the Right fit

Cannasat Therapeutics fi nds a new direction with Anthony Giovinazzo at the helm

With more than 31 years of international merchant banking and venture capital experience-including having served as the president of MDS Capital Corp. Neuroscience Partner’s Fund, Anthony Giovinazzo is looking forward to putting his expertise to use as the new president and CEO of Cannasat Therapeutics Inc. Stepping into the role in November of last year, Giovinazzo inherited a pipeline rich in potential, including a proprietary formulation technology for cannabis drug candidates, and the company’s lead product Relivar, a buccal tablet for symptomatic management of neuropathic pain.

The strength of this product and its validity are among the many reasons Giovinazzo chose to sign on with Cannasat. The company’s potential to be a major player in the CNS field was equally enticing. Conversely, with a reputation for being an out-of-the-box thinker as well as a polished executive, Giovinazzo was hand-picked by former Cannasat CEO David Hill as his ideal successor. Giovinazzo brings with him extensive experience in licensing drug candidates, mergers and acquisitions, the management of clinical development and the ability to build small, execution focused teams.

“I really credit the former CEO Mr. David Hill and his board for having brought me in,” says Giovinazzo. “They wanted to create a stronger management team and supplement the existing team they had with people that had large pharma in-licensing, merger/ acquisition, and international capital raising expertise. [Hill] really decided that it would make more sense to bring a race horse in to take the company forward and create and realize value as quickly as possible, and so here I am.”

The fact that Giovinazzo has a track record for delivering financial results as well as a good relationship with investors was not lost on the decision makers who put him in charge.

“If you go to the U.S. and you talk to institutional venture investors, they’d tell you they would always prefer to have a management team and a CEO that have had several experiences under their belts, and not just positive experiences because the negatives are the things that create scars on your back and remind you of where not to go or where to go in the process of building value.”

The successes on Giovinazzo’s resume include selling Cita NeuroPharmaceuticals Ltd. to Vernalis Plc. in what was one of the largest merger and acquisition deals of 2005. He was also able to raise US$36 million for Cervelo Pharmaceuticals Inc. in 2007. Moreover, of his 31 years of international biopharmaceutical experience in drug development, 16 have been spent in the CNS field. All of this points to why Giovinazzo was the logical choice to take the helm of this budding CNS company.

His blueprint to date includes assembling a portfolio of two to three additional drug candidates through in-licensing. More specifically, he plans to build a portfolio of CNS assets, all with a managed-risk profile in target markets considered to be high-growth. With this in mind, Giovinazzo’s wishes to rebrand Cannasat into a

“Growing the company’s portfolio of drug candidates through in-licensing and acquisitions, and to advance projects to Phase 2 proof-of-concept clinical studies are only part of my strategy. Once the drug candidates are sufficiently de-risked, I intend to out-license the programs to the appropriate pharma marketing partners for a combination of upfront, milestone, and royalty payments.” specialty central nervous system (CNS) drug company. “Growing the company’s portfolio of drug candidates through inlicensing and acquisitions, and to advance projects to Phase 2 proofof-concept clinical studies are only part of my strategy,” he says. “Once the drug candidates are sufficiently de-risked, I intend to outlicense the programs to the appropriate pharma marketing partners for a combination of upfront, milestone, and royalty payments.” Significant steps have already been taken towards implementing this plan. In February, Cannasat obtained an option on an oral formulation of apomorphine, an approved drug for Parkinson’s disease from Adagio Pharmaceuticals. The new compound, known as APL-130277, is effectively the same drug as apomorphine. But as an oral drug, it has the potential of treating a much larger group of Parkinson’s patients, who have a moderate-to-severe form of the disease unlike Apomorphine, which is given by injection to patients suffering from a severe version of the disease, and has drawbacks such as scarring and inflammation. “The compound has the potential to address a significant underserved portion of the $3 billion-plus Parkinson’s disease market,” says Giovinazzo, adding that because it is an approved drug, and requires one Phase 2 study to allow it to proceed to NDA new drug approval submission, the risk from a regulatory and clinical perspective is reduced. “This means that in less than three years, we will have a second project that should attract a substantial partnership or a merger and acquisition partner,” he says. In moving this newly acquired compound through the pipeline,

Giovinazzo says the company plans to conduct due diligence, proof-of-concept and preclinical studies this year, with a Phase 1 trial scheduled for 2011. The reformulated drug also qualifies for accelerated approval through the FDA’s 505 (b) (2) pathway after one successful Phase 2 clinical study.

In March, Giovinazzo took the next step towards building more of a CNS foundation, by agreeing to give IntelGenx a 50 per cent ownership stake and an exclusive worldwide license to develop and commercialize the company’s Relivar cannaboid drug candidate.

“Both the technology, and the candidate (Relivar) have very interesting potential to treat neuropathic pain associated with multiple sclerosis and cancer, as well as for nausea/vomiting and appetite stimulation,” says Giovinazzo. “The rationale is this an attractive proposition to Cannasat because it takes the future capital requirements out of our hands, accelerates the program, but in the end we still get to keep 50 per cent of the upside.”

On top of these two transactions, Giovinazzo hopes to in-license several more compounds.

“One never knows in this business which project might stumble or slow down, or have to be shut down and so being a one-trick-pony is not the best choice. Essentially by creating a portfolio of not one core asset, but three clinical development assets, you are left with three different trajectories to commercial valuation,” he explains.

“I believe one of the important risk mitigating factors that we’ve learned from the Americans is how they’ve built their biotech companies with portfolios rather than as single project company’s. It’s something we need to do more of from a commercial valuation perspective in Canada. And to be able to take that and move it forward by raising sufficient capital. So my strategy going forward is to build this portfolio, to create a true clinical development company and also to raise capital,” he says. Significant steps have The best part is he’s done it all before. For starters, he built Cita NeuroPharmaceuticals already been taken Ltd. over a period of three years, from a towards implementing single early stage drug candidate, to an independent CNS company with three midthis plan. In February, to-late stage drug candidates. “Cita was a great example of how you Cannasat obtained an build a company in Canada by in-licensing option on an oral formudrug candidates from elsewhere. With Cita, we in-licensed candidates from a European lation of apomorphine, mid tier pharma that had over a billion dollars in sales yearly. By doing good work in an approved drug for terms of having a team of 10 to 12 people Parkinson’s disease from that understand this area from a clinical and regulatory point of view, we in fact created a Adagio Pharmaceuticals. very valuable portfolio. Lucky for us we also had an investment bank approach us while The new compound, we were on the road show looking to buy us out. It’s a very good example of a company known as APL-130277, where you can build a portfolio, build a is effectively the same team, but eventually you have to think about the exit strategy for your stakeholders and it drug as apomorphine. was a very important lesson that I learned.” It’s important to note that others had a hand in getting Cita to a point where it was attractive enough for buyers. In fact, Giovinazzo brought in an executive team with experience to balance the business initiatives with the market initiatives. Giovinazzo believes that Cannasat will benefit like Cita did with a more experienced management team supplementing the current management team. With this in mind, he plans to bring in several individuals that he has worked with previously with other CNS ventures, including some top consultants with experience in both the regulatory and toxicology side. Yet even with a valuable team and product portfolio in place, there is still always the bigger question of where the money is going to come from. “What we really need to do to build value quickly is to do several

projects at the same time, running several studies as tightly as you can from a timing point-of-view and moving forward to an inflection point of some substance. That requires raising money either from the very sophisticated venture capital community internationally or the institutional investor community internationally. You need to raise eight to 10 million dollars at a time, if not more,” states Giovinazzo.

This is an approach the company was not following prior to Giovinazzo’s appointment as president and CEO.

“The company did extremely well on a limited basis raising almost $10 million over five years. But the truth is, that’s just not enough to do things quickly” explains Giovinazzo.

The first step he says is bringing in capital from multiple sources.

“Obviously from my experience, what I know is you can’t raise all the capital we want in Canada, but that should not stop us. And in fact because of my past experience in raising capital internationally, I’ll look at dividing up what I need by raising some of it here and some of it abroad, like the U.S. and the Far East which I think is achievable. With the current economic and capital markets environment, it’s quite likely that it will not be possible to raise all of the new capital I need in the short run from institutional investors, pension funds and insurance companies and mutual funds. But there’s a very good probability of having a hybrid model. Where you raise some of the money from large venture capitalists who do invest in public companies, what’s called a private placement in a company, alongside institutional investors so that you’re not depleting one source of capital completely, and leaving everyone hungry for future opportunity as well.”

He’s also not shy about turning to big pharmaceutical companies on the prowl for innovative products. As such, the strategy for Cannasat is to become a clinical development company, but to be of the type that doesn’t expect to complete the value-chain process. Essentially he is going into it with a pre-conceived notion that there is going to be an exit strategy in the end

“We will stop at a clinical proof of concept, Phase 2A or Phase 2B in order to have robust data, to attract a first tier or second tier pharmaceutical industry. In the CNS field or diseases of the brain, the companies may include Biovail, as well as the big players, sanofi aventis, GSK, and Pfizer.”

And why does he think pharma partners will come knocking?

“The pharmaceutical industry is facing intense competition from generics thanks to the patent cliff. They are on the lookout for areas of opportunity. This has lead to a trend of more licensing deals between pharma companies and biotech, as well as mergers and acquisitions. Moreover, the pharmaceutical industry in any 10 year time frame goes through an ebb and flow - they’ll move from cardiovascular, to cancer, to CNS, or a combinations of those, and what many of them have now realized is that there’s a huge and growing market in the CNS area. As such, many of them are targeting CNS as a primary or secondary area of interest. And hopefully, in the end, we’ll be there to capitalize.”

The Most Gentle Touch in Biotechnology

Like a newborn baby, biologically derived products require careful, precise and tender handling. Our centrifuges provide this treatment and more.

Hydrohermetic feed for gentle product treatment HydroStop for highest yields Hygenic design for cleaning-in-place (CIP) and sterilization-in-place (SIP) Scaled for 2 to 25,000 liter reactors GMP-compliant documentation

To learn more about GEA Westfalia Separator and how we can assist you with your separation needs in developing and manufacturing breakthrough biotech products, please contact Dan Van Damme at (905) 319-3900 ext. 216 or by email at: Dan.VanDamme@geagroup.com.

For more PRofiles information visit our COMMERCIALIZATION Web Portal at

www.bioscienceworld.ca