777% Gain Implied in Analyst's Target Price on Biopharma Co.
Research Report

First Wave BioPharma Inc.'s (FWBI:NASDAQ) investigative drug adrulipase is being evaluated in a Phase 2 study for the treatment of exocrine pancreatic insufficiency (EPI) in patients with cystic fibrosis, topline data from which are expected in July 2023, reported H.C. Wainwright & Co. analyst Dr. Yi Chen in a June 13 research note.

"The Phase 2 SPAN trial could demonstrate improved efficacy and safety of adrulipase, which may allow the company to secure a partner for further clinical development and potential commercialization," Chen wrote.

777% Projected Return

Ahead of the study results, H.C. Wainwright reiterated its US$10 per share price target on Florida-based First Wave, trading now at about US$1.14 per share, wrote Chen. The difference between these prices implies a substantial potential return for investors of 777%.

Chen noted the target price includes a discounted cash flow-based asset value for adrulipase of US$70 million, given the market size of patients in the U.S. with cystic fibrosis-caused EPI, a gastrointestinal disease, is estimated at 30,000.

First Wave Bio is rated Buy.

Dosing in Progress

The enrollment target of 12 patients for the SPAN trial has been reached across three trial sites in the U.S., Chen highlighted. Most patients have been administered the drug, which is in an enhanced enteric microgranule delivery formulation, and the rest of them are currently being dosed.  

Fat Molecules Targeted

Chen explained that the open-label study is assessing the adrulipase formulation in a titrated dose escalation fashion, with dose titrations being done over three weeks.

EPI occurs when the body does not produce enough digestive enzymes, particularly lipase. First Wave designed adrulipase, derived from the Yarrowia lipolytica yeast lipase, to break up fat molecules in the digestive tract so they can be absorbed as nutrients, added Chen. Therefore, the primary efficacy endpoint is the change in patients' coefficient of fat absorption (CFA) result compared to baseline, which was at least 80% for all enrolled study participants.

Secondary endpoints include stool weight, signs and symptoms of malabsorption, and coefficient of nitrogen absorption.

"Adrulipase could allow a reduced pill burden while delivering non-inferior therapeutic effect compared to current commercial porcine pancreatic enzyme replacement therapy (PERT)," Chen wrote.

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Disclosures for H.C.Wainwright & Co., First Wave Biopharma Inc., June 13, 2023

This material is confidential and intended for use by Institutional Accounts as defined in FINRA Rule 4512(c). It may also be privileged or otherwise protected by work product immunity or other legal rules. If you have received it by mistake, please let us know by e-mail reply to [email protected] and delete it from your system; you may not copy this message or disclose its contents to anyone. The integrity and security of this message cannot be guaranteed on the Internet. H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility.

H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.

I, Yi Chen, Ph.D. CFA and Raghuram Selvaraju, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst’s household has a financial interest in the securities of First Wave Bio (including, without limitation, any option, right, warrant, future, long or short position).

As of May 31, 2023 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of First Wave Bio. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. Mr. Selvaraju, who is [the][an] author of this report, is the Chairman of and receives compensation from Relief Therapeutics Holding SA, a Swiss, commercial-stage biopharmaceutical company identifying, developing and commercializing novel, patent protected products in selected specialty, rare and ultra-rare disease areas on a global basis ("Relief"). You should consider Mr. Selvaraju's position with Relief when reading this research report. The firm or its affiliates received compensation from First Wave Bio for non-investment banking services in the previous 12 months. The Firm or its affiliates did receive compensation from First Wave Bio for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

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