Sunshine Biopharma Stock: Advancing Novel Cancer Therapies (NASDAQ:SBFM)

Sunshine Biopharma, Inc. (NASDAQ:SBFM) is a clinical stage pharmaceutical company focused on the development of novel cancer therapies and antiviral drugs. The Company also engages in the development and commercialization of science-based nutritional supplements.

Pipeline

SBFM-PL4, the lead antiviral candidate of the Company, is a PLpro inhibitor being developed at the University of Georgia (UG), which targets a completely different part of the COVID-19 virus, offering a differentiated mechanism to fight the pandemic. SBFM-PL4 inhibits the PLpro (nsp3) protease that suppresses the human immune system and aggravates morbidity in the patient. Efficacy studies in coronavirus infected mice, and Phase 1 trials at the UG affiliate hospital are ongoing. The Company is arranging GMP manufacturing and preparing to file the IND application, and is anticipating a Fast Track designation. The Company has the relevant rights to the patent with coverage until 2040.

In February 2022, the Company expanded its antivirus program by entering into a collaboration agreement with the University of Arizona (UA) to develop novel PLpro inhibitors discovered by UA and the University of Illinois Chicago (UIC) researchers. The research at UA will focus on determining the in vivo safety, pharmacokinetics, and dose selection properties of three PLpro inhibitors owned by the university. Thereafter efficacy will be tested in MA10 mice infected with SARS-CoV-2, followed by human trials of the molecules that show efficacy. The Company has the first option for licensing all IP developed by UA under this collaboration.

The lead candidate of the Company in oncology is Adva-27a, a unique anticancer compound. The Company recently completed preclinical studies with Adva-27a demonstrating unique pharmaceutical properties. The product is effective at destroying various multidrug resistant cancers, including pancreatic cancer (Panc-1), breast cancer cells (MCF-7/MDR), small-cell lung cancer cells (H69AR), and uterine cancer (MES-SA/Dx5). The molecular mechanism that makes cancer cells resistant does not affect Adva-27a, which has a half-life of less than an hour and clears with no toxic intermediates. Adva-27a has shown an excellent pharmacokinetics profile in rats and is an excellent inhibitor of Topoisomerase II. The Company has planned Phase 1 clinical trial in pancreatic cancer indication, to be conducted at McGill University’s Jewish General Hospital in Montreal, Canada. The Company owns all patents and intellectual property pertaining to Adva-27a.

Earlier this month the Company announced positive results from preclinical studies that showed its two newly designed mRNA molecules to be effective against cultured cancer cells, while having little or no cytotoxic effect on normal human cells. The tests were conducted with a variety of cancer cells “including multidrug resistant breast cancer cells (MCF-7/MDR), ovarian adenocarcinoma cells (OVCAR-3), and pancreatic cancer cells (SUIT-2).” These mRNA molecules can be easily adapted to mRNA vaccine technology for administration to patients. The Company intends to file a patent application related to its ongoing research in “mRNA-as-therapeutic-agents” that has the potential to treat cancers with enhanced efficacy, reduced toxicity and convenience.

Essential 9 is the Company’s “science based nutrition” product consisting of nine essential amino acids (EAAs) that the human body cannot produce. Deficiency in one or more of the nine EAAs can lead to “loss of muscle mass, fatigue, weight gain, weakened immune system, and generally reduced wellness.” The vegan certified product is in tablet form and provides the nine EAAs in the proportions recommended by Health Canada.

Brief History

The Company was incorporated in 2006 as Mountain West Business Solutions, Inc. providing management consulting services. In 2009, it reverse merged with Sunshine Biopharma, Inc., who held the exclusive license to Adva-27a. In December 2015, the Company acquired all worldwide issued and pending patents for the Adva-27a anticancer compound terminating the license. Earlier in July 2014, the Company had formed a Canadian subsidiary to offer generic pharmaceutical products. Essential 9 was launched in December 2018 and is authorized for marketing by Health Canada. In 1Q-2021 the Canadian subsidiary shifted focus to the development and marketing of Science-Based Nutritional Supplements. The antiviral program of the Company gained speed with the filing of a patent application in May 2020 for a new treatment for coronavirus infections.

Financials

Sunshine Biopharma raised $6.8 million in net proceeds from a public offering in February 2022, and uplisted to Nasdaq under the symbols “SBFM” and “SBFMW” for its common stock and warrants respectively. The offering was for 1,882,353 units at a price to the public of $4.25 per unit, each comprising one share of common stock, par value $0.001 per share, and two warrants, each warrant exercisable for one share of common stock with an exercise price of $4.25. Prior to this public offering, the Company effected a reverse stock split combining 200 shares into one share of common stock. The Company also raised another $6.8 million from a private placement of common stock and warrants in March 2022. As of 3/16/2022, the Company had 7,129,778 shares of common stock, par value $0.001 issued and outstanding, of which insiders held about 7.72% and the public held over 92%.

The Company filed form S-3 on 3/30/2022, which became effective on 4/8/2022, related to the resale of 7,207,208 shares of common stock, which includes 2,301,353 shares issued and outstanding, 1,302,251 shares issuable against pre-funded warrants, and 3,603,604 shares issuable against common warrants at exercise price of $2.22 per share. The Company will not receive the proceeds from the resale of the common stock, however it will receive the exercise price of the warrants upon payment in cash. The Company’s last closing price of the common stock was $4.03 on 4/14/2022.

The Company had cash and cash equivalents of approximately $2.05 million as of 12/31/2021, which together with the $13.6 million net proceeds received in 1Q-2022, is anticipated to provide a cash runway of at least 24 months.

Risks

The company has a market capitalization of $28mn only. Its current share price of $4 is the result of a 200:1 reverse split, helped by a preclinical data readout in April that more than doubled the stock overnight. Notwithstanding all that, we never recommend investing in such small companies.

The Company’s CEO (since 2009), Dr. Steve N. Slilaty, is “the inventor on three out of four patents owned by the Company and is the developer of the Company’s anticancer compound, Adva-27a, and anti-coronavirus compound, SBFM-PL4, as well as the nutritional supplement product, Essential 9.” The Company is mostly dependent on its CEO for its technology, and a new employment agreement was entered into with Dr. Slilaty on 4/8/2022.

The Company may take advantage of exemptions from certain reporting requirements, being a “smaller reporting company” and a “non-accelerated filer.”

The Company has incurred losses since inception and as of 12/31/2021, has accumulated a deficit of approximately $32.65 million. Although the Company has a cash runway of at least 24 months, it will need additional capital in the future including for its R&D activities, which will further dilute the stock.

Bottom line

Sunshine Biopharma’s Adva-27a is a GEM-difluorinated C-glycoside derivative of Podophyllotoxin. It will compete directly with another derivative of Podophyllotoxin called Etoposide, a widely used Bristol-Myers Squibb (BMY) product, used “to treat various types of cancer including leukemia, lymphoma, testicular cancer, lung cancer, brain cancer, prostate cancer, bladder cancer, colon cancer, ovarian cancer, liver cancer and several other forms of cancer.” Adva-27a and Etoposide both attack the same target Topoisomerase II in the cancer cells, however Adva-27a allegedly has more desirable biological and pharmacological properties compared to Etoposide and is “the only compound known today that is capable of destroying multidrug resistant Cancer.” Because of its potential to treat all cancers with amplified Topoisomerase II, the candidate could generate interest from big pharma. However, those things are years away, and until there’s clinical data, we will stay firmly on the sidelines.