Provider and Payer Analysis Supports Potential Commercialization of Innovation Pharmaceutical's Brilacidin as a Novel Oral Mucositis Drug Candidate

WAKEFIELD, MA / ACCESSWIRE / July 22, 2022 / Innovation Pharmaceuticals (OTCQB:IPIX) ("the Company"), a clinical stage biopharmaceutical company, today provided an update on the Company's Brilacidin program in Oral Mucositis (OM). Brilacidin, delivered as an oral rinse, was shown in Phase 2 clinical testing (NCT02324335) to reduce incidence, delay onset and decrease duration of severe OM (WHO Grade ≥ 3) in Head and Neck Cancer (HNC) patients receiving chemoradiation. The Company and FDA have completed an End-of-Phase 2 meeting and agreed to an acceptable Phase 3 program.

To assess current insurance programs and Brilacidin's overall commercialization potential in OM, the Company engaged separate consulting firms to analyze the provider and payer landscape -- specifically, the likelihood of clinicians to prescribe and insurers to reimburse a novel OM treatment, such as Brilacidin, should it eventually gain marketing approval. Results of this analysis are summarized below.

• Large Unmet Need: Oral Mucositis (OM) presents a significant socioeconomic cost to the healthcare system and to patients, as it can substantially impact quality of life, result in hospitalization, and lead to disruptions in anti-cancer therapy and poorer outcomes. Current standard of care (SOC) treatment options (primarily devices) are lacking because they only act as symptom management and do not decrease incidence of severe OM (SOM).
• Competitive Positioning: Brilacidin's oral sachet formulation was perceived as convenient and highly preferred by key opinion leaders (KOLs) in comparison to intravenous (IV) options, and KOLs are willing to prescribe Brilacidin for all HNC patients because the compound's preventative properties and ease of use as an oral rinse. Brilacidin has the potential to be a first-line product for prevention and treatment of SOM due to efficacy perceived as being highly clinically meaningful.
• Development Considerations: KOLs viewed the primary endpoint of reducing SOM incidence as favorable, though recommend additional secondary endpoints to promote greater uptake (i.e., reduction of opioid usage, overall pain level, and time to onset of SOM). Maximizing overall efficacy (reduction of SOM) was identified as a higher KOL priority than the specific mechanism of action (anti-inflammatory activity) by which efficacy is achieved.
• Coverage Perspectives: Developing Brilacidin as a New Drug Application (NDA), via the 505(b)(1) pathway, significantly improves Brilacidin's commercialization prospects in the OM therapeutic area. OM products, such as MuGard, GelClair, Episil, and Caphosol, which were developed as devices and not drugs, have struggled to show clinical benefit, as they are primarily palliative in nature, and from a government payer perspective are not covered under Medicare Part D.
• Reimbursement Landscape: At least 2 approved drugs in all therapeutic drug classes must be made available under Medicare Part D, per USP Medicare Model Guidelines. The guidelines establish the framework (the rules) that drive payer formularies. Given there are no approved drugs for OM in HNC, should Brilacidin be approved, it is highly likely it would be included in payer formularies as a pharmacy benefit.
• Commercial Opportunity: Annually, in the U.S., Brilacidin has the potential to address 52,000 OM patients in HNC, with potential future extension to 20,000 OM patients in Hematopoietic Stem Cell Transplantation (HSCT), and 160,000 OM patients in all chemotherapy categories. Based on physician estimates of Brilacidin adoption and other pricing-based assumptions, forecasts of U.S. annual sales are $188 million for OM in HNC patients in 2030, with a potential additional upside of $106 million for OM in HSCT and $598 million for OM in all chemotherapy categories.

"This analysis reinforces Brilacidin's potential to become a breakthrough OM treatment and commercialization success," said Leo Ehrlich, Chief Executive Officer at Innovation Pharmaceuticals. "While our focus on Brilacidin over the last few years has been in the antiviral space, given COVID-19, we have made meaningful strides to advance Brilacidin in OM, including refinement of the oral rinse formulation in sachet form. We continue to pursue partnering opportunities so Brilacidin can be further advanced in oral mucositis in the clinic."

Additional information on the Brilacidin-OM revenue opportunity based on this analysis is available on the Company's website at the link below:

• https://www.ipharminc.com/new-blog/2022/7/22/brilacidin-revenue-opportunity-in-oral-mucositis

About Oral Mucositis

Oral Mucositis (OM) is a painful and debilitating complication of chemoradiation.1 Head and Neck Cancer (HNC) patients, comprising an estimated 66,000 newly diagnosed cases in the U.S. in 20212, and an estimated 900,000 worldwide3, are at high risk of developing OM. By 2030, the global incidence of HNC cases is expected to exceed 1 million per year. Moreover, between 25 and 60 percent of cancer patients, regardless of cancer type, also will experience OM. Characterized by inflammation and ulceration, patients suffering from OM are often unable to speak and eat (requiring the insertion of a feeding tube) and are more susceptible to infections, with severe cases leading to hospitalization at increased treatment costs of up to $25,000. There currently are no approved medications for the prevention of OM in the HNC population, with only limited palliative care options available. Worldwide, the OM market was estimated to be $1.5bn in 2021.4

1 The broadening scope of oral mucositis and oral ulcerative mucosal toxicities of anticancer therapies - Elad - 2022 - CA: A Cancer Journal for Clinicians - Wiley Online Library
2 Cancer Statistics, 2021 - PubMed (nih.gov)
3 Global Cancer Observatory (iarc.fr)
4 Oral Mucositis Market Size, Epidemiology, Market Research 2032 (delveinsight.com)

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About Innovation Pharmaceuticals
Innovation Pharmaceuticals Inc. (IPIX) is a clinical stage biopharmaceutical company developing a portfolio of innovative therapies addressing multiple areas of unmet medical need, including inflammatory diseases, cancer, and infectious diseases. The Company is also active in evaluating other potential investment opportunities that can add value and diversify its portfolio.

Forward-Looking Statements: This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements concerning future product development plans, including with respect to specific indications; statements regarding the therapeutic potential and capabilities of the StingRay System; future regulatory developments; and any other statements which are other than statements of historical fact. These statements involve risks, uncertainties and assumptions that could cause actual results and experience to differ materially from anticipated results and expectations expressed in these forward-looking statements. The Company has in some cases identified forward-looking statements by using words such as "anticipates," "believes," "hopes," "estimates," "looks," "expects," "plans," "intends," "goal," "potential," "may," "suggest," and similar expressions. Among other factors that could cause actual results to differ materially from those expressed in forward-looking statements are risks related to conducting pre-clinical studies and clinical trials and seeking regulatory and licensing approvals in the United States and other jurisdictions, including without limitation that compounds and devices may not successfully complete pre-clinical or clinical testing, or be granted regulatory approval to be sold and marketed in the United States or elsewhere; prior test results may not be replicated in future studies and trials; the Company's need for, and the availability of, substantial capital in the future to fund its operations and research and development, including the amount and timing of the sale of shares of common stock under securities purchase agreements; and the Company's licensee(s) may not successfully complete pre-clinical or clinical testing and the Company will not receive milestone payments. A more complete description of these and other risk factors is included in the Company's filings with the Securities and Exchange Commission. Many of these risks, uncertainties and assumptions are beyond the Company's ability to control or predict. You should not place undue reliance on any forward-looking statements. The forward-looking statements speak only as of the information currently available to the Company on the date they are made, and the Company undertakes no obligation to release publicly the results of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as required by applicable law or regulation.

INVESTOR AND MEDIA CONTACTS
Innovation Pharmaceuticals Inc.
Leo Ehrlich
info@ipharminc.com

SOURCE: Innovation Pharmaceuticals Inc.