AQSZF: Aequus Pharmaceuticals Analysis and Research Report

2018-04-30 - by Asif , Contributing Analyst - 92 views

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Aequus is a growing specialty pharmaceutical company, with a foundation built on improving drug delivery of existing medications. Aequus has a diversified portfolio of internally developed clinical and preclinical stage reformulated products as well as a number of commercial stage, third party products that fulfill an identified unmet medical need.

The company's development pipeline is focused on advancing products in specialty therapeutic areas with a goal of addressing the need for improved medication adherence through enhanced delivery systems. Aequus intends to commercialize its internal programs in Canada alongside its current portfolio of marketed established medicines and will look to form strategic commercial partnerships for these programs in other markets that would maximize the reach of its product candidates worldwide. The company's most recent addition to the development pipeline was a long-acting form of medical cannabis, where there is a high need for a onsistent, predictable and pharmaceutical-grade delivery of products for patients.

The company's commercial infrastructure is Canadian-based, with specialty sales representatives currently promoting two specialty medicines to secondary care physicians. The company leverage the unique demographics in Canada, such as a highly-concentrated population, to have an efficient sales force that the company intend to grow through promotional partnership agreements, asset acquisitions, in-licenses and with its own internal development programs as they mature and enter the market.

Both its development and commercial programs are supported and validated by insights from patients and physicians to ensure there is a realizable benefit for them from its work in improving drug delivery. Aequus’ management team has a proven track record of successfully managing the required clinical development, regulatory approval processes and marketing of products either directly or through partners. The company continue to leverage its internal capabilities and know-how to execute an efficient commercial strategy and development plan to drive shareholder value.


Aequus is a revenue-generating, fully integrated specialty pharmaceutical company with development stage products and commercial activities in Canada. Aequus looks to leverage its core capabilities, commercial infrastructure and existing product portfolio to continue on the Company’s current growth trajectory. The Company’s near-term growth strategy includes the following key components:

Advance development programs through proof of concept clinical studies and regulatory meetings with the United States Food and Drug Association (“FDA”), with the objective of the programs being to add sufficient value to execute at least one regional license in the near term; Progressive build-out of the Company’s commercial platform, including leveraging its specialty sales force in Canada to enable Aequus to continue to in-license and sell high value branded products in Canada.

Over the past 15 months, Aequus has in-licensed two products, launched promotional activities for two third party products in the Canadian market, entered into an additional commercial collaboration for the promotion of an ophthalmology product in Canada, and supported the advancement of its internal programs. These activities support the key areas of Aequus’ growth strategy.



In October, 2015, Aequus became the exclusive promotional and marketing partner for the first to market generic form of tacrolimus IR. This product had already been approved by Health Canada. Aequus began promoting tacrolimus IR for the treatment and prevention of acute rejection following organ transplantation in December, 2015.

In April 2016, Aequus launched promotional efforts in Canada for PRVistitanTM, a treatment for the reduction of elevated intraocular pressure in patients with open angle glaucoma or ocular hypertension. Aequus obtained multiple provincial formulary listings within the first six months of Vistitan’s launch, including a Limited-Use drug designation on the Ontario Drug Benefit Plan.


In February 2016, Aequus entered into an agreement with Supernus which was amended on June 15, 2016 for certain licensing fees (“Supernus Agreement”), whereby the Company acquired the Canadian commercial rights to Topiramate XR and Oxcarbazepine XR. Both products are branded, once-daily, extended-release anti-epileptic drugs (“AEDs”), and have been successfully marketed by Supernus in the U.S. since 2013 under the tradenames Trokendi XR® and Oxtellar XR®, respectively.

Under the terms of the Supernus Agreement, Aequus will be responsible for the regulatory submission and commercial activities for both products in Canada. Supernus is eligible to receive milestone payments and royalties from product sales in Canada. Aequus has since had on-going dialogue with Health Canada around the acceptability of the FDA clinical package and foreign market experience, and expects to file an NDS in 2018

Topiramate XR

(under the tradename of Trokendi XR® in the United States)

Topiramate XR is a once-daily topiramate product designed to improve patient compliance and to show a better pharmacokinetic profile than the currently available immediate release products, which must be taken multiple times per day. The currently approved immediate release form of topiramate in Canada is approved for use in epilepsy and prophylactic migraine. Topiramate XR’s pharmacokinetic profile results in lower peak plasma concentrations, higher trough plasma concentrations, and slower input rate. This results in moother and more consistent blood levels of topiramate than immediate release topiramate formulations can deliver. Such a profile may mitigate blood level fluctuations that are frequently associated with many of the symptomatic side effects or breakthrough seizures that patients can suffer when taking immediate release products. Side effects can lead patients to skipping doses, whereupon the increased non-adherence could place them at higher risk for breakthrough seizures.

Oxcarbazepine XR

(under the tradename of Oxtellar XR® in the United States)

Oxcarbazepine XR is a once-daily oxcarbazepine product with a novel pharmacokinetic profile showing lower peak plasma concentrations, a slower rate of input, higher trough plasma concentrations, and smoother and more consistent blood levels compared to immediate release products. The currently approved immediate release form of oxcarbazepine in Canada is approved for use in partial seizures in epilepsy. Oxcarbazepine XR has the potential to improve the tolerability of oxcarbazepine and thereby reduce side effects. This could enable more patients to tolerate higher doses of oxcarbazepine which would permit them to benefit from the resulting improved efficacy and greater seizure control, which has previously been reported in patients taking higher doses. Patients taking higher doses of immediate release oxcarbazepine are often unable to tolerate the increased side effects. In addition, Oxcarbazepine XR oncedaily dosing regimen is designed to improve patient compliance compared to the currently available immediate release products that must be taken multiple times per day.

The expected benefits of once-daily extended release forms of anti-epileptic drugs such as Topiramate XR and Oxcarbazepine XR include: (i) improved patient adherence with a once-daily dosing regimen, making it more probable that patients maintain sufficient level of medication in their bloodstream to protect against seizures; (ii) delivery of lower peak plasma concentrations and lower input rate over an extended time period, resulting in smooth and consistent blood levels of topiramate or oxcarbazepine during the day; and (iii) avoidance of blood level fluctuations that can be associated with symptomatic side effects or breakthrough seizures.


In June 2017, Aequus entered into a commercial collaboration with Santen Pharmaceutical Co., Ltd. (“Santen”) to become its exclusive promotional and marketing partner for an ophthalmology product in Canada, which is currently under review by Health Canada for marketing approval.

Under the terms of this agreement, Aequus and Santen will share the strategic responsibility associated with promotional activities for a currently undisclosed ophthalmic product in Canada. Santen will be responsible for product manufacturing and distribution, while Aequus will be mainly responsible for the field activities. Net product revenues will be split between Aequus and Santen over a ten-year term. The agreement also contemplates break fees to Aequus in the event of Santen internalizing the asset prior to the end of the term.


Aequus began promotional activities for Tacrolimus IR in December, 2015 and receives a tiered revenue split on incremental sales of the product over the established baseline set prior to promotion.

Tacrolimus immediate release is an immunosuppressant used for the treatment and prevention of acute ejection following organ transplantation. Tacrolimus is part of a patient’s immunosuppressive therapy prescribed chronically in their lifelong management to prevent graft rejection. Tacrolimus is recommended as a first line calcineurin inhibitor treatment by the BC Transplant consensus guidelines and is prescribed in >90% of new kidney transplant patients (OPTN/SRTR 2014). Due to the chronic risk of graft rejection, tacrolimus has been classified as a Critical Dose Drug with a Narrow Therapeutic Index. In Canada, tacrolimus is available in an immediate release form, marketed under the brand name of Prograf® in Canada, and in an extended-release form, marketed under the brand name of Advagraf® in Canada. Aequus is promoting the first to market and only currently available generic version of Prograf®.

In 2015, the immunosuppressive market in Canada reached $241M in sales, with tacrolimus products accounting for $100M. Since the initiation of Aequus’ promotional efforts, the generic version of the most commonly used dose of tacrolimus IR (1mg) has experienced growth of 153% to date and continues to gain market share from branded tacrolimus alternatives.

PRVISTITANTM (bimatoprost 0.03%, ophthalmic solution)

The second product promoted by Aequus’ salesforce is a branded ophthalmology product, PRVistitan™ (bimatoprost 0.03%, ophthalmic solution), obtained through the acquisition of Aequus Pharma (Canada) Ltd., formerly TeOra Health Ltd. (“TeOra”), on July 13, 2015. Commercial activities for this product commenced in May 2016. Similar to Tacrolimus IR, Aequus will split revenues of this product with its partner in a tiered structure.

Bimatoprost 0.03% is a prostaglandin approved by Health Canada for the reduction of elevated IOP in patients with open angle glaucoma or ocular hypertension. The Canadian glaucoma market in 2015 was estimated to be over $182 million, of which prostaglandins remain one of the primary treatment options for lowering IOP in glaucoma. There were an estimated 350,000 people living with glaucoma in Canada in 2015. The disease is the second leading cause of blindness worldwide, but is asymptomatic, which means that more than half of people are unaware they have it. The incidence of glaucoma is highest in patients bove the age of 80, but onset may be as early as 40 years of age. IOP-lowering drugs are prescribed as soon as the disease is diagnosed and must be taken chronically to prevent vision loss. Prostaglandins are the first-line approach among IOP-lowering agents, in 2015 bimatoprost accounted for 42% of all rostaglandin prescription volume in Canada (IMS Health).

PRVistitanTM, which was approved by Health Canada in 2014, is currently the only marketed version of 0.03% bimatoprost ophthalmic solution in Canada for this indication. Since its launch, and with the support of Aequus’ promotional efforts, Vistitan™ has been successfully listed among 90% of private payor groups as well as a benefit under key provincial formularies, including the Ontario Drug Benefit Plan, Alberta Health and Manitoba Health.

AQS1301 – Once-weekly transdermal aripiprazole

Key Highlights

AQS1301 is a once-weekly transdermal formulation of aripiprazole; Among the currently approved indications for aripiprazole, extensive primary research done by Aequus has validated the most suitable patient candidates for a transdermal patch to include major depressive disorder in elderly patients in a homecare setting, autistic patients suffering from irritability, as well as newly diagnosed and mild patients with Bipolar I Disorder; Two Proof of Concept clinical studies have been successfully completed in healthy volunteers; FDA pre-IND meeting feedback confirmed regulatory path forward via the Section 505(b)(2) accelerated approval pathway in the United States.

Product Overview

Aripiprazole is an atypical anti-psychotic sold under the brand name Abilify®. Originally approved and marketed in 2002 for schizophrenia, Abilify® is currently sold in over 65 countries and regions. Since its initial approval, aripiprazole has seen a label expansion in the United States to include acute treatment of manic and mixed episodes associated with bipolar I, adjunctive treatment of major depressive disorder, irritability associated with autistic disorder, and treatment of Tourette’s disorder. In 2015, Abilify® saw its first generic competition in the USA as its patent exclusivity expired. For 2015, aripiprazole US sales totaled $6.3 billion, with branded Abilify® representing 70% of sales revenues. Aripiprazole remains one of the most commonly prescribed anti-psychotics globally, with the compound currently available in oral tablets, oral solution, and intramuscular injection.

AQS1301 is designed to consistently deliver aripiprazole over a seven-day period at levels comparable to currently marketed once-daily formulations. By delivering aripiprazole over seven days in a comfortable, convenient and easy-to-use weekly patch, AQS1301 is intended to promote enhanced patient compliance.

Aequus has advanced the once-weekly, transdermal aripiprazole patch with its development and manufacturing partner, Corium. Aequus successfully completed an initial Proof of Concept clinical study for AQS1301 in December 2015, demonstrating that sustained, seven-day delivery of therapeutic doses may be possible with the current formulation. A follow-on Proof of Concept clinical study in healthy volunteers was completed in February 2017, demonstrating that steady state plasma concentrations were achieved by week three with relative concentrations of aripiprazole and its active metabolite, dehydroaripiprazole, comparable to oral dosing of Abilify®.

Following a pre-IND meeting with the FDA in August 2017, the FDA agreed that AQS1301 is a suitable candidate for the 505(b)2 regulatory pathway for approval in the United States. A Section 505(b)(2) NDA allows for regulatory approval in the United States, where the development of a new dosage form for an already approved drug, such as a change from a solid oral dosage form to a transdermal patch, can rely to some extent on previous safety and/or efficacy data provided by the literature or can reference past findings of safety and effectiveness for the approved drug.

Aequus has expanded its patent portfolio for AQS1301 to include China, the United States, Russia, Mexico, Japan, Canada and Australia, and is pending in multiple additional territories.

AQS1302 – Long-acting transdermal clobazam

Key Highlights

Clobazam is used for the treatment of epilepsy globally, with the exception of the United States where it is approved specifically for a severe form of epilepsy, Lennox-Gastaut Syndrome (“LGS”). Clobazam is also used for the treatment of anxiety in European and Latin American countries; AQS1302 is expected to provide the first transdermal, long-acting alternative to oral AED; Skin tolerability studies to date have shown positive safety data, Aequus anticipates advancing the program with the intention of gaining approval via the Section 505(b)(2) accelerated regulatory pathway in the United States.

Product Overview

Clobazam is a unique AED associated with fewer sedative side effects than other agents in its class (Sankar 2012). It is currently marketed in markets outside of the United States under the brand name Frisium® for the treatment of epilepsy, anxiety and alcohol withdrawal. It was approved in the United States in 2013 for LGS with an orphan designation under the brand name Onfi®. In 2015, US sales of clobazam reached $370 million USD. Clobazam is currently available as oral tablets and as a solution, dosed twice daily, and can be challenging for a caregiver or parent to administer, particularly in patients with severe, debilitating epilepsies such as LGS where difficulty swallowing is common. A long-acting form of clobazam in a non-invasive and easy to use patch is being developed to relieve this burden on patients and caregivers.

The formulation for AQS1302 is currently being optimized and has shown in-vitro to deliver the flux profile required for once-daily and up to seven days of therapeutic doses. Aequus has completed skin irritation and sensitization study in-vivo in animal models and expects to advance this program into a Proof of Concept clinical study in 2018. Similar to AQS1301, Aequus expects to follow a 505(b)(2) pathway in the United States for AQS1302 which will be further defined as the Company obtains Proof of Concept clinical data and obtains feedback from the FDA through a pre-IND meeting to further define the clinical plan.

Aequus has filed an international patent application with the US Patent and Trademark Office (“USPTO”) that covers transdermal extended-release formulations of clobazam and owns the worldwide rights to the formulations described in the patent application.

AQS1303 – Long-acting transdermal pyridoxine / doxylamine

Key Highlights

The combination of pyridoxine / doxylamine currently approved is first-line therapy and the only n-label intervention for nausea and vomiting of pregnancy (“NVP”) dosed several times per day; Aequus’ transdermal alternative provides a non-oral and long-acting alternative to the oral form; Initial Proof of Concept clinical study successfully completed in healthy volunteers; FDA pre-IND meeting anticipated in early 2018 to confirm approval via the 505(b)(2) accelerated approval pathway in the United States.

Product Overview

Pyridoxine/doxylamine is currently marketed as Diclegis® (United States)/Diclecitin® (Canada) for the treatment of NVP, as an oral tablet dosed up to four times per day. Diclegis is the only FDA approved medication for morning sickness in pregnant women and in 2015 reached sales in the United States of pproximately U.S.$120 million. A long-acting transdermal form of pyridoxine/doxylamine is being developed by Aequus to address the risk of missed doses due to emesis (vomiting) and to provide consistent symptomatic relief.

Aequus has demonstrated the current formulation can deliver the flux profile in-vitro required for oncedaily and up to seven days of therapeutic doses. Aequus completed a Proof of Concept clinical study in September 2017 with results suggesting that sustained delivery of therapeutics levels of the active ingredients through the skin over a multi-day period is possible with the current formulation. The formulation was well tolerated with no serious adverse events reported.

Aequus expects to follow a 505(b)(2) pathway in the United States for AQS1303 which will be further defined as the Company obtains Proof of Concept clinical data and presents the FDA the clinical plan during a pre-IND meeting.

Aequus has filed an international patent application with the USPTO that covers transdermal extended release formulations of the combination of doxylamine and pyridoxine. Aequus owns the worldwide rights to the formulations described in the patent application.

AQS1304 - Medical cannabis program

Aequus has initiated a research program of cannabinoid-based therapeutics targeting neurological disorders. n 2016, Health Canada provided patients in Canada the ability to access cannabis for medical purposes when recommended by their physician. There are insufficient data, however, for proper therapeutic treatment protocols regarding the proper dosage and frequency for patients dealing with a wide variety of symptoms and disease areas. Aequus recently published a survey that confirms the medical need for improved clinical trial data supporting safety and efficacy of medical cannabis, reliability of dose delivery systems, high quality data collection tracking real world clinical outcomes, physician education, and quality controlled ingredients.

Aequus has formed the following collaborations and steps forward in connection with this program:

  • In March 2017, Aequus acquired an exclusive world-wide license to a transdermal patch formulation containing cannabinoids for use in the treatment of epilepsy, Multiple Sclerosis and certain other neurological disorders from TRPL;
  • In May 2017, Aequus completed a needs assessment study with over four hundred physicians to validate and select a medical cannabis target product profile that is best suited for the needs of patients;
  • In June 2017, Aequus and CDRD entered into a broad research collaboration to establish preclinical safety and efficacy of select cannabinoid-based therapeutics targeting certain neurological movement disorders;
  • In August 2017, Aequus formed a collaboration with Scientus Pharma, Inc. (“Scientus”) to be the evelopment and commercial supplier of specific cannabinoid extracts, with an option for Scientus to co-fund the development of a cannabinoid containing transdermal formulation that would be esigned and optimized to address certain neurological disorders;
  • In August 2017, Aequus entered into a collaboration with Ehave, Inc. (“Ehave”) to access Ehave’s bioinformatics platform, providing cost effective and clinically relevant data collection in Aequus’ anticipated clinical trials in the medical cannabis regulatory regime.

Clinical Development Timeline

Aequus plans to advance the development of AQS1301 through to completion of the Phase 1 Bioequivalence study in the next two years. Concurrent with the Phase 1 clinical programs for AQS1301, Aequus anticipates engaging in partnering discussions relating to commercialization of the product in certain markets. In the next two years, Aequus also plans to advance its internal programs, AQS1302, AQS1303, and its recently announced potential program in medical cannabis, through formulation development and Proof of Concept clinical studies. The Company’s product development progress is contingent upon a number of factors. See the heading “Financial Instruments and Risks” below and the heading “Risk Factors” in the Company’s 2016 AIF. There can be no assurances that Aequus will complete each stage of development in accordance with the timelines set out above, or at all.

Out-Licensing Activities

Aequus continues to pursue development collaborators and marketing partners for its internal programs in markets outside of North America, particularly for AQS1301 and AQS1303 following the successful completion of Proof of Concept clinical studies for each in 2017.


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