David Bautz: Hi, and welcome to the next edition of our CEO Chat. I am David Bautz, Senior Biotechnology Analyst with Zacks Small Cap Research. Joining me today is Dr. Anil Diwan. He’s the CEO of NanoViricides, Inc. (NYSE:NNVC). NanoViricides is a clinical-stage nanobiotechnology company that is developing the NanoViricides platform of broad-spectrum antiviral drugs, including its lead asset, NV-387, which we will be discussing today. Anil, thanks for joining me today.
Anil Diwan: Good morning, and thanks for inviting me.
David Bautz: Alright, so let’s start with a broad overview of the NanoViricides technology. So, what is it exactly, and then can you also tell us what separates your technology from other antiviral treatments or vaccines that are out there?
Anil Diwan: Yeah, so let me start with the second part of it. We are completely different and coming from an outside of the box approach to how to handle viral infections. One of the major things that you have seen through COVID pandemic and other pandemics influence everything is that the viruses evolve in the field and then the vaccines become ineffective, antibodies that are used as drugs become ineffective, human systems.
Also, the people start contracting the same virus again because it has changed. And even the small chemical drugs they also become ineffective. Tamiflu resistance is known for influenza. Practically for any small chemical, the resistant viruses have emerged. So we wanted to solve that problem. And how do you solve that problem? For that, you have to find out what is it that doesn’t change no matter how much the virus changes, right? So, solving or trying to look at that, there are two different things that happen. First thing is that the virus comes in from outside, concentrates near the cell, using what are called attachment receptors. After that, it has now enough of an army next to the cell, and it can penetrate the cell. So it goes and binds onto the cell. So we focused on those things. Now, can we…present to the virus a machine, a chemical nanomachine that has exactly the same attributes on its surface that the virus is seeking on that particular receptor. So that requires a chemical synthesis, discovery, molecular modeling, all sorts of things. We went through all that. We developed drugs against herpesviruses.
We developed drug against HIV. All herpesviruses, they use HVEM. So because of that, that one drug could attack all herpesviruses. Same thing with HIV. All HIV viruses use CD4. We were able to copy CD4, and from that we were able to make an HIV drug. It is truly a machine because it moves, it changes. So when it binds to the virus in one point, it starts binding in multiple points and then it… actually spreads onto the virus surface by using lipid-lipid interactions. These are well-known physical phenomena, well-studied phenomena, and we took advantage of that. And it’s sort of like the reverse of virus fusing with the cell. Instead of that, now our machine is fusing with the virus surface.
So we did that with cell cultures. We did that in electron micrography first, and we got beautiful pictures. And that was demonstrated. We also did additional, more complicated studies of mechanism recently as well. And they have also shown that the NV-387 does interact with the virus.
So that’s where we are at. Now what happens? How do we take this into making a drug? So we did cell culture studies, and in the COVID timeframe, we did animal studies. And so we proceeded with NV-387 itself. We developed it through non-clinical studies, and we tried to get into clinical studies in the US. At that time, the market here was very saturated, could not start clinical studies, could not get any CROs even engaged at that time.
So we went to India and we were able to set up a collaboration there. We were able to get a consensus from the governing body in India, CDSCO, that this was a worthwhile project. And we were able to do phase one. We were going to do COVID treatment as well, but by the time the phase one part of the healthy subjects, which you have to do first to show that the drug is safe and tolerated well in humans, before you can go into patients in this particular scenario. So we completed that part, and then by that time, the COVID wave was gone; we could not find PCR-positive patients. So that’s where we had to stop that study. The report is being written up, and it should be submitted pretty soon to the governing body in India. We are ready to proceed ahead.
So what happens with this drug on other viruses that also use heparan sulfate or sulfated proteoglycans as attachment receptors? Is this really as broad-spectrum as it would be if that is the case? Right. So we started working on many different animal models. We developed animal models. And we tested the same drug, NV-387, in those animal models for efficacy against lethal lung infection. Lethal lung infection, why? Because that is what causes severe hospitalization in most of the viral diseases. That was what was happening in the case of coronaviruses as well.
RSV is a very well-known virus that is a pathogen in humans, mostly in very problematic infants and early-stage children, as well as in senior citizens, where the immune system has now started giving up. RSV has a market currently estimated at $8 billion plus, and that market is for two antibodies. One of them now is taking over most of the market and two vaccines. So the antibody is not a drug. It doesn’t work as a drug. It was only approved as a prophylactic. So there is no drug for RSV right now. So we said, okay, let’s do that. And lo and behold, just with NV-387 alone, treating those animals with RSV infection, we were able to cure those animals.
Of course, the untreated animals died, and ours were completely cured at the end of the study. We did histopathology, and lungs were clear. That was an amazing result. This hasn’t happened with RSV before with any drug. These are strong results. Then we also went after influenza. In that, what we did was there are three different drugs right now in ⁓ US stockpile for pandemic influenza potential response. One is Tamiflu, the other one is Xofluza, which was a recently introduced drug. And the third one, Peramivir, was developed with Barda by a US company. We tested each of them against NV-387 as a separate group. And our drug was substantially superior. I mean, it was like a more than 200 % improvement in survival in that lethal animal model. That is again an important study and a phenomenal result where those drugs have not been able to make the kind of impact that this drug made on the pathogenicity of the virus. Albeit in animal model, of course.
The way these animal models we choose, these studies are replicable and will be replicable in humans. And so that’s where we’ll go next. We also did studies with Mpox, monkeypox. Other viruses we talked about, they are RNA viruses. Monkeypox, completely different, DNA virus. Most difficult virus in the world is smallpox. And the next to that is monkeypox. No drug against monkeypox right now. We did a study against what are known approved drugs for smallpox, Tecovirimat and NV-387 matched the results and exceeded them in some cases. So the problem with Tecovirimat is that it did not work in Mpox clinical trial against humans. It was approved for smallpox in animal rule setting by studies against smallpox and related orthopoxviruses in relevant animal models. And then it was stockpiled. That entire thing, the government has paid more than $1.2 billion for development of the drug, more than $500 million for initial acquisition, and more than $200 million each year for additional acquisition of that same drug.
Lo and behold, it didn’t work in the Mpox emergency. So there is a hole there. And that is where we are going after. Now, what we are planning to do is we are taking NV-387. We want to show the phase two. So that’s where we are at. We are now proceeding to phase two clinical trials against MPOX. We want to show that the drug is truly effective in humans against the viral diseases, the way we are seeing how good it is in animal models. Beating every existing drug when it is there and when there is no drug still working very well.
David Bautz: Let’s talk about what kind of milestones that investors can look forward to over the next 12 to 18 months, that’s going to get you kind of to the next inflection point.
Anil Diwan: Our approach is mainly to advance the technology to de-risk it and to take it to regulatory approvals. So the strategy we are taking with Mpox is what is known as orphan disease first, and then go after the bigger markets. There is a law for orphan drug development, and we will be taking advantage of that law and that law when we do the phase two clinical trials will probably file before that so there will be orphan disease declaration we will be seeking for treatment of Mpox using NV-387. That once approved gives us a lot of communication with the FDA, and it eventually gives us seven-year exclusivity for the drug for use in Mpox. So that will be very important.
In addition, it also enables a priority review voucher, PRV, after approval of the drug. PRVs have been traded. They have been traded at $150 million to $300 million in the past.
And so the pharmaceutical companies want to accelerate their progress. And so they want to buy the PRVs. So the consultants that we are talking claim that the PRV values are going to be in the $200 to $400 billion range as a cash asset for the company that holds the PRV. So that is going to be a major game-changer for us when we can get that.
One more thing that has happened recently is that for orphan drugs, is now well recognized that conducting phase three is very difficult, if at all, time-consuming, and it adds to the cost that cannot be recouped. At the same time, it is also recognized that if you conduct the phase two properly for an orphan drug, you can get sufficient data that is viable data to be able to convince regulatory bodies that the drug is effective for the condition and the approval can be obtained form the basis of the phase two data set itself, not having to go into phase three. There are, of course, bells and whistles attached to that, but you can get into commercialization. And after that, you will be doing surveillance of the cases that are being treated to accumulate more data, which is what should be done anyways, for almost any drug, especially a novel drug anyways.
And this particular model is especially being implemented very strongly and very emphatically by the current Secretary of Health and the current FDA Commissioner, Mr. Kennedy and Dr. Makary, respectively. And I was invited to a meeting, in fact, where this was described, and we had a talk about that, that the FDA people were explaining to us what changes the FTA is going to go through and how they are going to accelerate the ability of companies to get through the regulatory process. And this was one of the things. So by going after Mpox, that actually helps us to get into the commercial stage regulatory approval much faster than it would if we were going after RSV, for example. And RSV, of course, is the major commercial thing that everybody knows.
Like I said, $8 billion market. HIV is a $10 billion market. Herpes is going to be $10 to $20 billion market once a good drug becomes available. One more thing that I forgot to mention, actually, is that we also tested NV-387 against measles virus. For doing that, we had to get a humanized mouse model. Lo and behold, NV-387 was successful in that model.
There is no drug for measles right now. The reality is that vaccination with measles, you need to reach 95 % vaccination rate for that to benefit herd immunity or the measles from not causing pandemic or epidemic. Today’s situation with the people having turned off against vaccines, which is natural, and with people having chronic diseases, 95 % of entire population of the United States or the world is not healthy enough that it can respond to that vaccine properly, and you can get 95 % immunity rates. So you automatically have a conundrum there that, unless you develop a drug against it, you’re going to go backwards in time.
If you look at measles rates, in the other countries, the underdeveloped countries have always been there. But in the developed countries, in the recent five years, especially, they have been going up. It comes in waves. The vaccine is from 1968. The virus has evolved since then. So, how much it has changed, we do not know. The vaccine is still known to work, which is a great thing, but the virus keeps evolving, and that is going to change that story.
So that’s where we are at with measles. So it’s going to be an important drug. Again, measles also is an orphan disease in the United States. So we will be able to seek an orphan drug designation for NV-387 for the treatment of measles. So that’s another milestone that we are looking at whether the FDA will look into animal rule, in which case we already have the data, or whether they will want some sort of additional human studies of some sort. And we’ll be discussing that with them once we go into the orphan designation process. So these are one by one by one that we are going to line up, all these different things.
In the rare disease space itself, I showed you three different things: Mpox, smallpox, and measles. And then we come back to the commercial space, influenza, RSV, coronaviruses. And once the company gets to the level that it can raise sufficient funds for going after those diseases, then we’ll be going there. And even now, there are no drugs in those spaces that are effective enough.
David Bautz: Okay, so in order to move the drug forward and for all those indications, what’s the strategy for financing for the advancement of NV-387?
Anil Diwan: The market for investments in the last two, three years in infectious diseases has been very difficult. Currently, we have an ATM active at the market offering active in which the company itself can sell shares into the public market, and that way company itself gets the money when somebody is buying those shares on the open market. So that is going on.
We do have always inquiries coming in from different groups, different funds, different investors, groups of different kinds. We do entertain them. We do take a look at them and we will decide which one is appropriate one to do. In the past, as you have seen, we have shied away from anything that has warrants attached to it, and we have shied away from anything that causes forward dilutions of different natures, which a lot of companies have capitulated to that and we are not doing that. The other part is that I personally have given a $3 million line of credit to the company, which probably will need to be used in the next, I would say, next quarter or something like that for financing our ongoing operations.
And by that time, we’ll have our events coming in that we have filed for the clinical trial. The clinical trial protocol is accepted that we are approved for clinical trial. We have dosed initial patients, and then we have top-line data on the initial patients and then data going on, as well as the orphan disease designation projects that I talked to you about. We, of course, do press releases for all of these things that we do, and as we achieve items and our events. And we’ll be doing that, and we hope that the investors will realize that we are making a tremendous change in how viral infections are treated.
Imagine going to the doctor today with a viral infection. What happens? They say, go home, rest, right? Two days, come back. After two days, you go back, say, Oh, I’m still having the same symptoms. What happens? Oh, I can’t give you Tamiflu now because it only works in the first 48 hours, right? So there is practically no drug because current drugs work only in that time frame.
Now imagine a drug where the doctor doesn’t have to even wait to find out what virus it is. The doctor has the confidence that, practically any respiratory virus, this drug is going to work against. Okay, you go to the doctor. Oh, I’m having breathing trouble. I’m having this thing, the sinus trouble. I’m having, I think it is a viral infection. I have fever too, et cetera. Doctor says, Okay, go. Take NV-387. End of the story. Two days later, you’re fine. Imagine that scenario, and that is real. Today, it will be real soon!
David Bautz: Alright, well, it sounds good. So thanks, Anil, for joining me today and giving us that overview.
Anil Diwan: Thank you very much for the opportunity.
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