This Biotech Is Targeting Indications Worth $70 Billion

Benzinga

Stephen C. Glover, Co-founder, Chairman, CEO and President of ZyVersa Therapeutics Inc.  was recently a guest on Benzinga’s All-Access.  ZyVersa is a clinical-stage specialty biopharmaceutical company leveraging advanced, proprietary technologies to develop transformative drugs for underserved patients with renal and inflammatory diseases. The company is currently advancing a therapeutic pipeline with multiple programs built around its two proprietary technologies – VAR 200 and IC 100.  The technologies could represent a leap forward in the treatment of several diseases.

Transcript

00:00 (upbeat music)

00:02 - All right, Steven Glover, the CEO of Zyversa Therapeutics

00:08 Inc. Ticker ZVSA, ticker's up there on the screen

00:11 if you guys wanna pull it up while we talk about it.

00:14 Steven, how you doing today?

00:16 - Yeah, I'm a little warmer than you are

00:19 down here in Florida, so good to see you.

00:22 - What part of Florida are you in?

00:24 - Just outside of Fort Lauderdale.

00:26 - Okay, great.

00:27 I'm about to be flying down to Florida on Friday myself,

00:29 so in a couple of days I'll be hopefully

00:31 just as warm as you.

00:32 - Be on the beach.

00:33 - Yep.

00:35 Well, Steven, I mean, before we get started,

00:38 do you wanna just give us a brief overview of Zyversa

00:41 and what it is that you guys do?

00:43 - Sure, I appreciate it.

00:44 We're really a company that's kind of

00:47 in that next stage of growth,

00:48 and I appreciate the time today to kind of get the story out

00:52 but we are in two areas.

00:54 One is in renal disease,

00:57 and it's an area that's a really high unmet medical need

01:00 with kidney failure,

01:01 and you end up in end stage dialysis and transplantation.

01:05 And we're getting ready to go into phase two

01:07 with our lead asset,

01:08 our first human clinical experience in 2024.

01:13 And it's about a $13 billion market.

01:16 And the funny part, I always tell everybody about this,

01:19 is people probably don't realize this,

01:21 but in Medicare, about 20% of the Medicare budget

01:26 is spent on treating renal diseases.

01:28 It's one of the largest portions of the Medicare budget

01:32 as far as treatment.

01:33 And so that's our lead asset,

01:35 and we're happy to be moving that forward

01:37 pretty quickly here in 2024.

01:41 And then our other asset is in the inflammation space,

01:45 and we refer to it as the inflammasome area,

01:48 a really cutting edge biotech area

01:51 related to a host of diseases.

01:55 We're targeting in our development alone

01:57 about $70 billion worth of indication sets,

02:00 everything from MS to Alzheimer's disease

02:03 to cardiovascular disease.

02:05 And we're just finishing up the preclinical program on that,

02:09 and a lot going on in '24 for us.

02:12 - Well, there you go.

02:15 I'm glad you brought up 2024.

02:17 I mean, right now, for the past couple of years,

02:21 the biotech macro environment has been tough,

02:24 especially for micro and small cap companies.

02:26 You know, your high inflation,

02:28 reduced capital availability, valuations plunging,

02:32 and the IPO window all but closing.

02:34 What are your thoughts for the outlook of 2024?

02:37 I mean, we've started to see small caps

02:38 starting to heat up a little bit,

02:40 biotech stocks, XBI's up more than 30% off its lows.

02:45 Do you expect these trends to continue in 2024?

02:47 - You know, great question.

02:49 I've seen more smiles probably in the last month

02:52 in the biotech meetings I've been in

02:53 than I've seen in two years.

02:56 And I say that 'cause I'm also on the chairman

02:59 of the board of a company called Ambrex,

03:01 and also I'm chairman of the board of a company called PDS.

03:04 And so, you know, kind of,

03:06 I see this from multiple companies' perspectives

03:08 as we talk about this.

03:10 And I really do think,

03:12 I think the change in the macro environment is going to,

03:15 you know, I was listening to you guys earlier,

03:17 you know, talk about where the market's beginning

03:20 to think about where '24 is at.

03:23 And I think that area in biotech

03:25 is actually gonna be one of the largest beneficial

03:27 recipients of, you know, some change here.

03:29 You're seeing what I call three things

03:32 I always look for, I've done this for 40 years.

03:34 And that is, you're seeing a change in the environment,

03:38 the feeder environment for the industry

03:40 from a capital ability to raise capital perspective.

03:44 I think the other thing you're seeing is M&A picking up.

03:48 And that's really one of the big signs.

03:50 If you look at, you know, the ADC space,

03:53 you know, there's been over $70 billion with acquisition.

03:56 You look at oncology, a lot of acquisition,

03:59 even in the space that we're in,

04:00 in flamazo inhibitor space,

04:02 there's been over $5 billion with acquisition

04:05 and preclinical to phase one over the last 24 months.

04:09 So there are areas within biotech

04:11 that are really ripe right now.

04:13 I actually was talking to several different CEOs

04:16 over the last couple of weeks.

04:18 And the point of view from that group was,

04:22 you know, in some ways, if you're very smart about this,

04:25 this may be one of the better times to invest in biotech.

04:28 It's been beaten down,

04:30 the indexes are starting to circle back.

04:32 And I think you see a great macro environment

04:35 for 2024 coming.

04:37 - Yeah, that's what a lot of investors

04:39 are hoping for right now.

04:41 And then, you know, Stephen, you mentioned earlier

04:44 on the top that Zyversa has two

04:47 different development platforms,

04:48 one in the renal space, of course,

04:49 the other in the anti-inflammatory space.

04:52 Your renal product, VAR200,

04:55 mediates removal of excess lipids

04:57 and cholesterol out of the kidney.

04:59 How does this, you know, play into the treatment

05:03 of kidney disease?

05:04 And how big is this market opportunity?

05:07 - Sure, you know, innovation is key in kidney disease.

05:11 I mentioned earlier, it's a big problem in the country.

05:13 I mean, we talk about pandemics a lot in our industry

05:17 and kidney disease is actually a pandemic.

05:20 And, you know, the ability to now go after

05:23 some new approaches here is what's really important.

05:26 So if you look at typical treatment in the kidney space,

05:31 you're really trying to delay progression

05:32 in the end-stage renal disease,

05:34 where you're in a dialysis center

05:36 and you're obviously getting dialyzed

05:38 to keep you as healthy as possible.

05:41 But unfortunately, you can tend to progress

05:44 and end up in end-stage renal disease

05:46 and transplantation.

05:48 And really your treatments today,

05:50 there really hasn't been a lot of new treatments

05:52 in the last 20 years.

05:53 A lot of innovation over the last five years

05:55 looking at different ways to go.

05:57 What we've been able to do

06:00 is your typical treatment algorithm

06:02 when you get diagnosed.

06:03 So you go into the doctor,

06:05 you get, you know, you have to take a urinalysis test,

06:08 they diagnose protein in your urine,

06:10 and you're referred to a nephrologist.

06:13 And really this is where your journey begins.

06:16 And that market, just to give you an idea,

06:18 is about $13 billion of treatments.

06:22 And it's, you know, unfortunately you progress.

06:25 And what we really needed here was innovation.

06:28 And so what we do is we're combining our product

06:31 which is VAR200.

06:34 It's really focused on the removal of lipids and cholesterol

06:38 in the renal cells that surround a structure

06:41 in the kidney called a podocyte.

06:43 And we're the only one out there doing this.

06:45 And we've got some great data that is really encouraging.

06:48 And what you do is you use this product

06:51 in combination with an anti-inflammatory

06:54 and with a cardiovascular product

06:56 to be able to treat the real three symptoms of the disease.

07:00 Whether it be hypertension,

07:01 you know, you're dealing with inflammation of the kidney,

07:04 that cause proteinuria,

07:06 and that is what leads to all the downward pressure

07:08 on your kidney failure.

07:10 By taking the approach that we're doing,

07:12 we're actually going after some of the causative issues

07:16 around keeping these podocytes alive

07:18 so that you keep the kidney intact

07:20 and you slow the progression to end-stage renal disease

07:23 is the way to think about this.

07:24 - Yeah, I mean, that's incredible.

07:26 And it sounds like the market opportunity there

07:28 is just massive.

07:30 Where are you in the development of this product,

07:33 of the VAR200?

07:34 Is it in clinical trials or where in the pipeline is it?

07:37 - Yeah, so we did a really,

07:42 a big development job over 2023,

07:45 getting ready to go into the first human trials.

07:48 And we just announced earlier this week

07:52 the retainment of our first CRO,

07:56 our clinical research organization,

07:58 which now has us ready to go start phase two.

08:02 So in early first quarter,

08:04 we'll begin to dose the first patients with our product.

08:08 And it's about a 12 week treatment regimen

08:12 for the initial patients.

08:14 And we expect to see preliminary data

08:16 out by mid-year in 2024,

08:19 to see if the product is working at the dose

08:22 and the frequency of which we think it will.

08:24 So a pretty exciting window here for us as a company.

08:27 - Yeah, that is exciting, Stephen.

08:29 Well, regarding your anti-inflammatory product, IC100,

08:35 how does your approach differ

08:37 from other anti-inflammatory products in development

08:39 and how will this make a difference

08:41 in the treatment of these inflammatory diseases?

08:45 - Great question.

08:47 I mean, many people may not really think about it.

08:51 And for the years, I didn't think about it this way

08:53 until I met with many, many experts.

08:56 Inflammation is one of the leading causes of disease

08:59 in the human population.

09:01 And we all think about it as, you know, we get a headache,

09:03 we take something for the headache.

09:05 Truly that's inflammation or you get a cut,

09:07 that's inflammation.

09:08 But the inflammation that I'm talking about

09:10 is inflammation driven by cytokines.

09:13 For example, IL-1 beta, IL-18 are cytokines.

09:17 And these cytokines are released

09:18 when you get a viral or bacterial infection

09:21 or you have certain diseases in your body.

09:23 And that inflammation is the one that causes

09:25 a lot of issues for the human population.

09:28 This is where you see impact to, you know,

09:31 everything from acute respiratory distress syndrome,

09:34 MS, cardiovascular disease, atherosclerosis,

09:37 Parkinson's disease.

09:38 There's over 70 different diseases

09:40 that are impacted by this type of inflammation.

09:44 And our approach has been working with

09:47 the University of Miami School of Medicine

09:49 and several other collaborators

09:51 is to target this structure called the inflammasome.

09:55 And the way to think about this is once your body

09:58 incurs for the first time a pathogen or a virus,

10:03 and the immune system responds,

10:05 that immune system response is triggered by an inflammasome.

10:09 And so what you want to try to do at this early stage

10:13 is to block that inflammasome

10:15 for producing these cytokines that are toxic

10:17 to the human body.

10:19 And that's about as much science as initially

10:22 that anybody would want to understand about this,

10:25 'cause it's extremely complex.

10:27 But what we have done with a lot of really thoughtful work

10:32 here in scientific innovation is we've targeted a biologic

10:36 at multiple inflammasomes to inhibit multiple inflammasomes

10:40 rather than just one inflammasome.

10:42 And why that is important is that many of the diseases

10:45 I talked about just referenced

10:47 are multiple inflammasome activated.

10:50 And so you really want to block a lot of these inflammasomes

10:53 to get the clinical response and efficacy that you want.

10:57 And then you want to obviously make sure

10:58 that you're safe and effective as part of that.

11:00 And we're actually one of the leading groups out there.

11:03 We're the only biological candidate at this later stage.

11:06 It's a monoclonal antibody, so very, very high science.

11:10 And we're really intrigued by the path forward here in 2024.

11:13 - Well, you know, Steven, again, congrats so far

11:18 on the growth you guys have seen.

11:20 It sounds like you've got a lot of good things

11:22 in the pipeline.

11:23 IC100 is earlier in development than your renal product.

11:27 How long will it be until this product

11:29 is ready for clinical trials?

11:31 - So '24 is all about finalizing our preclinical work,

11:36 and we're almost done with it.

11:37 So we've got one last safety work to do

11:40 in what's called GLP toxicology.

11:43 We plan on finishing that up

11:45 towards the end of the third quarter,

11:48 meet with the agency, FDA,

11:51 and fourth quarter get an open IND

11:53 and move into phase one, the first part of 2025.

11:57 And that's an important inflection point for the company

12:00 because as I mentioned earlier,

12:01 there's a lot of M&A and collaboration work in this space.

12:05 A lot of big companies, Merck, Pfizer,

12:08 you take a look at many companies in this

12:10 and Flamazone space,

12:12 and that's where a lot of your collaborations take place

12:14 as you transition from preclinical into phase one.

12:18 - Got it.

12:19 Well, Steven, running up on time here,

12:22 we've got about a minute left.

12:23 Is there anything else you'd like investors to know

12:26 about Zyversa before I let you go?

12:28 Any hot takes you got for 2024?

12:31 Anything you wanna leave us with?

12:33 - Yeah, I think we touched on it earlier.

12:35 I think biotech is set up.

12:37 We got the JP Morgan Healthcare Conference

12:39 coming up in January.

12:41 Everybody's really excited about it.

12:42 So I would say to those investors

12:45 that are interested in the space or interested in Zyversa,

12:48 do your homework, do your diligence,

12:50 and it's a great time in '24 to come into the space.

12:53 - I hope so.

12:54 I mean, I've got some of the,

12:56 a few biotech companies in my portfolio

12:58 that I've been looking at for the past couple of years

13:00 that I'm just like, "Do something.

13:01 What are you doing?"

13:02 And finally, they're starting to move.

13:04 They're starting to go up.

13:05 So I'm hoping that 2024 proves to be the year

13:08 that these things start to turn around.

13:10 And Steven, again, congrats on your guys' work so far.

13:13 It looks like you guys are doing a lot of great things.

13:15 And I hope we get to talk again soon.

13:17 Anytime you guys have some big news coming up, let me know,

13:20 and we'll bring you on the show

13:21 and have you tell our audience about it.

13:24 - Will do, Aaron.

13:27 Safe travels down to sunny Florida.

13:29 (upbeat music)

13:31 (upbeat music)

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