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Aequus Pharmaceuticals (AQS.V) gets Health Canada device licence approval, validates business model

10/19/2020

Aequus Pharmaceuticals (AQS.V), a specialty pharma company with a business model of acquiring and re-platforming existing approved biotech and health products to appeal to a wider market, has announced another win Monday morning with news Health Canada has approved the advancing of their Evolve dry-eye relief gel line to an easy-squeeze eye drop bottle.

Aequus Pharmaceuticals Inc., together with its partner Medicom Healthcare Ltd., has been issued a new Medical Device Licence for the first of three product submissions made for the Evolve preservative-free dry-eye product line. The new Medical Device Licence has been issued for Evolve Intensive Gel — a unique cross-linked combination of carbomer 980, hyaluronate and glycerol — which act together to provide intensive, durable hydration for patients with moderate to severe forms of dry-eye disease. The formulation will be made available in an easy-squeeze eye-drop bottle, containing 360 drops and no preservatives, phosphates or buffers.

Admittedly, in most industries, switching a product from a gel to a bottle would be a minor expansion of SKUs almost unworthy of mention but, in the health care world, receiving approval to switch packaging and delivery platforms can be a substantial administrative exercise that requires industry knowledge and sector respect to pull off.

AQS’ success in making their product more appealing to users is evidence they’re doing what they promised they would; building a legacy pharma company without spending a fortune getting there.

For mine, this news validates the Aequus business model.

The AQS business model is to sidestep the long clinical trial process of getting new medical products and treatments approved by regulators, by buying and licensing existing approved but perhaps unevolved or underutilized products, and reworking them to be more effective, user-friendly, and appealing to consumers. An example of this might be changing a suppository product to an inhalable spray.

In this instance, applying a gel to your eyes is obviously not the most fun activity (and likely a recipe for regular cases of pink eye), whereas an eye dropper is faster, easier, potentially safer, and will appeal to a wider patient base.

“Evolve Intensive Gel is a one-of-a-kind formulation in Canada, and is only the first of a full line of eye-care professional exclusive products being launched by Aequus, that will not only improve treatment and compliance for better patient outcomes, but create an improved revenue stream for eye-care professionals who spend additional time and resources treating dry-eye patients in practice,” said Grant Larsen, chief commercial officer at Aequus.

“Called Revive in other countries, this product is a revolutionary triple-action matrix gel designed for lubrication, restoration and protection of the ocular surface, providing extended ocular residency time,” says Medicom Healthcare CEO Simon Martin.

The dry eye market in Canada is reportedly worth $90 million annually, and affects 6.3 million Canadians, with the expectation that changes to many peoples work habits due to COVID-19 will expand that number over time as we squint more and more at screens.

Aequus CEO Doug Janzen expects Evolve products to be important revenue drivers for his company and says two more Evolve approvals are hoped for in quick time. “Launch activities for all three Evolve products are under way while the remaining two Evolve products are currently under review for approval with Health Canada,” he says.

AQS is developing a reputation as a partner company to the holders of pharma IP, and has a growing history of expanding the reach of products they’ve acquired to greater success. Recently the group announced their promotional service agreement on Sandoz’s generic immunosuppressant Tacrolimus Immediate Release (IR) has seen a 10X consumer pickup.

Aequus Pharmaceuticals Inc. has agreed to an extension of terms for its promotional service agreement with Sandoz Canada Inc. on tacrolimus immediate-release (tacrolimus IR) to Dec. 31, 2021. Aequus began promotional efforts in December, 2015, for Sandoz’s generic tacrolimus, and has since achieved over 10 times growth of the product in Canada through increased brand awareness, new patient adoption programs, and leveraging conversion experience and relationships across provinces.

The average stock price of the company over a 30 day average has risen 50% in the last three months, and was up slightly early at the time of writing on the news today.

— Chris Parry

FULL DISCLOSURE: Aequus Pharmaceutical is an Equity.Guru marketing client

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