares priced at CA45 cents (US34 cents) per share, for gross proceeds of CA$1.6 million, in February 2017. At that time, Kalytera issued 33.3 million shares for aggregate gross proceeds of CA$15 million.

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