Bioasis Technologies Inc. V.BTI

RE:Rising Tide Equity

[WHATSUPBOB34344]

Understanding the biOasis Drug Delivery Platform
(A Love Story)

True Story: I fell in love with biOasis at a speed dating event.

Author: Dan Carlson

It was, of course, speed dating for investors. Fifteen minutes with a company. Meet the CEO, hear the pitch, shake hands and move onto the next table.

Days can last an eternity when broken down into 15 minute increments. After a morning of hearing how each company was on the inflection point for serious profits (they weren’t), or how the land they owned contained the next Klondike (it doesn’t), I was certainly looking forward to happy hour. Then, lightning struck.

My meeting Rob Hutchison, the biOasis CEO, didn’t start out hot. I am a self-proclaimed novice when it comes to biotech. Seriously, without a doctorate, how can anyone expect to understand if certain molecules will be worth billions of dollars, or just make expensive urine? I typically just avoid biotech because there is a unique hurdle to success in this space called the FDA. This makes it a very binary space and one that I don’t usually feel qualified to evaluate on a risk/reward basis.

That being said, I sat down with Rob thinking that fifteen minutes isn’t too long and I would try to make the most of it. He explained the history of the company and the target diseases that they were focused on. Being a complete novice, I asked Rob to really dumb down his presentation for me. Basically, give me the elevator pitch and let me try to get my head around it. Thankfully, he did so and I managed to get the gist of it. Well, it was more like a light bulb went off in my head. Which is how we approached the end of fifteen minutes with this being the conversation.

Me: So, you’re saying that there are many existing drugs that can’t cross the blood brain barrier (BBB) effectively.

Rob: Yes.

Me: And, you can take an existing peptide, one that naturally crosses the BBB, attach it to these drug molecules and dramatically increase their penetration over the BBB.

Rob: Yes.

Me: And, these drugs are already FDA approved and your reformulation wouldn’t require full FDA trials for approval.

Rob: Yes.

Me: And, these major pharma companies would extend their patent life and receive approval for new indications with the reformulation.

Rob: Yes.

Me: For which, they could potentially pay you a large up-front fee and ongoing royalties on $1B plus drugs.

Rob: Yes.

Me: Holy s***.

That’s how the fifteen-minutes of speed dating ended, but that was just the beginning of my interaction with Rob. I pursued him like a shark at dinner, insisting I sit next to him and learning more about the genesis of the company, his background…whatever I could glean. By the end of the night, I was irreversibly hooked on biOasis.

What does biOasis do?

In a nutshell, biOasis attaches their discovered human peptide (they call it Transcend) to existing drugs, which enables them to cross the blood brain barrier, a heretofore impenetrable wall that protects the brain from the nasty toxin circulating throughout our bodies. The BBB is like an internal version of St. Peter at the Holy Gates. It keeps out the impure, letting through only the nutrients, proteins, etc. that are necessary for the brain. In doing so, the BBB denies access to most medications, not aware that they may be helpful in curing internal issues within the brain such as cancer, alzheimers, parkinsons, etc.

In more technical terms, the BBB “limits the free diffusion of polar solutes allowing only particles with a diameter less than 20 nm to cross to the brain. In addition, it expresses a wide variety of active efflux transporters that further restrict drug access to the brain. Furthermore, the endothelial cells within the BBB are equipped with a limited array of transport systems that supply the brain with nutrients, but also eliminate byproducts of brain metabolism. Taken together, these characteristics provide an effective protective shield against not only the high-molecular weight agents, but also small molecules.” – Hamdy Azim, Hatem Azim, Future Oncology

Thus, by blocking out high-molecular weight agents and small molecules, the blood brain barrier effectively denies access to most medications for diseases affecting the brain. However, it does allow passage to the particles necessary for life. It is this ability of the BBB to differentiate particles that has confounded scientists for years. It is also the key to biOasis’ transformational drug delivery system.

“biOasis Technologies Inc. has developed and is now commercializing a ground-breaking platform for the delivery of therapeutic compounds across the blood-brain barrier and into the Central Nervous System for the treatment of neurological diseases, including, but not limited to brain cancers, neurodegenerative and metabolic diseases. With the ability to transport therapeutics of almost any type and size across the blood-brain barrier, the Transcend Platform is now being licensed to biotechnology and pharmaceutical companies for the advancement of their neurotherapeutic programs.” ~ bioasis.ca

Okay, realizing that the reader of this article, like me, is probably not a doctor, let me recap. First, getting drugs across the BBB is the holy grail for brain disease treatment. Second, no one has ever managed to do this. Third, biOasis claims they can.

Sounds good, but why, you might ask, am I convinced that they can do so? The answer is contained within their patented approach. An approach that, while challenging in the lab, is fundamentally simple. So simple, that I can understand it and, furthermore, it makes empirical sense to me that it will be successful.

The answer lies in Iron. Iron is a mineral needed by our bodies; our whole body, including the brain. Yet, it is ingested into our system through food and drink. Thus, iron is inherently on the wrong side of the BBB to supply the brain. Rob, the founder of biOasis, understood this fact. He also, through a strategic partner, figured out how iron crossed the BBB. The human body is a marvel at creating ways to solve such issues. In the case of iron, to supply the brain it uses a protein that binds to the iron and transports it over the barrier using a receptor waiting for the protein. Rob and his team isolated the peptide from within this protein that does all the magic.

And therein lay the key to biOasis’ Transcend platform. There exists the peptide that can transport molecules into the brain using a receptor found on the blood brain barrier. If you can take that same peptide, and attach it to other molecules, could it then carry them over the BBB as well? The answer is “Yes!”

It’s incredibly elegant in its simplicity, isn’t it? Take a peptide that is already in the body, and designed to transport molecules over the BBB. Attach it to your drug and voila! You have a transportation and delivery system that is capable of taking all sorts of drugs over the blood brain barrier to attack brain diseases at their core.

Sounds Great, but Does It Work?

Cold fusion sounds great, doesn’t it? After all, nature fuses things together all the time at ambient temperature. So, why can’t humans perform fusion at room temperature, creating the world’s cheapest energy source? Because it doesn’t work. Sometimes great ideas are just that…ideas. They don’t all make it past concept to reality.

The Transcend platform is a great idea. Use a natural born transporter to bring drugs across the BBB to attack brain diseases. On paper it’s genius. But, how has it done in the lab? In testing? In trials?

biOasis has shown that Transcend can deliver a wide variety of therapeutics to the brain, including antibodies, enzymes, small molecule drugs and gene therapies such as siRNA, which together are expected to treat neurological diseases in several areas, including, but not limited to, brain cancers and neurodegenerative and metabolic diseases…The Transcend Platform has achieved a significantly high level of success in dozens of studies at over twenty third-party institutions and pharmaceutical companies. ~ bioasis.ca

According to the company, Transcend works. The “dozens of studies” and significant third party validation are impressive (and most are available online if you’re doing more homework). biOasis has also presented findings at numerous medical conferences, such as the International Cancer Research Conference in 2015. A little digging around the internet reveals a lot of data on Transcend, and it all appears to be very positive.

Furthermore, based on recent events, other parties believe it works as well. During 2016, biOasis has entered into licensing agreements with Vaccinex Inc. (www.vaccinex.com) and Astellas Research Institute of America (www.astellas.com). The Vaccinex deal, which was only signed a couple of weeks ago, is interesting in that it includes up to $20M in upfront and milestone payments; money that could be coming to the company in the not too distant future.

Based on the success of the studies done to date. And, judging from the recent licensing agreements (with more in the works according to the Company), I believe that Transcend does indeed enable drugs to cross the BBB. I think biOasis has cracked the code.

Sizing the Market

Frankly, I don’t want to spend a lot of time sizing up the market opportunity for Transcend. The reason being, the market opportunity is HUGE and the Company need only achieve a modicum of success to justify a much higher valuation.

To get a sense as to how big the potential market is, look at the first areas of research the Company is going after. Brain Cancer, Hunter’s Syndrome, and Alzheimer’s. These are all significant indications, with approved drugs that have sales well into the billions of dollars. And, they are indications that, sadly, have had little success in curing, or even slowing, the diseases.

Looking beyond the existing programs in place at biOasis, one can see Transcend being partnered with drugs for many other diseases. These include neurodegenerative diseases such as Parkinson’s, Huntington’s and ALS (more commonly known as Lou Gehrig’s Disease). The long term potential of the Transcend platform is enormous.

Thus, the market size for the drugs that could benefit from partnering with biOasis is in the 10’s of billions of dollars. Of course, biOasis would only get a piece of this pie. However, just a piece could be very, very substantial and could come within just a couple of years due to the accelerated approval process the Company will get as a result of working with already approved drugs in diseases that are truly without a current cure.

A good example of how biOasis could benefit from partnering with existing drugs, and, thus, a good example of their business model, is in Herceptin. This drug is the standard of care in breast cancer. It does close to two billion a year in sales. It also does a great job in curing breast cancer. The unfortunate aspect of curing breast cancer is that, by extending their lives, over 30% of women who survive breast cancer will develop brain cancer as a direct result of the breast cancer. This cancer is similar in nature to the breast cancer and Herceptin would be the drug of choice to fight it. However, Herceptin doesn’t cross the BBB.

Working with the Transcend platform, biOasis has demonstrated (in animal studies) that it can significantly increase the amount of Herceptin getting through the BBB, thus inhibiting the growth of tumors. If this were to work in humans, it would be amazing as many lives could potentially be saved.

Financially, it would be amazing as well for biOasis and Genentech (Herceptin’s owner). This is firstly because, with a new indication, there would be additional scrips written for Herceptin. But, there’s more. Herceptin is about to go off patent. The reformulated Herceptin on the Transcend platform would have an extended patent life. biOasis could be a cure for Herceptin sales, which would otherwise go off a cliff as generics enter the market.

A reformulated drug, like Herceptin, could represent a substantial windfall for biOasis. It’s likely they would get close to a 10% royalty payment from Genentech on this $6B drug, if they can pull it off. That’s close to $600M a year opportunity to biOasis, and could come within approximately two years of filing an IND.

There are many other drugs out there that are similar to Herceptin. They are existing treatments. They are FDA approved and making sales. They all (every drug company wants this) have patent lives they would like extended. biOasis, through the Transcend platform, has a multi-billion-dollar opportunity staring it in the face.

The Bottom Line

I’d like to be very clear on something. While I’m writing this, I feel like it’s a bit of an infomercial for biOasis. However, as I said in the very beginning, this is a true story; 100% so.

I’ve been investing in stocks for 30 years. I’ve had my share of winners and losers. However, there are only a handful of times that I’ve sat at a table and looked at the CEO across from myself and thought that I’d stumbled upon the motherlode. biOasis is one of those times.

Will it work out? Empirically it makes a ton of sense that it will succeed, but it’s a drug company. There are so many variables that one never knows how it will turn out. However, I can tell you this; if the Transcend platform works as advertised, biOasis will resemble a Company that found a printing press with stamps containing Ben Franklin on it…i.e., they will mint cash.

As always, investors should do their own due diligence. Don’t bet the farm. Read what’s available out there. Share your thoughts and opinions with me. But, do at least check out biOasis, a company that could hold the key to saving, or improving, many lives and is certainly deserving of some investor attention.

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