By: Tomas Ronolski - AllPennyStocks.com News

Friday, August 9, 2013

The rising rates of diabetes and obesity is alarming, to say the least. The 2013 Fact Sheet update from the American Heart Association shows that the number of obese children aged 5 to 17 has increased five-fold from 1974 to 2009. 23.9 million kids between the ages 2 to 19 are either overweight or clinically obese. There is an undisputable link between obesity and diabetes, with the Centers for Disease Control and Prevention saying that obese adolescents are more likely to develop pre-diabetes, a blood glucose level condition that indicates a higher risk for developing diabetes. About 26 million Americans, or 8.3 percent of the population, have diabetes with an estimated economic cost in 2012 of $245 billion, including $176 billion in direct medical expenses. The total cost has mushroomed 41 percent from $174 billion in 2007.

To that end, what’s the burden going to be on the health care system in a few more years if the diabetes and obesity epidemics can’t be brought under control? It could be crippling.

There’s no shortage of companies working on ways to manage diabetes given the robust market opportunity in a huge area of medical need. GlaxoSmithKline (NYSE:GSK) is waiting on a final decision from the Food and Drug Administration for its new diabetes drug candidate, albiglutide, with a deadline of April 15, 2014. Eli Lilly’s (NYSE:LLY) diabetes drug dulaglutide also has analysts speculating that the drug could be a hit. Microcap ALR Technologies (OTCBB:ALRT) has taken the route of disease management through a cutting edge, FDA-cleared remote monitoring technology with pilot programs now underway and partnerships with large health insurance plans. Fellow microcap Boston Therapeutics Inc. (OTCBB:BTHE) is also approaching diabetes from a different angle, one that sets the company apart from bigger biotechs.

Boston Therapeutics is focused on novel compounds based on complex carbohydrate chemistry in the fields of diabetes and inflammatory disease. The company is developing PAZ320, a complex carbohydrate drug for lowering blood sugars by blocking the enzymes in the intestine that digest sugars in food, representing a unique mechanism of action in diabetes therapy. The drug candidate is a new class of therapies for post-meal blood sugar, called carbohydrate hydrolyzing enzyme inhibitors (CHEI).

In diabetics, blood sugar is not eliminated after a meal, resulting in an elevated amount of glucose being bound to hemoglobin, which can lead to a hypoxic condition where red blood cells are short of oxygen. This can damage to tissue and organs.

PAZ320 is designed to be taken before meals to block the action of enzymes that break down carbohydrates into glucose in the gastrointestinal tract to decrease the amount of glucose available to be absorbed into the blood.

Phase 1 and Phase 2 trials have been conducted with promising results of PAZ320’s effect of blood sugar. In the year-and-a-half long Phase 2 trial, diabetes patients taking drugs for the disease were treated with PAZ320 before eating rice and data collected through a continuous glucometer. The results were then compared to baselines established by the patients without PAZ320 therapy under the same conditions. When treated with the drug, patients saw reduced blood glucose levels.

According to the company, the drug works equally well in pre-diabetics.

Additionally, Boston Therapeutics is developing BTI-7, a chewable form of the widely used anti-diabetes drug metformin. Because it is a variation of metformin, the company is only responsible to conduct a Phase 3 clinical trial to prove bio-equivalency.

On Friday, the company reported its results from the second quarter and six months ended June 30. From a financial standpoint, there was not much to write home about, as the small company generated negligible revenue from sales of its product Sugardown. On the upside, the $25,454 in sales of Sugardown in the first half of 2013 outpaced the $21,230 in the same period of 2012.

At this point, it seems that the key to the success of the company is the discussions with the FDA for pivotal stage clinical trials of PAZ320. It’s a unique drug that could formidably serve in an adjunctive manner with other diabetes therapies, which gives the company a strong upside from its current $7 million market capitalization should early and mid-stage trial results be replicated in Phase 3. Proper due diligence is, as always, encouraged.

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