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TENX: Tenax S-1 Filing

11/07/2018
By John Vandermosten, CFA

NASDAQ:TENX

On November 6th Tenax Therapeutics (NASDAQ:TENX) filed an S-1 proposing to raise $10 million in equity capital to support operations into 2020. While the funds are not needed to launch the Phase II trial for Levosimendan, they should be sufficient to support the completion of the Phase II trial and the end of Phase II meeting with the FDA. Total direct trial cost is anticipated to be from $4.5 to $5.0 million.

We had originally anticipated a 3Q:18 launch of the levosimendan trial for Pulmonary Hypertension associated with Heart Failure and preserved Ejection Fraction (PH-HFpEF). However, due to administrative delays with the larger institutions with which Tenax is working, the anticipated start has shifted into the fourth quarter.

During our last discussions with management, Tenax had identified 20 to 25 trial sites and has since narrowed this to 12 to 15 sites. Trial design remains the same and the trial expects to enroll 36 patients in the study. Below we include our discussion of the trial design.

Trial Design

In April the FDA allowed Tenax to submit their Investigational New Drug (IND) application under the existing clinical protocol for levosimendan. The agency also addressed the company’s questions and provided guidance on the upcoming Phase II. This announcement will allow for a timely IND submission and anticipated enrollment in 4Q:18. Substantial safety work has been performed on levosimendan, negating the need for another Phase I trial. The FDA recognized that there are no approved drug therapies to treat PH-HFpEF patients and acknowledged this may allow for a limited Phase III clinical program. Tenax will provide additional detail on the implications of a limited Phase III study at the End-of-Phase II Meeting for PH-HFpEF.

After meeting with the FDA for the pre-IND meeting, Tenax refined its trial design to reflect the input provided by the agency. Based on details provided in the corporate presentation and the press release, the structure required fewer enrollees and a greater number of sites. The trial will enroll PH-HFpEF patients in an open trial and responders will be randomized into the placebo-control trial (see exhibit). The study is anticipated to enroll 36 PH-HFpEF patients in 12 to 15 sites with a trial duration of 14 to 18 months. Based on preliminary work, enrollees will have a pulmonary arterial pressure (PAP) equal to or greater than 35, a pulmonary capillary wedge pressure (PCWP) equal to or greater than 20, a cardiac index (CI) of less than or equal to 2.2, a left ventricular ejection fraction (LVEF) of over 40 and be NYHA Class IIb or III.

The primary endpoint of the study will be a change from baseline PCWP with bicycle exercise at Week 6. Expected secondary endpoints will relate to a change in resting PCWP under a variety of conditions, a change in resting & stressed CI, change in pulmonary vascular resistance (PVR) at rest & under stress, a global assessment at week six based on the Likert scale and length of exercise period, a physician’s assessment of functional class and clinical events, including death and hospitalizations.

Based on management commentary and what has been accomplished in pre-clinical and clinical work to date, infusion for several hours one time per week appears to be the most likely dosing regimen; however, this will be confirmed in Phase II work.


View Exhibit I – Phase II Study Design

Milestones

‣ Meet with FDA for Phase II Trial Design – 1Q:18
‣ Complete Phase II Design – 2Q:18
‣ Begin Trial Enrollment – 4Q:18
‣ Conduct Comprehensive Strategic Alternative Review – 2018
‣ Raise Capital – 2H:18

Summary

The first quarter began with an announcement that a new indication would be pursued for levosimendan. Following the announcement, Tenax has populated its scientific advisory board, and highlighted the opportunity for levosimendan in PH-HFpEF to the scientific and investment community. After a favorable meeting with the FDA, the company is expected to start its Phase II trial for HF-PHpEF in the fourth quarter. Based on the research and analysis included in our initiation, PH-HFpEF patients should benefit from Levosimendan’s mechanism of action and clinical trials can be pursued with a reasonable cost and time commitment. The indication is also in an area with no other approved treatments. Market size is material and with no other approved therapy available, pricing should be strong and penetration high.

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