Exclusive Interview with Dr. Philip Toleikis, CEO of Sernova Corp.
01.12.2020 - 13:50 by Profiteer
Investors are dreaming of so-called tenbaggers, shares which can increase your investment tenfold. Who would not like to earn a whopping 50,000 Euro from a 5,000 Euro investment or a whopping 100,000 Euro from a 10,000 Euro investment?
Sernova Corp. (WKN: A0LBCR) even is a potential twentybagger. The company currently has a market capitalization of only 44.1 million USD.
Quelle: www.sernova.com
If you know that a direct competitor of Sernova was bought out for not less than 950 million USD cash last year, the current valuation of Sernova is ridiculously low.
While Sernova is already in the middle of a clinical trial in the US and has positive safety as well as efficiency data to report, Semma Therapeutics is still engaged in pre-clinical work and is not really making progress (Source: www.businesswire.com/news/home/20190903005227/en/Vertex-Acquire-Semma-Therapeutics-Goal-Developing-Curative).
950 million USD would correspond to approximately 5.92 CAD per outstanding Sernova share at the current USD/CAD exchange rate. An investment of 10,000 Euro could theoretically increase to around 215,000 Euro if a large pharmaceutical company were to put the same amount on the table for a potential takeover of Sernova. In our opinion, however, Sernova would have to be much more valuable - you will also agree to that after reading this interview.
Exclusive Interview with Dr. Philip Toleikis, CEO of Sernova
Profiteer: Dr. Toleikis, Sernova is developing regenerative medicine technologies that could provide a "functional cure" to a number of series chronic diseases. Can you please explain what you mean by that?
Dr. Philip Toleikis: As an example, patients with type 1 diabetes no longer have the ability to control their blood sugar levels after they eat a meal as the cells that make insulin have died. To replace the insulin the patients have to take injections of insulin multiple times a day for the rest of their lives. To correct this, Sernova is testing a small medical device (Cell Pouch) that is placed deep under the skin that houses new therapeutic cells which produce insulin with the goal to replace the insulin injections bringing the patient back to a normal life.
Our technologies also have the potential to eliminate the side effects of diabetes which lead to heart and kidney disease and amputations. This would be a "functional cure" to this disease. As a platform technology, there are multiple diseases we can treat using this approach.
Profiteer: Sernova has already conducted a first in human study in Canada showing the Cell Pouch is safe in diabetic patients and the transplanted cells are surviving and able to produce insulin. Sernova is now conducting a Phase I/II (safety/efficacy) clinical study in the United States at the University of Chicago and you recently provided a clinical update on this study.
It is great to see that the treated patients continue to meet the primary end point (safety) and secondary endpoints (efficacy). Why is this important?
Dr. Philip Toleikis: We believe Sernova is the first Company in the world to show in patients that an implantable device is safe when placed under the skin and that insulin is getting into the bloodstream of our patients from our implanted device with therapeutic cells and that the patients are experiencing benefit through a reduction in the need for insulin injections, and an improvement in sugar control measures that have real meaning to the patients with diabetes. This is a great achievement towards a "functional cure" of this disease.
Profiteer: Why did you choose to conduct this test with diabetes patients who are suffering Type 1 diabetes with severe hypoglycemic unawareness events?
Dr. Philip Toleikis: Diabetic patients with severe hypoglycemic unaware events do not have the ability to know when their blood sugar levels have dropped to a dangerous level after an insulin injection meaning that they could fall into a coma and die with every insulin injection. As the only solution to this issue is treatment with new cells we chose to try to help these patients first with our technologies.
Fortunately, we are showing in our clinical study that the number of hypoglycemic events are improved with our Cell Pouch and therapeutic cells. Thus, our product could become a potential lifesaver for these patients. As we continue to develop our technologies, we will be treating less severe diabetic patients and have the ability to improve the lives of millions of people suffering from this disease.
Profiteer: How easy is it to implant the Cell Pouch?
Dr. Philip Toleikis: The Cell Pouch is about the size of a business card, is flexible and very thin. It is rapidly implanted deep under the skin in a short procedure. The device is placed under the skin of the belly, where insulin injections are typically injected.
As we are looking at treating millions of patients a year, we are looking at developing a simple kit for surgeons with tools to easily place the Cell Pouch with minimal disturbance to the skin and this would be developed in concert with a major medical device company.
Profiteer: You said that the Cell Pouch is being implanted under the skin of the belly. I am wondering if the patient has a foreign body sensation after that. Can you elaborate a bit on that?
Dr. Philip Toleikis: When medical devices are placed in the body, the body will try to reject the device by surrounding the device with scar tissue similar to when you get a splinter in your finger. This would be very bad for the survival of therapeutic cells which require blood vessels and a natural tissue matrix to survive.
For this reason, we uniquely designed our device based on many years of experience to incorporate with tissue and blood vessels as that is required for our therapeutic cells to survive and function. This unique design has been important to the success of our technologies.
Profiteer: How long can the Cell Pouch stay in the body?
Dr. Philip Toleikis: The device is made of non-degradable polymers that are already approved for permanent use in the body in other applications. We believe we have created a healthy environment for cells to survive in the device and while we are assessing the durability of the cells in patients in our clinical study, we believe the product could function in patients for years with good quality cells.
The device can also be explanted and replaced when new cells are needed. Imagine a patient who currently takes insulin injections up to 6 times a day not having to take insulin injections. One year could represent a reduction of 1,800 needle pricks.
Profiteer: Do you have enough cash on hand to finish this trial and how is the JDRF helping you in that regard?
Dr. Philip Toleikis: Sernova was fortunate to receive a multi-million-dollar grant from the Juvenile Diabetes Foundation in the US to help fund our study. With this grant and cash on hand we have enough funding to treat the rest of our patients in the trial and continue follow up on our patients to get important safety and efficacy readouts.
Profiteer: To date, 5 of a total of 7 planned patients are enrolled in the US clinical trial. When do you expect full enrollment?
Dr. Philip Toleikis: We expect the trial to be fully enrolled, that means all patients treated with Cell Pouch during the first quarter of 2021. From here on in we would be transplanting therapeutic cells and then getting more safety and efficacy readouts.
Profiteer: Are big pharma companies waiting for final trial results or do you envision to sign collaboration agreements much earlier than that?
Dr. Philip Toleikis: While we have our own worldwide exclusive license to therapeutic cell technologies for treatment of diabetes, Sernova is interacting with a number of pharmaceutical companies who see the incredible potential for our regenerative medicine treatment of discases. These companies have developed therapeutic cells but need an implantable device for the placement of these therapeutic cells.
Typically, we would look to signing a collaboration agreement to test their cells using our device technologies and then during or following positive results work towards a licensing or co-development agreement to bring the combined product to market. The pharmaceutical companies we are interacting with already know that our device technologies are working in patients and are actively working on collaboration agreements with us and are not waiting for final clinical results.
Profiteer: Assuming positive results, how long would it take to go from a collaboration agreement to a licensing deal?
Dr. Philip Toleikis: Any company we are working with could start licensing or co-development negotiations at any time after a collaboration starts. The fact that we are not aware of any other implantable devices showing such promise in the clinic as ours makes our technologies very rare and needed to advance these critical cell therapy technologies to patients.
Profiteer: This year, you acquired and in-licensed several local immune protection technologies. What is the plan to commercialize them?
Dr. Philip Toleikis: We are aggressively pursuing these technologies to combine with our Cell Pouch to provide immune protected cells within the Cell Pouch for the treatment of all patients with chronic diseases for our cell therapy applications.
This combination would provide what we believe to be a safe solution for treatment of many chronic diseases requiring a protein or hormone or other factor to treat disease that could be produced by cells within our Cell Pouch.
Profiteer: When are you planning to go into the clinic with your haemophilia and thyroid programs?
Dr. Philip Toleikis: We hope to start clinical trials with our thyroid program within approximately a year depending on regulatory requirements. Our haemophilia program will likely follow that as we continue to prepare for next step preclinical studies.
Profiteer: The Cell Pouch can be used for all indications where the human body cannot produce proteins or hormones on its own anymore. Which additional indications do you find most promising?
Dr. Philip Toleikis: We are looking at the potential to treat multiple rare diseases where due to a genetic issue a protein or other factor is not being produced. As an example our haemophilia program is an ex vivo gene therapy program whereby we can insert the required gene in our therapeutic cells outside the body and then place the cells into our Cell Pouch where they will produce the required protein and this can be done for many diseases.
Profiteer: As far as we know, you are way ahead of direct competitors, but your market cap is only a fraction of the valuation of your peer group. How do you want to change that?
Dr. Philip Toleikis: We have been ‘heads down’ pouring our financial resources into developing our technologies. Now that we are making strong progress in the clinic, which is key towards getting a product on the market, we are now working on getting the word out to the world about our successes. This is an incredible time for savvy investors to invest in our company.
We trade on the Toronto Venture Exchange (SVA.V), OTCQB (SEOVF) and several German stock exchanges (symbol: PSH). Our plan is to transition to NASDAQ and that will also have the potential to bring in significant institutional funding and help bring our company to the world stage.
We are very excited for Sernova’s future and look forward to pleasing both our patients and investors as we complete 2020 and enter into 2021 and beyond.
Profiteer: Thanks for the interview and we wish you a lot of success for the future!
The translated interview in German can be found here:
Exklusivinterview mit Dr. Philip Toleikis, CEO von Sernova
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