Phylogica (ASX:PYC) talks strategy and platform direction


by Clive Tompkins

Phylogica Limited (ASX:PYC) CEO, Stephanie Unwin talks about the company’s strategy and platform direction following its 2017 AGM.

James Lush:
Hello I’m James Lush from Finance News Network. Joining us today is the CEO of Phylogica Limited (ASX:PYC), Stephanie Unwin.

Stephanie let’s start by talking about the AGM, you just completed that. How would you sum up the key messages that you delivered?

Stephanie Unwin: There’s three key messages we delivered today. First is that it’s been a really transformative year for Phylogica. In that time, we’ve transformed in a sense of turning over the executive. So we have a very very different executive makeup, to the executive of the previous year. And what we’ve done is we’ve added complementary skill sets. So we’ve taken it from a really R&D focus to one where we’ve added strategy, commercial and deep pharma connections real time into the USA.

The second is we’ve done a very large strategic review. We’ve spent three intense months of time really getting to understand our company. Looking under the hood, working out what we’ve got and where we should best apply that. And we’ve come to the view that it is pivot to the platform, we’re all about being a platform company and serving pharma customer needs.

And really the third is well then, how do we capitalise on that? Let’s do more in vivo validation work that proves the diversity of that platform and really is a compelling value proposition, for pharma customers.

James Lush: Let’s dig a bit deeper into that strategy and the implementation side of things. What about the validation of the platform?

Stephanie Unwin: This is I think the key program of work for us in 2018, it’s all about that scientific validation program. What we’re looking to do, we have a matrix of cell types and cargoes, each of which opens up an area of interest, of therapeutic interest, for pharma customers.

So across 2018, we’re looking at building out that matrix with further in vivo. So live animal work that proves that our FPPs, so these functional penetrating peptides, can get where we say they go with a cargo, or a drug payload that you’re interested in.

Very soon in fact, we’ll have our FPPs delivering a peptide vaccine that’s super important in immuno oncology.

The second thing we’re going to do is a body of work around Cre. Cre is essentially something that turns parts of the body in the animal, from red to green if it’s got to where you think it’s got to. And that’s a fantastic validation of bio distribution. Where in our body is our FPP delivering its cargo. And the third one is delivering antibodies, which is a really hot area in pharma.

James Lush: Why is the partnering strategy so important do you think?

Stephanie Unwin: We would really need to have non-diluted funding that comes from pharma deals. And so our partnering strategy is all about identifying who are those pharma customers, who have a problem with their existing programs, because they cannot get delivery into the cell. If we can target those partners and start to work with them, on delivering their cargoes where they need them to go, then we have a huge value proposition for ourselves going forward that, as I said, is sustainable.

One of the live collaborations we have on foot at the moment is with Genentech. That’s already delivered us a $2 million milestone payment. And we continue to get really encouraging results from that, which show that our FPPs, these functional penetrating peptides, are delivering their antibiotics into the intracellular environment to deal with superbugs.

So we want more of those sorts of deals and if we get them, it then means that we are starting to supplement what is investor funding. And in time, wholly replacing it with pharma funding the science work, that we know delivers great outcomes for patients.

James Lush: You sort of painted a picture showing us the vision. What about in the next few months, what’s the plan there?

Stephanie Unwin: Firstly we’ll be delivering work on the vaccine I just spoke about. So it’s our delivery mechanism, our FPP towing through the system, a peptide vaccine and that’s aimed at melanoma. So it’s really interesting work and that gives us in vivo readout. So a functional readout in live animal model that says yes, you’re getting your FPP to show that you can have tumour reduction, or vaccination against tumour growth.

So we’re pretty excited about that work and we revealed some preliminary data today, and there’re two sets of experiments. One is almost complete, one’s in train, both of which we’ll release over the next couple of months.

Also the Cre I’ve been talking about, which is where the fluorescence goes from red when it goes in, and to green if it’s delivering our FPP enzyme. That’s super important to us and we’ll start work on that. And the third one again is our Beta-actin, which is an antibody program and that’s going to be in vitro, meaning petri dish. But proof of concept again that this hot area about antibodies, is something that we’re going to get an early readout signal from.

James Lush: Just briefly, to financials. How are they stacking up?

Stephanie Unwin: We had a $5 million raising that was done at market at the time, which gave us the cash runway until the end of CY18, so next calendar year. That means that we do have sufficient cash in order to do this in vivo validation work, and take us through that period of time. And across them, we’ve also got two lots of R&D rebates. So we start today with a cash position with those two R&D rebates, about $8 million by the end of next calendar year. And we think that that’s going to be sufficient to do this work.

We then hope the deals start to flow and about midway through next year, we’re really hoping for good results from our BD activity.

James Lush: Just finally. How would you sum up how different you are from all your competitors?

Stephanie Unwin: We think we’re highly differentiated and we think we’re in a space that’s highly sought after. So we call it all about drugging the undruggable. And in that space, there are about three or four other companies but our FPP, our delivery mechanism is 37 times more potent than TAT, which is its closest competitor. We can take in such a diverse range of large cargoes. Our competitors can’t do that. They’ve typically got either a single focus, or a very poor sort of a weak cell penetrating peptide, which ours is much stronger than. Or they face another problem, which is they can’t escape the endosome. And that’s nature’s defence mechanism that says we’re trying to keep you out of getting into the cytosol, inside the cell.

James Lush: Stephanie Unwin, thank you so much for talking to us, it’s really interesting.

Stephanie Unwin: My pleasure, thank you.