Uncovered: Protecting brains of stroke patients – Argenica Therapeutics

Bryce: [00:00:31] Welcome to Uncovered by Equity Mates, a podcast where we shine a light on small to mid-cap companies that don't get analysts attention or media coverage. And today we're looking at Argenica Therapeutics to chat through. And as always, is my equity buddy Ren. How are you going? 

Alec: [00:00:45] Oh, I'm very good, Bryce. Very excited for this episode and very excited for our next iteration of uncovered. We've been doing it for a while now, and rather than jumping straight into the interview, we're going to break down the company, talk about, what we've learned, I guess, and then we're going to speak to the CEO and managing director of, Argenica Therapeutics, Liz Dallimore. So, a big episode and an interesting company that we're covering today. 

Bryce: [00:01:13] That's it ran. So today's company, as I said, are Argenica Therapeutics. The ASX ticker is AGN is a Pre-revenue pharmaceutical company. That is acting in the stroke space. 

Alec: [00:01:25] Yes. They are working on a drug, a oh seven. Yeah. This w seven doesn't have a license to kill though. It's got a license to save. And particularly, try and save brain cells that are killed during a stroke. So I think let's take a step back. Let's talk about strokes. When it comes to strokes, there's a saying: time is brain. And the reason for that is, during a stroke, blood vessels are blocked and oxygen can't make it to the brain. When your brain loses oxygen, it starts losing brain cells. Somewhere we read that a lack of oxygen kills 1.9 million brain cells every minute. Yeah. 

Bryce: [00:02:06] Pretty confronting

Alec: [00:02:07] I don't know how many brain cells we have.

Bryce: [00:02:10] I thought that as well when I was reading through this, I can feel like billions upon trillions. All right.

Alec: [00:02:17] 86 billion neurons, according to my quick Google search. Yeah. So what are we talking, like, less than a percent a minute still. 

Bryce: [00:02:27] Yeah. You don't want any brain cells. Yeah. I wonder how many losing a concussion is a bad concussion. And we'll take that offline. 

Alec: [00:02:34] Yeah, yeah. So I think that is why they say time is Brian. Time is. Because the longer that you're deprived of oxygen, the worse the outcomes are. There's like a I think it's called like a golden hour or something in strokes like that first hour, getting intervention is critical. But then they talk about a 4.5 hour window for treatment. 

Bryce: [00:02:56] Yeah. Which I thought was much larger than I thought it was. I, I'd always had in my head that golden hour. Yeah, yeah. Which obviously is the most critical, but sadly, only 35% of patients suffering from an acute stroke arrive within that critical 4.5 hour window arrive at hospital. Yeah. So being able to do something within that 4.5 hour or stretch that 4.5 hour out is where Argenica Pharmaceuticals comes in. 

Alec: [00:03:24] So I think the traditional way that people have tried to approach this issue is, all right, we've got 4.5 hours. We've really got an hour. But let's say 4.5 hours, how do we get people there as soon as possible? And so we've spoken to another company in this uncovered series, Vision Medical Devices, who are working on portable stroke detection technology so that that actually go on the ambulance to a stroke patient. Similarly, you know, Victorian Health is trialling a mobile stroke unit. Again, the idea is how do we get patients to care quicker? It's to bring the care to the patients rather than get the patient, bring them to the hospital. Argenica have slight, asking a slightly different question. And rather than trying to get the patient to hospital within that 4.5 hour window, they've asked, how can we widen that 4.5 hour window? And that's where this drug, AJ seven comes in.

Bryce: [00:04:20] So, this started as a project coming out of the University of Western Australia, a current theme that we have with a lot of these same. Yeah, these uncovered companies born born out of research at Australian universities. Love to say.

Alec: [00:04:33] Can I also just make the point that not the majors two cities, universities. We've had research from the University of Adelaide, University of Queensland, Queen of Queensland, University of Technology. Yeah. And I think multiple from University of Western Australia. 

Bryce: [00:04:46] Yeah. Great. So yeah it started as a research project and then has now been spun out to now try and commercialise. So Argenica Therapeutics was spun out of this research project to actually start commercialising this. And in June 2021, it was listed on the ASX to go out and essentially raise enough funds to put this drug into development and take it through the three phases of clinical trials that we'll speak to Liz about. 

Alec: [00:05:14] Yeah. Well, I guess a primer on clinical trials. Most clinical trials go through three major phases. And if you want to get your drug approved in any country, you really have to go through it. In Australia, the therapeutic goods. Administration over in the US, the Food and Drug Administration generally. Phase one is a small trial, a few few patients focussed on safety. What are the side effects? How safe is it? That's what you're trying to answer. Phase two is a slightly larger trial, generally up to 100 patients. And that's starting to assess the effectiveness of the drug. Sometimes in comparison to another treatment, sometimes in comparison to a placebo. Phase two you want to ask does this work at all? Phase three is the larger trial, sometimes up to a thousand patients, sometimes across different countries or different hospitals, different sites. With this phase three trial, you're comparing the new treatment to the best available treatment. And you really want to say, does this work better than what already exists? And so that's the process are Argenica are going through. And that's why it was created to take this drug through it. It commenced phase one trials in 2022, completed them at the end of the year, and reported to the market in 2023 that it sort of ticked everything it needed to take all the safety concerns. And so it moved to phase two and it kicked off phase two really quite recently, April 2024, it dosed its first five patients. So very early days of phase two, but that's sort of where the company is in its, I guess, clinical approval journey. [

Bryce: [00:06:57] Yeah. We'll pick that conversation up with Liz. So Ren, let's have a quick look at the financials. We said that it's pre-revenue. So it's not actually making any revenue from selling I seven. As with most pharmaceutical companies, the revenue at the moment is coming from R&D and tax. Sorry. Most phpment pre commercialisation stage a lot of the revenue that they get is from R&D tax incentives, government grants, those sorts of things. Obviously with the idea that it's commercialised at some point. 

Alec: [00:07:36] That's the cutting edge. It's like oh this is coming to us for. Look, I think the important thing is for a pre-revenue company like this, what's its balance sheet like? Does it have the money to say it through. And we're going to ask Liz that question directly. But I think when researching our Argenica, one thing that it was impossible not to notice is that for a company that is, that is making a loss every year and is pre-revenue it, the cash on its balance sheet keeps growing year after year, and that's because it's fundraised every year. So it IPO in 2021 and raised 7 million from investors. Then it had a $5.5 million placement in 2022 and a $4 million placement in 2023. So they can fundraise. Yeah.

Bryce: [00:08:23] Hold on.

Alec: [00:08:24] I actually don't know how much money like, phase three clinical trials are expensive.

Bryce: [00:08:29] So what's yours? 

Alec: [00:08:30] Squeeze? Yeah, they have nine mil on their balance sheet at the end of last financial year.

Bryce: [00:08:37] Let's say that they're losing 4.5 million bucks a year. 

Alec: [00:08:40] Spending. Yeah. Spending. Yeah. Yeah. 

Bryce: [00:08:43] So runway is tight. I mean the faster you can get this to commercialisation obviously the better it is.

Alec: [00:08:49] Whether or not this company succeeds gets through clinical trials like it's a big problem. And like some of the numbers around the scale of the problem are pretty confronting. So, every nine ten minutes someone has a stroke. In 2019 that was 13 million people globally. But here is the most confronting number I came across. 1 in 4 people will suffer a stroke in their lifetime, and only 10% will recover almost completely. 

Bryce: [00:09:20] Both of those stats are crazy. Yeah, 1 in 4. 

Alec: [00:09:23] 1 in 4. Yeah. 

Bryce: [00:09:24] Globally or in Australia.

Alec: [00:09:27] I think globally. Wow. Yeah. 

Bryce: [00:09:29] And only 10% will recover completely. Almost completely. 

Alec: [00:09:34] Yeah. So big problem. You know, like companies like Argenica other companies we mentioned, Am vision is working on a different approach to the challenge of strokes. Like it's kind of scary. So it's good that they're working on it.

Bryce: [00:09:47] Yeah. I'm really enjoying doing this, this uncovered series and seeing a lot of these companies come out of Australian universities, but be tackling meaningful health problems and, giving us a lot of hope that there are very smart people out there working on what could be very meaningful, solutions to some of these things. So. So that's a good time to pick up Liz. Let's bring her in. Uncovered. Please welcome to Equity Mates. 

Liz: [00:10:16] Thanks so much for having me, Bryce and Alec. It's great to be here. 

Bryce: [00:10:20] So these were a community of investors in this series, shining a light and understanding the story of small and mid-cap Aussie stocks. So in the 60s, I got my stopwatch here. How would you pitch Argenica? 

Liz: [00:10:33] So I can quickly. I do think, is probably one of the only few global neurology companies addressing, a screaming stroke and in your protection job. So we are now fully funded. We're going into phase three clinical trial and some really exciting upcoming milestones are coming up. So exciting time to be part of the company. 

Bryce: [00:10:55] Oh, awesome. 24 seconds.

Alec: [00:10:56] Well, you've absolutely nailed the onslaught. We've spoken to some say. 

Bryce: [00:11:04] Not about. 

Alec: [00:11:06] Some CEOs we spoke to. They couldn't get anything in under a minute. So, we're impressed. You could get that pitch done. I looked at there's probably a number of threads that we want to pull out, that pull out there. We want to pull on the, you know, the actual drug IO7 what you're creating. We want to pull on the thread that you said about fully Funded and how you're thinking about that. But I guess let's start by talking about the clinical trials that you mentioned. You mentioned you're in phase two clinical trials. So I guess help us understand what that means for those not in the pharmaceutical game. And, I guess, what are the major milestones and timelines for us to be watching going forward? 

Liz: [00:11:48] Yeah, sure. So, I guess your listeners are familiar with drug development crisis. So there are a number of sort of regulatory hurdles that we need to take as we developing the drug. And it's largely around looking at sort of safety of the drugs. Yes. So the first stage of that is to test the drug on healthy people. So this is what we call a phase one clinical trial. And we get healthy volunteers coming in that essentially, volunteered themselves to have the drug administered. So we've done that. The drug has proved to be safe, well tolerated in those healthy people. And now, as I mentioned, we're going through what's known as a phase two trial. So this is where, for the first time, testing the drug in stroke patients. So patients that are coming into emergency departments across Australia, I will deliver the drug treatment. And again, mainly looking at safety in this clinical trial. So this is again as I said, a big regulatory hurdle for the FDA for the TGA making sure the drug is safe. But in this trial we will also be looking at how well the drug actually protects against brain injury in these stroke patients. So that's the second part. And then the third part is undertaking what's known as a phase three trial. That will be a big global trial where we'll activate sites across the world. And really similar in terms of the design, we, from our phase two trial site assigning stroke patients coming in to emergency departments across the world, delivering our drug. And now, while we're primarily looking at, the ability of the drug to protect brain cells. So, it might sound like a long process, but just want to point out to your listeners that we have been on this journey for 12 years. So a lot of the drug development process happens in the early stages, in the preclinical, in the lab, where we really de-risking the asset side, that once we put it into humans, we've got a pretty good idea that it will be safe, that it, you know, and then it could potentially show this efficacy as well.

Alec: [00:13:57] So let's talk about neuroprotective drugs. That's a new term I've learnt while researching your company, the I guess give us to start with, I guess the 1 to 101 on what you're trying to do with AIG seven, and then maybe a little bit about the lay of the land. Does anyone else working on this challenge, and where are they at as well? 

Liz: [00:14:19] Yeah. So neuroprotective drugs really. It just means, neuro meaning the brain and protective meaning protecting. So we're trying to develop a drug that is able to protect the brain following stroke. So, if you know someone that's had a stroke, you can kind of pick those telltale signs of of what those sort of functional deficits are. So then I had sort of the drinking phase, the inability to, sort of talk properly. They might have some sort of palsy on one side of their body. And that is really caused from, cell death or brain cell death, following a stroke. So we're talking about scamming strokes here. And these, these are strokes caused by a clot in a blood vessel in the brain. And so when you get that clot in a blood vessel, it stops oxygen and stops blood flow, going to that part of the brain. The blood carries oxygen and brain cells need oxygen essentially to survive. So as soon as you get that lack of oxygen, brain cell death really starts occurring within about three seconds post stroke. So what we are trying to do with this drug is to hibernate brain cells following an escape stroke. At the moment, the only treatments available for patients address the clot itself. So really looking at how they remove that clots that can only be done in hospitals. So, the idea of a neuroprotective drug that can be given to patients soon after a stroke has kind of been the holy grail of stroke research and really sort of what I guess clinicians really want to say. So buying that patient not only sort of protects their brain, but also buying them time to get to the hospital and get the treatment they need to remove the clot. So, it's an exciting time. There has been a lot of work done in Europe, protection historically, but a lot of that is drugs proved unsafe. So there was toxic elements to them. They would hibernate these brain cells pretty much permanently. So we know obviously that that is no cause you need those brain cells to obviously be hibernated for a period of time, but start working again. So, a drug really has the ability to do that, which is a really unique what we call sort of mechanism of action of the drug. So globally there's only a couple of companies that are actually in phase two trials in storage. So not a huge amount of competitors out there. And really I think because, you know, we have been working on this drug within a couple of research institutes in health for, you know, as I said, 12, you know, up to 12 years now. So huge amounts of research behind us that really has allowed us to do sort of de-risk, look at the safety and get it to this point. 

Bryce: [00:17:13] This is probably going to go too much into the weeds. But just thinking about how you are telling brain cells to hibernate? What is it like. Right. Yeah yeah. Because I'm assuming they're still starved of oxygen. So that's like 1.1. And so it's kind of like you're coming in and just trying to slow down the process of it dying. 

Liz: [00:17:36] Exactly. Yeah. So yeah. So what happens. And I love the weights. It's happening. So yeah. So essentially what happens is the when you have that lack of oxygen to the brain, you get a flooding of glutamate. Glutamate is a neurotransmitter that our brain needs for normal functioning, but it just starts to accumulate on the outside of the cells. And when that happens, this glutamate activates little channels that are on the cell surface and causes them to open. And calcium starts flooding into the cells. And that's essentially this that causes the brain cells to die. Right. And when they die, it sort of becomes in this cascade. So you get more release of glutamate, more activation of these little channels on the cell, more calcium influx. And it just keeps sort of cycling. It's like what a drug does is it's actually essentially sort of binding to those little channels and pulling them inside the cell surface for a period of time. So stopping that calcium influx channel essentially getting into the cells. But what's really cool about the drug is that it only works for a period of about 12 hours. So then those little channels cycle back to the cell surface at a period, you know, point in time where blood flow has been restored, the patients have the clot removed, traces, and so it starts to just work normally, which is really important because you do need a bit of calcium in the cells. You need a bit of the glutamate. You need these channels to, to keep working for normal healthy brain cell function. 

Bryce: [00:19:13] Nice. Good. Wait. 

Alec: [00:19:15] Absolutely.

Bryce: [00:19:16] Makes sense and continues to amaze. It just continues to amaze me what people can do in the field of medicine. So yeah. Yeah. So let's you've been remarkably successful at raising money, iPod in 2021, a placement in 2022 and 2023 and another one upcoming. How do you think about your balance sheet and how much do you need to actually get through phase two and phase three? I imagine these are not cheap parts of the cycle of commercialising drugs like this. 

Liz: [00:19:49] No, that's absolutely right. So, we're pretty frugal, though. That's one point I will make. You know, we do a lot for, you know, a little bit on Jennifer. I think we've had some, some, you know, really good, capital and financial management. And we don't take it lightly that, you know, essentially we, we are sort of taking shareholders money, really, to help us progress. So we want to do that the most. Cost effective way. We have just completed a $12 million raise, which is essentially, able to to really get us to the end of that phase two and have enough money in the past, sort of twice that phase two to really look at sort of what, what we'll be looking to do in that phase three clinical trial, presuming that the phase two obviously is successful. So, yeah, in terms of the capital raises, they haven't been, you know, absolutely huge. We've sort of just taken the capital that we need at that point in time to really sort of make sure that we can keep delivering on these milestones. Our focus with that capital is really around that phase two trial. The other indications that we have, so the traumatic brain injury, the Alzheimer's disease and the HCA, a very much, grant funded. So we've sort of been able to attract over 0.2 5 million of non-dilutive grant funding to progress those indications. I will always try to find as much non funding, as we possibly can. So well obviously really grateful for our shareholders. The last rise was very much focussed on getting institutional investors into the story. And we sort of just had been in a bit of a race play before that. And so really the benefit of having those institutional investors on the register is, you know, they've got deep pockets, they hugely supportive. They're sticky investors. And they can really sort of help us as we, we sort of start hitting milestones and you know they'll buy on market. So really from a retail point of view, you know, it's really important that companies at our stage get those institutional investors on the register. Yeah. 

Bryce: [00:22:02] Nice. Well congrats. 

Alec: [00:22:03] Yeah. It's a fascinating story. And you know, one that we love to watch play out not not least because the one of the I guess confronting stats we came across when researching for this was that, 1 in 4 people globally will have a stroke in their lifetime, which is just crazy. Crazy. Yeah, yeah yeah. So, I guess, you know, we wishing you all the best, with these trials and, you know, all of this research coming out of Australian universities we hope to see succeed, we want to, I guess, finish with a question about what it looks like long term, because, you know, we're long term investors here. And this is a long term process that you're undergoing. And so, you know, if you are successful, what does Argenica look like in ten, 15 years? But also, I'm interested to know how this drug is used in your mind if it is all successful, because right now you're dosing patients when they come to hospital. But is this something where it's, you know, going to be in public places, there will be this drug so people can have it as soon as they start having a stroke. Will it be like defibrillators at the local pool, in the local library and stuff like that? So I guess, yeah. What is this? What does this look like in ten years if everything goes to plan? Yeah. 

Liz: [00:23:24] So ultimately our goal is that this drug is in every ambulance. So. Yeah. Not sure I'd want patients to administer it at the moment. So, you know, obviously when a paramedic arrives and those telltale signs of when someone's having a stroke is and it's, you know, you call the ambulance first and foremost. So all the Royal Flying Doctors or whatever it may be. So one of the big challenges at the moment with stroke care is that these large strokes, you have to get them to a stroke centre, which is in the metro area. So, you know, someone's sort of having a stroke in, you know, the Northern Territory or say Broome, for example. They've got quite a long delay, from stroke to, to where they're actually coming into this, into the. So, you know, if we could have a drug like this, it really sort of shuts down the brain and protects the brain because that patient time, that this drug is in every ambulance, every royal flying doctor, and not just for stroke, but, you know, the exciting data that we have. So traumatic brain injury, if someone's in a horrific car accident or, you know, domestic violence or they've had a sustained significant TBI that, you know, a paramedic arrives and they still have the option to use this drug. Also say cardiac arrest. The reason that a lot of patients die from a heart attack is because of lack of oxygen to the brain and brain cells starting to shut down. So we say that optionality is absolutely massive. So neuro protection is such a huge, all encompassing mark. And if we could have a drug like these in every ambulance, that has optionality across a number of neurological conditions, then we yeah, we'll be on to something absolutely huge, absolutely amazing. So yeah, we just have to go through that, that sort of process. Obviously clinical trials just for your listeners love to hear that they're long term holders, which is fantastic. That's what we love. Small caps companies love those very supportive shareholders. It is, you know, really sort of a price rise. We'll be looking to, to sort of global pharmaceutical companies that we can potentially partner with on that journey. So as we move into a global clinical trial. So starting to have those conversations at the moment, in pharma companies to see how we may sort of collaborate and work together on, on that launch of phase three trial as well. 

Bryce: [00:25:51] Would this have a utility like concussion treatment? 

Liz: [00:25:54] Yes. Yeah. So we've just got a concussion study running at the moment. And this is being funded very generously through a central government grant. So looking at the optionality for concussion. So in that case we would look at a bit more of an over-the-counter, you know, say like a nasal spray or something where patients could, could administer themselves because, you know, putting an IV line on the sideline, other footy field is not the best way to deliver drugs. So we've got really good data on the more severe TBI, but trying to expand that out and look at a potential concussion. So because it is my concussion it is horrendous. And obviously getting a lot of press. But it's really, you know, once you sort of just sustain that big knock, that big concussion, the damage starts almost instantly. So you get the inflammation in the brain, you get the accumulation of proteins. And so we know that our drug does work on those processes associated with concussion. So fingers crossed we get some good data out from that on. And we can look at how we progress. 

Bryce: [00:27:12] Well, thank you so much, Liz. Really looking forward to seeing how these phase two trials close out and then, moving into phase three, obviously, some really important work that you guys are doing that affects 1 in 4 people. So I appreciate you coming on the show. And, yeah, all the best with it. Thank you very much. 

Liz: [00:27:29] Thanks so much, guys.