10-K
1
tm211119d1_10k.htm
FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
x ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2020
or
̈ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number: 001-36357
LIPOCINE INC.
(Exact name of registrant as specified
in its charter)
675 Arapeen Drive, Suite 202, Salt Lake City, Utah 84108
(Address of Principal Executive Offices) (Zip Code)
801-994-7383
(Registrant’s telephone number,
including area code)
Securities registered pursuant to Section
12(b) of the Act:
Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share LPCN The NASDAQ Stock Market LLC
Securities registered pursuant to Section
12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ̈
No x
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act. Yes ̈ No x
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days. Yes: x
No ̈
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§220.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files). Yes x No ̈
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ̈
Accelerated filer ̈
Non-accelerated filer x
Smaller reporting company x
Emerging growth company ̈
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ̈
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ̈
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ̈ No x
Outstanding Shares
The
aggregate market value of the common stock held by non-affiliates of the registrant was $72 million as of June 30, 2020.
For purposes of calculating the aggregate market value of shares of our common stock held by non-affiliates as set forth on the
cover page of this Annual Report on Form 10-K, we have assumed that all outstanding shares are held by non-affiliates, except
for shares held by each of our executive officers, directors and 10% or greater stockholders. However, this assumption should
not be deemed to constitute an admission that all executive officers, directors and 10% or greater stockholders are, in fact,
affiliates of our company, or that there are not other persons who may be deemed to be affiliates of our company. Further information
concerning shareholdings of our officers, directors and principal stockholders is included or incorporated by reference in Part
III, Item 12 of this Annual Report on Form 10-K.
As of March 9, 2021, the registrant had
88,290,650 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's definitive Proxy Statement for
its 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.
TABLE OF CONTENTS
Page
PART I
Item 1. Business 3
Item 1A. Risk Factors 21
Item 1B. Unresolved Staff Comments 53
Item 2. Properties 53
Item 3. Legal Proceedings 53
Item 4. Mine Safety Disclosures 54
PART II
Item 6. Selected Financial Data 55
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 73
Item 8. Financial Statements and Supplementary Data 73
Item 9A. Controls and Procedures 102
Item 9B. Other Information 102
PART III
Item 10. Directors, Executive Officers and Corporate Governance 103
Item 11. Executive Compensation 103
Item 14. Principal Accountant Fees and Services 103
PART IV
Item 15. Exhibits and Financial Statement Schedules 103
2
FORWARD-LOOKING STATEMENTS
THIS ANNUAL REPORT
ON FORM 10-K, IN PARTICULAR “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION,”
AND “ITEM 1. BUSINESS,” CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT
OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, that involve risks and uncertainties.
Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement
that does not directly relate to any historical or current fact. Forward-looking statements may refer to such matters as products,
product benefits, pre-clinical and clinical development timelines, clinical and regulatory expectations and plans, REGULATORY
DEVELOPMENTS AND REQUIREMENTS, THE RECEIPT OF REGULATORY APPROVALS, THE EXPECTATIONS FOR AND RESULTS OF CLINICAL TRIALS, PATIENT
ACCEPTANCE OF LIPOCINE’S PRODUCTS, MANUFACTURING AND COMMERCIALIZATION OF LIPOCINE’S PRODUCTS, anticipated financial
performance, future revenues or earnings, business prospects, projected ventures, new products and services, anticipated market
performance, future expectations for liquidity and capital resources needs and similar matters. Such words as “may”,
“will”, “expect”, “continue”, “estimate”, “project”, “intend”,
and “potential” and similar terms and expressions are intended to identify forward looking statements. Forward-looking
statements are not guarantees of future performance and our actual results may differ significantly from the results discussed
in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed
in Part I, Item 1A “Risk Factors” of this Form 10-K. Except as required by applicable law, we assume no obligation
to revise or update any forward-looking statements for any reason.
PART I
ITEM 1.BUSINESS
General
Lipocine Inc. (“Lipocine”
or the “Company”) was originally incorporated on June 19, 1997, under the laws of the State of Delaware.
We are a clinical-stage biopharmaceutical
company focused on applying our oral drug delivery technology for the development of pharmaceutical products focusing on metabolic
and endocrine disorders. Our proprietary delivery technologies are designed to improve patient compliance and safety through orally
available treatment options. Our primary development programs are based on oral delivery solutions for poorly bioavailable drugs.
We have a portfolio of proprietary product candidates designed to produce favorable pharmacokinetic (“PK”) characteristics
and facilitate lower dosing requirements, bypass first-pass metabolism in certain cases, reduce side effects, and eliminate gastrointestinal
interactions that limit bioavailability.
Our
most advanced product candidate, TLANDOTM, is an oral testosterone replacement therapy (“TRT” or “T-replacement
therapy”) comprised of testosterone undecanoate (“TU”). On December 8, 2020, we received tentative approval
from the United States Food and Drug Administration ("FDA") regarding our New Drug Application ("NDA") filed
in February 2020 for TLANDO as a TRT in adult males for conditions associated with a deficiency of endogenous testosterone, also
known as hypogonadism. In granting tentative approval, the FDA concluded that TLANDO has met all required quality, safety and
efficacy standards necessary for approval. However, TLANDO has not received final approval and is not eligible for final approval
to market in the U.S. until the expiration of the exclusivity period previously granted to Clarus Therapeutics, Inc. with respect
to Jatenzo®, which expires on March 27, 2022. We are currently reviewing the FDA’s tentative approval of TLANDO and
remain committed to taking appropriate actions with the goal of receiving final approval to permit the launch of TLANDO. Under
the Pediatric Research Equity Act (“PREA”), if TLANDO receives full approval, we will need to address the PREA requirement
to assess the safety and effectiveness of TLANDO in pediatric patients. The FDA has also required us to conduct certain post-marketing
studies including: (i) conduct an appropriately designed label comprehension and knowledge study that assesses patient understanding
of key risk messages in the Medication Guide for TLANDO and (ii) conduct an appropriately designed one-year trial to evaluate
development of adrenal insufficiency with chronic TLANDO therapy. The timetables for these post-marketing requirements will be
established at the time of full approval of TLANDO.
3
Additional pipeline candidates include
LPCN 1144, an oral prodrug of bioidentical testosterone comprised of TU for the treatment of non-cirrhotic non-alcoholic steatohepatitis
(“NASH”) which is currently in Phase 2 testing, TLANDO XR, a next generation oral TRT product comprised of testosterone
tridecanoate (“TT”) with the potential for once daily dosing which has completed Phase 2 testing, LPCN 1148, an oral
prodrug of bioidentical testosterone for the treatment of NASH cirrhosis, and LPCN 1107, potentially the first oral hydroxyprogesterone
caproate product indicated for the prevention of recurrent preterm birth, which has completed a dose finding Phase 2 clinical
study and has been granted orphan drug designation by the FDA.
LPCN 1144 is currently being tested
in the LiFT (“Liver Fat intervention with oral Testosterone”) Phase 2 clinical study, a paired-biopsy study
in confirmed non-cirrhotic NASH subjects. Study enrollment has been completed and top-line primary endpoint results after 12 weeks
of treatment were released in January 2021. Top-line primary endpoints indicated that treatments with LPCN 1144 resulted in significant
liver fat reduction, assessed by magnetic resonance imaging, proton density fat fraction (“MRI-PDFF”) technique, and
showed improvement of key liver injury markers with no observed tolerability issues.
Industry
Testosterone Background
Testosterone, or T, is the primary circulating
sex hormone in males and is critical to the development and maturation of reproductive tissues as well as other secondary male
characteristics such as muscle growth and bone density. Synthesized in the gonads of both males (testis) and females (ovaries),
testosterone circulates bound to sex hormone binding globulin (~60%), loosely bound to albumin, a protein in the blood that binds
to testosterone (~40%), or as a free molecule (~1%). Once circulating, testosterone enters cells directly and activates a network
of proteins that ultimately result in metabolic conversions, which in turn produce observable effects. The concentration of circulating
testosterone can vary drastically over time or between individuals and can be dependent on genetic factors, other medical conditions,
lifestyle behaviors, and/or concurrent medication administration. Although large variability exists, the effects of testosterone
are also determined by a number of factors including the amount of steroid penetration, sensitivity of enzymes and cellular proteins
to the hormone, and the action of genomic receptors at the cellular level. As a result, assessing clinically low, or potentially
high, levels of naturally occurring testosterone often requires a number of quantitative tests in conjunction with clinical evaluations.
Hypogonadism Overview
Low serum testosterone causes significant
clinical impact and can result in erectile dysfunction, low libido, decreased muscle mass and strength, increased body fat, decreased
bone density, decreased vitality and depressed mood. Furthermore, low serum testosterone concentrations have been found to be
an independent predictor of a number of cardiovascular risk factors including obesity, abnormal lipid levels, hypertension, type
2 diabetes, and systemic inflammation. Well-designed, prospective clinical trials have determined that low testosterone levels
are also independently associated with mortality risk. These findings have generated interest amongst the medical community and
general public regarding the importance of maintaining appropriate serum testosterone levels, which has stimulated growth of the
testosterone replacement therapy market which peaked in 2013. The testosterone therapy market contracted in 2014 due to a number
of factors including the withdrawal of direct to consumer advertising mid-2014 but has seen year-over-year growth since 2014.
Hypogonadism typically refers to a permanent
deficiency of sex hormones rather than a temporary deficiency that may be related to acute/chronic illnesses or other medical,
personal, or environmental factors. Primary hypogonadism describes disease states that intrinsically affect the gonads. Examples
of these include the genetic disorders, Turner syndrome and Kleinfelter syndrome. Secondary hypogonadism refers to disease states
that affect gonadal-related structures such as the hypothalamus and pituitary gland that directly impact the development of gonads
and as such the release of testosterone and other sexual hormones. Kallmann syndrome, in which patients fail to undergo all of
the changes associated with puberty, is a type of secondary hypogonadism. Although a number of inherited diseases are known to
affect the gonads either directly or indirectly, it is generally believed that the majority of individuals with hypogonadism develop
the condition as a result of age-related declines in testosterone or other acquired conditions.
Diagnosis and Treatment of Hypogonadism
Epidemiological studies have determined
that total testosterone follows an age-related decline with mean serum concentration at the age of 75 years approximately two
thirds that at 25 years. Because naturally occurring testosterone exists at low concentrations, with normal testosterone levels
in the range of 300 to 1000 ng/dL automated platform-based assays have been found to lack specificity and are prone to inter-lab
variability. The lack of reliable laboratory tests is complicated further by the inter-individual variability seen in an unaffected
population. Thus, in order to accurately diagnose hypogonadism in a male, at least two morning serum testosterone levels are performed
in conjunction with a clinical assessment of patient symptoms. Patients can only be diagnosed when they present with symptoms
that are directly related to low morning serum testosterone level.
4
Treatment for male hypogonadism (both primary
and secondary) is TRT. Some of the reported benefits of TRT include improved libido and sexual function; increased bone density,
muscle development, and cognition; as well as a reduction in other risk factors caused by low testosterone.
Testosterone Replacement Market
Due to the wide variability in therapeutic
range and other medical conditions that may confound an accurate diagnosis, there is a consensus that male hypogonadism is significantly
undertreated. A large study of 1,475 men between the ages of 30 and 79 years old revealed that the prevalence of hypogonadism
is about 24%. Based on this prevalence rate and the U.S. Census Bureau’s 2019 estimate that there are 90.1 million men between
30 years old and 79 years old, approximately 21.6 million men in the U.S. may have low testosterone. In the study fewer than 4%
of patients were receiving treatment for hypogonadism.
TRT’s have been commercially available
in the United States for over 70 years and have followed a progression of delivery systems that included subcutaneous, or under-the-skin,
injection, intramuscular injection, transdermal patch, topical gels, creams, subcutaneous-delivery injections, and finally orals
which were launched in 2020. The difficulty in creating an easy to use/administer and clinically effective testosterone therapy
is related to the molecule’s complex PK’s. PK’s describe how the body affects a specific drug after administration
through the mechanism of absorption and distribution, as well as the chemical changes of the substance in the body. For example,
oral therapies, require multiple, high daily doses due to low bioavailability. Bioavailability is the fraction of a drug dose
that is actually absorbed into the bloodstream. Additionally, the few oral therapies that have been used in the United States
previously quickly went out of favor after significant side effects were revealed, most notably liver toxicity.
Currently, the U.S. TRT market consists
of therapies that exist in multiple forms:
· gel/cream/patch;
· injectable;
· intranasal;
· buccal tablet, which is a tablet shaped patch applied to the upper gums; and
· oral.
Historically transdermal patches and gel-based
TRT were the most desirable application type, however currently injectables are the most prescribed.
The male testosterone market was $1.4 million
in 2020 according to IMS Health data and based on wholesale acquisition costs (“WAC”). Additionally, testosterone
replacement prescriptions were approximately 7.6 million in 2020 according to IMS Health data, a 6.8% growth over 2019 prescriptions.
Injectables are the predominant dosage form in this market in terms of annual prescriptions written. The historical growth in
the market was driven by increasing recognition by both patients and providers of the prevalence of hypogonadism and its far-reaching
medical consequences. Additionally top TRT treatments were marketed by AbbVie Inc. (“AbbVie”) and Eli Lilly and Company
(“Lilly”) until the respective products went generic.
Product Candidates
Our
current portfolio includes our most advanced product candidate, TLANDO, an oral TRT product candidate, which received tentative
approval from the FDA on December 8, 2020. TLANDO has not received final approval and is not eligible for final approval to market
in the U.S. until the expiration of the exclusivity period previously granted to Clarus Therapeutics, Inc. with respect to Jatenzo®,
which expires on March 27, 2022. Additionally, we are in the process of establishing our pipeline of other clinical candidates
including an oral androgen therapy for the treatment of non-cirrhotic NASH, LPCN 1144, a next-generation potential once daily
oral TRT, TLANDO XR, an androgen therapy for the treatment of NASH cirrhosis, LPCN 1148, and an oral therapy for the prevention
of preterm birth, LPCN 1107.
These products are based on our proprietary
Lip’ral drug delivery technology platform. Lip’ral technology is a patented technology based on lipidic compositions
which form an optimal dispersed phase in the gastrointestinal environment for improved absorption of insoluble drugs. The drug
loaded dispersed phase presents the solubilized drug efficiently at the absorption site (gastrointestinal tract membrane) thus
improving the absorption process and making the drug less dependent on physiological variables such as dilution, gastro-intestinal
pH and food effects for absorption. Lip’ral based formulation enables improved solubilization and higher drug-loading capacity,
which can lead to improved bioavailability, reduced dose, faster and more consistent absorption, reduced variability, reduced
sensitivity to food effects, improved patient compliance, and targeted lymphatic delivery where appropriate.
5
TLANDO: An Oral Product Candidate for Testosterone Replacement
Therapy
Our most advanced product, TLANDO, is
an oral formulation of the chemical, TU, which is an eleven carbon side chain attached to T. TU is an ester prodrug of T. An ester
is chemically formed by bonding an acid and an alcohol. Upon the cleavage, or breaking, of the ester bond, T is formed. TU has
been approved for use outside the United States for many years for delivery via intra-muscular injection and in oral dosage form
and more recently TU has received regulatory approval in the United States for delivery via intra-muscular injection and in oral
dosage form. We are using our proprietary technology to facilitate steady gastrointestinal solubilization and absorption of TU.
Proof of concept was initially established in 2006, and subsequently TLANDO was licensed in 2009 to Solvay Pharmaceuticals, Inc.
which was then acquired by Abbott Products, Inc. ("Abbott"). Following a portfolio review associated with the spin-off
of AbbVie by Abbott in 2011, the rights to TLANDO were reacquired by us. All obligations under the prior license agreement have
been completed except that Lipocine will owe Abbott a perpetual 1% royalty on net sales. Such royalties are limited to $1 million
in the first two calendar years following product launch, after which period there is not a cap on royalties and no maximum aggregate
amount. If generic versions of any such product are introduced, then royalties are reduced by 50%.
NDA PDUFA Outcome
On
December 8, 2020 we received tentative approval from the FDA regarding our NDA filed in February 2020 for TLANDO as a TRT
in adult males for conditions associated with a deficiency of endogenous testosterone, also known as hypogonadism. In granting
tentative approval, the FDA concluded that TLANDO has met all required quality, safety and efficacy standards necessary for approval.
However, TLANDO has not received final approval and is not eligible for final approval to market in the U.S. until the expiration
of the exclusivity period previously granted to Clarus Therapeutics, Inc. with respect to Jatenzo®, which expires on March
27, 2022. We are currently reviewing the FDA’s tentative approval of TLANDO and remain committed to taking appropriate actions
with the goal of receiving final approval to permit the launch of TLANDO. Under the PREA, if TLANDO receives full approval, we
will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric patients. The FDA has
also required us to conduct certain post-marketing studies including: (i) conduct an appropriately designed label comprehension
study that assesses patient understanding of key risk messages in the Medication Guide for TLANDO and (ii) conduct an appropriately
designed one-year trial to evaluate development of adrenal insufficiency with chronic TLANDO therapy. The timetables for these
post-marketing requirements will be established at the time of full approval of TLANDO. We are currently evaluating multiple commercial
alternatives with TLANDO, should it receive FDA approval, including out-licensing TLANDO to a third-party, launching TLANDO on
our own, or launching TLANDO on our own with the assistance from a “risk share” partner.
Recent Competition Update
On
March 27, 2019, Clarus’ product JATENZO®, an oral TU product, was approved by the FDA and also received three years
of data exclusivity. On February 10, 2020, Clarus announced that JATENZO® has been launched and is commercially available.
Based on the FDA’s tentative approval of TLANDO, we will not be able to begin marketing TLANDO until March 27, 2022, the
expiration of the exclusivity period granted to Clarus with respect to JATENZO®.
Additionally, our competitors may introduce
other T-replacement therapies. For example, on January 5, 2021 Marius Pharmaceuticals, Inc. (“Marius”) submitted a
NDA to the FDA seeking approval of KYZATREX®, its novel oral TU soft gelatin capsule for the treatment of primary and secondary
hypogonadism in adult men.
We are also aware of other pharmaceutical
companies that have T-replacement therapies or testosterone therapies in development that may be approved for marketing in the
United States or outside of the United States.
Based on publicly available information,
we believe that several other T-replacement therapies that would be competitive with TLANDO are in varying stages of development,
some of which may be approved, marketed and/or commercialized prior to TLANDO. These therapies include T-gels, oral-T, an aromatase
inhibitor, a new class of drugs called Selective Androgen Receptor Modulators and hydroalcoholic gel formulations of Dihydrotestosterone
(“DHT”).
6
LPCN 1144: An Oral Prodrug of Bioidentical Testosterone
Product Candidate for the Treatment of NASH
We
are currently evaluating LPCN 1144, an oral prodrug of bioidentical testosterone comprised of TU, for the treatment of non-cirrhotic
NASH. NASH is a more advanced state of non-alcoholic fatty liver disease (“NAFLD”) and can progress to a cirrhotic
liver and eventually hepatocellular carcinoma/ liver cancer. Twenty to thirty percent of the U.S. population is estimated to suffer
from NAFLD and fifteen to twenty percent of this group progress to NASH, which is a substantially large population that lacks
effective therapy. Currently, there are no FDA approved treatments for NASH, a silent killer that affects ~30 million Americans.
Approximately 50% of NASH patients are in adult males and the number of NASH cases is projected to increase 63% from 16.5 million
cases in 2015 to 27.0 million cases in 2030. NAFLD/NASH is becoming more common due to its strong correlation with obesity and
metabolic syndrome, including components of metabolic syndrome such as diabetes, cardiovascular disease and high blood pressure.
In men, especially with comorbidities associated with NAFLD/NASH, testosterone deficiency has been associated with an increased
accumulation of visceral adipose tissue and insulin resistance, which could be factors contributing to NAFLD/NASH.
History of Liver Disease
The liver is the largest internal
organ in the human body and its proper function is indispensable for many critical metabolic functions, including the regulation
of lipid and sugar metabolism, the production of important proteins, including those involved in blood clotting, and purification
of blood. There are over 100 described diseases of the liver, and because of its many functions, these can be highly debilitating
and life-threatening unless effectively treated. Liver diseases can result from injury to the liver caused by a variety of insults,
including hepatitis C virus (“HCV”), hepatitis B virus (“HBV”), obesity, chronic excessive alcohol use
or autoimmune diseases. Regardless of the underlying cause of the disease, there are important similarities in the disease progression
including increased inflammatory activity and excessive liver cell apoptosis, which if unresolved leads to fibrosis. Fibrosis,
if allowed to progress, will lead to cirrhosis, or excessive scarring of the liver, and eventually reduced liver function. Some
patients with liver cirrhosis have a partially functioning liver and may appear asymptomatic for long periods of time, which is
referred to as decompensated liver disease. Decompensated liver disease is when the liver is unable to perform its normal functions.
Many people with active liver disease remain undiagnosed largely because liver disease patients are often asymptomatic for many
years.
Markers of Liver Cell Death
Alanine aminotransferase (“ALT”)
is an enzyme that is produced in liver cells and is naturally found in the blood of healthy individuals. In liver disease, liver
cells are damaged and as a consequence, ALT is released into the blood, increasing ALT levels above the normal range. Physicians
routinely test blood levels of ALT to monitor the health of a patient's liver. ALT level is a clinically important biochemical
marker of the severity of liver inflammation and ongoing liver disease. Elevated levels of ALT represent general markers of liver
cell death and inflammation without regard to any specific mechanism. Aspartate aminotransferase (“AST”) is a second
enzyme found in the blood that is produced in the liver and routinely measured by physicians along with ALT. As with ALT, AST
is often elevated in liver disease and, like ALT, is considered an overall marker of liver inflammation.
Relationship between Hypogonadism and NAFLD
Preclinical and clinical studies
in the NAFLD/NASH literature have shown the prevalence of testosterone deficiency across the NAFLD/NASH histological spectrum
wherein low testosterone was independently associated with NAFLD/NASH with an inverse relationship between testosterone and NAFLD/NASH
symptom severity. A recent National Institute of Diabetes and Digestive and Kidney Diseases (“NIDDK”) report suggests
that 75% of biopsy confirmed NASH subjects have less than 372 ng/dL of total testosterone and that the degree of fibrosis severity
is inversely related to free testosterone levels; thus, providing a good rationale for testing LPCN 1144 in adult NASH patients
regardless of their hypogonadal status. We have received clearance from the FDA to clinically investigate LPCN 1144 in an expanded
target population of adult male NASH patients. Specifically, the FDA waived the limitation of only testing LPCN 1144 in NASH subjects
with total testosterone levels below 300 ng/dL (threshold for hypogonadism).
Post hoc analyses of our existing
clinical trials in subjects with comorbidities typically associated with NASH comorbidities indicate that testosterone therapy
significantly and consistently reduced elevated levels of key serum biomarkers (liver function enzymes and serum triglyceride)
generally associated with NAFLD/NASH.
7
Current Status
We have initiated the LiFT Phase
2 clinical study in confirmed non-cirrhotic NASH subjects. The LiFT clinical study is a prospective, multi-center, randomized,
double-blind, placebo-controlled multiple-arm study in biopsy-confirmed hypogonadal or eugonadal male NASH subjects with grade
F1/F3 fibrosis and a NAFLD Activity Score (“NAS”) ≥ 4 with a 36-week treatment period. The LiFT clinical
study enrolled 56 biopsy confirmed NASH male subjects. Subjects were randomized 1:1:1 to one of three arms (Treatment A is a twice
daily oral dose of 142 mg testosterone equivalent, Treatment B is a twice daily oral dose of 142 mg testosterone equivalent formulated
with 217 mg of d-alpha tocopherol equivalent, and the third arm is twice daily matching placebo). We currently expect 36-week
biopsy data will be available in the third quarter of 2021.
The primary endpoint of the LiFT
clinical study is change in hepatic fat fraction via MRI-PDFF and exploratory liver fat/marker end points post 12 weeks of treatment.
Additionally, key secondary endpoints post 36 weeks of treatment include assessment of histological change for NASH resolution
and/or fibrosis improvement as well as liver fat data.
Additionally, subjects will have access
to LPCN 1144 through an open label extension study. The extension study will enable the collection of additional data on LPCN
1144 for up to a total of 72 weeks of therapy
Treatments with LPCN 1144 post 12 weeks
of treatment resulted in robust liver fat reduction, assessed by MRI-PDFF, and showed improvement of liver injury markers with
no observed tolerability issues. Inclusion of d-alpha tocopherol formulated with the testosterone prodrug resulted in additional
liver benefits, notably improved key liver markers without compromising tolerability.
Key results are presented in the following tables:
Table 1. Mean absolute liver fat using MRI-PDFF in all subjects
(n=56)* at Week 12.
Treatment Change from baseline (CBL) Placebo-adjusted CBL
% p-value % p value
Placebo (n = 19) -1.7 NS n/a n/a
* Missing data was obtained using Multiple Imputation
NS: Not significant (p > 0.05)
Table
2. Mean relative liver fat using MRI-PDFF at Week 12 in subjects (n=52) with liver fat ≥ 5% at baseline.*
Treatment Change from baseline (CBL) Placebo-adjusted CBL
% p value % p value
Placebo (n = 18) -9.9 NS n/a n/a
* Based on available data.
Table 3. Responders with > 30% Relative Reduction in Liver
Fat at Week 12, Intent to Treat Dataset (n=56)*.
Treatment Responder (% of subjects) p value vs Placebo
* Subjects with missing data are considered non-responders
8
Table 4.
Average changes in key serum liver injury markers ALT and AST at Week 12 (n=52)*.
ALT (U/L) AST (U/L)
Treatment Absolute Placebo-Adjusted Absolute Absolute Placebo-Adjusted Absolute
Placebo (n = 17) 1.8 NS n/a n/a 2.8 NS n/a n/a
* All available data
During
the 12 weeks of treatment, the observed rate and severity of Treatment Emergent Adverse Events (“TEAEs”) in both the
LPCN 1144 treatment arms were comparable to the placebo arm. Three subjects in the placebo group and one subject in the combined
treatment arms discontinued study drug due to TEAEs. We currently expect 36-week biopsy data will be available in the third
quarter of 2021.
Previous to the LiFT clinical study,
we completed a 16-week POC liver imaging clinical study to assess liver fat changes in hypogonadal men at risk of developing NASH
using MRI-PDFF technique. Treatment results from the POC liver imaging study demonstrated that 48% of the treated NAFLD subjects,
defined as baseline liver fat of at least 5%, had NAFLD resolution, defined as liver fat <5% post treatment. Additionally,
100% of the subjects experiencing NAFLD resolution had at least a 35% relative liver fat reduction from baseline with a relative
mean liver fat reduction of 55% in this group. Further results from the POC liver fat clinical study after 16 weeks of treatment
are as follows:
Category, n Baseline Mean % Median % EOS, %
**Based on subjects who experienced at least a 30% reduction
in liver fat from baseline.
TLANDO XR: A Next-Generation Long-Acting Oral Product Candidate
for TRT
TLANDO XR is a next-generation,
novel ester prodrug of testosterone comprised of TT which uses the Lip’ral technology to enhance solubility and improve
systemic absorption. We completed a Phase 2b dose finding study in hypogonadal men in the third quarter of 2016. The primary objectives
of the Phase 2b clinical study were to determine the starting Phase 3 dose of TLANDO XR along with safety and tolerability of
TLANDO XR and its metabolites following oral administration of single and multiple doses in hypogonadal men. The Phase 2b clinical
trial was a randomized, open label, two-period, multi-dose PK study that enrolled hypogonadal males into five treatment groups.
Each of the 12 subjects in a group received treatment for 14 days. Results of the Phase 2b study suggest that the primary objectives
were met, including identifying the dose expected to be tested in a Phase 3 study. Good dose-response relationship was observed
over the tested dose range in the Phase 2b study. Additionally, the target Phase 3 dose met primary and secondary end points.
Overall, TLANDO XR was well tolerated with no drug-related severe or serious adverse events reported in the Phase 2b study.
Additionally in October 2014,
we completed a Phase 2a POC study in hypogonadal men. The Phase 2a open-label, dose-escalating single and multiple dose study
enrolled 12 males. Results from the Phase 2a clinical study demonstrated the feasibility of a once daily dosing with TLANDO XR
in hypogonadal men and a good dose response. Additionally, the study confirmed that steady state is achieved by day 14 with consistent
inter-day performance observed on day 14, 21 and 28. No subjects exceeded Cmax of 1500 ng/dL at any time during the 28-day dosing
period on multi-dose exposure. Overall, TLANDO XR was well tolerated with no serious AE’s reported.
We have also completed a preclinical toxicology study
with TLANDO XR in dogs.
9
In
February 2018 we had a meeting with the FDA to discuss these pre-clinical results and to discuss the Phase 3 clinical study and
path forward for TLANDO XR. Based on the results of the FDA meeting and additional pre-clinical trials conducted after the FDA
meeting, we have proposed a Phase 3 protocol for TLANDO XR and have solicited FDA feedback. Based on initial FDA feedback, we
expect the Phase 3 clinical trial design to follow the International Council for Harmonisation of Technical Requirements for Pharmaceuticals
for Human Use (“ICH”) guidelines and will include a three-month efficacy treatment period and a one-year safety component
for up to 100 subjects. We continue to refine the Phase 3 protocol and plan to request FDA approval of the protocol once it is
finalized. Additionally, the FDA previously requested that a food effect study needs to be completed, and that ambulatory blood
pressure monitoring (“ABPM”) be included as part of the Phase 3 clinical study. We anticipate the next steps in developing
TLANDO XR will be to scale up the formulation and conduct a food effect study with TLANDO XR. We are also exploring the possibility
of licensing TLANDO XR to a third party, although no licensing agreement has been entered into by us.
LPCN 1148: An Oral Prodrug of Bioidentical Testosterone
Product Candidate for the Treatment of Cirrhosis
Cirrhosis
is end-stage NAFLD for which there is no FDA approved drug treatment. Liver cirrhosis is estimated to affect in excess of 600,000
Americans, with men affected at twice the rate of women, and results in approximately 45,000 deaths every year. Due to a lack
of available organs, only a third of waitlisted patients are getting liver transplants, and patients that do receive a transplant
are increasingly being described as frail. Low testosterone affects up to 90% of cirrhotic men, and is a predictor of mortality
and increased adverse events including ascites, hepatic encephalopathy, and clinically significant portal hypertension.
We
are currently formulating plans to conduct a POC study in male cirrhotic subjects through consultations with the FDA and key opinion
leaders to evaluate the therapeutic potential of LPCN 1148 for the treatment of cirrhotic subjects. On May 5, 2020 the FDA accepted
our Investigational New Drug application ("IND") to initiate a Phase 2 POC study to evaluate the therapeutic potential
of LPCN 1148 for the treatment of liver cirrhosis in adult male cirrhotic patients. The planned Phase 2 clinical study is a prospective,
multi-center, randomized, placebo-controlled 52-week study in male cirrhotic patients that are on the liver transplant list.
LPCN 1107: An Oral Product Candidate for the Prevention
of Preterm Birth
We
believe LPCN 1107 has the potential to become the first oral hydroxyprogesterone caproate (“HPC”) product indicated
for the reduction of risk of preterm birth (delivery less than 37 weeks) (“PTB”) in women with singleton pregnancy
who have a history of singleton spontaneous PTB. Prevention of PTB is a significant unmet need as approximately 11.7% of all U.S.
pregnancies result in PTB, a leading cause of neonatal mortality and morbidity.
We
have completed a multi-dose PK dose selection study in pregnant women. The objective of the multi-dose PK selection study was
to assess HPC blood levels in order to identify the appropriate LPCN 1107 Phase 3 dose. The multi-dose PK dose selection study
was an open-label, four-period, four-treatment, randomized, single and multiple dose, PK study in pregnant women of three dose
levels of LPCN 1107 and the injectable intramuscular ("IM") HPC (Makena®). The study enrolled 12 healthy pregnant
women (average age of 27 years) with a gestational age of approximately 16 to 19 weeks. Subjects received three dose levels of
LPCN 1107 (400 mg BID, 600 mg BID, or 800 mg BID) in a randomized, crossover manner during the first three treatment periods and
then received five weekly injections of HPC during the fourth treatment period. During each of the LPCN 1107 treatment periods,
subjects received a single dose of LPCN 1107 on Day 1 followed by twice daily administration from Day 2 to Day 8. Following completion
of the three LPCN 1107 treatment periods and a washout period, all subjects received five weekly injections of HPC. Results from
this study demonstrated that average steady state HPC levels (Cavg0-24) were comparable or higher for all three LPCN 1107 doses
than for injectable HPC. Additionally, HPC levels as a function of daily dose were linear for the three LPCN 1107 doses. Also,
unlike the injectable HPC, steady state exposure was achieved for all three LPCN 1107 doses within seven days. We have also completed
a POC Phase 1b clinical study of LPCN 1107 in healthy pregnant women in January 2015 and a POC Phase 1a clinical study of LPCN
1107 in healthy non-pregnant women in May 2014. These studies were designed to determine the PK and bioavailability of LPCN 1107
relative to an IM HPC, as well as safety and tolerability.
A
traditional pharmacokinetics/pharmacodynamics (“PK/PD”) based Phase 2 clinical study in the intended patient population
is not expected to be required prior to entering into Phase 3. Therefore, based on the results of our multi-dose PK study we had
an End-of-Phase 2 meeting and subsequent guidance meetings with the FDA to define a pivotal Phase 2b/3 development plan for LPCN
1107. However, these discussions will need to be updated based on recent developments with Covis Group’s (“Covis”)
Makena®. We plan to resume our interactions with the FDA to discuss our pivotoal Phase 2b/3 clinical trial design and better
understand next steps to advance LPCN 1107. Additionally, a pivotal Phase 2b/3 study will not occur until the results from a planned
food-effect study with LPCN 1107 are reviewed by the FDA, though manufacturing scale-up work for LPCN 1107 has been completed.
10
We
do not anticipate the initiation of a pivotal Phase 2b/3 study with LPCN 1107 to occur in 2021until additional clarity from the
FDA is obtained with regards to Makena or the product candidate is out-licensed. We may conduct the required food effect clinical
study in advance of receiving clarity on Makena. We are also exploring the possibility of licensing LPCN 1107 to a third party,
although no licensing agreement has been entered into by the Company. No assurance can be given that any license agreement will
be completed, or, if an agreement is completed, that such an agreement would be on acceptable terms.
The
FDA has granted orphan drug designation to LPCN 1107 based on a major contribution to patient care. Orphan designation qualifies
Lipocine for various development incentives, including tax credits for qualified clinical testing, and a waiver of the prescription
drug user fee when we file our NDA.
Recent Competition Update
On
October 5, 2020, the FDA’s Center for Drug Evaluation and Research (“CDER”) proposed that Makena be withdrawn
from the market because the PROLONG trial failed to verify the clinical benefit of Makena and concluded that the available evidence
does not show Makena is effective for its approved use. Upon withdrawal of Makena, the FDA would also withdraw all abbreviated
new drug applications for drug products containing hydroxyprogesterone caproate that reference Makena as their referenced listed
drug. CDER issued AMAG, the NDA holder at the time, a notice of an opportunity for a hearing (“NOOH”) to withdraw
approval of Makena, for which AMAG responded by requesting a hearing and providing detail on the company’s position,
recognizing clinicians’ decade-long use of Makena’s treatment and the public health implications of withdrawing approval.
The FDA Commissioner granted a hearing, and the process is expected to take months. During this time, Makena and the approved
generics of Makena will remain on the market until the FDA makes a final decision about these products.
Currently,
Makena and the approved generics of Makena are the only products approved for the prevention of recurrent preterm birth.
The
FDA also indicated that it intends to hold a meeting with experts in obstetrics, neonatal care, and clinical trial design to discuss
how to facilitate development of effective and safe therapies to treat preterm birth.
Research and Development
We
currently have five products in our development pipeline (TLANDO, LPCN 1144, TLANDO XR, LPCN 1148 and LPCN 1107) and we continue
to conceptualize and discuss new indications for current products as well as new development opportunities. In 2020 and 2019,
we spent $9.7 million and $7.5 million, respectively, on research and development.
Competition
Testosterone Market Overview
The
gel-based testosterone replacement products that are currently available include AbbVie’s AndroGel® , Lilly’s
Axiron® Topical Solution and Endo’s Testim® and Fortesta® along with their respective authorized
generics as well as the equivalent generic versions of each. Transdermal patches include Allergan’s Androderm®. Intramuscular
forms of testosterone also exist although commercialized mostly in generic forms by multiple companies and in branded form as
Aveed® by Endo. Additionally, Endo markets the buccal testosterone replacement therapy Striant® and the Testopel®
implantable testosterone pellets, which it acquired from Auxillium in 2015. Antares Pharma, Inc. markets a sub-cutaneous weekly
auto-injector testosterone therapy, XyostedTM. Aytu BioScience Inc. markets an intranasal testosterone therapy, Natesto®,
which it licensed from Acerus Pharmaceuticals in 2016. Finally, Clarus markets an oral TRT, JATENZO®, which received
approval in March 2019.
Currently,
intramuscular injections have the highest market share in the testosterone replacement market in terms of annual prescriptions.
While gels are also widely-used form of TRT, there is a risk of transference; additionally, the gels are messy to apply and have
significant compliance issues leading to high rates of discontinuance among patients. Additionally, certain intramuscular injections
have the potential to cause pulmonary embolisms as well as cause injection site reactions, scarring, pain and risk of infection
in patients. We believe a safe and effective oral therapy could potentially increase patient convenience and compliance, while
eliminating the testosterone transference risk associated with gels and injection site reaction of injectables.
The
FDA has granted a therapeutic equivalence rating of AB to “generic” versions of approved products which have been
approved via a 505(b)(2) NDA. In July 2014, FDA granted the AB rating to Perrigo’s 1% testosterone gel drug product (NDA
203098) approved in January 2013, and a BX rating to Teva’s 1% gel drug product (NDA 202763) approved in February 2012.
Each are versions of AbbVie’s AndroGel 1.0% and employed 505(b)(2) submissions citing AndroGel as their reference listed
drugs. Teva’s version was found to be bioinequivalent to AndroGel, hence the BX rating. Upsher-Smith Laboratories also received
approval for a version of Endo’s Testim (VogelxoTM; NDA 204399) in June 2014 using the same pathway. In January of
2015, the FDA determined that VogelxoTM is therapeutically equivalent to Testim and received an AB rating. In August 2015,
the FDA granted AB rating to Perrigo’s 1.62% testosterone gel drug product (NDA 204268) which also received FDA approval
in August 2015. Lilly and Acrux’s Axiron had patent expiry in February 2017. On July 6, 2017, Acrux confirmed that a generic
version of Axiron® Topical Solution, 30 mg/1.5 mL (Testosterone Topical Solution, 30 mg/1.5 mL) has been launched in the United
States by Perrigo Company plc. Acrux also confirmed the availability of an authorized generic version of Axiron in the United
States, through a marketing and distribution agreement between Lilly and Company and a leading authorized generics company
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Other Therapies in Development
Recently
there has been increased interest in developing oral TRT’s therapies as well as testosterone therapies which are not considered
testosterone replacement and as such will need to achieve efficacy endpoints in addition to endpoints related to serum testosterone
levels that are required for testosterone replacement therapies.
Marius
is developing an oral TU as a testosterone replacement therapy for the treatment of hypogonadism in men as well as in the treatment
of Constitutional Delay of Growth and Puberty in adolescent boys (14-17 years of age). Marinus submitted a NDA to the FDA in January
2021 for its product, KyzatrexTM, its novel oral TU soft gelatin capsule for the treatment of hypogonadism in adult men.
Mereo
BioPharma Group Ltd. is currently developing BGS649, a once weekly aromatase inhibitor, for first-line therapy for the treatment
of male infertility associated with hypogonadotropic hypogonadism (“HH”).
TesoRx
Pharma LLC is developing an oral bio-identical testosterone, TSX-002, for the treatment of Constitutional Delay of Growth and
Puberty. Phase 2 clinical studies have been conducted. TesoRx is also developing a potential once-daily oral TU product candidate,
TSX-049, as a testosterone replacement therapy for the treatment of hypogonadism in men. TSX-049 is still in pre-clinical development.
NASH Market Overview
There
are currently no medications approved for the treatment of NASH. However, various therapeutics are used off-label for the treatment
of NASH, including vitamin E (an antioxidant), insulin sensitizers (e.g., metformin, pioglitazone), antihyperlipidemic agents
(e.g., gemfibrozil), pentoxifylline and ursodeoxycholic acid. There are several product candidates in Phase 3 or earlier clinical
or preclinical development for the treatment of NASH, including FGF21 Stimulants such as BIO89-100 (89bio), Efruxifermin (EFX;
Akero Therapeutics), Pegbelfermin (Bristol Myers Squibb/Ambrx Inc.); FGF19 Analog:Aldafermin (NGM Biopharmaceuticals); FXR Agonists:
Tropifexor (Novartis), EDP-305 (Enata Pharmaceuticals), PXL007/EYP001 (Poxel/Enyo Pharma:) Glucagon-like Peptide-1 (GLP-1) Agonist:
Semaglutide (Novo Nordisk); Peroxisome Proliferator-activated Receptor (PPAR) Regulator: Lanifibranor (Inventiva);THR-β
Agonis:t VK2809 (Viking Therapeutics), and Resmetirom (Madrigal Pharmaceuticals).
Additional
pharmaceutical and biotechnology companies with product candidates in development for the treatment of NASH include AstraZeneca
plc, Boehringer Ingelheim GmbH, Bristol-Myers Squibb Company, Conatus Pharmaceuticals Inc., CymaBay Therapeutics, Inc., Durect
Corporation, Galectin Therapeutics Inc., Galmed Pharmaceuticals Ltd., Immuron Ltd., Ionis Pharmaceuticals, Inc., Islet Sciences,
Inc., Madrigal Pharmaceuticals, Inc., MediciNova, Inc., MiNA Therapeutics, NGM Biopharmaceuticals, Inc., Novo Nordisk A/S, NuSirt
Sciences Inc., Viking Therapeutics, Inc. and Zydus Pharmaceuticals (USA) Inc. NASH is a complex disease and we believe that it
is unlikely that any one therapeutic option will be optimal for every NASH patient.
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Hydroxyprogesterone caproate, or HPC, Preterm Birth,
or PTB, Market Overview
PTB
is defined as delivery before 37 weeks of gestation. The only approved therapy for prevention of PTB in women with a prior history
of at least one preterm birth (~180,000 pregnancies annually) is a weekly intramuscular injection of HPC, marketed by Covis under
the brand name Makena®. The FDA granted a 7-year orphan drug exclusivity to Makena in February 2011 because the product is
intended to treat “rare diseases or conditions” defined as a condition that affects fewer than 200,000 persons in