Drug Re-Purposing Co. seeks new stroke therapies


Drug re-purposing co. Algernon Pharmaceuticals Inc. is actively reinventing itself. The company’s lead therapeutic candidate, NP-120 (Ifenprodil), is currently being evaluated in a Phase 2 trial for IPF and chronic cough, and the company is now moving forward with a breakthrough new use of DMT for treat ischemic stroke.

Clinical-stage drug repurposing company Algernon Pharmaceuticals Inc. (AGN:CSE; AGNPF:OTCQB; AGW:FSE) has been increasingly active in finding breakthrough new opportunities to address unmet medical needs.

One of Canada’s top-rated hedge funds, AlphaNorth Asset Management, advised on a call with Streetwise Reports that he has been active enough to build his equity position in the company towards the end of 2021.

AlphaNorth commented that Algernon Pharmaceuticals’ stock price fell in part due to an aggressive stock cut of 1:100 and the cancellation of an investigational clinical trial for a potential COVID-19 treatment. , as well as certain tax-loss sales at the end of the year by investors. When the shares fell below C$45.00 per share, AlphaNorth felt they had become significantly undervalued and began aggressively adding to the position.

Steven Palmer, CIO and President of AlphaNorth, noted that the company’s exciting product candidates in its development pipeline, along with the reduction in Algernon’s total number of outstanding common shares to approximately 1.7 million, have created an attractive investment opportunity. The company’s total market capitalization had shrunk to around C$8.5 million and could be considered very cheap because it held around C$2 million in cash on its balance sheet, had a product for chronic cough and idiopathic pulmonary fibrosis (IPF) in clinical phase 2 trials, and have another product entering the clinic to evaluate N,N-dimethyltryptamine (DMT) for a new indication as treatment of ischemic stroke.

Shares of the company have rebounded a bit in recent weeks, bringing the company’s current market capitalization to around C$13 million, which Palmer says is still an attractive valuation when all factors are taken into account.

After strengthening its financial structure, the company is now focused on advancing its drug development efforts. AlphaNorth’s Steven Palmer said he expects the company to announce additional new drug candidates in the coming months, as well as additional clinical trial plans.

Algernon Pharmaceuticals is currently evaluating Ifenprodil in phase 2 clinical trials in Australia and New Zealand for chronic cough and IPF. Enrollments for the trials have closed and the company expects to receive the results during Q2/22.

Palmer noted that Algernon’s preclinical data suggests its drug offers superior initial results to Merck & Co. Inc.’s (MRK:NYSE) Phase III drug candidate. Palmer commented that another competitor, BELLUS Health Inc. (BLU: TSX; BLUSF: OTCPK), has also been successful in getting a drug to treat chronic cough into phase 2 trials, which has helped increase the market capitalization of this company at nearly CA. $800 million from this clinical study in chronic cough alone.

Palmer pointed out that Algernon’s preclinical data not only looks better than the Bellus Health product, but unlike the other studies, Algernon’s trial also targets IPF.

The company is also moving forward with testing a second drug candidate called DMT, which is being considered for the treatment of strokes. According to Palmer, some well-known and notable scientific advisers have agreed to help with the investigation.

The underlying premise is that the psychedelic drug DMT could help in the treatment of stroke patients, so this will be the first-ever attempt to clinically test this compound in stroke patients.

It is expected that DMT will be given intravenously to patients in several different concentrations and adjusted for body weight. Although DMT is classified as a highly regulated Schedule 1 hallucinogenic drug, the company anticipates that study participants will only receive sub-psychedelic dosage levels.

There are two major classes of stroke. The first and most important form is called ischemic stroke, which occurs when arteries in the brain become clogged with blood clots which restrict the flow of blood and oxygen to the brain. The second group is called hemorrhagic stroke, which occurs when an artery in the brain loses blood or ruptures. Hemorrhagic strokes can be caused by high blood pressure and aneurysms that cause arteries to stretch and burst. As DMT is known to increase blood pressure, Algernon only discusses its potential use in ischemic strokes to target and potentially heal damaged brain cells.

An important aspect of Algernon’s business model is that the company focuses its research efforts on existing off-patent drugs that 1) have been used before for other indications or in other countries and 2) have already made undergoing a medical and regulatory approval process.

Therefore, as drugs are well documented to be safe, society is looking for ways to reuse them for other medical conditions. Palmer referred to the classic example of Viagra from Pfizer Inc. (PFE:NYSE), originally created to treat hypertension and angina, a form of cardiovascular disease. Palmer noted that “one of the main advantages of this strategy is that it effectively shortens the time needed for clinical trials, because clinicians can usually skip phase 1 because they already know the drug is safe, and they can skip directly to phase 2 to determine if it works or not.”

This approach also reduces investment risk and can also provide a longer active life of the patent.

Speaking about the future prospects of Algernon’s business plans, Steven Palmer said the company has approximately C$2 million in cash to fund its current operations; but, as the proposed clinical trials move forward, it is expected that Algernon will need to raise another round of funding.

Palmer mentioned that the primary purpose of the company’s stock reduction was to help push the company’s stock price above $4.00/share, which would allow Algernon to list its shares on NASDAQ and perhaps do a coinciding capital increase at that time. AlphaNorth believes the company is well on its way to that end and expects that goal to be achieved this year.

Algernon is a drug repurposing company committed to discovering new applications for previously approved drugs and other natural compounds. The company strives to select compounds for advancement that have never been approved before in the United States or Europe, as this helps prevent the possibility of off-label prescription writing.

Shares of Algernon Pharmaceuticals trade under the symbol “AGN” on the Canadian Securities Exchange and last closed at C$7.31 per share on Thursday, February 3, 2022. Additionally, the company’s shares trade under the symbol “AGNPF” on the OTCQB. Exchange and “AGW” on the Frankfurt Stock Exchange.

Steven Palmer, CFA is the CIO, President and Co-Founder of AlphaNorth Asset Management, which oversees the management of the AlphaNorth Partners Fund. The AlphaNorth Partners Fund is a diversified, Canadian-focused, buyer-biased small cap equity hedge fund. The company was recently recognized as the highest rated equity hedge fund in Canada during the 2021 Alternative IQ Canadian Hedge Fund Prices for equity funds based on its five-year annualized rate of return of 40.35%.

The AlphaNorth Partners Fund invests in all sectors with the aim of positioning itself early in situations where the fund can earn multiples on its money. AlphaNorth invests in biotechnology, technology, precious metals and other special situations, including consumer products companies.



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