Dipexium aims to have first topical antibiotic approved for DFI

Dipexium (NASDAQ:DPRX) is enrolling patients in two pivotal Phase 3 trials of its Locilex topical antibiotic in what it hopes will be the first FDA-approved antibiotic topical cream for the treatment of mild infections of diabetic foot ulcers.

“Current treatments used off-label to treat mild diabetic foot infections (DFI) generate systemic resistance, exhibit poor safety and toxicity profiles and have a more narrow spectrum of activity,” president and CEO, David Luci, says in an interview with BioTuesdays.com. “They’re used for lack of anything better.”

Locilex has the potential to be a truly differentiated front-line therapy for mild DFI, he contends, noting that the topical cream has demonstrated bactericidal activity against several of the most difficult-to-treat resistant bacteria, or “superbugs,” known to cause DFI. These include methicillin-resistant staphylococcus aureus, vancomycin-resistant enterococci, extended-spectrum beta-lactamase and other multi-drug resistant bacteria.

Mr. Luci says that in over 500 patients treated by Locilex’s prior owner, Magainin Pharmaceuticals, the product demonstrated an excellent safety and tolerability profile, no systemic absorption and no bacterial resistance or cross-resistance to other antibiotics.

Antibiotic resistance remains a major threat to public health around the world. In the U.S., antibiotic resistance infections sicken more than two million people each year, leading to at least 23,000 deaths. No new class of antibiotics has been developed since the late 1980s. From 2001 to 2013, the FDA approved only three new molecular entities to combat bacterial diseases – the lowest rate since the 1940s.

“There are no FDA-approved anti-microbial peptides to treat skin infections; we’d be the first,” Mr. Luci contends. “The bugs are going to have a hard time around us because Locilex is different than other drugs or generations of older drugs that the bugs have seen before.”

He points out that among the significant drawbacks of oral antibiotics used off-label to treat DFI is systemic antibiotic resistance, limited spectrum of activity, poor safety and tolerability, drug-drug interactions with certain diabetes medications and/or an impact on blood glucose.

Mr. Luci says that he and his partner, Robert DeLuccia, executive chairman of Dipexium, were drawn to Locilex after the FDA rejected Magainin’s new drug application (NDA) in 1999.

While an FDA advisory committee unanimously approved the safety of Locilex, the committee cited inconsistencies with the efficacy results and recommended that Magainin conduct an additional Phase 3 placebo-controlled study. In addition, the FDA also identified certain manufacturing deficiencies relating to stability and quality control issues in a subsequent non-approvable letter in 1999.

“When we acquired Locilex, we figured that if we could reformulate the product and fix the manufacturing issues cited by the FDA, we could have a straight shot at approval based on the earlier FDA panel recommendation for a placebo-controlled study,” he recalls.

“It’s almost a unique advantage in drug development, because almost across the board, other antibiotics have had to beat a standard-of-care medication to get on the market. The placebo study hurdle was a substantial part of the attraction.”

Last September, Dipexium received a U.S. patent on its reformulation of Locilex and its method of use, extending U.S. protection to mid-2032. The new patent also may extend patent protection worldwide to mid-2032. The company also has made changes with manufacturing Locilex, which, it believes, have resolved the stability and purity concerns previously cited by the FDA.

Some 650,000 patients contract mild DFI in the U.S. annually, along with another 470,000 moderate DFI patients. Currently, generic systemic antibiotics are used commonly to treat moderate DFI.

According to Mr. Luci, 61% of diabetic foot ulcers will become DFI, a leading cause of diabetes-related hospitalizations. “Before a wound can be treated, the infection must be removed,” he says, adding that in 10 days, mild DFI has the potential to progress to severe DFI, often leading to amputation.

Feltl & Co. analyst, Ben Haynor, in an initiation report in May, wrote, “…we believe it [Locilex] would become the go-to therapy in mild DFI and is likely to be used off-label in moderate DFI cases, likely in conjunction with a systemic antibiotic.” He attributed that belief to the fact that Locilex is a topical and is not absorbed into blood circulation.

In addition, he pointed out that because there are no indicated therapies for mild DFI, securing reimbursement should be a straightforward process.

Mr. Haynor figures Locilex has the potential to capture 45% of the mild DFI, and 18% of the moderate DFI, theoretical addressable market by 2022, resulting in peak sales of $323-million.

He started Dipexium at a “strong buy,” with a price target of $21.75. The stock closed at $10.05 on Friday.

Dipexium’s two pivotal Phase 3 studies – OneStep-1 and OneStep-2 – are identical, double-blind, placebo-controlled clinical trials being conducted simultaneously. Enrollment in both studies started in July 2014. The studies, which are being conducted under a special protocol assessment from the FDA, will each enroll about 180 patients with mild DFI at 20 separate centers in the U.S.

The primary objective of the trials is to establish the clinical superiority and safety of Locilex plus standard local wound care, compared with placebo cream plus standard local wound care.  Patients will be treated for 14 days, with a final evaluation at day 28.

The primary endpoint is clinical response, or having the “infection resolved” in the judgment of each treating physician, using DFI treatment guidelines of the Infectious Disease Society of America.

Secondary endpoints include complete microbiological response, as well as the incidence and severity of adverse events.

Avika Felt, an analyst with Oppenheimer, said in an initiation report in April, that he views the Phase 3 studies as “relatively low risk due to the use of a placebo control as well as prior Phase 3 data, demonstrating safety and efficacy for the same active ingredient.”

If approved, he said Locilex is well positioned to gain significant uptake by physicians. He rates the stock at “outperform,” with a 12-to-18 month price target of $27.

Dipexium expects to report top-line data in the first quarter of 2015, leading to a NDA filing in the second half next year. “Locilex could be approved by the FDA within 24 months of commencing Phase 3 enrollment,” Mr. Luci says.