The cocktail of drugs given to HIV patients has been dominated by Gilead Sciences (GILD) for over a decade. They are the undisputed leader with a strong majority of the global market share and 11 HIV drugs which include names you have heard on prime time TV commercials like Biktarvy®, Descovy®, and Truvada®.
Gilead had close to $17.0 billion in annual sales in its HIV franchise which represents close to 70% of its annual sales. On the surface, GILD looks like the undisputed champion of HIV drugs, but the reality is that its HIV pipeline is stale, old, and lacks any innovation.
A new challenger is stepping into the ring with an HIV treatment that not only controls the disease but also boosts the immune system, something none of the HIV drugs can claim. Enzolytics (ENZC) HIV therapy is called ITV-1, which has a solid safety profile and demonstrated efficacy in HIV.
The biggest issue with HIV therapy has historically been patient compliance. HIV Patients have to adhere to a strict regimen of drugs—otherwise, they develop drug resistance. Gilead’s latest drug, Biktarvy(r), is a once-a-day tablet that is a combination of 4 drugs, Bictegravir, Emtricitabine, Alafenamide, and Tenofovir. In summary, it’s a bunch of old drugs concentrated into one easy-to-take tablet.
In the past decade, much of the innovation in HIV has focused on simply improving patient compliance by making the therapy easier to take by reducing the number of pills a patient needs to take, and by combining different antivirals together to increase efficacy. When a patient forgets to adhere to their antiviral regimen, they are at risk as the virus can then rebound and the patient is put at risk that the highly-mutating HIV might find a way around the antivirals. So to keep patient compliance high is to keep efficacy high, and it doesn’t get simpler than one-pill-a-day. But now, new innovation is needed.
The shift in focus has turned to improving the quality of life and trying to eliminate many of the side effects of the antiviral pills sold by Gilead and other big pharma. Many HIV patients suffer from headaches, nausea, vomiting, rashes, and fatigue, and many of these side effects are the direct result of the toxic antiviral pills. The pills even contribute to vitamin D deficiency. Even though the current drug regimens keep the disease in check, they don’t improve the quality of life because HIV patients are still exposed to opportunistic infections and horrible side effects. This is where ENZC’s drug can steal the spotlight from GILD.
Gilead Dominates with HIV
Though Gilead has attempted to break into other markets, the bulk of Gilead’s profits still come from HIV. The company has made the right moves in recent years, attempting to diversify its revenue stream away from mostly HIV. Originally, its acquisition of Pharmasset for treatment of HCV was wildly successful, but the treatment was so efficacious that it cured HCV and Gilead ate away its own market share, which once peaked at over $19 billion (2015) in revenues for Gilead, but now sits at a quarterly run rate equivalent to $2 billion a year. Remdesivir sold almost $1.5 billion this quarter, but as vaccines roll out and other companies come out with better antivirals that can be given before patients need to go to the hospital, COVID-19 revenues will likely dwindle. So for now, Gilead is still heavily dependent on HIV, and Enzolytics is threatening the cornerstone of its business.
Source: Gilead Q1 2021 10Q
The global HIV market is estimated to be over $30 billion and is expected to grow to over $36 billion globally by 2027. This is a massive market opportunity with room for improved therapies and 27% of sufferers not receiving ART therapy.
Gilead and other big pharma companies such as Merck (MRK), GlaxoSmithKline (GSK), and J&J (JNJ) have continued to revise ART pill regimens to increase patient compliance and to make improved antiretrovirals, but none of this innovation addresses the underlying issues with these toxic pills. Instead, big pharma has been most preoccupied with incremental innovation and extending their profit runways by tweaking the therapies they provide to patients, as shown in the decades-long timeline below. Enzolytics is looking to turn all of this upside down, and big pharma should be wary.
Source: Current status and prospects of HIV treatment
Enzolytics Secret Sauce
Enzolytic’s HIV treatment is immunotherapy, not chemotherapy. And in this way, it differs from all the other HIV treatments on the market. The therapy, called inactivated pepsin fragment (IPF), and also known as ITV-1, is a purified extract of porcine pepsin. This therapy appears to work across a range of infectious diseases, from coronaviruses to HIV. It is not a fully understood mechanism, but it is suggested by Enzolytics’ patent on ITV-1 that the therapy works by strengthening the immune system, most likely by two mechanisms:
- By acting as a superantigen—inducing polyclonal expansion of T cells and stimulating a broad immune response against the virus, and by binding directly to gp41 and gp120 of the HIV virus (the parts that attach to immune cells and are used to enter the cell), and
- By preventing viral entry, which means the virus can’t get in the cell to replicate. ITV-1 pepsin fragments have been shown to bind to gp41 and gp120 on HIV. When these are bound up by the inactivated pepsin fragments, the HIV particle cannot attach to CD4 to enter the cell and replicate. Historically, HIV is highly mutable so it would avoid ligands that can bind the gp41/gp120 area. But by also stimulating the immune system against these epitopes, the immune system can continue to respond against mutating HIV.
The formation of gp41/ITV-1 and/or gp120/ITV-1 complexes is hypothesized to stimulate the immune system as these complexes are shown to be superantigens; i.e. they stimulate a significant percentage of the CD4 and CD8 T cell population, not just a very tiny portion of them (the ones very specific to a particular antigen). This gp41/ITV-1 superantigen is recognized by heat shock protein gp96, which helps it be processed into a presented antigen on MHC, and also helps mature dendritic cells, which are the main antigen-presenting cells in the immune system. Below are two proposed mechanisms of gp96-mediated immunity. It “chaperones” peptides into the cell very efficiently so they get loaded onto MHC and stimulate the immune system against those antigens much more efficiently than without the chaperone, “gp96.”
Nicchitta, C. V. (2003). Re-evaluating the role of heat-shock protein-peptide interactions in tumor immunity. Nature Reviews Immunology, 3(5), 427-432.
To summarize, ITV-1 boosts the immune response to combat HIV and other opportunistic infections, and it also helps prevent viral entry.
What is interesting is that the ITV-1 therapy at least at the right dose is safe—it doesn’t cause cytokine release syndrome or systemic shock. Also of note is its dual-pronged anti-HIV mechanism—something other HIV medications cannot boast.
Clinical Results and New Trials
The therapy has been tested already in a clinical setting in the EU, but due to interference with costs in manufacturing and a lack of financing, the clinical trial couldn’t be completed. However, they do have data, and this data will show investors how the current clinical trial should readout.
Now that the Bulgarian Drug Administration (BGA) has been supplanted by the European Medicines Agency (EMA), the company is conducting a trial under EMA guidelines. This is great for Enzolytics because approval of ITV-1 under the EMA can lead to FDA approval due to the EU Recognition Treaty. And, this time, the clinical trial should be completed because Enzolytics has already secured a partner: Partnership International Medical Partners, Ltd. (IMPL), which is a 50/50 joint venture between Enzolytics and Bulgarian principals. Enzolytics is producing the ITV-1, while the other party is funding the clinical trials.
The prior clinical trial showed an 80% drop in viral load, an increase in CD4+ cell counts as well as an increase in other key immune cells. CD4+ cells are the cells that are infected by HIV and are eventually depleted by the virus. So the increase in CD4 count is key. For instance, this could include dendritic cells, macrophages, monocytes, and helper T cells. And in line with the improved cell counts were improvements in opportunistic infections, compatibility with other ART (antiretroviral therapy) drugs, and no side effects.
The big difference to keep in mind is that all the currently marketed drugs use chemotherapy versus immunotherapy. None of the current drugs help restore the immune system. They simply block the viral replication inside the immune cells.
The beauty of this ITV-1 product and the IPF technology is that it can be used in a wide range of infectious diseases as it helps stimulate the immune system against a virus. Enzolytics now has data suggesting that ITV-1 works on coronaviruses, so ITV-1 could potentially work as a Tamiflu for colds or for COVID-19. Roche’s (RHHBY) Tamiflu produced about $3 billion dollars in peak sales just for influenza.
Enzolytics also has another platform technology, whereby it uses artificial intelligence (AI) to make optimized monoclonal antibodies (mABs) to fight various infectious diseases. Enzolytics does this by identifying conserved, immutable sites on viruses and then making monoclonal antibodies to attach to those sites. This is the only way to really make effective mABs against viruses that like to mutate, like HIV and COVID-19. The problem our immune systems have with them is that they mutate when our bodies make antibodies to neutralize them. But, Enzolytics screens thousands of different versions of viruses to determine which parts of the virus don’t change and then makes antibodies for that part. This way, the antibody will attach to any virus variant.
For HIV, the idea is that neutralization of all viral particles will either work on its own or be used in combination with antiretroviral therapy to improve responses. With multiple unchanging sites being identified on HIV, the chances the virus can simultaneously mutate all of those sites at once in order to avoid being neutralized for good goes way down. Thus, HIV can be neutralized once and for all, and potentially without any toxic side effects. With COVID-19, these antibodies could be used like Regeneron’s (REGN) and Eli Lilly’s (LLY) antibodies were used under Emergency Use Authorization (EUA) to treat those who had contracted COVID-19 like they were used on President Trump. These mAB treatments had their EUA’s revoked as the virus is now mutating and these mABs might become useless. With Enzolytics, investors can have confidence that this will not happen.
Acceleration of Drug Development Pipeline
Enzolytics is now advancing these antibodies through the clinic. It is expected that the INDs for these mAB products will be submitted later this year. This will be done in the EU, and after that, the FDA may accept some or all of ENZC’s data.
In order for ENZC to be taken seriously in their bout with GILD, they need to demonstrate that they are capable of developing this drug without the help of big pharma. They are going to need to run a large randomized controlled trial (RCT) across many nations and a large number of clinical trial sites. This means they need to manufacture the drug to exacting standards and dispense the drug in clinical trials.
Next Steps, ITV-1
We’re clear on where the mAB therapeutics for COVID-19 and HIV is, but ITV-1 is further along in development and this is the impending threat to Gilead. Gilead is historically more of an antiretroviral company, with their success in HIV and subsequent purchase of Pharmasset and their HCV cure for $11 billion. While the company is trying to attack nonalcoholic steatohepatitis (NASH) and now cancer with their purchases of Kite Pharma and Immunomedics, their rapid development of remdesivir for COVID-19 just shows that their roots are still firmly planted in antiviral therapies.
But ART therapy is toxic to HIV patients, so this new HIV immunotherapy, ITV-1, is a big threat to GILD. ENZC’s mABs for HIV is also a big threat, but they’re earlier in the development timeline.
So here’s what’s happening with ITV-1. First and foremost, the development of this asset will be funded by Enzolytics’ partners, IMPL (International Medical Partners, Ltd.), so the roadblock that prevented them from succeeding before (lack of funding) is addressed. As mentioned before, this joint venture is a 50/50 collaboration between Enzolytics and its European partners, and ENZC will produce the drug while the partners will fund the clinical trials. The company will manufacture the drug through its CMO (contract manufacturing organization), Danhson Ltd, and the European partners are contracting with Clinical Design Ltd, their contract research organization (CRO) in cooperation with PharmaLex, their consultants, to design and human clinical trials. After this is completed, the company may license the program under the EMA umbrella to potential big pharma partners.
IMPL has the licenses to distribute the ITV-1 therapeutic in the 27 European countries under the EMA umbrella, as well as other countries such as Russia, Ukraine, Moldova, Belarus, Armenia, Azerbaijan, Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, Tajikistan, Estonia, Latvia, and Lithuania. All this information is detailed in the company’s June 14, 2021 press release.
It is important to note that about 37.6 million people in the world suffer from HIV and roughly 27% of them do not have access to ART from the big pharma companies. CEO Cotropia addressed this in his presentation at the Emerging Growth Conference. The other key piece is that the company bears no burden of financing the clinical trials. Getting a distributor license in place especially with a partner willing to foot the entire bill for all clinical trials demonstrates that the drug is marketable should it receive approval.
In addition to the IMPL distribution license, Enzolytics also signed a distribution license with a “Licensing Entity,” an owner of a pharmaceutical plant in Eastern Europe, for a separate geographical area, including India, Pakistan, UAE, Indonesia, Philippines, Nigeria, Benin and Togo, Kenya, Tanzania, Rwanda, Libya, Uganda, North Sudan, Egypt, Morocco, and Tunisia. For this license, ENZC received $1 million and 50% ownership and profit share in the Licensing Entity, which was recently valued at $8 million. In addition to the $1 million, the Licensing Entity agreed to invest $2 million in the Enzolytics Preferred Series E stock, so that the entity would be committed.
So what does ENZC have in all of this?
It has proved that ITV-1 works. It has one of, if not the best, monoclonal antibody platforms as it has a unique, fully human antibody production method by using human B cells from convalescent plasma, and an AI collaboration by where it can determine the very best sites (immutable, conserved, neutralizing) to target. It has the development plans for both platforms and funding for ITV-1. And last but not least, it has distribution deals in place so that it is ready for commercialization.
Potential Big Pharma Partners: Many Potential Deals
Enzolytics confirmed the interest from pharmaceutical companies who potentially wanted to partner with the company in the development and commercialization of the antibody therapies for HIV, COVID-19, and HTLV-½. Outlined in their April 2021 progress report update, Enzolytics detailed the outline of milestones it needs to complete for interested parties to partner with it for the various indications. According to the press release, most of these milestones should be completed around the end of the year 2021, so investors can speculate when these deals may be completed. One has to wonder whether the HIV potential partner is Gilead.
Filling the Gaps in GILD’s Pipeline
It’s almost ludicrous to think that GILD would want to buy or partner with ENZC so that it can develop ITV-1 or ENZC’s monoclonal antibodies, only to see them cannibalize its $17 billion in annual HIV sales. This line of reasoning is superficial at best for two reasons. First, if GILD doesn’t partner with ENZC, GILD will have a lot to lose. Second, ENZC’s hidden value lies in its intellectual property and its value as a platform technology. GILD has 5 main areas of focus, HIV, Liver Disease, Cardiovascular, Hematology/Oncology, and Inflammation/Respiratory.
When looking at ENZC as a platform drug there is overlap in Oncology, Inflammation, and HIV. While it might not be enticing to have so many competing drugs in the same indications, there is significant value in ENZC’s relationship with Intel Corp. (INTC) and its Artificial Intelligence screening of drug candidates. Enzolytics recently outlined a comprehensive protocol to address current and future pandemics using AI and its human mABs.
As Gilead has a great track record of quickly responding to viruses with their antivirals such as remdesivir, this could solidify their leadership position in the mAB space, leapfrogging competition such as Eli Lilly and Regeneron, as they could rapidly develop and produce better-neutralizing mABs for future pandemics. It could also help expand their pipeline to address other infectious diseases, as the mAB development platform Enzolytics has put together is applicable to most, if not all viruses.
It’s also important to point out that GILD isn’t the only big pharma in HIV. Merck, Pfizer, Roche, and Johnson and Johnson (JNJ) are also in the hunt for a once-a-day drug or a once-a-month injection to compete with Biktarvy. If all these new drugs under development are just a repackaged mix of a bunch of old drugs, then the only way to distinguish a new drug lies with ENZC’s ITV-1 drug. Taken together with the existing HIV drugs, ITV-1 would boost the HIV patient’s immune function and likely reduce the incidence of opportunistic infections and acquiring antiretroviral drug resistance/viral rebound.
ENZC is a very credible threat to GILD’s HIV franchise. Their recent moves in clinical trial development are a net positive for investors. The company has been moving very deliberately to demonstrate that they have the capability and capacity to produce this drug. Their agreement with IMPL shows that they can indeed produce the drug. Their collaboration with IMPL for clinical development shows that they have the capability to complete the trials and get to the next readout in a cost-efficient manner. This strategy has continued to derisk the drug development process and now it’s to the point where there is only regulatory risk—that the EMA or FDA won’t approve it. With upcoming partnerships possible with respect to ENZC’s monoclonal antibodies and a derisked HIV immunotherapy that already has positive phase 3 clinical data, there appears to be mostly upside and less risk.
WHEN INSIDER FINANCIAL HAS A STOCK ALERT, IT CAN PAY TO LISTEN. AFTER ALL, OUR FREE NEWSLETTER HAS FOUND MANY TRIPLE-DIGIT WINNERS FOR OUR SUBSCRIBERS. WE SPECIALIZE IN FINDING MOMENTUM BEFORE IT HAPPENS!
Disclosure: Insider Financial and its owners do not have a position in the stocks posted and have posted this article for free without editorial input. This article was written by a guest contributor and solely reflects his opinions.