Kalytera Therapeutics, Inc. (TSXV: KALY) (“Kalytera”) is pleased to announce encouraging results from a Phase 2a study evaluating the safety and efficacy of cannabidiol (“CBD”), a primary constituent of the marijuana plant, for the treatment of acute (Grade 3-4) Graft versus Host Disease (“GvHD”).

In the present study, ten patients with acute (Grade 3-4) GvHD that was refractory to standard treatment with high-dose steroids, were administered daily doses of CBD for up to three months. Nine of the ten patients enrolled in the study responded to treatment; seven achieved complete remission, and two achieved a near-complete response. Six patients are still alive with a median follow-up period of 13 months (range 5-30 months). Two patients (one with Grade 3 GvHD and one with Grade 4 GvHD) died from leukemia relapse, and two patients (one with Grade 3 GvHD and one with Grade 4 GvHD) died from GvHD-related infectious complications. No patient deaths were determined to be associated with CBD treatment.

Historical control data gathered at the same clinical site, the Rabin Medical Center, in Petah Tikva, Israel, examined 305 patients who underwent allogeneic hematopoietic cell transplantation without CBD therapy between May 2007 and December 2016. Of these 305 patients, 32 developed acute (Grade 3-4) GvHD. Among 12 patients with Grade 3 GvHD, three patients responded to first-line high-dose steroids and are alive, six patients died within four months from GvHD and its complications, one patient died after 12 months from a second malignancy, and two patients who were refractory to steroids are still alive (one patient after more than two years and one patient at three months). Among 20 patients with Grade 4 GvHD, all died within four months from GvHD and its complications.

In the present study, among ten patients with steroid-refractory acute (Grade 3-4) GvHD, 90% achieved either complete remission (“CR”) or a near-complete response with CBD. Two patients died from GvHD and its complications (one patient with Grade 4 GvHD who achieved CR with CBD, but had a GvHD flare-up upon uninformed cessation of CBD; another patient with Grade 3 GvHD had to stop CBD after four days of treatment following a severe infection, thus efficacy could not be evaluated). These preliminary results compare favorably with the results of the historical control group of 29 patients with steroid-refractory Grade 3-4 GvHD, among which 26 patients died from GvHD and its complications.

The present study was conducted by Talent Biotechs, a privately held, Israeli-based developer of CBD therapeutics, that was recently acquired by Kalytera.

The ability to treat GvHD is a major unmet need. GvHD remains a major cause of morbidity and mortality after allogeneic hematopoietic cell transplantation (“HCT”). Typically, only 60% of patients respond to first-line therapy with high-dose steroids. The 12-month mortality rate among patients with steroid-refractory Grade 3 and 4 GvHD exceeds 60% and 80%, respectively.

The U.S. FDA has recommended that the sponsor of the study apply for both Breakthrough Therapy and Fast Track Designations, each of which could accelerate the approval process.

In addition, the successful results of an earlier Phase 2a clinical trial evaluating the safety and efficacy of CBD in the prevention of acute GvHD have already been published.

“We are very excited about these results and the benefits to patients with no other treatment options,” said Dr. Andrew L. Salzman, CEO of Kalytera. “These results are significant in this disease setting, and we look forward to starting a comparator-controlled, randomized, multicenter Phase 2b study in the near-future”.

Conference Call and Webcast

A conference call and webcast will be held on Thursday, February 23, 2017 at 12:00 PM ET to discuss the study results. Conference call and webcast information is as follows:

Date: Thursday, February 23, 2017

Thursday, February 23, 2017 Time: 12:00 PM ET

12:00 PM ET Conference Call: http://dpregister.com/10101838 (Register to receive dial-in instructions)

http://dpregister.com/10101838 (Register to receive dial-in instructions) Webcast: http://services.choruscall.com/links/kaly170223.html (Allow at least ten minutes to access the site before the webcast begins)

The conference call and webcast will be available for replay on the Kalytera website.

About Graft versus Host Disease

Hematopoietic cell transplantation (“HCT”) is a procedure where the stem cells of the bone marrow or peripheral blood of a healthy donor are transplanted into a new host after chemotherapy or radiation. This is a lifesaving procedure for many diseases of the blood and bone marrow including leukemia, Hodgkin and Non-Hodgkin lymphoma, multiple myeloma, sickle cell anemia, and thalassemia. There were over 8,000 HSCT procedures in the U.S. in 20141 and the use of HCT procedures is expected to continue to increase. While HCT procedures can be lifesaving, they pose many dangerous side effects, including infection and GvHD.

GvHD is an orphan disease and multisystem disorder that occurs when the transplanted cells from a donor (“the graft”) recognize the transplant recipient (“the host”) as foreign. This interaction initiates an immune reaction that causes the transplanted donor cells to attack the patient’s organs, including the skin, gastrointestinal tract, liver, lungs, eyes, oral cavity, heart, nervous system and other organs. This reaction can occur within days after the transplant (acute GvHD) or months to years after HCT (chronic GvHD).

GvHD can be mild, moderate, severe, and even life threatening. Patients with acute GvHD may suffer from rashes and blistering of the skin, nausea, vomiting, abdominal cramps accompanied by diarrhea and jaundice. Generally, acute reactions are more severe and life threatening.

GvHD is a major cause of morbidity and mortality following HCT. Researchers estimate that even with intensive prophylaxis with immunosuppressive treatments, 30-50% of patients transplanted from fully matched sibling donors and 50-70% of patients transplanted from unrelated donors will develop some level of GvHD2. The GvHD market was valued at $295M across the six major markets in 2013, and is expected to grow to $544M by 2023, according to research and consulting firm GlobalData3.

Standard of Care: Prevention and Treatment of GvHD

The first step in prevention of GvHD is the selection of donor cells that closely match the genetics of the immune system of the transplant recipient, ideally a sibling donor. From there, the patient relies on drugs that have been developed to prevent or treat GvHD. Medicinal prevention of acute GvHD is dependent on immunosuppression of the donor cells, either pharmacologically or through T cell depletion. Common drugs include methotrexate, cyclosporine tacrolimus, sirolimus, mycophenolate mofetil and ATG. Preventive measures and clinical practices vary by institution4.

Treatment of GvHD involves pharmacologic suppression of the graft’s immune cell activation and reestablishment of donor-host immune-tolerance. Most patients are prescribed corticosteroids, which directly suppress the donor’s immune cell attack on host tissue, but also raise the risk of infection and cancer relapse. As with prevention, the optimal drug strategy for GvHD is not well defined. Less than 60% of patients with GvHD respond to corticosteroids, putting many at risk for fatal outcomes5.

CBD and GvHD

CBD is a major component of Cannabis sativa, commonly known as marijuana. CBD possesses potent anti-inflammatory and immunosuppressive properties. Unlike the other major component of cannabis, tetrahydrocannabinol (“THC”), CBD is non-psychoactive and is well tolerated by humans when taken over extended periods of time6. CBD has shown benefit in a number of models of inflammatory diseases including diabetes7, rheumatoid arthritis8, multiple sclerosis9, and inflammatory bowel disease10.