Precision oncology company Race Oncology (ASX: RAC) is looking to raise capital to enable the execution of its expanded business strategy and to progress the clinical program of its anti-cancer drug Zantrene following a recent breakthrough discovery.
The company has opened a share purchase plan to raise up to $29.7 million to fund a number of phase 2 clinical trials, as well as make improvements to the formulations of Zantrene, and undertake further research and development.
Zantrene® (bisantrene dihydrochloride) is a small molecule anti-cancer drug that has shown to be a highly targeted precision oncology agent at low doses and a chemotherapeutic at high doses.
It has been identified as a highly potent inhibitor of the Fatso/Fat Mass and Obesity Associated (FTO) protein, of which overexpression has been shown to be the genetic driver of a diverse range of cancers.
Race Oncology is exploring the use of Zantrene as a new therapy for melanoma (skin cancer) and clear cell renal cell carcinoma (kidney cancer), which are both common FTO overexpressing cancers.
It also has compelling clinical data for Zantrene as a chemotherapeutic agent and is currently in a phase 2 clinical trial in acute myeloid leukemia (AML). This follows a small proof-of-concept phase 2 trial in AML in 2020 which provided a 40% clinical response rate in a difficult to treat patient group.
Breakthrough heart protection discovery
Last month, the company announced a breakthrough in its preclinical research, discovering that Zantrene protects from anthracycline-induced heart damage, while in tandem acting with anthracyclines (chemotherapy drugs) to improve their ability to target breast cancer.
Race Oncology intends to further evaluate this important discovery, fast-tracking the planning of a phase 2b trial for 2022 in breast cancer patients at high risk of anthracycline-caused heart damage.
University of Newcastle Associate Professor Aaron Sverdlov said the concept of potential cancer therapies that are both non-cardiotoxic and cardio-protective had not been evaluated or even entertained before now, largely due to disease-specific approaches in healthcare.
“Our results suggest that Zantrene, an effective anti-cancer medication, can concomitantly provide protection against toxic effects on the heart from one of the most commonly used chemotherapy agents, doxorubicin.”
“This is the first evidence of its kind to demonstrate that there is a therapy that both targets the cancer and protects the heart.”
“It has the potential to improve health outcomes for countless cancer patients and survivors by both improving their cancer treatment while preventing development of cardiovascular disease,” Prof Sverdlov added.
Race Oncology chief scientific officer Dr Daniel Tillett described the ground-breaking development as a “best of both worlds” outcome.
“Given anthracyclines are used in millions of cancer patients every year, it is hard to overstate the clinical and commercial potential of this breakthrough,” he said.
Share purchase plan funds
The share purchase plan opened on 23 November, offering eligible existing shareholders the opportunity to purchase up to $30,000 in fully paid shares at $3 each. This represents a 17.4% discount to the volume weighted average price over the prior five trading days.
The use of funds will depend on the amount raised but in order of priority, Race Oncology said $8 million would fund a phase 1/2 FTO solid tumour clinical trial, with a further $2.2 million being spent on improved formulations of Zantrene, $1 million on pre-clinical cardio-protection studies and $800,000 on the development of new molecules.
In a mid-case scenario, the budget to improve Zantrene formulations would be bumped up to $2.6 million while an additional $7.5 million would cover a cardio-protection phase 2b clinical trial in breast cancer patients.
If the full $29.7 million is raised, a phase 2 extramedullary (EMD) acute myeloid leukemia/myelodysplasia (AML/MDS) clinical trial could also be funded at $9.2 million and a further $600,000 would go towards Zantrene formulation improvements for a total $3.2 million.
The share purchase plan will close on 17 December with the results and issue of new shares expected on the 21 December. The offer is not underwritten.
Race’s ‘three pillar’ business strategy
Race Oncology is pursuing a ‘three pillar’ strategy for the clinical development of Zantrene.
The first pillar concerns maximising the current Zantrene formulation including FTO inhibition, cardio-protection and AML commercialisation pathways.
The second pillar involves enhancing Zantrene with new formulations and intellectual property for FTO-targeting solid tumours. The third pillar is focused on new molecular development and could potentially involve partnerships and/or acquisitions.
Commercial opportunity for Zantrene as a cardio-protective drug
Race Oncology chief executive officer and managing director Phil Lynch said in a video presentation that development of Zantrene as a cardio-protective agent brings “potential opportunity in millions of cancer patients every year” as it could be used in most patients where anthracycline are used.
“Commercially, we could sell Zantrene independently and it can be used adjunctively with anthracyclines, we could potentially have co-formulated products and solutions, we can licence, or we can partner. There’s an enormous range of opportunities that will be explored down the road,” he said.
Dr Tillett said this breakthrough is particularly important for cancer patients because it means they can receive optimal chemotherapy treatment without the risk of long-term heart effects.
“At the moment, many cancer patients may get suboptimal treatment because oncologists are so concerned about the risk of permanent damage to the heart that they will give the patient lower or fewer doses of chemotherapy,” he said.
“This discovery also potentially takes away the major risk that comes with [anthracycline] treatment, which is damage to the heart and that can be unpredictable – even some patients given low doses of the drug can suffer long-term consequences and doctors don’t know before they’re treated if that will happen or not,” Dr Tillett added.