Claritas Announces Option to Acquire Rights to Novel Drug for Treatment of COVID-19 Related ARDS

Drug is Being Tested in Patients with Acute Respiratory Distress Syndrome (“ARDS”) Caused by COVID-19

SAN FRANCISCO and TORONTO, Sept. 16, 2021 (GLOBE NEWSWIRE) — Claritas Pharmaceuticals, Inc. (TSX VENTURE: CLAS and OTC: CLAS.V) (the “Company” or “Claritas“) today announced that it has entered into a binding Letter of Intent (the “LOI”) with Biozeus Biopharmaceuticals S. A., a Brazilian corporation (“Biozeus”), under which Biozeus will grant to Claritas an option to acquire an exclusive, worldwide license to develop and commercialize Biozeus’ novel, proprietary drug, BZ371B, for the prevention and treatment of pulmonary diseases, including ARDS and asthma (the “Option”). The Company’s entry into the Option is subject to receipt of all regulatory approvals, including approval of the TSX Venture Exchange (the “TSXV”).

Highlights

• The worldwide market for treatment of ARDS is projected to reach $934.8 million by 2026.¹
• ARDS is one of the common clinical manifestations of severe COVID-19 infection.
• BZ371B is being evaluated in a 10-patient clinical study of patients with COVID-19 related ARDS requiring intubation and mechanical ventilation (the “Clinical Study”).
• Data from the first four patients in the Clinical Study demonstrate a dramatic reduction in the severity of the disease.
• Biozeus has agreed to grant to Claritas an option to acquire exclusive, worldwide rights to develop and commercialize BZ371B for the treatment of ARDS and all other pulmonary diseases (the “License”).
• If data from the remaining six patients in the Clinical Study are equally positive, Claritas will exercise the Option to acquire the License.

“Our strategy is to position Claritas as a leader in nitric oxide pharmaceuticals, and our potential acquisition of BZ371B is an important element of that strategy,” stated Robert Farrell, Claritas’ President and CEO. “With the addition of BZ371B, we believe that Claritas will have the strongest and most promising pipeline of nitric oxide pharmaceuticals in development. Our nitric oxide-releasing compound, R-107, has the ability to deliver supplemental nitric oxide throughout the body for both the treatment of viral infections, including vaccine-resistant COVID-19 infection, and as a potential breakthrough product that could provide unrivalled results in treatment of pulmonary arterial hypertension (“PAH”). With BZ371B, Claritas will be in the unique position of having a second nitric oxide pharmaceutical that has the ability to cause the patient’s own cells to generate nitric oxide gas inside the body. No therapy in existence today, other than BZ371B, has such a mechanism of action wherein the body itself is stimulated to generate its own nitric oxide supply.”

“For the past three decades, numerous studies have proven that nitric oxide gas is a potent vasodilator in the blood vessels of the lungs, decreasing pulmonary artery pressure and improving oxygen saturation. ² However, when nitric oxide gas is administered into the lung via inhalation therapy, its ability to pass through the lung tissue to reach the pulmonary arteries is quite limited. Consequently, the impact on pulmonary blood flow resulting from administration of inhaled nitric oxide is modest.”

“Unlike the modest impact produced by inhaling nitric oxide, the initial clinical data observed with nebulized BZ371B showed a highly significant effect. The explanation for the profound benefit of BZ371B vs. the modest impact of inhaled nitric oxide is likely to relate to the difference in the concentration of nitric oxide gas achieved in the blood vessels coursing through the lung. In the case of inhaled nitric oxide, the gas is distributed throughout the lung and only a small fraction reaches the periphery of the lung where it is able to diffuse out of the lung and into the adjacent muscular wall of the pulmonary arteries. In contrast, in the case of nebulized BZ371B the drug reaches the lung cells and induces them genetically to express nitric oxide synthase (“NOS”) protein. NOS is an enzyme that causes cells to produce nitric oxide naturally. When BZ371B is administered to the lungs via a nebulizer, the drug enters the lungs, and causes the lung cells to express NOS, which, in turn, results in those cells producing nitric oxide. The lung cells producing nitric oxide are situated directly adjacent to the pulmonary arteries, and therefore the concentration of nitric oxide reaching the muscular wall of these arteries is very high. Indeed, much higher than the concentration of nitric oxide reaching the arteries from inhalation of nitric oxide gas. The greater concentration of nitric oxide produced naturally from administration of BZ371B causes the arteries to dilate, thereby increasing blood flow. The resulting improvement in blood flow increases the amount of oxygen in the bloodstream.”

“An additional benefit expected of BZ371B is its ability to generate very elevated concentrations of nitric oxide inside the lung epithelial cells where the COVID-19 virus is located. Nitric oxide is well established to inhibit replication of coronaviruses, such as COVID-19³; hence it is expected that BZ371B, by inducing expression of NOS, will have the additional action of terminating viral replication.”

“Because nitric oxide is a readily diffusible gas that passes across cell membranes, BZ371B is also anticipated to generate high levels of nitric oxide surrounding the outside of the cells in which NOS has been induced. Nitric oxide is well known to block the structure of the spike protein which COVID-19 uses to attach to the lung cells⁴. Hence, it is expected that BZ371B therapy, in inducing the expression of NOS throughout the cells of the lung, will also prevent COVID-19 from entering and infecting healthy lung epithelial cells.”

“In summary, we expect that BZ371B will reveal a trifecta effect in patients with life-threatening COVID-19 infection: (1) to improve blood flow in the COVID-19 infected lung, thereby improving blood oxygen levels; (2) to halt viral replication within cells already infected by COVID-19; and (3) to prevent the spread of COVID-19 infection within the lung by blocking the attachment and uptake of the virus into heathy uninfected lung cells.”

Mr. Farrell went on to say, “Given the expectation that BZ371B will be effective against COVID-19 infection, it is currently under evaluation in the Clinical Study. The Clinical Study will enroll a total of ten intubated and mechanically ventilated COVID-19 patients who have developed ARDS, a potentially fatal respiratory condition. In ARDS, fluid accumulates in the lungs, which in turn reduces blood oxygen to dangerously low levels. ARDS constitutes a medical emergency, and for patients with severe ARDS there are currently no available approved treatments. The Clinical Study is being conducted in critical care hospitals in Rio de Janeiro and Sao Paulo, Brazil. Based on the exceptionally positive data from the first four patients in this study, as well as the positive data seen in a previous animal model of ARDS, we believe that BZ371B could become a best-in-class, front-line therapy for ARDS.”

”Subject to receiving TSXV approval for the transaction, we will execute the Option to acquire the License for this drug. Upon completion of the Clinical Study, if the data from the remaining six patients are comparable with the results observed in the first four patients, we will exercise the Option, and acquire the License. We currently estimate that the Clinical Study will be completed in early 2022.”

“We are currently developing our nitric oxide-releasing compound, R-107, for both the treatment of viral infections, including vaccine-resistant COVID-19 infection, and as a potential breakthrough product that could provide unrivalled results in treatment of pulmonary arterial hypertension (“PAH”). With the addition of BZ371B for treatment of ARDS, Claritas will clearly be positioned as a leader in the development of nitric oxide pharmaceuticals, with two nitric oxide compounds in development, each of which will address distinct and large commercial markets in the pulmonary space,” stated Mr. Farrell.

BZ371B Induces Expression of Nitric Oxide Synthase and Combats Mismatch of Blood Flow and Ventilation in ARDS

BZ371B is a novel patented 9-aminoacid peptide drug, modeled after a natural venom found in an Amazonian spider whose bite has been known for fifty years to increase blood flow. Study of this venom has revealed that it induces NOS expression, which is the critical enzyme responsible for the production of nitric oxide. BZ371B is a chemical analogue of the spider venom. When it is administered to the lung via a nebulizer, it dilates the pulmonary blood vessels, bringing copious blood to those regions of the lung that remain open to ventilation. This tight coupling of blood flow and ventilation is critical in combatting diseases, such as ARDS, where the lungs are clogged with inflammation and debris.

If Claritas Exercises its Option and Acquires the License, Claritas Will Develop BZ371B as a Nitric Oxide Therapy for Treatment of ARDS

ARDS is a life-threatening lung disease that can be caused by sepsis, pneumonia, trauma, and severe COVID-19 infection, and is characterized by fluid build-up in small air sacs (alveoli) in the lungs. ARDS prevents the lungs from filling up with air and causes dangerously low oxygen levels in the blood. ARDS patients are typically put in an intensive care unit (“ICU”) and on a ventilator to assist with breathing.

The Advantage of BZ371B Over Inhalable Nitric Oxide Gas in Resuscitation of ARDS

Inhaled nitric oxide is used extensively throughout the world as a rescue agent in patients with ARDS with excellent results in many patients, but its efficacy is inconsistent, and it has thus not been approved by the FDA for this clinical indication. It appears that the level of inhaled nitric oxide gas reaching the pulmonary blood vessels is limited, and often insufficient to induce their dilation. The ideal solution to overcome this local deficiency of nitric oxide would be to trigger the lung cells to produce their own supply of nitric oxide, which would be available locally in high concentrations, and be more than ample to reach the adjacent pulmonary blood vessels. Accordingly, it was logical to test BZ371B, a potent inducer of NOS expression, as a nebulized agent in patients dying from ARDS, where there is a severe deficiency of pulmonary nitric oxide.

To date, four patients have been studied to date in Brazil, receiving doses of BZ371B administered by nebulization to their lung via a mechanical ventilator. All four patients were hospitalized in an intensive care unit, carrying a definitive diagnosis of COVID-19 associated pneumonia and full respiratory decompensation. All four patients presented with systemic COVID-19 infection, as evidenced by disease outside of the lung involving other organs that had failed (so-called “multiple organ failure”). All four patients had a breathing tube inserted into their trachea, were placed into a therapeutic deep coma, and were ventilated by a respiratory machine providing 100% oxygen under maximal pressures in order to inflate their lungs in the setting of extreme stiffness secondary to pulmonary inflammation and water accumulation (edema).

Under the terms of the experimental protocol approved by the hospital ethics review board and consented to by the families, only terminally ill patients in the most dire condition were permitted to participate in the study. In the case of the initial four patients studied, each was determined by their physicians to have less than 2-3 hours to live. All four patients were cyanotic (colored dark blue) due to minimal oxygen reaching their tissues, and all four had loss of function in most organs (kidney, liver, heart, brain, and lungs) which were in a terminal state of shutdown and failure.

Patient #1

Patient #1 presented with COVID-19 pneumonia and ARDS, associated with renal and cardiac failure. He experienced an instantaneous response to nebulized BZ371B, as evidenced by a tripling in airflow into the lung, a four-fold increase in oxygen perfusion to tissues, and a 2.5-fold increase in lung oxygenation. Although the duration of the protocol called for a limit of 3 days of BZ371B therapy, his physicians elected to continue dosing for a total of 9 days due to the apparently profound effect of the drug on the patient’s well-being. His improvement in response to BZ371B continued during the additional period of six days but his physicians chose at that point to cease treatment with the drug because other organs (kidney, heart) continued in failure. After BZ7371B was discontinued, he died quickly thereafter.

Patient #2

Patient #2, who presented with COVID-19 pneumonia and ARDS, also responded immediately to nebulized BZ371B, with results similar to those observed in Patient #1. Directly following dosing there was an instant tripling of her airflow and a doubling in lung oxygenation. This improvement persisted until the physicians stopped the drug after three days, according to the protocol. Shortly after withdrawal of BZ371B, she died from respiratory failure.

Patient #3

Patient #3, who presented with COVID-19 pneumonia and ARDS, responded immediately to BZ371B nebulization, as did the first two patients, with an instantaneous tripling in airflow and a doubling in lung oxygenation. Despite this very favorable response, she was taken off the experimental protocol on Day 2 when it was realized that an infection had been present before beginning BZ371B (the existence of an infection was an exclusion criteria set by the hospital ethics review board). After therapy with BZ371B was discontinued, she died within several hours.

Patient #4

Patient #4 presented with life-threatening COVID-19 pneumonia, uncontrollable bleeding, and renal failure. She responded immediately to BZ371B nebulization, similarly to the initial three patients, with an instantaneous tripling in airflow and doubling in lung oxygenation. Despite this favorable and rapid response to BZ371B, her bleeding could not be staunched, and she exsanguinated from hemorrhagic shock, dying after 24 hours.

It should be noted that although the first patient had previously received inhaled nitric oxide therapy, with no apparent benefit, that nonetheless BZ371B therapy appeared to be profoundly effective. This difference in response to production of nitric oxide and external provision of nitric oxide, highlights the importance of the mechanism of action of BZ371B, i.e., the drug’s ability to induce nitric oxide production by the pulmonary cells. Thus, the production of nitric oxide by the pulmonary cells induced by administration of BZ371B was seen to be highly effective, whereas the administration of nitric oxide into the ventilator circuit was not. In sum, the endogenous production of nitric oxide by the lung itself was superior to provisioning of artificial nitric oxide into the gas circuit of the ventilator.

With BZ371B, Claritas will be in the unique position of having the ability to generate nitric oxide gas inside the patient. No therapy in existence today, other than BZ371B, has such a mechanism of action wherein the body itself is stimulated to generate its own nitric oxide supply.

The above four patients were all in terminal respiratory failure and no therapy or medical intervention was judged to have been able to provide any benefit. Hence, their permission to be included in this experimental protocol was granted. The fact that BZ371B appeared to provide immediate relief, within minutes of its administration, is strongly indicative of a causal benefit from the drug treatment. Additional patients will need to be studied to statistically confirm the initial benefits of BZ371B that have been observed.

The above improvements noted in air flow and lung oxygenation produced in response to nebulized BZ371B are clinically significant, because disturbances in these two parameters are the principal cause of death in ARDS, as follows:

• Air flow is impaired in ARDS because the lungs are stiff, and it is necessary for the ventilator to utilize massive pressure in order to inflate the lungs with each breath. The use of such high pressure is itself damaging to the lung, producing so-called barotrauma that is often irreversible and incompatible with removal from mechanical ventilation. Patients with end-stage barotrauma cannot oxygenate and invariably succumb. The ability of BZ371B to improve air flow is expected to abort this vicious cycle of high pressure ventilatory requirement and worsening barotrauma, such that patients can be more easily ventilated and survive.
• Lung oxygenation is impaired in ARDS because ventilation and blood perfusion are poorly matched due to: (1) over-constriction of the pulmonary blood vessels; and (2) inadequate ventilation of certain lung segments. The lack of proper matching of ventilation and perfusion results in arterial blood leaving the lungs that is blue (i.e., low in oxygen). In the absence of oxygen-rich arterial blood, critical organs in the body (liver, brain, heart, kidneys) may not receive sufficient oxygen to function or remain viable. The consequent loss of organ function, so-called “multiple organ failure”, is typically fatal. The ability of BZ371B to alleviate this mismatch of ventilation and blood flow is expected to ensure that blood leaving the lungs is red (i.e., rich in oxygen) and peripheral organs can thereby receive sufficient oxygen to function and remain viable.

Taken together, the profound improvement in these two parameters which were noted in all of the first four patients of this study, are highly encouraging evidence that this drug may be able to increase survival if BZ371B therapy is initiated at the first sign of respiratory failure, before respiratory decompensation and multiple organ failure.

Importantly, there was no clinical evidence of any side-effect or toxicity from the dosing of B7371B to the four patients. Admittedly, this is a small sample of subjects from which to draw any meaningful conclusions about safety. Nonetheless, it can be stated that there was no evidence of toxicity, and this is encouraging, especially in patients with severe medical illness.

Future Strategic Collaboration with Biozeus

Following Claritas’ exercise of the Option and execution of the License, Claritas and Biozeus intend to expedite the development of BZ371B by entering into a Collaboration Agreement (the “Collaboration Agreement”) under which they will work together to design and complete clinical studies to demonstrate the safety and efficacy of BZ371B in the treatment of COVID-19 related ARDS, and other pulmonary diseases and disorders.

Under the Collaboration Agreement, Biozeus will make available to Claritas the full capabilities of Biozeus, including its expertise in working with nitric oxide synthase inducing compounds. Biozeus will also provide a platform of services, including expertise in the manufacture of BZ371B, and in connection with Claritas’ interactions with the Brazilian Health Regulatory Agency (“ANVISA”).

Terms of the LOI

The LOI provides that Biozeus will grant to Claritas an option to acquire an exclusive, worldwide license to develop and commercialize BZ371B for the treatment of ARDS and all other pulmonary diseases and disorders (the “Option”).

Under the terms of the LOI, Claritas has agreed to provide the following payments to Biozeus in consideration for the Option and the License:

• Following TSXV approval of the transaction, Claritas and Biozeus will execute the Option, and Claritas will pay to Biozeus an option fee of USD $50,000, which will be paid through a cash payment to Biozeus of USD $25,000 and the issuance to Biozeus of USD $25,0000 of Claritas Common Stock.
• If Claritas has not exercised the Option by December 31, 2021, Claritas may extend the term of the Option through February 28, 2022 upon payment of an additional option fee to Biozeus of USD $25,000 in cash.
• Following Claritas’ exercise of the Option and execution of the License, Claritas will pay a cash license fee to Biozeus of USD $500,000;
• Claritas will also pay the following cash milestone payments and royalties on net sales to Biozeus:
  • USD $500,000 in cash and USD $500,000 in Claritas Common Stock on completion of a Phase 1 clinical study;
  • USD $1 million in cash on successful completion of the first Phase 2 clinical study in prevention and/or treatment of any pulmonary disease
  • USD $1 million in Claritas Common Stock on successful completion of the Phase 3 clinical study.
  • USD $2 million in cash upon the first approval of BZ371B in prevention and/or treatment of the first pulmonary disease by the FDA.
  • USD $2 million in cash upon the first approval of BZ371B in prevention and/or treatment of the first pulmonary disease by the EMEA or any regulatory authority other than FDA
  • USD $2 million in cash on approval of BZ371B for prevention and/or treatment of each additional indication of pulmonary disease approved by the FDA.
  • USD $2 million in cash on approval of BZ371B for prevention and/or treatment of each additional indication of pulmonary disease approved by the EMEA or any regulatory authority other than FDA
  • USD $2 million in cash upon worldwide revenues from sales of BZ371B for prevention and/or treatment of pulmonary disease reaching USD $50 million
  • Claritas will also pay royalties to Biozeus on net sales sales as follows:
    • On net sales for prevention and/or treatment of for ARDS, Claritas will pay to Biozeus a royalty of 8%.
    • On net sales for prevention and/or treatment of any other pulmonary indication, Claritas will pay to Biozeus a royalty of 10%.

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¹ Reports and Data, Acute Respiratory Distress Syndrome ARDS Market, August 2020
² McIntyre RC, Jr, Pulido EJ, Bensard DD, Shames BD, Abraham E. Thirty years of clinical trials in acute respiratory distress syndrome. Crit Care Med. 2000;28:3314–31
³ Sara Akerstrom, Mehrdad Mousavi-Jazi, Jonas Klingstrom, Mikael Leijon, Ake Lundkvist and Ali Mirazimi, Nitric Oxide Inhibits the Replication Cycle of Severe Acute Respiratory Syndrome Coronavirus, Journal of Virology, 2005 Feb; 79(3): 1966-1968
⁴ Wanyi Fang, Jingrui Jiang, Lei Su, Tong Shu, Huan Liu, Shenghan Lai, Reza A. Ghiladi and Jun Wang, Free Radic Biol Med, 2021 Feb 1; 163; 153-162

About Claritas Pharmaceuticals
Claritas Pharmaceuticals, Inc. is a clinical stage biopharmaceutical company focused on developing and commercializing therapies for patients with significant unmet medical needs. Claritas leverages its expertise to find solutions that will improve health outcomes and dramatically improve people’s lives.

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Cautionary Statements
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release may contain certain forward-looking information and statements (“forward-looking information”) within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation in respect of its product candidate pipeline, planned clinical trials, regulatory approval prospects, intellectual property objectives, and other statements containing the words “believes”, “anticipates”, “plans”, “intends”, “will”, “should”, “expects”, “continue”, “estimate”, “forecasts” and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that future clinical studies may not proceed as expected or may produce unfavorable results. Claritas undertakes no obligation to comment on analyses, expectations or statements made by third parties, its securities, or financial or operating results (as applicable). Although Claritas believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond Claritas’ control. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is made as of the date hereof. Claritas disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. 

Contact Information
Robert Farrell
President, CEO
(888) 861-2008
info@claritaspharma.com