Biotech CEO blasts Pentagon over funding for experimental PTSD drug
The top executive of a biotech firm working on a treatment for military-related post-traumatic stress disorder is criticizing President Trump's Department of Defense for not providing ample funding to assist in the development of the drug.
"The Army is not yet engaged at the level that I hope they'll be," Tonix CEO Seth Lederman told Fox Business. "I think it's hard for the government to deal with a small company, but they have to deal with a small company because there aren't any big companies doing this."
“It’s really time for the Department of Defense to step up and make a commitment to this,” he added.
Lederman says the company approached the department within the Pentagon charged with funding drug development “on more than one occasion.”
A spokeswoman for the DOD's medical research arm said publicly available data on the company's treatment does not provide enough evidence of "a meaningful clinical benefit for the treatment of PTSD."
The Pentagon "is committed to discovering, developing, and deploying the best medical solutions to treat PTSD," she said in an emailed statement. "Our current focus is using an innovative clinical trial design for Phase 2 testing of multiple drugs simultaneously, as opposed to the traditional one-drug-at a time approach."
Tonix does have a cooperative research and development agreement (CRADA) with the Pentagon, which Lederman says shows “they have some interest.” But the lack of financial investment has puzzled both the New York-based company and investors.
"It's particularly surprising because investors in biotech -- if they've got ten or 20 portfolio companies -- their prostate cancer company has gotten Army money, their breast cancer company has gotten Army money, their Duchenne muscular dystrophy company has gotten money. And they're just scratching their heads on why Tonix” has not gotten money, he said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TNXP | TONIX PHARMACEUTICALS | 0.14 | +0.00 | +1.79% |
Known as Tonmya, the drug aims to improve an individual’s sleep quality by targeting receptors associated with trauma-related nightmares and wakefulness, which the company says will amplify the ability of sufferers to recover from traumatic episodes.
Patients on the treatment, Lederman says, haven’t experienced the side-effects that come with other treatments, including weight gain and decreased sexual function.
While advanced trials of the drug were halted in 2018, Tonix is gearing up to relaunch human-testing later this year involving over 500 individuals with a focus on those who have suffered from a traumatic event within the past nine years. The prior study looked at 250 people with military trauma from 2001 and beyond.
“Further out from nine years, the group didn’t have the same response,” Lederman said. “We learned a lot from that and we learned something very important, which is that PTSD should be diagnosed early and should be treated early.”
Lederman did not have a reason for why the Pentagon has not provided financial backing, except for potential disagreements within the department over the cause of what is sometimes referred to as battle fatigue syndrome.
"There's a legacy in the Army that some believe...that PTSD was a deficiency in training," he said. "I do not think it's fair to call PTSD sufferers a deficiency of training."
The rise in veterans suffering from the disorder, Lederman argued, is “beginning to affect the ability of the military to recruit new soldiers."
The DOD "does not, nor has it ever, considered PTSD to be due to training deficiencies," the spokeswoman said.
A report accompanying legislation to set the defense budget for fiscal year 2018 directed the Pentagon to consider guidance from the Food and Drug Administration that "may provide for the identification, development, and approval of novel therapies for the treatment of PTSD.”
Tonix's Tonmya has received breakthrough designation from the FDA, the agency's fast-track approval route for promising drugs.
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The company in December 2018 raised $15 million through a public offering and spends roughly $6 million per quarter. Lederman said the firm is “open-minded” on the future and would consider an acquisition or licensing partnership.
Since its first public offering in 2012, the stock has dropped from $4,100 to $1.86 at close on Wednesday.