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Business Observer Wednesday, Aug. 10, 2022 1 month ago

Company sniffs unique opportunity with nasal COVID-19 vaccine

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With a new CEO at the helm and a radical pivot in product strategy, Tampa-based Oragenics has taken risks that, if successful, could make it the next big name in pharmaceuticals.
by: Brian Hartz Tampa Bay Editor

For people who dread the prospect of getting COVID-19 vaccines and booster shots via needles, a Tampa pharmaceutical firm might bring to market a product that can soothe their fears.

That company is Oragenics, and it’s gone through a whiplash-inducing series of seismic changes over the past few years. The list includes the recent hiring of a new CEO and a major acquisition that completely changed its identity and product strategy.

“The one avenue where we could differentiate ourselves, even though it’s quite challenging, is if we could develop an effective nasal vaccine, of which there are very few,” says Fred Telling, chairman of the board of directors at Oragenics. “There’s a lot of science which suggests that if you can deliver [the vaccine] intranasally, that it might provide mucosal immunity.”

Current vaccines, Telling explains, reduce the impact of COVID, but not the likelihood someone will contract the disease. Mucosal immunity would do that while also reducing transmissibility, company officials believe, because nasal inhalation is the primary way the coronavirus enters the body.

“That’s very important,” Telling says, “if it works. It’s still early, and the science will be what the science will be. We’re always guided by that.”

At first glance, Oragenics might appear to have all the makings of a trendy tech startup. Yet the company has been around since 1996, focusing primarily on oral probiotics products and novel antibiotics for humans and companion pets. But the May 2020 acquisition of Noachis Terra Inc., a Gainesville-based pharmaceutical company, was a watershed moment. Noachis Terra, according to a news release, held a worldwide, nonexclusive license to a COVID-19 vaccine candidate known as TerraCoV2 that was granted by the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health.

“This is our big bet,” Telling says. “The major focus of the company is the successful development of this intranasal vaccine.”

At present, Oragenics is still in a pre-clinical phase of its vaccine development, meaning it has yet to begin testing on human subjects. It has raised a total of $98.8 million over 13 funding rounds, but is nowhere near profitable, reporting only about $87,000 in revenue against a loss of $15.71 million through 2021. The company is publicly traded on the New York Stock Exchange, under the symbol OGEN. It had a market cap of $43.46 million through Aug. 3, with shares trading in the low to mid 30 cents a share range. 

“We’ve now gone through multiple studies in animals,” says Kim Murphy, 59, a former Oragenics board member named CEO in June. “We're looking forward to seeing what this vaccine can do in humans, but we just don't know until we get there.”

 

Leadership matters

Between Murphy and Telling, there's a healthy amount of uncertainty mixed with optimism about Oragenics' future prospects. One big reason for the company’s confidence? The woman at the top of the organizational chart: Murphy. A veteran of vaccine programs at pharmaceutical giants GSK, Merck and Novartis, she brings instant credibility and respect to the company, and her appointment should reassure investors that Oragenics’ big pivot will have a high probability of success. (Some investors have been patient for many years: The company posted a loss of $9.95 million in 2018, followed by $15.87 million loss in 2019 and a $26.64 million loss in 2020. Oragenics, overall, has lost more than $75 million since 2018, proving the axiom that in bioscience and pharmaceuticals it takes a lot of money to make money.)

Murphy, Telling says, was a member of the Noachis Terra board of directors when it was acquired by Oragenics, so she was already aware of the potential of the former company’s COVID vaccine candidate. “Adding Kim to our board in 2020 made good sense when we executed the agreement” to buy Noachis Terra, he says.

“I was delighted when Oragenics called me to join the board in May of 2020,” Murphy says. “As the pandemic was kicking off, I felt like I could use my my skills and background to help the company.”

Murphy’s path to pharmaceutical industry leadership wasn’t typical. She studied journalism in college with an eye toward a career in science communication, eventually landing a job at a medical journal. That experience, she says, piqued her interest in the pharmaceutical industry.

“I fell in love with the power of prevention through vaccine,” Murphy says. “I was fortunate to take part in and lead multiple launches at Merck and Novartis and GSK.”

Murphy also looks to be a solid pick for Oragenics because she’s no stranger to exploring new frontiers in the world of vaccines. While at Merck, she played a key role in the development of Gardasil, the world’s first vaccine that prevents diseases, including cervical cancer, caused by human papillomavirus, or HPV as it’s commonly known.

Gardasil, she says, has “had significant impact on cervical cancer rates. Fifteen years later, I’m so proud of that.”

However, intranasal vaccines are extremely rare, meaning Murphy and her team of seven employees have a steep hill to climb. At present, only one intranasal vaccine, FluMist, is on the market, and it treats the common form of influenza, not COVID-19.

“There are significant challenges when developing a novel vaccine,” Murphy says. “And trying to bring an intranasal COVID vaccine to market, as you can imagine, has a lot of technical issues. But so far the team is doing an outstanding job of using its background and expertise to solve problems together.”

Murphy demurs when asked about the business and competitive motivations for developing an intranasal vaccine, citing public health as the project’s ultimate incentive.

“There is an unmet medical need,” she says. “That’s what drive us.”

That’s all well and good, of course, but there are several other reasons why an intranasal vaccine would be a formidable weapon in the battle against COVID-19. A reduction in transmissibility of the coronavirus, for example, would help minimize the spread of new variants. An inhalable vaccine might also appeal to children and adults who are afraid of needles.

“We also have the potential for single-dose efficacy,” Murphy says, “which is important to improving compliance, overall.” That means people wouldn’t have to get multiple shots and boosters.

If Oragenics is successful, she adds, its vaccine could also be a huge boon to populations in the developing world and remote locations.

“It has the potential to be stored and distributed at refrigerated temperatures, rather than the freezing temperatures that the current mRNA vaccines require,” Murphy explains. “Because of that, transportation is much more feasible throughout the globe. And so the potential for intranasal vaccine is tremendous in under-vaccinated areas.”

Another question: Would an intranasal COVID-19 vaccine appeal to the tens of millions of skeptical Americans who keep the nation’s vaccination rate below 70% and prolong the pandemic?

“The answer is unknowable,” Telling says. “It’s theoretical. There’s a portion of the population that doesn’t like needles, particularly younger kids. So, yes, we think a needle-free alternative will be helpful. But the people who are anti-vax, conceptually, I don’t think it’ll change their view.”

 

The road ahead

Telling says Oragenics isn’t going all-in on an intranasal vaccine. Using a poker analogy, he says the company is “keeping 30%” of its chips available for the development of other products, such as lantibiotics, which can tackle the rising threat of antibiotic-resistant infections. Of the remaining 70% of its resources, the company has devoted about 55% to its COVID-19 vaccine efforts.

A toxicology report from the first round of animal testing should be finalized by the end of August or sooner, Murphy says. Reaching this first pre-clinical milestone allows the firm to continue the studies that are expected to lead to an application for human trials. She’s quick to point out, however, that despite the success of Operation Warp Speed, the Trump Administration’s rapid vaccine development program, the timeline for Oragenics’ vaccine is difficult to predict.  

Vaccine development “is anything but easy,” Murphy says. “It’s long, it’s highly regulated — as it should be — and it can be quite costly. Risk is inherent in vaccine development, as it is in any drug development. That’s probably the best summary I can give.”

(This story has been updated to clarify that data from Oragenics' animal testing will need to be used in additional research before an application for human testing can be finalized and submitted.)

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