Innovation Pharmaceuticals Views Brilacidin-OM as Clearly Differentiated Compared to Limited Competition for Preventing Severe Oral Mucositis

BEVERLY, MA – March 15, 2018 (GLOBE NEWSWIRE) Innovation Pharmaceuticals, (OTCQB:IPIX) (“the Company”), a clinical stage biopharmaceutical company, is pleased to provide shareholders with a status report on the development of Brilacidin-OM, Innovation Pharma’s novel defensin mimetic drug candidate for the prevention and treatment of Severe Oral Mucositis (SOM) in Head and Neck Cancer (HNC) patients receiving chemoradiation. Over the last weeks, there has been significant attention directed to this disease. Additional perspectives on the SOM market—an area of great unmet medical need, attracting investment and industry attention—and the Company’s prospects in this emerging market are discussed.

Summary Points

· Brilacidin-OM viewed by Company to have significant competitive advantages and less challenges than other OM drug candidates:

o Prevention: Effective reduction of SOM incidence, beyond providing symptom relief, would be a critical factor toward successful commercialization

o Delivery: Brilacidin-OM developed in sachet packets offers a portable, quick-mixing, “instant” oral rinse therapy—patients and providers likely would more readily adopt

o Cost: Brilacidin-OM avoids costly manufacturing and logistics of sterile IV therapy competitors amid a regulatory environment demanding lower drug prices

· Company preparing for U.S. Food and Drug Administration (FDA) meeting to discuss Brilacidin-OM development plan

The Company is currently focused on completing the Clinical Study Report for its Phase 2 clinical trial (see NCT02324335) evaluating Brilacidin’s ability to safely prevent and attenuate SOM in HNC patients receiving chemoradiation and compiling a Briefing Package for discussion with the FDA. The study’s primary endpoint was met, with Brilacidin, as a preventative treatment, showing a clear reduction in the incidence of SOM (WHO Grade ≥ 3) compared to placebo. A key secondary endpoint in the trial, delaying the onset of SOM, also was also met. Brilacidin is being developed under FDA Fast Track Designation.

SOM Landscape

In cases of SOM, patients cannot eat solid food (Grade 3) and cannot consume either solids or liquids (Grade 4)—a situation that can result in weight loss and, most critically, suspension of cancer therapy. As noted in a video on SOM published on the “Healthy Body, Healthy Mind” website, a loss of 10-to-15 pounds causes the incidence of cancer therapy side-effects to double; negative effects of developing SOM can also be overwhelming to a patient’s physical well-being and positive mental attitude.

There are currently no FDA-approved drugs for the prevention of SOM in HNC patients receiving chemoradiation. The additional inpatient expenses incurred when suffering from SOM are estimated to be as high as $18,000 to $25,000 per case in the U.S. when hospitalization is required. These two factors contribute to SOM qualifying as an area of significant unmet medical need.

According to published statistics, the number of annual new HNC cases in the U.S. is estimated to be 65,000 (worldwide, ~750,000 cases annually). Between 60 to 70 percent of these patients typically will develop SOM (confirmed in our own clinical study), with the overall incidence of HNC patients developing some grade of OM (WHO Grades 1 to 4) approaching 100 percent. Because it cannot be predicted which patients will develop SOM, a preventative treatment, such as Brilacidin-OM, would begin in all patients as soon as starting chemoradiation and continue until its completion (typically a seven-week course).

Brilacidin-OM: A Leading SOM Drug Candidate

The Company believes that Brilacidin-OM occupies a lead position among OM drug candidates currently advancing in clinical pipelines. Most of these potential competitor drugs target mainly symptom relief and not prevention of SOM, and/or are disadvantaged by not having as patient-friendly modes of delivery (e.g., IV) in comparison to oral rinse Brilacidin-OM. Given Brilacidin-OM is administered as a convenient and patient-friendly oral rinse, the Company believes that it would be attractive to both doctors and patients, which would translate to substantial market penetration should it one day gain regulatory approval. Innovation Pharma also believes that it would be a preferred treatment for payers due to being inherently less costly than IV infusion therapies.

Moreover, should Brilacidin-OM become an approved product in HNC, there likely would be an opportunity to broaden the label to cover preventative treatments for additional cancer markets involving chemotherapy and Hematopoietic Stem Cell Transplantation (HSCT) therapy. OM is a costly and frequent complication in these areas as well. This OM market, in aggregate, is estimated to comprise as many as 650,000 people annually in the U.S. (between 25 percent and 60 percent of all cancer patients receiving chemotherapy will experience OM). We believe most other competitor products, with less patient-friendly modes of delivery, would be less likely to reach this broader OM market.

Management recognizes unprecedented and newfound interest in the OM space, including the first-ever awarding of FDA Breakthrough Therapy designation for an experimental IV-administered OM drug. Increased industry efforts and regulatory attention toward advancing truly viable OM drugs, beyond simple oral coatings and “magic mouthwashes” that are readily available today, is fostering excitement among patients and physicians who await much-needed improvements in OM care. The emergence of different types of drug candidates, with varying efficacy and modes of delivery, will drive competition and add significant value to promising compounds, such as Brilacidin-OM.

Brilacidin-OM: Sachet Development

While already competitively advantaged as an oral rinse versus IV drug delivery, Innovation Pharma is actively exploring developing Brilacidin-OM as a sachet—an industry term for a small packet, similar to a common sugar packet. A sachet is easily transported and is less expensive than a liquid formulation and should be considerably less costly than a sterile IV drug for SOM. Add in the facility costs of multiple IV infusions per week over a treatment period of 6-7 weeks, and the cost can easily escalate (e.g. 1 hour of infusion, 5 days a week), which can severely limits a drug’s commercial prospects, especially if there are far less expensive alternatives. With a sachet, the Company envisions patients simply mixing the contents of the Brilacidin-OM sachet with water for a quick-and-easy treatment at home or on-the-go for the prevention of SOM.

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