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October 2013
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Systemic Versus Non-Systemic Diabetes Drugs


By TDM Financial
Boston Therapeutics Delivers New Class of Chemistry

There are plenty of blockbuster drugs on the market worldwide
to help diabetes patients control their glucose levels. In 2012,
Sanofi’s (NYSE: SNY) Lantus sat atop the list of best selling diabetes
drugs with the insulin product generating $6.67 billion in sales. Merck
& Co. (NYSE: MRK) took second with Januvia, a dipeptidyl peptidase
4-inhibitor, which tallied $4.05 billion.  Adding to that franchise,
Janumet – a drug that combines Januvia with metformin – chipped in
another $1.68 billion. Novo Nordisk (NYSE: NVO) sold $2.8 billion worth
of its NovoRapid / NovoLog fast-acting insulin drug, ranking as the
third biggest seller. A look at the other seven diabetes medications
that round out the top ten shows each of the remaining drugs generating
at least $1.52 million in revenue during 2012.

Clearly it’s a huge market and it’s growing bigger at an alarming
pace with analysts forecasting the diabetes drug market to grow from $35
billion currently to $58 billion in 2018. From 2000 – 2011, the number
of diagnosed cases of diabetes more than doubled to 366 million. By
2030, the International Diabetes Federation estimates that number will
climb to 552 million; that’s 10 percent of the world’s population. Of
the three types of diabetes, Type 2 is the most common, encompassing
about 95 percent of all cases.

As some of these blockbuster drugs will be soon facing generic
competition as they lose patent protection, other drugs are expected to
garner regulatory approval, such as Johnson & Johnson’s (NYSE: JNJ)
SGLT2 inhibitor Invokana and Takeda Pharmaceutical’s Nesina.

The sleeper in the midst of these pharma giants is Boston Therapeutics
(OTCQB: BTHE), a clinical-stage pharmaceutical company focused on
developing compounds based on complex carbohydrate chemistry. The
company’s lead drug candidate is PAZ320, the first drug in a new class
of chemistry called carbohydrate hydrolyzing enzyme inhibitors, or
CHEIs. Led by carbohydrate expert Dr. David Platt, Boston Therapeutics
demonstrated the potential of PAZ320 to dramatically reduce the post
meal elevation of glucose in a Phase ll clinical trial at Dartmouth
Medical Center in New Hampshire. In the trial, 45 percent of the Type 2
diabetes patients showed a 40-percent reduction in post-meal blood
glucose, a critical time when diabetes patients often suffer from large
spikes in sugar levels. This is especially important because research
suggests that post-meal plasma glucose excursions can contribute to
cardiovascular disease. The results of the trial were published in the July/August edition of the American Association of Clinical Endocrinologists’ peer-reviewed journal Endocrine Practice.

The carbohydrate approach is differentiated from all the other drugs
of the majors through a mechanism of action that doesn’t involve insulin
injections or interaction with the kidneys, pancreas, liver or cells. A
chewable tablet, PAZ320 is non-systemic, meaning that it operates in
the gastrointestinal tract to stop the sugar from ever making it to the
bloodstream, effectively “cutting the monster off at the head” by
blocking the enzymes that are involved in the digestion of sugar in the
intestine. The unprocessed carbohydrates that are normally converted to
sugars simply exit the body as waste.

Developing a therapeutic that doesn’t depend upon interaction with
the vital organs could help PAZ320 avoid the side effects that have been
the subject of controversy with DPP-4 inhibitors due to a correlation
with pancreatitis and potentially pancreatic cancer. Additionally,
PAZ320 was shown in the Phase ll trial to be effective regardless of the
patient being on other medications. This opens the doors to the
potential as an adjunctive therapy as well as a stand-alone treatment to
regulate glucose.

Boston Therapeutics recently completed a raise
of $5.3 million to support a Phase ll trial in France with PAZ320
intended to compile the requisite data for a pivotal Phase lll trial of
the drug candidate in 2014. The company plans for top-line data from a
300-patient Phase lll trial in 2015 and filing for a New Drug
Application in 2016.

With the cash in the coffers and the company aligning for a
late-stage trial next year, investors have come into Boston Therapeutics
at an increasing rate in recent months, pushing the share price to a
new all-time high on October 4 at $1.30. Even with the increases, BTHE
still only commands a market capitalization of about $26 million. This
leaves plenty of room for continued share appreciation as the company
could become more competitively valued with peers in the industry as the
stock price reflects the uniqueness of their drug candidate.

About Emerging Growth LLC:

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