Phoenix PharmaLabs CEO Bill Crossman on Ending Opioid Addiction

 
Phoenix PharmaLabs on Netcapital

Addressing the opioid crisis by developing potent, safe, non-addictive painkillers.

Introduction

The Centers for Disease Control and Prevention reported that more than 81,000 drug overdose deaths were recorded over the 12-month period ending in May of 2020, the highest number of overdose deaths ever in that period. Synthetic opioids (mostly illicitly manufactured fentanyl) were the highest driver of this increase, alongside cocaine. Opioids function as painkillers by stimulating the Mu region of the brain to generate relief. The euphoria generated by these drugs is what leads to the addiction.

Phoenix PharmaLabs is developing safe and non-addictive painkillers as a solution to the opioid crisis. This Deal to Watch has two compounds — one for chronic pain and one for acute — that it is taking into Phase 1 human trials. We spoke to CEO Bill Crossman to learn why ending opioid addiction is so important to him.

Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.


Kingscrowd
Can you give us a brief elevator pitch for your company?

Phoenix PharmaLabs is a preclinical drug discovery company that is focused on advancing two lead drugs that are potent, safe, non-addicting painkillers that also show promising potential for opioid and cocaine addiction therapy. Opioids are the most widely prescribed drugs for moderate to severe pain. However they are plagued by serious side effects, including euphoria (which leads to abuse and addiction), withdrawal, constipation, and death from overdose.

Our lead compounds — PPL-103 and PPL-138 — have clearly demonstrated in preclinical trials in non-human primates that they are potent analgesics (10x-to-100x more potent than morphine), but are non-addicting, do not produce physical dependence or withdrawal, and do not cause death from overdose at elevated doses. PPL-138 has demonstrated long duration of action and no tolerance, making it an ideal candidate for effective treatment of moderate to severe chronic pain while PPL-103 appears to be very promising for acute pain. Both drugs have demonstrated promising potential as superior addiction therapy drugs for treatment of opioid, cocaine, and methamphetamine addictions.

Kingscrowd
What inspired you to take the leap and build this company?

All of the leading opioids on the market today like morphine, oxycodone, hydrocodone, fentanyl, etc. bind to the mu receptor in the brain and then aggressively stimulate that receptor. Mu is great at producing pain relief, but it also produces euphoria (which leads to abuse and addiction). While at Stanford Research Institute (SRI) PhoenixPharma Lab founder Dr. John Lawson discovered unique characteristics of compounds that bind to three receptors — mu, kappa and delta — and then just partially stimulate those receptors in a much more balanced manner. That partial stimulation derives analgesic benefit from all three receptors, but it is not sufficiently strong to produce the serious side effects associated with any of the receptors. The reason that all of those other opioids are addictive is because they produce a euphoric “high.” Without that euphoria, drugs would not be abused and would not be addicting. Dr. Lawson then left SRI, founded Phoenix PharmaLabs, and developed PPL-103 as a safe, potent non-addictive painkiller.

Kingscrowd
What past experiences prepared you to start, build, and lead your company?

I have been launching early stage technology companies for more than two decades, but after I learned that my stepson was addicted to opioids I decided to join Phoenix as CEO. Millions of Americans are addicted to opioids, and most of them (approximately 80%) initially became addicted after taking prescription opioids. My stepson initially became addicted after he had been prescribed opioids for treatment of severe pain following an injury. Now he has been addicted for almost 20 years. And trust me — it is an absolutely devastating addiction. We are now witnessing a horrendous death toll from the COVID19 pandemic — but opioid-related death is a serious problem as well. About 50,000 Americans die every year from opioid overdose — and there is no vaccine against that.

Kingscrowd
What is your vision for the future of the industry you are operating in?

The market for prescription opioids is growing about 5% per year and is projected to reach $35 billion by 2025. The total market for pain therapy exceeds $100 billion. But the world needs a non-addicting pain drug for treatment of moderate to severe pain. The CDC states that, “This is a major public health problem that is getting worse, and getting worse rapidly.” Many people in the world are in severe pain without access to opioids because of the addiction liability. Our company is committed to meeting this major unmet medical need.

Kingscrowd
Who is on your team and how did you come together?

As a biotech company, Phoenix relies on a team of domain experts in various scientific disciplines. 

Board members include: 

  • John Lawson, Ph.D., Founder, Board Chairman & Chief Scientist (Primary developer of the company’s Intellectual Property)
  • Lawrence Toll, Ph.D., Chief Neuropharmacologist (Professor, Florida Atlantic University / President, International Narcotics Research Conference)
  • Timmy Chou, Vice President & CFO (CEO/CFO of emerging companies)

Lead domain experts include:

  • Daniel E. Levy, Ph.D, Lead: Chemical Synthesis & Mfg. Scale-Up (Founder, DEL BioPharma)
  • Claude Barriault, Ph.D, Lead: Preclinical Study Oversight (KreaMedica / Camargo Pharmaceutical)
  • Timothy P. Bradshaw, Ph.D, Lead: Preclinical and Clinical Trial Planning (PRA Health Sciences)
  • James R. Myer, BS, DABT, Lead: Toxicology (American Board of Toxicology)
  • Deepa Deshpande, Ph.D., RAC, Lead: Regulatory Affairs (President, Universal Regulatory)
  • Mei-Chuan (Holden) Ko, Ph.D, Consultant: NHP Studies (Professor, Wake Forest University)
Kingscrowd
Do you have any competition, if so, how do you differentiate?

Last year the company conducted a thorough review of competition for a potent, safe, non-addictive analgesic for effective treatment of moderate to severe pain. Many analgesics are effective for treating mild to moderate pain, but no drugs are as effective as opioids for treating moderate to severe pain. Besides PPL-103, the only analgesics that appear to provide potent, safe, non-addicting relief of moderate to severe pain are two partial mu/NOP (Nociceptin) compounds – and Phoenix just acquired one of them, which we now call PPL-138.

Kingscrowd
What does your business model look like?

The strategic objective of our company is to partner with appropriate market leader(s) that have the resources to maximize the market potential of our compounds. Phoenix has had discussions/diligence with most of the leading pharma companies that have a strategic focus on pain or addiction therapy. Most said that they would be interested in doing a deal at some point (typically during Phase I). We plan to continue to advance both compounds into Phase 1 trials within a year, advancing PPL-103 for acute pain and PPL-138 for chronic pain. We shall then continue to advance the compounds to Proof of Concept in order to position them for optimal deal terms — through a license or acquisition — in about three years.

Kingscrowd
What brought you to equity crowdfunding and how do you intend to use the money you raise this round to scale the business?

We were initially introduced to Netcapital by Scott Livingston, CEO of Livingston Securities. In our first Netcapital offering in 2019, the offering was oversubscribed with approximately $1.1 million raised.

We intend to use the proceeds of this round alongside other investment funds and government grants to develop oral or sublingual drug product formulations and then advance both PPL-103 and PPL-138 through Phase 1 human clinical trials and Proof of Concept in humans.

We have been successful in receiving strong validation of our science from the NIH/National Institute for Drug Abuse and the US Army Medical Research and Material Command (USAMRMC), which have awarded us grants of about $3 million. We plan to apply for additional grant opportunities in the near future.

Kingscrowd
What do you want potential investors to know about you and/or your company?

In addition to pain relief, both PPL-103 and PPL-138 have demonstrated promising potential as non-addicting addiction therapy treatments for opioid, cocaine, and methamphetamine addictions. After these drugs have been licensed to big pharma companies for pain, Phoenix plans to pursue license opportunities for both of these compounds for addiction therapy. Opportunities have also been identified for the compounds as treatments of pain in companion animals. The company’s other 24 compounds could also have potential for these or other indications such as anti-itch.

Kingscrowd
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? have you set any future goals for the company?

Within about three years we anticipate that PPL-103 and/or PPL-138 will have advanced through Phase I and Phase II(a) to proof of concept in humans. At that point, we plan to out-license one or both of the compounds for acute and/or chronic pain. Licenses of other drugs in the pain space at the Phase I or II stage have often generated hundreds of millions of dollars in upfront fees and milestone payments in addition to future royalties. We would plan to dividend out most of these cash flows to investors but nevertheless retain a portion of the funds to support licenses of those drugs for addiction therapy and to develop those or other Phoenix compounds for other indications. Of course, it is possible that Phoenix may be acquired by one of the large pharmaceutical companies at some point. Within five years or less, we anticipate that we would offer an IPO in order to enable shareholders to exit the stock at a price that would capture the value of the future cash flows of the company.


We at KingsCrowd are excited to see where Bill and his team take the company. Phoenix PharmaLabs is currently raising on Netcapital.


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