CLAS Claritas Pharmaceuticals Inc

Claritas Pharmaceuticals, Inc. (TSX VENTURE: KLY and OTC: KALTF) (the "Company" or "Claritas") today announced that it has signed a Letter of Intent dated January 17, 2022 (the “LOI”) with Salzman Group, Inc. (a Delaware corporation), Salzman Group, Ltd. (an Israeli corporation), and Salzman Group Pty. Ltd. (an Australian corporation), (collectively, the “Salzman Group”), under which Salzman Group will grant to Claritas an exclusive, worldwide license to develop and commercialize R-107 for the treatment of skin ulceration and wound healing, including the treatment of severe burns.

Highlights

• R-107 has potential to be a revolutionary new treatment for severe burns
• Claritas will apply for Orphan Drug Designation for R-107 in treatment of severe burns in pediatric patients
• Claritas expects to commence a Phase 2a Clinical Study of R-107 in pediatric patients with severe burns in 2H 2022
• The worldwide market for an effective treatment for severe burns could exceed $1 billion annually

R-107 is a liquid, nitric oxide-releasing molecule with issued and pending composition of matter and method of use patents in approximately 40 countries, including the U.S., Australia, Brazil, China, Europe, India, Japan, Russia and South Korea.

Claritas previously licensed R-107 from Salzman Group for the treatment of both COVID-related lung disease and non-COVID pulmonary diseases. In accordance with the LOI, and subject to the approval of the TSX Venture Exchange, Claritas will enter into a new license agreement with Salzman Group for the development and commercialization of R-107 for the treatment of skin ulceration and wound healing, including the treatment of severe burns (the “License”). The Company expects to enter into the License by mid-February 2022.

Naturally produced nitric oxide participates in the wound healing process by stimulating the synthesis of collagen, triggering the release of chemotactic cytokines, increasing blood vessels permeability, promoting angiogenic activity, stimulating the release of epidermal growth factors, and by interfering with the bacterial mitochondrial respiratory chain.

“Based on extensive research with nitric oxide in treatment of burn wounds, we believe that R-107 is an extraordinary product candidate for the treatment of severe burns," said Robert Farrell, President and CEO of Claritas. “There is an important unmet medical need for a viable treatment to help patients heal from life-threatening severe burns, and we believe that R-107 will address this unmet need."

"Severe burns represent some of the most horrific injuries a human can endure," said Perenlei Enkhbaatar, MD, PhD., FAHA, a member of Claritas’ board of directors and an internationally renowned authority and leader on the biology and pathophysiology of nitric oxide. "In spite of major advances in burn care, we have reached a limit in our ability to heal severe burns with currently available products. Nitric oxide has been shown to promote tissue repair and healing in animal models of acute burn wounds, and nitric oxide-releasing R-107 may overcome the difficulties and limitations encountered with direct administration of nitric oxide itself.”

Nitric Oxide

Nitric oxide is produced by virtually every cell type in the body and plays an important role in controlling the normal function of cells. It has been demonstrated that this ubiquitous, naturally occurring molecule plays an important role throughout the body. Recent studies have demonstrated the effectiveness of nitric oxide as a potential therapy in the treatment of skin ulceration and burn wounds, including the treatment of severe burns.

Nitric Oxide-Releasing R-107 in Treatment of Severe Burns

Nitric oxide gas has been shown to play a significant role in the promotion and regulation of diverse wound healing processes, including burn wounds.1 For example, nitric oxide has been shown to enhance angiogenesis, epithelial cell migration, collagen synthesis, and wound closure.2 These cellular and physiological responses all suggest that nitric oxide plays a critical role in the overall wound healing process; and studies involving the application of nitric oxide further support its potential utility for wound healing and tissue repair and regeneration.3 4

Nitric oxide has also been shown to promote tissue repair and healing in animal models of diabetic ulcers and skin lacerations, as well as in acute burn wound models.5 6 For example, the application of a nitric oxide containing gel to full thickness burns in a rodent model has shown significant improvements in the rate of healing (wound closure) and re-epithelization.7 8Wound closure is of critical importance in this setting to promote healing and to reduce the risk of a variety of infections, including sepsis.910

However, most studies of nitric oxide in wound healing have involved topical application of gels designed to stimulate the body’s own natural production of nitric oxide, and thus generate only minute amounts of nitric oxide locally.

Direct delivery of therapeutically relevant doses of nitric oxide gas to the wound site has been accomplished, although this method is complicated by nitric oxide’s instability in air and the difficulty of delivering it in a clinical setting.

R-107 potentially provides a more rational approach to nitric oxide-based wound healing treatment:

• Unlike gels that stimulate the body’s own natural production of nitric oxide, and thus generate only minute amounts of nitric oxide locally, R-107 is a nitric oxide-releasing molecule that delivers sustained and sufficiently high levels nitric oxide.
• Unlike direct delivery of nitric oxide gas to the wound site, which is complex and difficult to accomplish in a clinical setting, R-107 can be formulated as a topical liquid or gel that will provide a means for convenient, practical, sustained, and safe administration.
• R-107 has a major effect on vasodilation, and thus increases perfusion and microcirculatory blood flow into the wound site.11 12This is crucial because wounds have a nitric oxide deficiency, and blood flow is impaired. R-107 will greatly increase perfusion and this will help speed up the healing process.
• R-107 is a potent antioxidant. Specifically, it degrades superoxide, hydrogen peroxide, and peroxynitrite. These are formed in abundance in wounds and are a major reason for poor epithelialization and wound closure. Standard nitric oxide donors are helpful, but they also result in production of peroxynitrite when the nitric oxide that they deliver reacts with superoxide in the wound. R-107 uniquely does not form peroxynitrite. Hence its advantage over all other nitric oxide donor molecules.

• R-107 releases nitric oxide that is a potent antibacterial and is expected to reduce wound site bacterial colonization, which is currently a major impediment to timely wound healing and closure.
• R-107 does not develop tolerance, like other organic nitrates. This is a unique attribute of R-107 and it is crucial because the drug must be given repeatedly for at least 3 weeks.
• R-107 is expected to be safe if it is absorbed at the wound and enters the systemic circulation. This is important because other agents used to treat wounds (such as silver nitrate) are toxic if absorbed into the circulation.
• It is common for severe burn patients to receive autologous skin grafts, wherein healthy skin is removed from a donor site on the patient’s body, and is used to help close the wound at the site of the burn injury. R-107 will play an important role in this setting, as it is expected to speed up wound healing at both the site of the burn injury as well as at the donor site.

To promote more rapid wound closure and prevent infection at the burn wound site and at the donor skin graft site, Claritas will develop R-107 for administration in both a liquid solution formulation and in an ointment formulation. The R-107 liquid formulation will be a 10% solution of R-107 in PEG400 for 14-day irrigation of wound dressings for: (1) administration to skin grafts after excision of full thickness burns; and (2) administration to split-thickness skin donor sites. The R-107 ointment formulation will be a 10% solution of R-107 in PEG400/3500 ointment for subacute and chronic therapy of skin grafts after excision of full thickness burns.

One of the most difficult long term-effects of a severe burn is the hypertrophic scarring that occurs at the burn wound site. Scarring is not only a cosmetic issue. Scarring also causes contractures around joints, so that limbs and fingers can become difficult or impossible to move, requiring surgery to release such contractures. Burn wound site scarring is caused by over-expression of collagen. Normally, nitric oxide suppresses TGF-beta mediated stimulation of collagen expression. However, in a burn wound, TGF beta is up-regulated, and causes over expression of collage. Studies have demonstrated that nitric oxide suppresses TGF-beta and thereby reduces the over-expression of collagen. For example, when sodium nitroprusside, a nitric oxide donor, was given, collagen expression was very strongly inhibited.R-107 in a topical liquid or gel format has the potential to be used as a first-line therapeutic for partial thickness burns, and also potentially in wound healing for full thickness burns after debridement and prior to skin grafting.

• Approximately 2.4 million people per year in the United States are treated for burn injuries, with 650,000 of these cases requiring care by a medical professional and 75,000 requiring hospitalization.
• These patients represent one of the most expensive catastrophic injuries to treat; a patient sustaining burns over 30% of their total body surface may require upwards of $200,000 in hospital, pharmaceutical, and primary care costs.
• By reducing the time to heal a burn wound and protect against infection by using a single, inexpensive and safe topical gel, patients can expect better healing outcomes, shortened hospital stays and medical care duration, and reduced cost for that care.

Claritas believes that nitric-oxide releasing R-107 may provide significant improvements in the rate of burn healing (wound closure) and re-epithelization, and a concomitant reduction in hypertrophic scarring, leading to better patient outcomes, reduced hospital stays, and diminished healthcare costs.

Terms of the LOI

The LOI which Claritas has entered into with the Salzman Group provides that Salzman Group will grant to Claritas an exclusive, worldwide license (the “License”) to develop, manufacture and commercialize R-107 for the treatment of skin ulceration and wound healing, including the treatment of severe burns (“Skin Ulcers and Wound Healing Indications”).

Under the terms of the LOI, Claritas has agreed to provide the following compensation to Salzman Group in consideration for the License:

• Upon execution of the definitive License agreement, Claritas will issue 1.2 million shares of Claritas’ common stock to Salzman Group, Inc. Provided, however, that Claritas will not issue any common shares to Salzman Group, Inc. unless Salzman Group, Inc. and all affiliates certify that the issuance of such common shares will not cause Salzman Group, Inc. and its affiliates to beneficially own in excess of 19.99% of the Company’s outstanding shares of common stock;
• Claritas will pay cash license fees of USD $12,300 to Salzman Group Pty. Ltd. and USD $187,700 to Salzman Group Ltd. within 90 days of the execution of the definitive License agreement;
• Claritas will also pay to Salzman Group, Inc. the following cash milestone payments and royalties on net sales for Skin Ulcers and Wound Healing Indications:
  • USD $1 million on successful completion of a Phase 2 clinical study of R-107 in the treatment of either skin ulcers or wound healing, including the treatment of severe burns;
  • USD $1.5 million on successful completion of a pivotal Phase 3 registration clinical study of R-107 in the treatment of either skin ulcers or wound healing, including the treatment of severe burns;
  • USD $5 million on FDA approval of R-107 for the treatment of any one Skin Ulcer and Wound Healing Indication;
  • USD $5 million on EMEA or MHRA approval of R-107 for the treatment of any one Skin Ulcer and Wound Healing Indication;
  • USD $5 million on Japanese approval of R-107 for the treatment of any one Skin Ulcer and Wound Healing Indication;
  • During the applicable term of any patent covering R-107 in the treatment of Skin Ulcer and Wound Healing Indications, Claritas will pay to Salzman Group, Inc. a royalty of five percent (5%) of the net sales for all R-107 products for the treatment of Skin Ulcers and Wound Healing Indications

About Claritas PharmaceuticalsClaritas Pharmaceuticals, Inc. is a clinical stage biopharmaceutical company focused on developing and commercializing therapies for patients with significant unmet medical needs. Claritas focuses on areas of unmet medical need, and leverages its expertise to find solutions that will improve health outcomes and dramatically improve people's lives.

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Cautionary StatementsNeither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation in respect of its product candidate pipeline, planned clinical trials, regulatory approval prospects, intellectual property objectives, and other statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that future clinical studies may not proceed as expected or may produce unfavorable results. Claritas undertakes no obligation to comment on analyses, expectations or statements made by third parties, its securities, or financial or operating results (as applicable). Although Claritas believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond Claritas’ control. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is made as of the date hereof. Claritas disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. 

Contact InformationRobert FarrellPresident, CEO(888) 861-2008info@claritaspharma.com

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