With AzurRx BioPharma, Inc. (NASDAQ: AZRX) shares giving back some of its massive 40% gains after announcing positive Phase 2 data from its MS1819 clinical trial last week, one salient point emerges- AZRX is now a more compelling value and investment opportunity than ever before.
That takes into account that markets are far from perfect. More so when it comes to small-cap stocks, where traders have a tendency to bully them around to achieve a particular outcome. Still, the battling sentiment also creates opportunity. And for companies that can defend their turf with compelling data, chances are that appropriate market forces prevail. With AZRX offering just that, expect its share price to respond accordingly. Higher.
Last week, AZRX reported stellar topline results from its Phase 2 MS1819 Combination Trial. The study is evaluating MS1819 in combination with the current standard of care, porcine-derived pancreatic enzyme replacement therapy (PERT), to treat severe exocrine pancreatic insufficiency (EPI) in patients with cystic fibrosis (CF). As noted, the data to date is excellent.
Frankly, it's about as good as it can get, with 100% of treated patients reaching both primary and secondary endpoints. Better still, data showed clinically meaningful improvement in Coefficient of Fat Absorption (CFA) endpoints, and most importantly, showed that its combination therapy may benefit cystic fibrosis patients with severe EPI. Simply put, the results are a powerful validation of AZRX's platform.
And while the stock price soared on the news, it has since given back a portion of those gains. Now, price no longer appears to fairly represent the accomplishment or the fact that multiple strategic opportunities to monetize the asset could now be in play. Those already invested in AZRX know that monetization is a big part of AXRX's overall strategy. For investors considering the investment opportunity, the timing is right to pull the trigger.
Why? Because companies close to starting Phase 3 trials don't last long at a $0.58 share price. Nor do they stay at these same levels when data shows front-line best-in-class treatment potential. And AZRX delivered on the data and is close to delivering on the former.
Hence, long-term traders should ignore the mood swings in the stock. The real focus should be on what AZRX has planned for the future. And from that perspective, AZRX appears to be in its best position ever to create shareholder value from one of its lead assets.
Thus, AZRX presents a compelling investment proposition. Sellers take note.
A Plan To Monetize
In fact, selling at this point could lead to leaving substantial investment dollars on the table. Remember, AZRX has been clear on conference calls that it is willing to sell parts or all of an asset to fund new programs. And when playing in billion-dollar drug markets, those interests can be substantial. Consider, too, that Big Pharma left the drug development stage years ago. Now, they acquire and are willing be pay handsomely for promising drug candidates. Those in Phase 3 are getting premiums.
Most important to that near-term proposition, AZRX delivered impressive Phase 2 data. The data collected from 20 patients showed that MS1819 combined with PERT led to clinically meaningful improvements in the primary efficacy endpoint, the Coefficient of Fat Absorption.
Better yet, results are clinically significant. Patients showed an average gain of more than six percentage points from baseline, compared to the five-point improvement in CFA cited by the clinical literature as clinically significant. Also notable, the data demonstrated positive improvements in weight gain and other secondary endpoints. While the results made for an excellent day at AZRX, it's their future that now looks even brighter.
And AzurRx is not slowing down its intent to get a drug to market as quickly as it can. Already, the team is taking the next steps toward marketing approval by finalizing the development of a new enteric-coated microbead formulation they believe can enable more medication to reach the small intestine and enhance its therapeutic potential.
To those that say time is money and expect the formulation phase to take years, consider this: AZRX expects its formulation work to be completed by the end of this year. Hence, another potential near-term catalyst is in the crosshairs. Even better, work completed in the formulation process is accretive to the entire MS1819 combination therapy program, potentially instigating a higher share price multiple ahead of its Phase 3 trial.
Accelerating Program Development
Moreover, the positive data does more than validate the effectiveness of its drug candidate. It also opens doors of opportunity. And with about $13M in cash after its July capital raise, AZRX is in a capital position to negotiate deals from a place of strength.
In the bigger picture, AZRX's healthy cash position can serve as more than a bargaining chip; it's also enough to fund its next stages of program development. Thus, if AZRX is interested in making a deal, expect the terms to be investor-friendly. If not, they have the strength to go it alone. Either scenario is worthy of a much higher stock price, especially at the speed its development and clinical-stage programs are accelerating.
There, AzurRx is already developing a new enteric-coated microbead formulation for MS1819 with plans to initiate a bridging study in 2022 evaluating the formulation as a single-agent therapy. That initiative puts another revenue-generating shot on goal from MS1819 in the queue as well. Best of all, the takeaway from the data is unambiguous- AZRX is getting closer to bringing a safe and effective drug to market to control EPI. The result will be a win-win-win proposition for patients, investors, and AZRX.
Rightfully, patients will get the biggest win, benefiting from a treatment that can mitigate the debilitating gastrointestinal conditions common to its cystic fibrosis condition. Currently, between 25%-30% of refractory cystic fibrosis patients with severe EPI cannot achieve adequate nutrition using PERT alone. AZRX data shows that they may be able to clear that hurdle.
Moreover, beyond being a safe and effective therapy that allows CF patients to control EPI, a significant inherent benefit is that AZRX's candidate could significantly diminish the daily pill burden required with PERT-based medications. It also fills the gap where PERT alone is insufficient.
Further, its MS1819 Phase 2 data indicates that the combination therapy improved fat absorption and other nutritional levels, essential for maintaining a healthy weight, better pulmonary function, and prolonged survival in CF patients.
Equally important from a marketing perspective, overall safety was excellent, with no serious adverse events (SAEs) and only a few mild adverse events reported. The best news for AZRX is that several patients reported feeling considerably better after being on the MS1819-PERT combination for six weeks. That's validation from the ground level. And AZRX intends to make that same "better feeling" available to the thousands of other patients suffering from these debilitating conditions.
Of course, investors should appraise the totality of AZRX. And while its uncompromising MS1819 data earned the headlines last week, investors would be missing the mark by underestimating the value of its other pipeline assets.
Advancing A Pipeline Of GI Treatment Candidates
In fact, the inherent value from its broad pipeline of targeted, non-systemic large and small molecule therapies to treat gastrointestinal (GI) and infectious diseases is likely worthy of absorbing the entire market cap. That's how big its other programs can be. Even better, like its MS1819 program, AZRX is designing its other trials to take advantage of lower-risk development pathways.
They already announced a potentially transformative in-licensing deal with First Wave Bio. Likely, investors didn't yet grasp the potential of that deal. Expect further updates to clue them in, and at the same time, provide justification for a higher share price.
From the start, that collaboration is an inherent value driver, bringing a new asset -proprietary formulations of micronized niclosamide, a small molecule with anti-viral and anti-inflammatory properties, to its treatment arsenal. It also adds two new therapeutic indications, treatments for COVID-19 GI infections and for immune checkpoint inhibitor-associated colitis (ICI-AC) in advanced cancer patients, to its clinical-stage GI pipeline. And with data mounting that the COVID-19 virus can stay in the GI tract for weeks, maybe even months, that collaboration is timely.
Know this, too. AZRX is one of the few clinical-stage companies focused on treating the long-term effects of the COVID-19 virus, specifically in the GI tract. Hence, with the billions of dollars being allocated to find an effective long-term treatment against ALL the effects from COVID-19, short and long term, AZRX could be positioned to earn a piece of those given dollars. And with its Phase 2 RESERVOIR program moving ahead, getting some funding is far from being a long shot.
That program, which specifically targets COVID-related conditions, launched in April of this year and is evaluating FW-1022, an oral micronized niclosamide tablet for COVID-19-related GI infections. If the data shows as intended, the program could lead to expedited marketing of one of the most needed drugs in a generation and be a lifesaver to millions of patients worldwide. Even better, AZRX would enjoy the leadership position as the first to develop therapeutics to help the world's population deal with the lasting effects of COVID-19 infections.
Topline data from its Phase 2 RESERVOIR trial is expected during the first quarter of 2022. Thus, with at least two transformative pieces of news presumed within the next six months, AZRX giving back any of its gains makes little sense.
But, markets have a way of shaking the weak and enriching the professionals. And that scenario could be the case with the swings in the AZRX share price. Beyond the day-trading, long-term, with data support, AZRX stock can be a rocket.
Heading Into 2H 2021
Undoubtedly, data expected in the back half of 2021 could be the fuel to launch that rocket to prices back toward their highs. And if new data broadens the scope of its already published MS1819 results, the trajectory for share prices is likely to be sharply higher.
As it stands, AZRX stock offers investors an early chance to own part of a company that can change the treatment of EPI in patients with CF landscape. At roughly $0.58, the opportunity brings a tremendous amount of inherent and intrinsic value not shown in its stock price. That's a consideration as well.
Best of all, as AZRX showed, its stock is always just a single press release away from surging substantially higher. And while there is often a give-and-take pattern when trading small-cap stocks, compelling data wins at the end of the day. Hence, AZRX has the advantage going forward.
And trading with an advantage can be an investors' best ally. Take note of what AZRX is telling.
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