Diffusion Pharmaceuticals Inc. (NASDAQ:
DFFN) (“Diffusion” or the “Company”), an innovative
biopharmaceutical company developing novel therapies that enhance
the body’s ability to deliver oxygen to areas where it is needed
most, today announced that Robert Cobuzzi, Jr., Ph.D., Chief
Executive Officer, has issued a Letter to Shareholders. The letter
provides an update on recent events and outlook for the remainder
of 2021 and early 2022.
The full text of the letter follows:
Diffusion Pharmaceuticals Shareholder
Letter
September 9, 2021
Dear Fellow Stockholders,
I assumed the role of President and CEO at
Diffusion Pharmaceuticals one year ago, in September 2020. Since
that time, we have made many organizational and strategic advances
and have endeavored to regularly communicate our progress. The
purpose of this letter is to summarize these changes, highlight the
data obtained from our clinical trials and describe how we plan to
use the data to direct our development strategy for our lead
product candidate, trans sodium crocetinate (TSC).
Over the coming weeks and months, we will
continue to communicate our plans and progress through our usual
channels, including press releases, investor conference
presentations, media interviews and SEC filings. We also will seek
to expand the depth and breadth of information available about our
development activities through a series of podcasts featuring our
Chief Medical Officer, Chris Galloway, M.D. and me. The first
episode of this podcast series, entitled “The Science of Solving
for Hypoxia” is available through the Diffusion website at
www.diffusionpharma.com.
1. Organizational
ChangesThe story of every organization is primarily about its
people, so let’s start there.
Since last September, there has been significant
change at every level of our organization, from the Board of
Directors (Board) to the management team and to our operating team.
We have implemented these changes to most effectively position us
for short and longer term success.
I joined the Diffusion Board in January 2020 and
was appointed CEO in September 2020. My scientific training and
expertise, coupled with my significant biopharmaceutical industry
experience in drug development and business development, match well
with the current needs of Diffusion. Bill Hornung, our Chief
Financial Officer since late 2018, is another industry veteran.
Bill has been a great partner to me, both to provide historical
context and in helping to shape Diffusion for the future. Last fall
we further enhanced our management team with the addition of two
very skilled leaders: our General Counsel, Bill Elder, and our
Chief Medical Officer, Dr. Chris Galloway.
In addition to management team talent, we also
have added accomplished individuals throughout the organization,
including in our administration, clinical operations, finance,
quality assurance, and chemistry, manufacturing and controls (CMC)
functions. As we move forward, we plan to continue to grow and
supplement our team as Diffusion continues to mature.
At the Board level, Jane Hollingsworth, who
joined the Board in August 2020, was appointed our new Board Chair
in June 2021, bringing more than 25 years of experience founding
and leading life sciences companies. Diana Lanchoney, M.D., and
Eric Francois – both elected to the Board in June 2021 – bring
extensive technical expertise and many years of biopharmaceutical
company leadership experience to the Board. Jane, Diana and Eric
add meaningful new perspectives to our Board, enhancing the skills
available to support the organization.
Collectively, these changes already have had a
meaningful, positive impact on our ability to refine and execute
our strategy, which I believe position us well for future
success.
2. Development
Strategy ChangesLet’s talk more about the changes to our
development strategy over the last 12 months.
Since the founding of Diffusion, the focus has
been on developing TSC as a platform therapeutic that can be used
to enhance standard-of-care treatment for conditions complicated by
hypoxia. Today, the development of TSC remains the cornerstone of
our strategy.
Over time, we have generated a substantial
amount of data on TSC. This includes data on CMC, preclinical
safety and efficacy data in a wide array of experimental models,
clinical data on single dose safety, tolerability, and
pharmacokinetics in healthy volunteers, and clinical safety and
efficacy data evaluating TSC as an adjuvant therapy in the
treatment of a variety of indications, as noted below.
In late 2017, a Phase 2/3 follow-on study in GBM
patients initiated, and in late 2019 a Phase 2 clinical study in
acute stroke patients was initiated. However, both of these studies
were terminated prior to completion due to non-clinical factors,
including a lack of adequate financial resources and, in the case
of the stroke study, the onset of the COVID-19 pandemic in early
2020.
In April 2020, due to the anticipated
persistence of the COVID-19 pandemic coupled with the strong belief
in the potential of TSC to improve low tissue oxygen levels, we
announced a clinical research program evaluating TSC in patients
with COVID-19. This program led to our recently completed Phase 1b
clinical study evaluating TSC in COVID-19 patients.
The 24 patient, Phase 1b COVID-19 trial was
completed in February 2021. This study evaluated the safety and
pharmacokinetics of ascending doses of TSC administered every six
hours for at least five and up to 15 days, which was a more
frequent dosing regimen than had been used in previous clinical
studies. Topline results from primary endpoint data, announced
shortly after study completion in February 2021, indicated TSC was
safe and well-tolerated when administered using the more frequent
dosing regimen. Secondary and exploratory endpoint data, announced
in May 2021, indicated that patients receiving the highest TSC dose
tested, 1.5 mg/kg, had (i) faster time to improvement in World
Health Organization ordinal scale by day 7 and through day 29, (ii)
reduced time on oxygen supplementation, and (iii) reduced hospital
length of stay compared to those receiving lower doses.
It is important to recall that the COVID-19
trial was designed as a safety and tolerability study only and was
not designed or powered to evaluate TSC’s efficacy as a treatment
for COVID-19.
Focused new development strategy
Last fall, we took the opportunity to conduct a
thorough analysis of all available data to map a strategy for
future success. The available data at that point supported TSC’s
potential to enhance the standard-of-care for many hypoxia-related
indications but did not yet provide direct evidence of TSC’s
ability to enhance oxygenation in humans nor did it yet demonstrate
the safest and most effective doses to produce this oxygenation
effect.
In order to address these outstanding questions,
in November 2020 we announced our plan to conduct a trilogy of
short-term, clinical studies – collectively referred to as the
Oxygenation Trials – utilizing three different experimental
clinical models of oxygenation:
- The TCOM Trial was the first of our
three Oxygenation Trials. In short, it was designed to measure the
direct effects of TSC on peripheral tissue oxygenation (tcpO2) in
healthy normal volunteers using a device called a transcutaneous
oximeter (TCOM) that measures the release of oxygen from blood
vessels through the skin. This study was completed in March 2021
and is described in more detail below.
- The Altitude Trial, which we expect
to initiate in the fourth quarter of this year, is designed to
measure the effects of TSC on maximal oxygen consumption and
partial pressure of blood oxygen in healthy normal volunteers
exercising under conditions that simulate altitude and induce
hypoxia.
- The ILD-DLCO Trial, which we expect
to initiate in the late fourth quarter of this year, is designed to
measure the effects of TSC on the diffusion of carbon monoxide
through the lungs (DLCO) as a surrogate measure of oxygen transfer
efficiency, or uptake, from the alveoli of the lungs, through the
plasma, and onto hemoglobin within red blood cells, in patients
previously diagnosed with interstitial lung disease (ILD).
The TCOM Study
The topline results of the TCOM study were
announced in the second quarter of 2021. In this study, TSC was
observed to be safe and well-tolerated at all doses tested with no
serious adverse events or dose-limiting toxicities. Analysis of the
primary endpoint data indicated a positive dose-response trend in
TCOM readings with TSC as compared to placebo that persisted
through the measurement period. Due in part to the small number of
subjects in each cohort, and the inherent variability of tcpO2
measurement, the magnitude of effect was not statistically
significant; however, the trends in the primary endpoint data
indicated an improvement in peripheral oxygenation with TSC with no
evidence of hyperoxygenation, a potentially toxic condition.
The figure below was created by subtracting the
median response observed in the TCOM Trial’s placebo group from the
median response observed in each TSC dosage group at each of the
measurement times during the one-hour period following dosing. As
you can see, these data show increasing peripheral tissue
oxygenation following TSC administration that persisted through the
one-hour measurement period, particularly at the two highest doses
tested (2.0 mg/kg and 2.5 mg/kg).
A chart accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/b7d15092-3e6d-4012-8cf8-90a5f0d464e4
We believe the TCOM Trial provides clinical
evidence of exactly the outcomes we were hoping to see - that TSC
facilitates the passive diffusion of oxygen from areas of high
concentration to areas of low concentration without causing
hyperoxygenation.
While the results of the TCOM study were not
statistically significant - due we believe to the small sample size
and the innovative trial design - they represent a positive and
meaningful step towards the accomplishment of the strategic
objectives of our Oxygenation Trials. Moreover, the 2.0 mg/kg and
2.5 mg/kg doses at which the effects of TSC were observed in the
TCOM study are higher than the doses tested in any of the recent
clinical trials of TSC. Therefore, in addition to providing
evidence of a direct effect of TSC on oxygenation, these results
help inform dose selection for future trials.
3. Looking
AheadThe body of data we have amassed to date makes us optimistic
about the broad therapeutic potential of TSC. We believe the two
remaining Oxygenation Trials – our Altitude and ILD-DLCO Trials –
will answer additional outstanding questions, providing important
additional data related to TSC dose and oxygenation as well as the
mechanism of action. This information will guide our selection of
the initial TSC indication to be studied for regulatory approval,
which we expect to announce in the fourth quarter of this year.
Perhaps equally important to the progress we
have made in our clinical program, as of June 30, 2021, we believe
we have sufficient cash resources to fund our planned clinical
trials and other operational needs through 2023. This includes the
capacity to fully fund a Phase 2b clinical study evaluating TSC in
the initial indication we will choose and identify in the fourth
quarter of 2021 and expect to commence in the first half of
2022.
Looking forward, our team is committed to
maximum effort, good planning, and strong execution as we strive to
realize the potential of TSC for patients and for you, our
stockholders. We are excited about Diffusion’s prospects for the
future and remain focused on executing the plan we have designed to
develop TSC. We will continue to endeavor to win your confidence,
successfully demonstrate the clinical value of TSC, and build a
foundation for the future growth of Diffusion.
On behalf of the entire Diffusion team, I thank
you for your continued support.
Best wishes for your health and safety,
Robert J. Cobuzzi Jr., Ph.D.President and
CEODiffusion Pharmaceuticals Inc.
About Diffusion Pharmaceuticals
Inc.Diffusion Pharmaceuticals Inc. is an innovative
biopharmaceutical company developing novel therapies that enhance
the body’s ability to deliver oxygen to areas where it is needed
most. Diffusion’s lead product candidate, TSC, is being developed
to enhance the diffusion of oxygen to tissues with low oxygen
levels, also known as hypoxia, a serious complication of many of
medicine’s most intractable and difficult-to-treat conditions. In
addition to TSC, Diffusion’s product candidate DFN-529, a novel,
allosteric PI3K/Akt/mTOR Pathway inhibitor, is in early-stage
development. For more information, please visit us at
www.diffusionpharma.com.
Forward-Looking StatementsThis
press release includes express and implied forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, as amended, including regarding the Company’s
near-term strategic priorities and the potential therapeutic value
of TSC. The Company may, in some cases, use terms such as
“believes,” “estimates,” “anticipates,” “expects,” “plans,”
“intends,” “may,” “could,” “might,” “will,” “should,”
“approximately,” or other words that convey uncertainty of future
events or outcomes to identify these forward-looking statements.
Although the Company believes that it has a reasonable basis for
each forward-looking statement contained herein, forward-looking
statements by their nature involve risks and uncertainties, known
and unknown, many of which are beyond the Company’s control, and as
a result, the Company’s actual results could differ materially from
those expressed or implied in any forward-looking statement.
Particular risk and uncertainties include, among other things,
those related to: the Company’s ability to design, initiate,
enroll, execute, and complete its ongoing and planned studies
evaluating TSC; the optimal doses and dosing regimens of TSC in
connection with the potential treatment of any particular disease
or indication; general economic, political, business, industry, and
market conditions, including the ongoing COVID-19 pandemic; and the
other factors discussed under the heading “Risk Factors” in the
Company’s filings most recent Annual Report on Form 10-K and other
filings with the U.S. Securities and Exchange Commission. Any
forward-looking statements in this press release speak only as of
the date hereof (or such earlier date as may be identified) and,
except as required by applicable law, rule, or regulation, the
Company undertakes no obligation to update any such statements
after the date hereof.
ContactsInvestors:Tiberend
Strategic Advisors, Inc.Maureen McEnroe, CFA / Lisa
Shermmcenroe@tiberend.com / lsher@tiberend.com
Media: Kate
BarretteRooneyPartners(212)
223-0561Kbarrette@rooneypartners.com
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