Rising High: Exclusive talk with botanical drug JV DeFloria

In this edition of “Rising High,” The Fly conducted an exclusive interview with Jared Stanley, Chief Executive Officer, and Joel Stanley, Chairman, of DeFloria, a collaboration between Ajna BioSciences and Charlotte’s Web (CWBHF). Here are some highlights:

BOTANICAL DRUG : DeFloria aims to address crucial healthcare needs through innovations in botanical drugs originating in nature. With a combined century of experience in regulatory, research, and quality-controlled standardized manufacturing, the company is seeking to secure FDA approval for AJA001, an orally delivered, multi-cannabinoid drug, developed from Charlotte’s Web proprietary hemp genetics that targets autism spectrum disorder.

“We’re moving a very viable treatment option forward for ASD, where two only exist presently, both of which are heavy hitting drugs with pretty heavy hitting side effects,” Joel said. “DeFloria’s strategy is to simply follow the FDA’s botanical drug development guidance to move this new therapy through to approval specifically for irritability associated with autism.”

COMPETITIVE EDGE: As competition continues to ramp up in the biotech drug development space, Jared noted that the Stanley family and the DeFloria team have been laying the foundation for the drug for over 15 years, leading to the Investigational New Drug application clearance for a Phase 2 trial. 

“What we have overcome in this IND clearance to go into Phase 2 is really meeting the Chemistry, Manufacturing and Controls requirements from the FDA,” he said. “We really built Charlotte’s Web to deliver that same, consistent experience every time. What we didn’t know at that time was we were building the foundation to what would become DeFloria, which was a consistent supply chain starting with a fully integrated breeding program, seed supply, cultivation processes, harvesting processes and extraction. We scaled all these processes to meet the demand. All of this was built across more than a decade by Charlotte’s Web, allowing us to meet the CMC needs to advance this IND into Phase 2.”

There is also a high unlikelihood of the product being genericized in the market, the chairman said, as it is a botanical drug in which more than 6,000 compounds have been discovered. 

“I really view CMC and the high unlikelihood that we would see generic competition post-commercialization in the market as our strongest competitive advantages against traditional pharmaceutical development,” he said. Joel added DeFloria has established a team and infrastructure capable of creating a complex botanical drug that is reproducible and highly consistent as well as highly characterized.

“The compounds in a drug have to be characterized for the FDA to allow you into the clinic,” he said. “As far as anyone knows, this is the first systemically absorbed botanical drug. There are four botanical drugs approved, but none of them are systemically absorbed, three of them are in fact topical. We are really reaching a milestone here. What sets us apart in the broad biotech space is that we’re the only company that has proven that we can move an oral systemic botanical drug through the FDA regulatory process, and the CMC is a huge piece of that.”

The CEO said the majority of biotech is generally focused around generating new molecules and new chemical entities, but DeFloria separates itself by going to nature and standardizing it for the first time.

“We do what, quite frankly, a lot of people don’t know how to do,” he said. “The majority of new chemical entities fail before they even reach a Phase 1 because they might be toxic or maybe they don’t work. We are working with known medicines but doing what no one has bothered to do, standardizing them so that they can become FDA approved drugs and ultimately covered by insurance.”

AJA001: In February, DeFloria announced the FDA completed its review of the IND application for AJA001 concluding that the company may proceed with its planned Phase 2 clinical trial, designed as an open-label, 12-week study that will enroll 60 adolescent and young adult patients. The company plans to initiate the Phase 2 study by mid-year.

“The biggest takeaway from the Phase 1 is that we derived our safe upper limit,” Jared said. “We had 70 healthy participants come into the study, and we administered a single-ascending dose and a multiple-ascending dose. We gathered blood plasma concentration levels throughout the dosing and learned a lot regarding pk and pd in AJA001, but we had two important takeaways. One, we saw the blood plasma concentration levels increase as we increased dosing, and they increased proportionally. This was a good sign to inform us our dosing was working through metabolizing the drug within the body. Then we also derived a safe upper limit.”

“The primary goal of the Phase 2 study will be to establish a titration regimen and efficacy signals to inform dosing levels for Phase 3 studies,” the CEO said. “Where and how much do we start of the dosing titration schedule? How long of a titration schedule and where are we really seeing the sweet spot for efficacy signals within the ASD community? This what we hope to learn from our Phase 2, so as we go and invest into a bigger and broader clinical trial, a randomized placebo-controlled trial, that we optimize our clinical trial design for Phase 3.”

Joel added DeFloria chose to focus on ASD as the indication only has two approved drugs, risperdal and aripiprazole, both of which are atypical anti-psychotics which basically subdue the patient.

“By shutting down parts of the brain, you’re shutting down parts of the body and so the patient ends up with a lot of unwanted side effects,” he said. “There are not really any options, and this is a large unmet need. The total addressable market within autism is almost 8M people in the U.S. and we are going after irritability associated with autism, which would be a little bit less than that total number.”

The chairman noted DeFloria is working with Charlotte’s Web’s patented genetics, which the company has over a decade of data on through partnerships with Johns Hopkins and a non-profit called the Realm of Caring. “This is basically open-label data on our patented genetics,” he said. “We were able to go and find statistically significant improvement in many autism patients in both anxiety and depression over long periods of time. It is very rare that a drug gets to move into Phase 2 efficacy trials already having statistically significant data within the indication. That’s a part of the reason that we chose it. If you combine it with the large unmet need, we believe that this indication is one of the better paths for us to take for a drug that has the potential to address numerous, diverse indications.”

CULTURE SHIFT: As culture and consumer trends shift towards natural and holistic medicine, Joel said he believes DeFloria is well-positioned as the company focuses on compounds originating in nature. “A hundred years ago, if you walked into a pharmacy or a drugstore what you saw was plant extracts,” he said.  “We’ve known that many of these plants have worked for millennia and many of them work quite well. However, as the pharmaceutical system and western medicine developed, we started to learn how to synthesize and isolate molecules. We took the approach, largely through academia and medicine, that we can understand what single molecules can do much better than we can understand what complex molecules can do, which is true. Unfortunately, in the process, we abandoned whole plant combinations of molecules, nature’s combinations of molecules, that we evolved alongside for a millennium.”

People are now looking more towards natural medicines, the chairman said, as consumers are tired of a side effect chasing loop within pharmaceuticals. 

“Conventional drugs and single molecule drugs aren’t bad,” he said. “This isn’t an either/or paradigm, this is a both/and. Unfortunately, we don’t have both. People want natural options but in order for that to happen in western medicine and the FDA approval system, someone has to step up and standardize the natural option and characterize those molecules so that we know that there is a reproducible therapeutic outcome. That’s exactly what we are doing.”

More broadly than autism, AJA001’s approval will represent the first time that a systemically absorbed, full-spectrum botanical makes it back into medicine, Joel said, but this time in a whole new way. 

“We didn’t have the instrumentation and ability to partner with nature a hundred years ago that we have now, with modern laboratory technology,” he said. “Now we can create a reproducible, repeatable experience with this botanical medicine. This is a groundbreaking drug more broadly just for bringing more natural options back to the medical community and legally prescribed by physicians for the first time.”

ELECTION RESULTS: In this year’s U.S. election, Donald Trump was elected president and Jared said with Robert F. Kennedy Jr. as newly appointed Department of Health & Human Services secretary, DeFloria expects an overall ‘welcoming’ for natural options within the pharmaceutical market.

“However, we don’t expect much to change,” he said. “We remain optimistic that botanical drug development will continue to thrive under existing regulations irrespective of any administration. In the end, it is about whether the drug is safe and efficacious within the indication that we are seeking. Ultimately those will be the two barriers for entry of any drug into the market and the administration won’t change that process.”

Joel added that he is a little more bullish about RFK being positive for a company like DeFloria, which is pushing more natural solutions.

“Then again Jared is absolutely right,” he said. “The FDA’s process for drug approval is going to remain the same. However, the sentiment for more natural options is not only out there by consumer demand, but RFK’s philosophy, would be tailwinds for botanical drugs.”

CHALLENGES: When asked about the largest hurdles facing the botanical drug development space, Joel pointed to misunderstanding within the investment community as the drugs are relatively new. 

“When I started Ajna Biosciences four years ago, there were only two approved botanical drugs and now there are four,” he said. “There are some folks out there that just don’t understand. You can have good conventional drug developers, but they go cross-eyed when you talk about a complex botanical mixture with some times more than 6,000 compounds in your drug substance. A lot of people that have been in drug development just don’t understand that there is a very different and very doable process to create botanical products. I would say that educational piece has been most important for us to show how it is done and that we’ve created the team and infrastructure that can bring these kinds of drugs to market. And our clearance into Phase 2 is a major proof of concept for drugs like these.”

The pharmaceutical industry is at about $670B and approximately 25% of drugs are derived from plants, Jared said, but they’re single molecules, synthesized or isolated from plants.

“Being in the botanical industry now is more like being in the dotcom boom but being only one of your kind in the mid-90s,” he said. “We’re at the forefront of a massive disruptor within the pharmaceutical industry. But we are also the very front, so we have to change the mindset on the opportunity within the investment community.”

OPPORTUNITIES: As the botanical drug development space evolves, Joel said he believes AJA001 will be “the tip of the spear” for oral systemic botanical pharmaceutical drug development. 

“A complex CBD-forward botanical drug has the opportunity to go after multiple indications over its lifetime,” he said.  “We believe that this is going to be a very diverse drug. In fact, full-spectrum cannabinoids may be one of the most diverse medicines we know of, so it’s a great one to take from nature, and we believe this is going to be very valuable. As this concept is proven out, I think the botanical drug industry will start to build. Right now, there are very few companies even attempting to do what we are doing, but I think we’ll see an explosion in desire for botanical drugs. It’s a matter of just actually getting these to the market, and I think the numbers will speak for themselves. That will drive future competition and the building of a whole new category, a very disruptive category to the current synthetic pharma.”