In an Aug. 17 research note, ROTH Capital Partners analyst Jonathan Aschoff provided a financial and operational update on AzurRx BioPharma Inc. (AZRX:NASDAQ).
ROTH has a $6 per share target price on AzurRx; the stock is currently trading at about $0.90 per share.
Aschoff relayed that the life sciences firm ended Q2/20 with $1 million in cash and subsequently raised about $13.5 million net. It exchanged $6.9 million of debt into preferred stock, entirely eliminating its debt. The transaction also left AzurRx with about $13.5 million in cash, which the analyst indicated is enough to fund the company for about a year.
Operationally, AzurRx recently announced interim results from its Phase 2 combination trial of MS1819 plus pancreatic enzyme replacement therapy (PERT), and they were positive, highlighted Aschoff. The released data were for five cystic fibrosis patients with severe exocrine pancreatic insufficiency (EPI). MS1819 is a recombinant lipase for EPI and is the biopharma's lead clinical program.
The study's primary endpoint was clinically meaningful improvement with the three tested doses, and it was achieved at greater than 80%, Aschoff noted. The study also met the secondary endpoints and demonstrated a "highly favorable safety profile." He added that "clean safety is crucial in a cystic fibrosis population, given all the medication these patients take for complications arising from cystic fibrosis."
The Phase 2 combination trial continues. The goal is for at least 20 patients to complete the study. The next set of data is expected in Q2/21.
In other news, the New York-based company commenced dosing in the Phase 2b, OPTION 2 monotherapy study evaluating MS1819 against PERT. About 30 patients will receive MS1819 in two doses: 2.2 grams and 4.4 grams. The trial's primary endpoint is the coefficient of fat absorption whereas secondary endpoints are the coefficient of nitrogen absorption, signs and symptoms of malabsorption and stool weight. Interim results from OPTION 2 are anticipated expected in about Q1/21.
"The four-way crossover design reduces the number of required enrollees without requiring too much extra time compared to a parallel three-arm trial, and we note that it is not easy to start a new trial given the current COVID-19 headwind," Aschoff commented.
Finally, he mentioned two of AzurRx's achievements in Q2/20. One was executing a manufacturing agreement with Delpharm for it to provide MS1819 for the Phase 2b OPTION 2 trial. The second was effecting an agreement with Creapharm Clinical Supplies for it to package, label and distribute MS1819 for the Phase 2 study.
ROTH estimates that MS1819 will be commercialized in the U.S. in 2022 and sales will reach $350 million in 2030. Upside would come from commercialization success outside of the U.S. of MS1819 and/or of the company's early stage beta-lactamase program.
The investment banking firm has a Buy rating on AzurRx BioPharma.
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Disclosures from ROTH Capital Partners, AzurRx BioPharma Inc., Company Note, August 17, 2020
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of AzurRx BioPharma, Inc. and as such, buys and sells from customers on a principal basis.
Shares of AzurRx BioPharma, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
