Dogwood Therapeutics, Inc. (NASDAQ:DWTX) is advancing IMC-2 (valacyclovir + celecoxib) as a treatment for Long COVID. The drug is currently being evaluated in a Phase 2a clinical trial being conducted by the Bateman Horne Center (BHC). Dogwood previously supplied the BHC with an unrestricted investigational grant to fund the ongoing 12-week, placebo controlled study of the valacyclovir/celecoxib combination in up to 60 Long COVID patients across three treatment arms:
Val/Cel 750mg/200mg BID (1.5g/400mg per day)
Val/Cel 1500mg/200mg BID (3.0g/400mg per day)
Placebo
The company announced that enrollment of the Phase 2a trial had completed in July 2024 and recently confirmed that topline data are expected in mid-November 2024. Previously, the company announced it had reached alignment with the U.S. Food and Drug Administration (FDA) on the requirements for advancing IMC-2 as a treatment for Long COVID. The FDA agreed that for the Phase 2 study, Dogwood can use fatigue as the primary endpoint and orthostatic intolerance as a key secondary endpoint. In addition, the FDA would like Dogwood to evaluate a range of IMC-2 doses, which includes valacyclovir doses above presently approved dosage strengths.
Previously, the BHC conducted an open label, proof-of-concept trial of IMC-2 in patients with Long COVID and showed that patients experienced clinically and statistically significant improvements in fatigue, pain, and symptoms of autonomic dysfunction. Importantly, the combination of valacyclovir/celecoxib was well tolerated as there were no serious adverse events and the side effect profile was consistent with what is known for both valacyclovir and celecoxib. The following table gives an overview of the results for various study endpoints examined, the majority of which statistically significantly favored valacyclovir/celecoxib. For a full analysis of those results please see our previous report here.
While we believe the treatment of Long COVID is a compelling opportunity, it is difficult to get an accurate assessment of the total number of individuals who are suffering from the condition. A 2023 survey by the Centers for Disease Control (CDC) estimated that the prevalence of Long COVID in U.S. adults went from 7.5% in 2022 to 6.0% in 2023, but remained unchanged during 2023 (Ford et al., 2023). Importantly, approximately one-quarter of adults in that survey reported significant activity limitations due to Long COVID. This is translating into a severe economic cost, including an estimated approximately $500 billion in increased medical expenses (Cutler, 2022).
Virios Combines with Wex Pharmaceuticals to Form Dogwood Therapeutics
In October 2024, Virios Therapeutics, Inc. (VIRI) announced a business combination with privately-held Wex Pharmaceuticals, Inc. to form Dogwood Therapeutics, Inc. (DWTX). The combined company will be focused on the clinical development of three assets: Halneuron®, which is currently in a Phase 2b clinical trial for the treatment of chemotherapy-induced neuropathic pain (CINP); IMC-1, a Phase 3-ready asset for the treatment of fibromyalgia; and IMC-2, which is currently in a Phase 2 trial for the treatment of Long COVID.
Halneuron®
The lead asset for Dogwood is Halneuron (tetrodotoxin, TTX), a sodium channel blocker currently in a Phase 2b clinical trial for the treatment of CINP. TTX was originally discovered in the pufferfish and subsequent research has identified the toxin in 13 phyla (in both Eukarya and Bacteria) that includes both marine and terrestrial eukaryotes (Lago et al., 2015). As a natural poison, TTX is extremely effective and is the most potent non-peptide neurotoxin known. It blocks the influx of sodium through voltage-gated sodium channels (NaVs), thereby preventing the initiation and propagation of action potentials in almost all neurons and muscle cells (Stevens et al., 2011).
Mammals possess nine voltage-gated sodium channels, NaV1.1-NaV1.9. TTX binds to NaV1.1, NaV1.2, NaV1.3, NaV1.4, NaV1.6, and NaV1.7 (Nieto et al., 2012). NaV1.7 is expressed in all types of dorsal root ganglion (DRG) neurons, sympathetic neurons, Schwann cells, and neuroendocrine cells (Catterall et al., 2005). It is responsible for the perception of pain, which is supported by multiple lines of evidence. Individuals with loss-of-function mutations in the SCN9A gene (which encodes the alpha-subunit of NaV1.7) experience a complete inability to sense pain (Cox et al., 2006) while those with a gain-of-function mutation in SCN9A experience erythromelalgia (Dib-Hajj et al., 2005). In animal models, NaV1.7 nociceptor-specific knockout mice showed increased mechanical and thermal pain thresholds (Nassar et al., 2004). These results led researchers to hypothesize that TTX could be a potential therapeutic to control pain.
Halneuron Clinical Trials
The latest clinical trials investigating Halneuron include a Phase 2 cancer related pain (CRP) study and a Phase 2 CINP trial.
Phase 2 CRP Trial
This was a randomized, double blind, parallel design, multicenter trial that enrolled 165 patients with moderate to severe inadequately controlled CRP. All patients were on standard of care pain management. Halneuron or placebo was administered twice a day for four days and all patients recorded their pain response from days 5-8 (early post-injection period) and from days 9-15 (late post-injection period). The results showed a statistically significant improvement in pain outcomes for Halneuron, with 51% of Halneuron patients experiencing a ≥30% reduction in pain compared to only 35% in the placebo group, as shown in the following image.
For Global Impression of Pain Change, 55% of Halneuron patients reported an improvement in pain compared to 24% of placebo patients. Conversely, 70% of placebo patients reported no change or worse pain compared to only 37% of patients. In addition to a positive pain response, the duration of pain relief was much higher for Halneuron patients, as shown in the following figure. The average pain response for Halneuron responders was 57.7 days compared to 10.5 days for placebo responders. Lastly, over one-quarter of Halneuron responders (27%) had pain relief that lasted for 30 days or longer after one cycle of treatment.
Phase 2 CINP Trial
This was a randomized, double blind, dose-finding, placebo controlled, multicenter study in patients with CINP. Various doses of Halneuron were tested over four days of treatment followed by measurement over four weeks. The study included a total of 125 patients across five dosing cohorts (four active and one placebo). The results showed that a dose of 30 μg twice per day for four days demonstrated the highest level of pain reduction compared to placebo, with the responder analysis results given below.
Halneuron is currently being evaluated in a Phase 2b clinical trial for CINP. We anticipate an update from the company on the trial in the first half of 2025 an interim data readout in the second half of 2025.
Background on CINP
CINP is the result of injury to the somatosensory nervous system following chemotherapy treatment (Colvin, 2019). For agents such as paclitaxel and oxaliplatin, the rate of CINP is up to 81% and 98%, respectively (Hershman et al., 2010; Gebremedhn et al., 2018). CINP begins as an acute pain syndrome that coincides with drug administration, however it can progress to a chronic condition following multiple rounds of therapy.
The only drug endorsed to treat CINP by the American Society of Clinical Oncology (ASCO) is duloxetine, which showed a significant reduction in pain in a Phase 3 clinical trial (Lavoie Smith et al., 2013). However, the drug is not FDA approved for the treatment of CINP. In addition, in a preclinical oxaliplatin-induced neuropathic pain model, Halneuron was superior to duloxetine based on the paw withdrawal threshold (PWT), a measure of pain tolerance.
Financial Update
On November 7, 2024, Dogwood announced financial results for the third quarter of 2024. As expected, the company did not report any revenues for the third quarter of 2024. R&D expenses for the three months ending September 30, 2024 were $0.5 million compared to $0.4 million for the third quarter of 2023. The increase was primarily due to increases in expenses associated with the grant to BHC for the Phase 2 trial in Long Covid. G&A expenses for the third quarter of 2024 were $1.8 million compared to $0.9 million for the third quarter of 2023. The increase was primarily due to higher legal and professional fees partially offset by lower insurance expenses.
As of September 30, 2024, Dogwood had approximately $2.0 million in cash and cash equivalents. This does not include the $16.5 million in loan proceeds received on October 7, 2024. We also anticipate an additional $3.0 million of loan proceeds will be received by the company in February 2025. This should be sufficient to fund operations through the end of 2025. As of November 6, 2024, Dogwood had approximately 1.3 million common shares outstanding and, when factoring in stock options, warrants, and the Series A convertible shares, a fully diluted share count of approximately 23.6 million.
Conclusion
We look forward to the topline data from the Phase 2 trial of IMC-2 in Long COVID in the next couple of weeks. In addition, we anticipate an update from the company regarding the Phase 2b trial of Halneuron in the first half of 2025 and interim results from the study should be available in the second half of 2025. With no changes to our model our valuation remains at $11.50.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.
