All right, hello, everyone, and thank you all for joining us today for the Lytham Partners 2024 Investor Select Conference. My name is Robert Blum, managing partner, Lytham Partners. During this fireside chat webcast, we welcome Jaguar Health, ticker symbol of JAGX on the Nasdaq, and joining us from the company is the company's Chief Executive Officer, Lisa Conte. Before I begin, I just want to remind everyone that Lisa is available for one-on-one meetings. I know we're almost sort of at the end of the event, but if you'd like to schedule a meeting, even afterwards, I'd be happy to try to coordinate that for everybody. You can send me an email, blum, B-L-U-M, @lythampartners.com, or visit the website lythampartners.com/select2024.
From there, you can click on the Investor Registration tab and make your one-on-one selection. So, with that, Lisa, welcome.
Hi, Robert, my favorite conference. I'm thrilled to be here. Nice to see you again.
Wonderful to see you again as well. So let's sort of start high level, for those that aren't completely familiar with the company, talk a little bit about Jaguar Health, the company's mission, and sort of about the Jaguar family of companies, if you will.
Oh, thank you very much. Okay, if anybody doesn't know about Jaguar, how could that be? But we do all our drug discovery from plants used traditionally in tropical areas. That's our basic enabling technology. We've been around a couple of decades, and we are now a commercial stage company. So we do have a product that we took through our discovery process. These are all prescription drugs, natural, for the most part, focused on the gastrointestinal area at the moment, commercially. We have some other research going on. So the lead product that is commercialized now is called crofelemer. The trade name is Mytesi for humans, and it is plant-based, it is natural, it's sustainably harvested, it's fair trade, and it is an FDA-approved drug. And it's the only oral drug approved by the FDA under something called botanical guidance.
Under botanical guidance, there is no practical pathway by which to generate a generic. So we essentially have exclusivity forever. Even though we do have a very broad and bold and robust patent strategy and patents issued, there is this great exclusivity opportunity because we are a natural product. This same product is also commercialized under the trade name Canalevia, approved by the Center for Veterinary Medicine, the CVM of the FDA, for chemotherapy-induced diarrhea in dogs. So we have two commercial activities. Human is by far the priority in the company, and that's what we do, and the key thing is this product, crofelemer, with its paradigm-shifting, mechanistic approach to normalizing gut function, has completed a trial for prophylaxis of Cancer Therapy-Related Diarrhea. It's been about a six-year effort.
It is completed, and the data will be out sometime in the first quarter, in the next couple of months. We don't know the data ourselves. It's blinded at this moment, but we're very excited because this is blockbuster in terms of the number of patients that can benefit. And it's also in multiple proof of concept studies for the rare disease indications of intestinal failure with short bowel syndrome, and a collection of congenital diarrheal disorders, which is an ultra-rare indication, and data will be coming out on that in 2024 as well. So this is a very, very big year for the company because things in the pharmaceutical industry take a long time to do, but they happen to be culminating this year for us.
Take a step back, and how—as you said, your focus as a company is on plants that have this sort of long history of medicinal use by indigenous people. It's obviously very unique. How did your focus on plant-based medicines begin?
Well, so about, if you really want to hear, about 34 years ago, I was a venture capitalist, and I was on vacation, climbing Mount Kilimanjaro. And so I, and in those days, so 34 years ago, you know, different things come into vogue, get funded at different times in the venture world, and basic enabling technologies was something that was in vogue. And I saw these traditional medicines being used, sort of this green goop in a pharmacy as I was climbing Kilimanjaro, for people who are having altitude sickness.
I thought, "Oh, you know, why not look at these plants that have been in man for thousands of years, that are more likely to be safe and effective because the plant has been in man for thousands of years as a basic enabling technology?" So it was a simple light bulb moment at that time, and then came home from Kilimanjaro, and we really put together the business plan. So this, and what we came up with is exactly what we do. It's not like one plant, one drug going for a rifle shot, but it's a prioritization process that because a collection of plants for symptoms that we were interested in were more likely to yield something that was safe and effective, it was a prioritization process.
And what was really interesting at the time, high-throughput screening and combinatorial chemistry was very much in vogue, and we were the opposite approach. We're going to do low-throughput screening. We're not going to focus on known targets. We're going to focus on whole animal models of symptom management, so we could discover new mechanisms of action, new ways of treating and potentially curing diseases. And that's exactly what we were able to do with the symptom of diarrhea.... GI function, crofelemer, a total paradigm-shifting approach to treating gastrointestinal disorders. And where crofelemer came from was this prioritization process. It kept landing at the top of the decision tree until ultimately it became our FDA-approved drug.
Gotcha. No, it's a fascinating background to it, and I'm glad you sort of shared that with everyone that may not be familiar with that history there. Let's dive into crofelemer a little bit more, and let's start on the human side, right? Talk about sort of the lead indications, some of the other opportunities there in the pipeline, and then sort of the commercialization process there. So just sort of expand on the human side first.
Sure. So it's approved right now for chronic diarrhea. The specific indication is non-infectious diarrhea in adults living with HIV, AIDS, on antiretroviral therapy. So it's a chronic approval, and that's a specialty market, and another word for that is relatively small market, and we do commercialize it directly ourselves. We have a sales effort, about 10-12 different people in the sales and marketing effort. And so why did we do that first? It was fast-tracked priority review by the FDA.
So got the product out on the market, and as the first product we ever commercialized, there's a lot of learning that comes into an organization, particularly in the United States, with all the obstacles that are put up by the payers in the United States and the different segmentation to, you know, understand how to get a product to that patient based on the very intimate relationship they have with a prescription from their doctor and to get it paid. Where we are going with it now is, as I said, we just completed the study for prophylaxis for Cancer Therapy-Related Diarrhea , and this is a trial with all solid tumor types, on targeted therapy, with or without cytotoxic chemotherapy. So this is huge in terms of the number of patients that can benefit.
I was just talking to someone this morning who had done some research, and they said when it comes to oncologists, the three things that they care about to keep their patients on therapy are death, diarrhea, and mucositis. So diarrhea is what we're obviously looking to mitigate, a whole collection of symptoms. What am I trying to say? Urgency and bloating and cramping, as well as diarrhea and dehydration of water loss in patients. So what we've learned from HIV is how important and how powerful the patient voice is, and as we move into cancer, we have wholeheartedly embraced that, not just thinking about ultimately commercialization, but back to the very beginning.
So we did patient surveys, with an S, to identify what would be clinically meaningful, what would be quality of life meaningful to the patient, and incorporated that into our discussions of the design with the FDA. Our primary endpoint is, I think, the first time for a pivotal trial in cancer patients, a patient-reported outcome. And then ultimately, when we are going for supplemental approval, again, the product's already approved, supplemental approval to expand the indication to cancer, we absolutely are incorporating that patient voice in getting into the guidelines. Prophylactic use, every time some of these offending targeted agents are being utilized, "Hey, you know, get Mytesi on board," so the patient never has to deal with diarrhea.
The patient voice, in particular, the metastatic patient voice, because quite honestly, metastatic patients, you know, didn't have a long runway, didn't have a long life five, 10, 15 years ago. But with targeted therapies, they're living five, 10, 15 years, and the concept of tolerable toxicities is just insulting. Tolerable to whom? These patients deserve the opportunity to live, not just to exist, and managing these chronic symptoms associated with targeted therapy, of which diarrhea is very prominent, is very important to patient quality of life, as well as compliance to their therapy.
You know, something that you've stated here a couple of times, I just want to make sure that the audience is familiar with what you're referring to when you say targeted therapy versus, say, just traditional chemotherapy.
So targeted therapies are those, tyrosine kinase inhibitors, the antibody therapy, the CDK4/6s that are targeted to a particular enzyme or receptor sites of the particular cancer, as opposed to cytotoxic chemotherapy, where you're killing everything that grows, right? Where you lose your hair, your gut, that's where the diarrhea comes from, your fingernails. So these are very targeted, and most, if not all, work by a mechanism that induces a hypersecretion of chloride ions. And so it may do it through different pathways, but sort of the holy grail is the common last step in secretory or watery diarrhea, is the active secretion of chloride ions into the gut, and then water's coming in based on osmosis, and that's the diarrhea going out. And the paradigm-shifting approach of crofelemer is, what it does is it works locally in the gut.
So you take it, it's a pill, goes in the intestine, and it normalizes the abnormal ion flow, which normalizes the water flow and just allows gut function to get back to normal, but only does so in an abnormal situation. So if you and I have everything's normal, everything's fine, you can swallow a whole bottle of Mytesi it doesn't do anything. And locally acting, meaning locally in the gut, you don't have the systemic exposure, so you don't have to worry about drug-drug interactions, secondary metabolites causing problems later on, metabolism by the liver. Really, really important in patients who are complicated, who are on life-saving medications, and you don't want to interfere with the ability of those life-saving medications to do what they're doing.
In addition, if you are normalizing the diarrhea and the gut function, for example, in cancer, about 40% of patients go off their life-saving therapy or go to a subtherapeutic dose because of the symptom of diarrhea. So not only are you not interfering with it, but you're giving the patient the opportunity to stay on their particular regimen. So that is the focus that we have on targeted therapy, with or without chemotherapy, traditional chemotherapy, because traditional cytotoxic chemotherapy is causing a lot of diarrhea as well.
All right. Thank you for sort of expanding on that. Well, let's back up first. Current standard of treatment for Cancer Therapy-Related Diarrhea is what?
Remarkably, in the chronic situation, the standard of care is you go off your cancer therapy, you take a holiday, or you go to a subtherapeutic dose, and then you start to run out of protocols. You start to run out of regimens. Now, there are, you know, when we think about diarrhea, we all think about Imodium, loperamide, loperamide. These are opioids, and so they work basically by the mechanism of constipation, and crofelemer is not an opioid, so we don't have that risk of constipation. They're not labeled to be used chronically, so if they're used, you know, just for a severe situation, patients get loopy. They're, you know, they shouldn't be doing certain things like driving at certain times. They're really not adequate. They've never been tested specifically in this situation.
So really, when you're talking about the chronic situation, because people are on targeted therapies for months, years, years, the rest of their lives in a metastatic situation, you have to have something that's going to normalize and bring their life back to normal. Not a new normal, bring their life back to normal, that they can take every single day, and that's where crofelemer comes in.
Right. What have been sort of the, we'll call it the learnings, that you've come by to understand from the commercialization of Mytesi for HIV, where it's already approved, that you believe will ultimately benefit sort of the anticipated indication, we'll use the safe harbor word here for Cancer Therapy-Related Diarrhea ?
So definitely what I was mentioning, and we can't say it enough, the patient voice and the outreach for the patient to understand what the opportunity is for them to, as I said, I really dislike this new normal, and you hear that with HIV patients all the time. "Well, this is my new normal." Like, "No, no, no, no, no. Let's get you back to normal. There is no new normal." So that's definitely been a learning. On the reimbursement side, you know, the level of education that has to go on for a new paradigm, a shift, a shifting mechanism of action, there's crofelemer, there's no other anti-secretories that are approved. We don't even know any other anti-secretories that are in clinical development.
So the opportunity to educate the payers that this is different, this is something that is used every single day, potentially every single day, prophylactically. So stopping the problem from happening, not putting a Band-Aid on the problem that has already happened. So the methodology that we use to create that education, which is also supplemented with financial modeling, okay? So it talks, we have papers that have been published by third parties that show that it takes about three times as much, costs about three times as much, to take care of a cancer patient who's managing chronic diarrhea because of their rehydrations and going into the hospital, in some cases progressing all the way to death, as it does to a matched cancer patient.
So pulling all that together, staying on therapy, outcome of the disease, cost of managing the disease, education about "don't let the problem start in the first place," is all learning that has occurred from HIV. And then another interesting learning thing that occurred from the animal area, so we are approved, conditionally approved, in animals with crofelemer. It's called Canalevia-
Right
F or chemotherapy-induced diarrhea. Somebody was making fun of me yesterday. I was like, "If you're going to have cancer and cancer-related diarrhea, it's better to be a dog than a human right now." But anyway, we don't want to be silly about it, but it's a very important issue to manage. What we find is that the companies that manufacture the cancer agents sort of point to the availability of crofelemer because it allows them to keep their patient on their therapy, thereby improving their penetration, their revenues, the whole thing. So the keeping a good rapport with the five dozen or so targeted therapies that are out there, and the manufacturers of those, actually can provide potentially some help in the education and the awareness and the utilization of crofelemer when we get to the anticipated indication in Cancer Therapy-Related Diarrhea .
A ll right, no, that's helpful. That was actually another question, what was sort of the learnings, if you will, from Canalevia and how that pertains to cancer in the humans? I think you've sort of addressed that. Let's sort of talk about the business model, right? You mentioned you sort of initially went after an orphan drug sort of rare disease. Talk about the benefits to Jaguar as a company in sort of going after these orphan drug rare diseases.
Yeah. So crofelemer, and by the way, not Mytesi, crofelemer, Mytesi is a pill. Crofelemer, in a different formulation, a powdered, highly concentrated liquid formulation, is in development for, and has orphan drug designation for short bowel syndrome, and the intestinal failure associated with that, and the intestinal failure of a collection of congenital diarrheal diseases. Now, as you know, there are many companies that are rare disease-focused companies. We're not a rare disease-focused company, but within the company, that is a business model for these indications of crofelemer. And the, the opportunity there is really important indications. Third-party market research puts short bowel syndrome at something like $5 billion-$12 billion opportunity because these patients are so ill, high mortality, high morbidity, high expense to manage them throughout their life. That can be reached with relatively small clinical trials because the patient populations are so small.
For short bowel syndrome, you're talking about maybe 80,000 patients around the world. With congenital diarrheal disorders, the one that we are focusing on first, MVID, microvillus inclusion disease, is maybe a couple of hundred patients around the world. So you're talking about very small numbers of clinical trials to show benefit, to be able to get the product to the patients, show the benefit, and then, of course, the revenue generation that's coming to the company. With greater access to regulatory input. There's some tax benefits as well. So it's a really nice business model within Jaguar, and we've put most of the execution of that into a footprint that we have in Europe called Napo Therapeutics. It's actually based in Italy. And one of the reasons for it is, it's global development.
When you have small populations, you know, you're dealing with patients wherever they are in the world so that you can find them. But in Europe, there's something called the Early Access Patient Program, where based on proof of concept data, that we are expected to have this year in 2024, in certain countries in Europe, you can actually have reimbursed revenue and utilization of the products by patients while the product is going through the full development process, a program that does not exist in the United States. So that's one of the reasons why we have the lead in the development and commercialization for the rare disease indications, stemming from the footprint that we have in Italy right now, Napo Therapeutics.
What market size on HIV and then, you know, hopefully with eventual approval on the cancer side is what?
So HIV is, will never be more than about $25-$30 million in the United States. As we move into cancers, we don't put out, you know, particular guidance, certainly not right now in the anticipated indication, but we can give you an analogy. So chemotherapy-induced nausea and vomiting, those agents are typically used prophylactically, and usually utilized for the first 3 days in cytotoxic chemotherapy. So, you know, cytotoxic chemotherapy is not a lifelong thing like targeted therapy. It'll be maybe for five to six months. So that market is about a $3 billion market, and easily, 50% of that market is valued at, with a generic. It's generic utilization. So you can imagine how huge the opportunity is to benefit patients when we get to targeted therapy every single day.
Prophylaxis, there's about, as I said, like 60 different targeted agents out there, every single solid tumor. And part of the game in the pharmaceutical industry, part of the risk, is manufacturing in anticipation of successful clinical trial results and regulatory. So we've been putting the expense and into making sure we have sufficient drug supply to get into this opportunity with success in the trial, which would then lead to a supplemental NDA for Mytesi, the crofelemer that's already approved in humans. And then with a supplemental NDA filing, hopefully six months, it could be up to nine months before we'd actually be able to educate, promote, and sell to the cancer indication. But one of the interesting things about having a product that's already approved is we're already fully in the supply chain. You know, so the day-
Right
T hat we get that approval, the product is already in the pharmacies.
So six to nine months is sort of... You're thinking this is a 2024 event, then?
No, six to nine months from when we file the supplemental NDA. So we'll get the data, let's say, the first quarter. It'll take us six months or so to file the supplemental NDA, and then six to nine months from there to be able to promote.
Gotcha. Okay, thank you for clarifying that. We've got about five minutes left here. Let's, I just wanna touch a little bit on, on sort of Magdalena Biosciences, JV you formed here, about a year ago, between yourself and Filament Health. Talk a little bit about the JV, what the objectives are here, and maybe some upcoming expectations that you can share with investors.
S ure. Magdalena, which is named after the river in Colombia, which dumps north into wherever, I got to think of my geography, wherever it dumps into. Anyway, the main river artery there. And Magdalena is focused on everything that we talked about with crofelemer, so traditional use and new ways of thinking about treating and potentially curing diseases. Only in this case, it's not GI disorders, it's mental health disorders. And so part of it came from the fact that we have a library of 2,300 plants that we have collected over 30 years that are focused on symptoms that we see in the field, and about 20% of those are in the area of mental health or cognitive disorders. And it's an asset that we have just sitting there.
So as we saw some of the really interesting breakthroughs going on with psychoactive and psychedelic medicines, we thought, this is, you know, we should look at what we have there. We got our hands full with clinical development crofelemer, but there's really potential novel agents there. So, what we did is we formed a joint venture with a company called Filament Health that has natural product chemistry capabilities, and we provide the library and this research and this asset that we have sitting there. Some of it is psychedelic, all of it is psychoactive in the library that we're providing. And we're not going after the MDMAs and the psilocybin and the ketamines. That's absolutely fascinating, the research that is going on there. The first NDA has been filed. What's the next generation?
What are the molecules that are not known, the plants that are not known, that can, as I said, benefit this whole area? That's what Magdalena is doing. We have some really fascinating data that has just been produced in animals, which we'll, we'll be talking about shortly. The game here, again, like we did with crofelemer, we start with plant material as we observe it being in humans, then we have to go back into animals, then to go back into humans again. But because this will be done under a botanical IND, under botanical guidance, like with crofelemer, you can leapfrog based on the traditional use in humans over phase I and go right into proof of concept phase II studies. That's the goal with Magdalena.
With this first round of funding that came in, which was at about a $5 million valuation, Jaguar owns 40% of this. It's outside money that came from One Small Planet, a venture fund, to get to the point of that botanical IND, specifically looking at ADHD with a new plant based on the human use, where we have done some verification with some animal studies and then back into humans. Very exciting.
Now, thank you for that. We're sort of right at the end here. Any sort of final takeaways that you want to make sure people are thinking about and maybe some key milestones that we should be looking for over the year here?
Yeah. The final thought is on the cancer study, which is probably the next big announcement that's coming, the results, the targeted... That study is actually called OnTarget. There's been, you know, a collection of data points over the years. For this particular indication, there's been two investigator-initiated trials, one prophylactic, one therapeutic, one from Georgetown, one from UCSF, that have been published. We have a doggy poster that is coming out in a publication tomorrow with a very diarrheagenic human agent in dogs, which are a beautiful model of this situation. We have an investigator report that has been published with a patient that meets all our enrollment criteria. So it's a collection of data points that are leading up to this release of the results from this trial, which went on for, like, six years. That's, that was the plan.
We didn't plan on the pandemic. That added a little time. So that's a big point, the proof of concept, for the rare diseases. Another big milestone will be some partnering. So while we expect to commercialize in the United States, we bring in partners around the rest of the world, and while we are the keeper of the messaging and the learning in the United States, we are definitely open and expecting to do some partnering to have more feet on the ground, some more resources. We have experience now being a one-product company. We learned a lot. We're looking at leveraging our market awareness and patient voice to bring in other assets to leverage that capability as well.
All right. Interesting. Well, we'll have to be on the lookout for that. Well, again, Lisa, thank you so much for the time today. I greatly appreciate it. I always find it informative. I hope everyone else did as well. Just want to remind everyone, if you've not scheduled, or if you didn't have a one-on-one throughout the day here today and would like to schedule one, reach out to me. I'll make sure to make the connection here for everyone. We hope everyone has enjoyed the conference. We still have a couple more hours left here. Thank you again so much, Lisa, for the time today. Greatly appreciate it.
Thanks so much. Love talking about it. Love seeing you.
Thanks, guys.