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Kalytera to Enter Medical Cannabis Market With Focus on Treatment of Psoriasis and Menstrual Cramps

SAN FRANCISCO & TEL AVIV, ISRAEL--(BUSINESS WIRE)--

Kalytera Therapeutics, Inc. (TSX VENTURE: KALY and OTCQB: KALTF) (the "Company" or "Kalytera") today announced that it has entered into an agreement with Beetlebung Pharma, Ltd. ("BPL") for an option to acquire all rights to medical cannabis products in development by BPL for the treatment of both dermatologic diseases and women's health.

Under this agreement, Kalytera will have the option to license from BPL certain proprietary medical cannabis formulations, which can initially be brought to market in jurisdictions that have already approved access to cannabis for medical purposes. Kalytera believes that this will provide a more near-term path to revenues, compared with the lengthier process required for commercialization following FDA approval.

The collaboration with BPL will bring together Kalytera's expertise in clinical pharmaceutical development, with BPL's proprietary cannabis technology. Kalytera is a leader in the development and commercialization of cannabinoid pharmaceuticals with a late-stage clinical program in the prevention and treatment of acute graft versus host disease, and BPL is an Israeli-based pharmaceutical discovery company conducting world-class research and development in the field of cannabinoid and cannabis-based therapeutics, with specific expertise in the development of novel formulations of cannabis extract.

“Research has demonstrated that medical cannabis possesses extraordinary therapeutic potential,” stated Robert Farrell, President and CEO of Kalytera. “However, many of the medical cannabis products currently available have not been shown to be safe and effective in treatment of specific diseases. There have been few, if any, clinical trials to date conducted in compliance with GCP standards supporting the safety and efficacy of these products. Kalytera and BPL intend to address these issues and bring to market proprietary medical cannabis formulations for the treatment of dermatologic diseases and women's health that will meet the standards of the pharmaceutical industry.”

The strategic aim of the alliance is to expedite development and commercialization of efficacious and low cost medical cannabis products that can be marketed in jurisdictions such as Australia, Canada, Germany and Israel, where access to medical cannabis has been legalized.

Kalytera and BPL are already collaborating in the development of a novel cannabinoid-based compound for the treatment of acute and chronic pain. Patents for this compound have been filed in the U.S. and other jurisdictions, and Kalytera has obtained an exclusive, worldwide license for this compound from BPL (the “Pain Therapeutic License”).

BPL is in the process of preparing patent applications for Canada, the U.S. and other jurisdictions that will cover all compounds invented by BPL in the fields of dermatologic diseases and women's health. Following each such patent filing, Kalytera may exercise its option to acquire from BPL an exclusive worldwide license for the patent pending compound.

The terms of such license will be substantially similar to the terms of the Pain Therapeutic License. To secure the exclusive option from BPL, Kalytera has paid BPL an initial fee of US$25,000. If it exercises its option to license, Kalytera will pay an additional US$25,000 plus any historical patent costs, royalties equal to a single-digit percentage of Net Sales (as defined in the license agreement), sublicensing fees in the event that Kalytera sublicenses its rights under the license and future contingent milestone payments payable in cash. Kalytera would also enter into a sponsored research contract with BPL under which BPL would design, manage and conduct a clinical study of patients (likely in Canada and/or Israel) designed to provide data to be used to market products covered by the license.

“We are pleased and excited to announce this new alliance,” said Robert Farrell. “BPL is doing world-class research and development work in the field of cannabinoid and cannabis-based therapeutics, and this alliance will expand our existing collaboration beyond the field of pain.”

Kalytera’s Exclusive Option to License Proprietary Medical Cannabis Formulation for the Treatment of Psoriasis

The initial dermatologic product that Kalytera has obtained an option to license from BPL for commercialization on a worldwide basis is a topical medical cannabis extract for the treatment of psoriasis. Kalytera expects to initially commercialize this product in Canada.

The global psoriasis drug market is expected to be valued at US$21.4 billion by 2022, according to a new market research report by Grand View Research, Inc., and the rising prevalence and incidence of psoriasis is anticipated to fuel the market’s growth.

Severe psoriasis is currently treated with monoclonal antibody therapeutics costing more than US$25,000 per year, and Kalytera will seek to bring to market a potentially safer, more effective, and less expensive medical cannabis extract for the treatment of severe psoriasis.

A research review conducted by researchers at the University of Colorado Anschutz Medical Campus, and recently published in the Journal of the American Academy of Dermatology, concluded that cannabinoids are effective against psoriasis. However, an obstacle to effective transdermal treatment of psoriasis is the barrier property of the stratum corneum, the outer layer of skin. The stratum corneum is a thick tissue layer comprising a structured lipid/protein matrix that acts as a barrier for uptake of topically administered agents. Drug formulations with a particle size exceeding 500 nanometers in diameter are unable to penetrate the stratum corneum. Most topical cannabis formulations, such as those prepared with coconut oil, which typically have a droplet size of 1,000–10,000 nanometers, are thus far too large to penetrate the stratum corneum barrier and are of no clinical benefit.

In contrast, medical cannabis extract for treatment of psoriasis developed by Kalytera is expected to have a particle size of approximately 80 nanometers. If successfully developed, this formulation would be the first in its class intended to allow the whole-plant resin to pass through the stratum corneum barrier, and to diffuse into the stratum basale (the lowest layer of the epidermis), where the cannabis compounds are expected to bind to the CB1 and CB2 receptors in the skin, muscle tissue, immune cells, and sensory nerves. Binding of cannabinoids to these receptors has been demonstrated to reduce inflammation and hyper proliferation of cells, both of which are the hallmarks of the psoriatic disease process.

To further improve uptake of the cannabis extract, Kalytera intends to enhance the formulation with select naturally-occurring terpene and sesquiterpene compounds from the cannabis plant that are often lost during the extraction process. This approach should allow large amounts of terpenes and sesquiterpenes to be co-administered along with the cannabis extract. These terpenes and sesquiterpenes may contribute to an entourage effect, thereby potentially improving the effectiveness of the cannabis extract.

Kalytera’s Exclusive Option to License Proprietary Sustained Release Medical Cannabis Formulation for the Treatment of Menstrual Cramps

In the area of women's health, the initial product that Kalytera has obtained an option to license is a medical cannabis extract for the treatment of severe menstrual cramping, a condition known as dysmenorrhea. Kalytera intends to initially commercialize this product in Canada, and later on a worldwide basis. Later products in the field of women’s health that Kalytera may license include additional medical cannabis formulations for post-menopausal female sexual dysfunction, including vaginal dryness and dyspareunia (pain on intercourse).

According to a report by Market Research Future, the global market opportunity for treatment of dysmenorrhea is expected to reach US$8.40 billion in 2023 from US$5.68 billion in 2016, with a compound annual growth rate of approximately 12.28% during the forecast period 2017-2023. In addition to various medical cannabis products marketed for the treatment of dysmenorrhea, other pharmaceutical treatments include non-steroidal anti-inflammatory drugs (NSAIDs), and various hormonal based oral contraceptive drugs. As reported by Market Research Future, patients report high levels of dissatisfaction with the currently available therapeutics.

Extensive medical research has demonstrated that cannabis is effective in relieving pain associated with an array of conditions, including dysmenorrhea. A number of medical cannabis products are currently available for the treatment of dysmenorrhea, including vaginal suppositories containing 10 mg of tetrahydrocannabinol ("THC") and 50 mg of cannabidiol ("CBD"). However, there have been no clinical trials to date supporting the safety and efficacy of these products. Furthermore, these suppositories are absorbed into the bloodstream rapidly, resulting in only a transient reduction in menstrual cramping reported to last for only an hour or so, whereas Kalytera believes a more sustained treatment is required.

The product in development for the treatment of dysmenorrhea is a vaginal suppository that will utilize a sustained release proprietary formulation intended to provide a smooth and consistent release of cannabinoids at steady levels over a period of 8 to 12 hours. Kalytera believes this product could make significant inroads in this market following completion of a clinical study demonstrating safety and efficacy in the treatment of dysmenorrhea.

If it exercises its option to license this technology, Kalytera expects to work with BPL to conduct an initial clinical study in Canada and Israel to provide marketing data in support of commercialization for this product in those and other jurisdictions that have legalized access to medical cannabis. Following initial market launch in these jurisdictions, Kalytera plans to conduct registration-directed clinical studies for FDA approval, in order to access larger commercial markets.

Kalytera’s Continuing Expansion and Diversification Within the Field of Cannabinoid Therapeutics

The strategic alliance announced today is another step in Kalytera's expansion and diversification of its cannabinoid-based product development portfolio. Kalytera currently has an ongoing late-stage clinical program with cannabidiol (“CBD”) in the prevention and treatment of acute graft versus host disease, as well as a pre-clinical cannabinoid-based therapeutic program in the treatment of pain.

About Kalytera Therapeutics

Kalytera Therapeutics, Inc. is pioneering the development of CBD therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of CBD medicines for a range of important unmet medical needs, with an initial focus on acute graft versus host disease and treatment of acute and chronic pain.

About Beetlebung Pharma

Beetlebung Pharma Limited (BPL), an Israeli affiliate of the Salzman Group, focuses on the discovery and development of novel cannabis-related pharmaceutical therapeutics. The Salzman Group provides clinical management and other services to Kalytera in connection with Kalytera’s programs evaluating CBD in the prevention and treatment of graft versus host disease. BPL has invented a broad range of cannabinoid new chemical entities in therapeutic areas encompassing pain, inflammation, autoimmunity, ischemia-reperfusion injury, trauma, and central nervous system injury. BPL is also active in the development of novel formulations of existing cannabinoids, terpenes, and sesquiterpenes that may contribute to the entourage effect. To provide scientific support for its pharmaceutical programs, BPL carries out biological research on terpenoid cell signaling and pharmacology in its basic research laboratories. BPL is a private, closely held corporation.

Cautionary Statements

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation in respect of its product candidate pipeline, planned clinical trials, regulatory approval prospects, intellectual property objectives and other statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that future clinical studies may not proceed as expected or may produce unfavourable results, the risk that Kalytera may not be able to exercise the options described above in the event it is not able to fund the development of the optioned technology, the risk that development and commercialization of the formulations described herein may not be completed as expected, the risk that such formulations may not exhibit the expected mechanism of action and may not have the desired safety and efficacy profile, and other regulatory and market risks. Kalytera undertakes no obligation to comment on analyses, expectations or statements made by third parties, its securities, or financial or operating results (as applicable). Although Kalytera believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond Kalytera's control. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is made as of the date hereof. Kalytera disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

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