GlycoMimetics: An Investment Update

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About: GlycoMimetics, Inc. (GLYC)
by: Busted IPO Forum
Summary

Today, we look at an interesting small-cap developmental concern with a couple of compounds in late-stage development.

This developmental concern is well-funded and getting increasing positive analyst commentary of late.

A full investment analysis is provided in the paragraphs below.

"There's a fine line between genius and insanity. I have erased this line." - Oscar Levant

In this in-depth article, we look at a rare disease concern that has been public for some five years now. It is focused on the rare disease space. The company has a couple of compounds currently in late-stage development.

Company Overview

GlycoMimetics (GLYC) IPO'd in 2014 and is a Rockville, Maryland-based biotechnology company. The company is dedicated to developing therapeutics that improve the lives of patients with orphan diseases. The company is advancing drug candidates that target selectins, adhesion molecules that play a role in the inflammatory response in a wide array of conditions. The company's pipeline centers around two late-stage clinical programs, Rivipansel and Uproleselan. GlycoMimetics has a market capitalization of roughly $540 million and trades for around $12.50 a share.

Pipeline

Source: Company Presentation

Rivipansel

Rivipansel is the most developed drug candidate in the company's portfolio. It is a glycomimetic drug that acts as a pan-selectin antagonist, binding to three members of the selectin family: E-, P- and L-selectin. The drug is designed to treat vaso-occlusive crisis of sickle cell disease, which is a severe complication of sickle cell disease that can result in acute ischemic organ injury. The drug works by reducing activation, adhesion and inflammation that are thought to contribute to reduced blood flow through microvasculature during vaso-occlusive crisis. By disrupting the underlying cause of VOC, the drug may enable patients to leave the hospital sooner.

Source: Company Presentation

Sickle cell disease is a genetic disease that affects roughly 100,000 people in the United Sates, predominately affecting individuals of African descent. One of the most severe complications of sickle cell disease is vaso-occlusive crisis. VOC results in severe, debilitating pain that occurs periodically over the course of a sickle cell patient's life. VOC results in roughly 75,000 hospitalizations per year in the United States alone. The average hospital stay is six days. The current standard of care for VOC is primarily hydration and pain management.

In 2011, Pfizer (NYSE:PFE) and GlycoMimetics entered into a worldwide license agreement for the development and commercialization of Rivipansel. GlycoMimetics was responsible for development through the Phase 2 clinical trial and Pfizer is now responsible for all future clinical development. Pfizer is currently conducting a Phase 3 clinical trial for Rivipansel in SCD.

Pfizer continues to enroll patients with sickle cell disease in the Phase 3 clinical trial of Rivipansel for the treatment of vaso-occlusive crisis. The trial remains on track to be completed in early 2019, with top-line data expected to be announced late in the second quarter of 2019.

Uproleselan

Uproleselan is an E-selectin inhibitor designed to be used in combination with chemotherapy to treat patients with acute myeloid leukemia, multiple myeloma, and other hematological cancers. E-selectin plays a vital role in binding cancer cells within vascular niches in the bone marrow, which inhibits the cells from entering circulation where they can be more readily killed by chemotherapy. The company believes that uproleselan results in lower bone marrow toxicity, which makes stem cells in the bone marrow divide less frequently, ultimately protecting them from chemotherapy that targets rapidly dividing cells. The drug has been granted Breakthrough Therapy Designation for adults with relapsed or refractory AML and has received the Fast Track designation.

Acute myeloid leukemia is blood and bone marrow cancer. AML is the most common type of acute leukemia in adults. According to the American Cancer Society, each year in America, roughly 20,000 people are diagnosed, and roughly 10,000 people die from all forms of the disease. AML is characterized by rapid growth of abnormal white blood cells that gather in the bone marrow, inhibiting normal blood cell production. Current treatment options for AML consist of chemotherapy, radiation therapy and stem cell transplantation.

Source: Company Presentation

In December of 2018, the company presented on the final clinical outcomes data and subgroup analyses from the Phase 1/2 AML trial of uproleselan at the American Society of Hematology Annual Meeting. The results support the potential synergistic benefit of combining uproleselan and chemotherapy.

Source: Company Presentation

GlycoMimetics has initiated its first company-sponsored Phase 3 pivotal trial of uproleselan in relapsed/refractory acute myeloid leukemia at sites in U.S., Europe, Canada and Australia. The company is currently working to expand the clinical sites of the trial. Also, the company plans on continuing the collaborative Haemato Oncology Foundation for Adults in the Netherlands European study of Uproleselan in newly diagnosed patients unfit for chemotherapy in 2019. Lastly, the National Cancer Institute collaborative study of Uproleselan in newly diagnosed patients fit for chemotherapy has been initiated and is recruiting patients at multiple sites.

Source: Company Presentation

Analyst Commentary and Balance Sheet

As of the end of the first quarter, the company had cash and cash equivalents of roughly $195 million. Operational costs including for R&D in the first quarter came in just a tad above $15 million, so the company is well-funded.

The company receives sparse coverage from Wall Street, but analyst activity has picked up recently. On April 12th, Piper Jaffray initiated coverage with an overweight rating and placed a $20 price target on the name. The analyst believes that the stock is undervalued given the fact that the company has two Phase 3 assets, and she thinks that Rivipansel is a $1.5 billion opportunity: "I see significant upside from two relatively de-risked programs."

After Q1 results on May 2nd, Cowen & Co., Roth Capital and H.C. Wainwright all reissued Buy ratings on GlycoMimetics.

Verdict

GlycoMimetics is as an interesting "Tier 4" concern. It has two late-stage compounds in development, upcoming potential catalysts and is well-funded. The name also seems to be starting to catch some analyst attention of late. I think the stock is more than worthy of "watch item" status and I have bought a small stake for my personal portfolio.

In addition, I prefer Global Blood Therapeutics (GBT) as a sickle cell play. However, a few shares of GlycoMimetics within a well-diversified biotech portfolio seems more than warranted.

"No great mind has ever existed without a touch of madness." - Aristotle

Bret Jensen is the Founder of and author of articles on The Biotech Forum, The Busted IPO Forum, and The Insiders Forum.

Disclosure: I am/we are long GBT, GLYC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.