AzurRX BioPharma, Inc (NASDAQ: AZRX)
AzurRx has been generating a lot of attention lately. And, while many emerging companies tend to get some early nods from investors and analysts, the focus on AZRX has strong fundamental underpinnings.
AzurRx is developing a broad pipeline of non-systemic biologics to treat gastrointestinal (GI) and infectious diseases. Importantly, for AzurRx investors, the company is working to provide near term shareholder value by focusing on short-term, lower risk development pathways. More specifically, AZRX recently announced initial patient enrollment for its phase II “MS1819-SD” trial, which sets the stage for a robust 2017.
AZRX Pipeline – MS1819
AzurRx BioPharma’s lead agent, MS1819-SD, is a yeast based recombinant lipase intended to treat exocrine pancreatic insufficiency (EPI), a disease of the pancreas, that is related to chronic pancreatitis (CP) and cystic fibrosis (CF). The company has an on-going phase II trial of MS1819-SD and is currently recruiting and treating patients in Australia and New Zealand, with initial efficacy results expected to be released in the first half of 2017. On Decemebr 21st, AZRX announced that it has, in fact, enrolled the first three patients in this phase II trial at two sites in New Zealand.
The phase I trial not only produced strong safety and tolerability results, it also demonstrated the potential to provide a materially improved efficacy profile and dramatically reduced pill burden. Currently, patients may be prescribed up to forty pills per day to treat EPI, an issue that AzurRx BioPharma is confronting head on. With MS1819-SD, the company aims to reduce the pill burden, down to 4 to 6 capsules per day, while potentially improving efficacy versus the existing standard of care.
AzurRx Advances Phase II Trial For MS1819-SD
The ongoing Phase II study of MS1819-SD, conducted in a partnership between AzurRx BioPharma and its European partner Mayoly Spindler, is an open label, dose escalation study that is being conducted outside of the United States, in Australia and New Zealand. The company expects to fully enroll between 12-15 patients with EPI caused by CP within the next few months, with data being released in the first half of 2017, although AZRX may provide regular updates as warranted and consistent with the study protocol.
While the primary focus of this Phase II trial is to evaluate the safety and tolerability of MS1819-SD dose escalation, the secondary objective is to investigate the efficacy and dose response in patients by analyzing the coefficient of fat absorption and its change from the baseline.
The enrollment of the initial patients in this Phase II trial is a significant milestone for AZRX and furthers the path for MS1819-SD to more fully demonstrate its therapeutic potential, with the goal of improving or eliminating many of the devastating and painful conditions affecting EPI patients.
Unlike the current standard of care which is derived from the pancreas of pigs, MS1819-SD is a recombinant enzyme that is derived from the yeast Yarrowia lipolytica, which makes it non-animal based and entirely vegan compound. In earlier studies tested on animals, MS1819-SD demonstrated an outstanding profile to compensate for the pancreatic lipase deficiency that is common among CP patients. Replacing the activity of this enzyme can alleviate greasy diarrhea, fecal urge, weight loss and could ultimately alleviate malnutrition.
Upon successful trial results, AZRX will look to address a lucrative market, with potential to treat over 100,000 patients in the United States with EPI caused by CP and an additional 30,000 patients with EPI caused by CF. Currently, the standard of care is treatment with porcine (pig) derived replacement pills and in 2015, that market was estimated to be $820 million in the United States alone, and $1.5 billion globally, according to both the National Pancreas Foundation and analysts on Wall Street that cover the sector.
AZRX Pipeline – AZX1101
AZRX’s second initiative, AZX1101, is a proprietary complex biologic being developed to prevent hospital acquired bacterial infections. AZX1101 works by blocking the activity of a broad spectrum of antibiotics from acting within the GI tract. In doing so, AZX1101 may prevent the toxicity of intravenous antibiotics to gut bacteria and the complications that would come from the “healthy biome” in a patient’s gut from being disrupted. The commercial market can be substantial, with the CDC estimating that over 1.7 million hospital associated infections are reported each year, either causing or contributing to death in about 100,000 patients a year, with the annual cost to treat the infections running as high as $11 billion.
AzurRx intends to file an Investigational New Drug (IND) application for AZX1101 by the end of 2017, with a primary development focus on preventing Clostridium difficile (C. diff) infection. However, beyond C. diff, AZRX expects that AZX1101 may demonstrate broad utility in the prevention of antibiotic associated gastrointestinal adverse events.
AZRX Creating Shareholder Value Through Expertise
Behind AzurRx’s pipeline advancement is a strong management team and accomplished advisory board. AzurRx’s core management and scientific team has over 60 years of experience covering hepato-gastroenterology and infectious diseases, clinical practice, basic scientific research and translational medicine, pharmaceutical R&D and university board leadership. This team is focused on creating shareholder value through optimizing clinical milestones, several of which are expected during the next six to twelve months.
AZRX – Word On The Street And Partners
With AZRX focused on both developing and expanding its clinical pipeline, Wall Street analysts are also beginning to take note of the potential in the company. Analysts at WallachBeth Capital have initiated coverage on AZRX shares with a “BUY” rating and a twelvemonth price target of $7.00 per share, representing potential upside of 71% from the current share price.
Coming off of its recent IPO, priced at $5.50 per share, AZRX raised over $5.3 million by issuing 960,000 shares to investors. The proceeds place AZRX in a stable cash position for the near- and intermediate-term, allow AZRX to aggressively pursue clinical validation trials for MS1819-SD, and provide ample resources for working capital and general corporate expenses. The funds will also be used to advance the IND application AZX1101, planned for 2017.
As of November 22, 2016, AZRX had only 9,631,088 shares outstanding, inclusive of the shares sold in its IPO. The low share count provides shareholders significant leverage with positive clinical milestones. AZRX is actively pursuing business development. In December, AzurRx announced a promising deal with TransChem, Inc. that will enable AZRX to license TransChem’s proprietary transition state chemistry technology for MTAN inhibition. AzurRx management believes that this partnership will enable the company to tackle one of the major frontiers in medicine, the impact of bacterial biofilms on humans with its first potential market being the ability to impact h.pylori, the major culprit in stomach ulcers. This partnership with TransChem is expected to move AZRX even closer to becoming a significant player in non-systemic therapies for gastrointestinal and infectious disease.
Understanding AZRX In Simplest Form
Once all of the scientific language is absorbed and investors try to distinguish between a gastrointestinal disease and a GI tract infection, AZRX can be broken down to simplest terms by going to the root of AzurRX BioPharma’s existence.
AZRX management describe the company as “business led, science driven, and clinically advanced.” While this sounds simplistic in nature it drives home the basic mission at AzurRx, to provide shareholder value by developing technologies that can deliver the highest quality therapies to treat patients afflicted with gastric disease.
Secure with a global presence, AZRX is well positioned to advance on multiple fronts, aiming at potential drug approvals outside of the United States, and expanding its geographic footprint. With AZRX having a basic research presence in France and a clinical presence in countries such as Australia and New Zealand, management appears to be aiming at expedited international approvals as well as the United States.
That said, investors should understand that they are on a mission alongside AZRX, one that may produce some truly revolutionary clinical outcomes. If the phase II trial results with MS1819-SD can confirm what has already been demonstrated in prior trials, the science at AZRX can be quickly thrown into the mainstream.
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