NASH Pharmaceuticals 1: Fast-Tracking Pharma Success

Drug repurposing? It doesn’t sound very sexy. In fact, it is the key to a pharmaceutical treasure chest.

Today, developing new drugs has never been so expensive and time-consuming. From the initial “discovery” phase through to the completion of the formal clinical trials necessary for licensing, this process can eat up as much as 15 years, with costs in some cases exceeding half a billion dollars.

If that isn’t daunting enough for pharmaceutical companies, 90% of new drug candidates fail before ever reaching the stage of actual human testing. Yet because of the time/expense/risk inherent in this process, even a single drug success can mean a payoff in the $100’s of millions for a drug company and its shareholders. In some cases, the reward is in the billions.

Drug repurposing, as its name implies, involves finding a new therapeutic application for an existing, approved drug. This approach can save as much as 8 years of R&D time and $10’s of millions in development costs. Suddenly, drug repurposing looks much sexier to investors.

Enter NASH Pharmaceuticals Inc. (CSE: BTH, OTCQB: BTHCD, Forum), a wholly owned subsidiary of Breathtec Biomedical Inc. A brief explanation is in order.

NASH Pharmaceuticals was a private biopharma company. Breathtec is a health technology company specializing in medical device development, that was looking to add a drug development division.

In the fall of 2017, NASH’s CEO Christopher Moreau was looking for new ideas for the Company’s drug research program. Opportunity knocked in the form of a renewed acquaintance.

Dr. Mark Williams (now NASH’s Chief Science Officer) was an experienced drug development scientist in the pharmaceutical industry. Among the projects in which he had taken a lead role was “repositioning” multiple drugs for new medical applications.

Williams was fascinated with the research and commercial potential of drug repurposing and began investing his personal time and energy over 5 years doing his own research in this area. Moreau and Williams had met 12 years earlier, having previously worked together for the same biotech company.

A chance encounter led to coffee. The two began to talk about their current work, and the NASH Pharmaceutical business model was born. Moreau introduced Williams (and his research) to the Nash Board of Directors and the Board was equally enthused with the commercial potential of this drug repurposing strategy. Dr. Williams became the Chief Science Officer for NASH.




To close the loop, Breathtec Biomedical recently “acquired” NASH Pharmaceuticals, but it is the NASH management team and unique business model that are now the focal point of operations.

Of great interest to investors is that when Dr. Williams was introduced to the NASH Board in early 2018, he brought more with him than just an exciting concept. He also brought thirteen previously approved drug candidates that were ready for fast-track screening, all potentially leading to the enormous payoffs previously outlined. More on this later.

Here investors not familiar with the pharmaceutical industry require a little educating. Drug development begins with pre-clinical research. This is the process starting from initial discovery that culminates in animal testing for the potential drug candidate.

Success at the pre-clinical level eventually leads to human “clinical trials”. This is formal testing of the potential drug on human patients and it is comprised of three phases. A Phase I clinical trial is devoted to establishing the safety and tolerance of the potential drug in human patients.


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This is where the drug repurposing strategy exhibits such strength as a business model. These drugs that are being “repurposed” have already been through the approval process once. This means that safety and tolerance (the objective of a Phase I trial) has already been established. Thus, drug repurposing is a drug development short-cut that allows the developer to leap-frog all of the many years of pre-clinical work and a Phase I clinical trial and move directly into a Phase II trial.

It is at the Phase II stage where the efficacy of a potential drug is tested (and hopefully demonstrated). It is this stage where the drug development process becomes of enormous interest to Big Pharma. The numbers here speak for themselves.



It is here where the pharmaceutical industry shifts gears from looking at the scientific potential of a drug candidate and becomes squarely focused on the commercial potential. Here Big Pharma has never been so interested in (and so dependent upon) the junior pharma companies doing the majority of such research.

The hunger of multinational pharmaceutical companies for new drugs (that can be patented) can be summed up in three words: the Patent Cliff.

The Patent Cliff is the label that the pharmaceutical industry has attached to the rapid depletion of patented drugs already developed by the major drug companies. Not only have these drug patents expired for a long list of licensed drugs, but many of the expired patents are for major revenue-producers for Big Pharma.

At the same time that is has never been more difficult and expensive to bring new patented drugs to market, drug-makers saw patents expire (in 2017 alone) on drugs with total annual revenues of $26.5 billion. But last year wasn’t even the worst year for Patent Cliff losses for Big Pharma.

In 2012, patents expired on licensed drugs with total annual revenues of $55 billion. And the moment that a drug loses patent protection, revenues for the patent-holder can fall by as much as 80%. Ouch.

With such huge holes to fill in their pipelines and drug development so intensely expensive and time-consuming, it is simply not feasible for these multinational drug companies to replenish their drug pipelines through internal R&D alone. Increasingly, Big Pharma is forced to buy new drugs to restock its own drug cabinet.

So if drug repurposing is such an efficient strategy for addressing a huge, known problem, why isn’t everyone doing it? Dr. Williams explains how and why this isn’t nearly as simple a process as it sounds.

“In order to even have a chance for a successful drug repurposing program you need to be able to file a new patent for the old drug, once your research confirms that it can treat a new disease. For this to occur, the idea, the concept, the scientific approach needs to be completely novel, one that has not been thought of before or even written about in order for you to be able to file a new patent…and there in lies the most challenging part.

How does one come up with a new idea about how a drug works in the body and could therefore possibly treat a new disease, that’s totally new? That’s the catch. For the Nash Pharma program, it was a combination of years of intense research with some good luck thrown in.”

Not as easy as it sounds. Even if a junior pharma company can find a promising drug to repurpose that isn’t unpatentable because of “prior art” or out-of-bounds because another drug company has already pioneered such research, researchers still have to find therapeutic applications for these repurposed drugs that actually work.

This is a process not unlike finding the proverbial needle in a haystack. This leads back to what Williams brought to the table when he joined NASH Pharmaceuticals: thirteen viable drug repurposing candidates that could be screened, repurposed, and then quickly advanced to a Phase II clinical trial. CEO Moreau estimates that these drugs can be readied for Phase II trials at a rough average of 7 – 13 months time, and at a cost of approximately $30,000 per drug.


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What are these thirteen “needles”? What is the commercial potential of NASH’s lead R&D programs? What are other companies worth that have brought such drugs to market?

In Parts II and III of Stockhouse’s first multi-part series, investors will learn the answers to these questions and more.

The world needs new drugs. The combination of aging populations and greater health expectations are increasingly making us drug-dependent populations. In the United States, more than 40% of all Americans over the age of 18 are on some form of prescription drug regimen.

Big Pharma needs help. NASH Pharmaceuticals sees its drug repurposing business model as not only the solution for this major health issue, but as the means to unlock pharmaceutical riches that could easily total in the billions of dollars – for this $12 million junior pharma company.


breathtecbiomedical.com





FULL DISCLOSURE: Breathtec Biomedical Inc. is a paid client of Stockhouse Publishing.