Military Interest in Oxycyte Continues - Analyst Blog

Military interest in Oxygen Biotherapeutics' (OXBT) Oxycyte continues to be a strong driver for clinical development. The company's phase 2b clinical trial studying Oxycyte for the treatment of traumatic brain injury (TBI), which has been enrolling at sites in Switzerland and Israel, has recently been expanded to include enrollment from the Israeli military.

We believe this could work to greatly enhance enrollment, as military blast injury (MBI) is a significant cause of TBI.  For example, there were an estimated 380k such incidences among American military personnel from 2002-2008. TBI is the largest killer in the War on Terror, and primarily occurs due to roadside blasts or bombs.

Time to treatment is a significant hurdle to reducing the severity of TBI-MBI on the battlefield. Roughly 50% of military severe TBI survivors suffer major long-term impairments. The ideal medication would be to rapidly provide oxygen-rich fluid to the damaged tissue. It must be portable, stable at room temperature, and easy to use quickly after a TBI-MBI occurs. We believe Oxycyte has these ideal characteristics. As such, we expect significant U.S. military interest in Oxycyte should the STOP-TBI program offer positive data.

Beside the potential army use in TBI and MBI, we note the U.S. Navy has been looking at Oxycyte for the potential treatment indications as well. Oxygen Bio has signed a Cooperative Research and Development Agreement (CRADA) with the U.S. Naval Medical Research Center (NMRC) to conduct preclinical trials using swine models to assess the safety and efficacy of Oxycyte for decompression sickness, spinal cord injury due to decompression sickness (DCS) and hemorrhagic shock. An investigation new drug application (IND) for the treatment of decompression sickness is expected later in 2010.

In June 2010, the U.S. Navy release data from a study demonstrating decreased mortality in porcine animal models that were given an intravenous dose of Oxycyte emulsion after the onset of DCS. These results showed a statistically significant decrease in mortality compared with the control group that did not receive Oxycyte. The data was published in the June issue of Aviation Space and Environmental Medicine.

The data show a 72% 24-hour survival for the Oxycyte group vs. 45% for the control (p<0.05). Functional recovery as measured by the Tarlov Scale was also higher for the Oxycyte test group, 52% vs. 28%, compared to the control. The authors of the paper are Drs. Richard T. Mahon, Tomas T. Watanabe and Charles R. Auker and Madison C. Wilson, all of the Undersea Medicine Department at the U.S. Naval Medical Research Center. Their work was funded by the Office of Naval Research.

The NMRC plans to conduct studies in spinal cord injury and hemorrhagic shock next. The protocol for the spinal cord injury trial will measure safety and efficacy of Oxycyte in conjunction with recompression therapy. The hemorrhagic shock protocol will look at using Oxycyte for preservation of systemic oxygenation in large porcine models.

Approval for use of Oxycyte by the U.S. Navy based on animal-rule data could come by 2012. This could be a significant opportunity for Oxygen Bio based on the characteristics of the drug and the potential for broad-scale deployment on U.S. or NATO submarines.

In a bullish scenario, we envision the U.S. Navy purchasing Oxycyte for its 250 – 300 submarines with an estimated 100 to 120 doses per ship. The same characteristics that make Oxycyte attractive to the U.S. Army – portable, stable at room temp, easy to use – also fit well within what the U.S. Navy would be looking for on a disabled vessel.

We believe Oxycyte has the ideal characteristics for several potential applications in the field of combat or during active service. Oxycyte is a proprietary perfluorocarbon (PFC) therapeutics oxygen carrier is designed to enhance oxygen delivery to damaged tissue. When used as an intravenous emulsion, Oxycyte can carry as much as 4x the amount of oxygen as a normal red blood cell (RBC) despite being nearly 1/50th the size.

Oxycyte has 50x greater O2 solubility and diffusibility than RBCs and can move through the circulatory system at rates up to 2x the speed of hemoglobin. Thus, Oxycyte is highly efficient for transporting oxygen to tissues and carrying carbon dioxide (CO2) to the lungs for disposal.

The product is not a blood substitute because it does not include white blood cells, antibodies or plasma. There are no supply issues and no disease transmission / typing or cross-matching limitations. It also has a shelf-life far greater than the 42 days for human donated blood.

Oxygen Bio expects to market Oxycyte with a 12 to 18 month shelf-life, although in theory the product could last much longer given its chemically and thermally stable structure.
 
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