For those new to this company, it’s a development stage biotechnology play that’s trying to bring a host of drugs to market, parallel to one another, in a range of potential blockbuster indications. The two leads, and the ones that we see as providing the most near term (or maybe we’re better saying the maximum nearer term) value are Prurisol and Brilacidin. The former is under investigation as a psoriasis treatment, and the latter is targeting a triple regimen of acute bacterial skin and skin structure infection (ABSSSI), oral mucositis and ulcerative proctitis/ulcerative proctosigmoiditis (UP/UPS), two types of Inflammatory Bowel Disease (IBD). There’s a third asset, called Kevetrin, which is under investigation as an ovarian cancer therapy, but we’re going to focus on Prurisol and Brilacidin for the purposes of this discussion.
So, looking at major milestones (and these are our catalysts), the company expects to have completed no fewer than four trials by the end of this year. A phase IIa in UP/UPS, a phase II in OM and a phase IIb in psoriasis (plus a phase IIa in ovarian cancer).
To add some specifics to this, we already got interim readouts from UP and OM, both during the first quarter. The UP trial should wrap up this quarter, and we should get topline shortly after wrapup. An interim on the psoriasis trial should hit press during the third quarter (this has been pushed back a little) and the trial should wrap up during the second half of the year. The OM trial, the one that we got interim from last quarter, will wrap up and read out during the second half of this year (we’re predicting final quarter for this one).
The idea, beyond these completions, is to score partnership deals on each of the assets before they move into pivotal trials.
As such, between now and end of the final quarter of 2017, there are numerous opportunities for the company to announce deals with big names in the sector – all of these target indications are high interest spaces, and ones that a number of Big Pharmas would love to get into, or need to if they are to remain competitive in areas in which they already dominate.
Beyond the trial close outs, and the partnership deals, this means that there’s a longer term potential (we’re talking throughout 2018) for the initiation of five registration studies – those described above, and a phase III in ABSSSI, which is subject to an SPA agreement being reached with the FDA.
Sure, there’s the chance that these trials won’t read out as positive, and that’s a binary risk any early stage exposure needs to consider. There’s also the standard dilution risk that comes with this end of the biotech space (although this mitigates somewhat when considered in line with the potential partnerships, as opposed to the company pushing to pivotal on its own).
That said, there’s so many shots on goal, and so much promising data supportive of the ongoing studies, that it’s tough to see them all missing the target; and if one or two hits, the company’s current market cap is going to quickly revalue to the upside.