Tetra Bio-Pharma hopes $6M raise carries firm through to revenue stage

An Orl​éans-based company that’s spent years developing drugs designed to mimic the pain-killing and anti-inflammatory benefits of cannabis without major side effects is hoping its latest fundraising effort will give it enough working capital to see its research efforts through to market.

Tetra Bio-Pharma, which trades on the Toronto Stock Exchange and the OCTQB exchange in the U.S., said last week it’s agreed to issue up to $6 million worth of unsecured debentures and stock purchase warrants to London-based investment firm Alpha Blue Ocean Group.

The offering is expected to occur in 15 tranches for total net proceeds of about $5.4 million.

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Chief commercial officer Steeve Neron said the deal should provide enough cash to keep the company afloat for the next 14 to 15 months as it awaits the green light from Health Canada to sell one of its key products – a gel capsule used to treat chemotherapy-induced nausea and vomiting in cancer patients and weight loss and severe nausea in patients with HIV infections.

The drug’s active ingredient is dronabinol, also known as THC, a synthetic form of the active natural substance in cannabis. Tetra says the drug, branded REDUVO, “remains a top priority and the company is ready to launch manufacturing activities as soon as possible following regulatory approval.”

“Right now, I should be in revenue mode. Unfortunately, we’re still at the mercy of Health Canada.”

“Right now, I should be in revenue mode,” Neron said this week. “Unfortunately, we’re still at the mercy of Health Canada.”

In addition to developing REDUVO, Tetra’s scientists have been working on other products that provide the anti-inflammatory benefits of CBD, a therapeutic ingredient found in cannabis, but without some of the side effects that can include nausea, headaches and fatigue.

One of them, ARDS-003, is a cannabinoid-derived drug is designed to treat sepsis and acute respiratory distress syndrome, life-threatening conditions triggered when the body’s immune system “goes rogue” in response to an infection such as COVID-19 and begins attacking healthy cells as well as harmful bacteria and viruses.

The company says the drug effectively blunts the severity of the exaggerated immune response that often occurs in patients suffering from COVID-19, cancer and other diseases, thereby reducing the likelihood of deadly consequences such as sepsis and ARDS.

While the drug is currently administered via injection, Tetra is also working on an oral formulation designed for out-patient settings. Earlier this month, Tetra issued a news release saying preclinical trials have delivered positive results from live COVID-19 virus infection studies in animals as well as a septic lung model. 

According to the release, ARDS-003 “produced a significant reduction of systemic cytokine/chemokine release” – the so-called “cytokine storm” that can cause organ failure and severe respiratory illness when a person’s immune system kicks into overdrive. 

Meanwhile, Tetra is also developing an inhalable cannabinoid-based pain reliever for cancer patients. Dubbed QIXLEEF, the drug is currently undergoing clinical trials in the U.S. 

Last month, Tetra announced a deal that will see British medical pot producer Akanda Corp. supply pharmaceutical-grade cannabis for the drug. Akanda has also agreed to manufacture the drug at a facility in Portugal, with Tetra pegging the total addressable market for QIXLEEF at nearly $1.7 billion by 2028.

Still, investors appear to be getting antsy. 

Tetra believes its products have multibillion-dollar sales potential, but the drugs have yet to make it to pharmacy shelves – a situation that’s reflected in the firm’s share price.

Share price plummets

Tetra’s stock has plummeted by more than 80 per cent in the past 12 months, and now sits at just five and a half cents on the TSX as of Wednesday afternoon.

Tetra has slashed its workforce from 65 employees a few years ago to 32 today and trimmed expenses in other areas in an effort to rein in expenses. Neron says the firm has cut its burn rate from more than $420,000 per month to about $200,000 as it looks to extend its runway.

Now, he’s hoping good news on the regulatory front comes sooner than later.

“There seems to be a lack of confidence either in the board or in the management team,” he said. “We need significant and very material advances to get a spike in the share price, in my opinion.

“We hope that these (clinical) milestones will generate a growth in the share price and accordingly people will start exercising their warrants and we won’t have to do any more raises.”

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