About ARPO
According to its website, Aerpio Pharmaceuticals, Inc. (NASDAQ: ARPO) is a biopharmaceutical company focused on leveraging Tie2 activation for ocular disease and vascular stabilization.
The company's lead product candidate, razuprotafib (AKB-9778), is a small molecule Tie2 activator being developed for the topical ocular treatment of primary open angle glaucoma. In two consecutive Phase 2 trials in patients with diabetes, subcutaneous razuprotafib produced a statistically significant decrease in intraocular pressure (IOP) across all time points. In a small, cohort of open angle glaucoma patients, topical ocular razuprotafib yielded statistically significant IOP reductions in patients already on standard of care glaucoma treatment. Phase 2 trials for topical ocular razuprotafib are planned to start Q3 2020.
The company is also advancing razuprotafib subcutaneous formulation in two ongoing COVID-19 clinical trials. The first trial is the I-SPY trial for the treatment of acute respiratory distress syndrome or ARDS in COVID-19 patients. The second COVID-19 trial is run in collaboration with MTEC, the Medical Technology Enterprise Consortium which is funded by the U.S. military. The goal of this study is to assess razuprotafib's potential to prevent the ARDS in patients with moderate to severe COVID-19 infections.
The Company is also evaluating development options for ARP-1536, a humanized monoclonal antibody, for its therapeutic potential in the treatment of diabetic vascular complications including nephropathy and diabetic macular edema (“DME”).
The Company’s third asset is a bispecific antibody that binds both VEGF and VE-PTP which is designed to inhibit VEGF activation and activate Tie2. This bispecific antibody has the potential to be an improved treatment for wet age-related macular degeneration and DME via intravitreal injection.
Finally, the Company has exclusively out-licensed AKB-4924 (now called GB004), a first-in-class small molecule inhibitor of hypoxia-inducible factor-1 (HIF). GB004 is being developed by AKB-4924’s exclusive licensor, Gossamer Bio, Inc. (NASDAQ:GOSS). On May 12, 2020 Aerpio and Gossamer announced the terms of an ammended agreement which included an immediate payment of $15M and $90M in milestone payments regarding regulatory approvals. Aerpio is also eligible to receive tieres royalties on sales of licensed at percentages ranging from low to mid-single digits.
Discussion
I am certain that many of you have seen dozens of biotechs gain significantly in this January 2021. I consider many of them overvalued now and I expect many of them to go through a painful reality check leaving many investors "holding heavy bags."
Two biotech stocks that have not been part of the January 2021 biotech frenzy are Protalix Therapeutics (NYSEMKT:PLX) and Aerpio Pharmaceuticals, Inc. (NASDAQ: ARPO) ....at least not yet. I expect that when these two begin to rally many of the recent high rollers will deflate. I expect Protalix to quadruple this year upon the upcoming approval of its Fabry drug candidate PRX-102. I've recently discussed Protalix potential in my blog post entitled: "PLX @ $3.6 - One Step Closer To Commercialization Of Potentially Blockbuster Fabry Drug. Strong Clinical Data Reported December 30. December 2016 To April 2017 Deja Vu."
Regarding ARPO, I expect the stock to at least double in 1Q 2021, and this blog is to discuss this opportunity for value investors.
But before I go into it, I would like to remind all that ARPO experienced a 50% haircut on December 11, 2020 when the company announced that its lead drug candidate razuprotafib met the primary efficacy endpoint at Day 28 with the twice-daily dose group in open angle glaucoma.
So why the overreaction and the selloff after some clearly good news? Well, the market overreacted to the other part of the announcement which stated stating that the once-daily dose group did not show a statistically significant improvement at Day 28.
"Primary Open Angle Glaucoma, better known as POAG, is a leading cause of blindness affecting approximately 76.0M in 2020 and expected to increase to 118.0M by 2040. POAG is characterized by optic nerve and neuroretina anomalies and progressive visual field defects. Elevated intraocular pressure, or IOP, is the primary modifiable risk factor and reducing IOP is the only clinical approach shown to slow or prevent vision loss."
"Despite the availability of effective IOP lowering drugs, many patients require multiple agents to control IOP that together often fail to achieve target IOP. The conventional outflow pathway, consisting of the trabecular meshwork and a specialized vessel called Schlemm’s canal, controls IOP and has been identified as the site of increased resistance to aqueous humor outflow in POAG. Importantly, most current POAG therapies do not target conventional outflow, and reduce IOP by either decreasing the formation of aqueous humor or facilitating non-conventional outflow pathways."
"The failure of most current therapies to modify conventional outflow has been hypothesized to contribute to continued deterioration of conventional outflow and progressive increases in IOP over time. We believe that developing agents that target conventional outflow pathology directly will likely have improved therapeutic potential alone or in combination with approved glaucoma agents and may prevent progression of POAG that often occurs despite current therapy."
IOP, or intraocular pressure, is the fluid pressure inside the eye. Tonometry is the method eye care professionals use to determine this. IOP is an important aspect in the evaluation of patients at risk of glaucoma.
The December selloff and the gradual ongoing recovery can be seen in the following chart:
I am certain that many investors took the December selloff opportunity to score substantial tax loss credits and some of the same investors might be accumulating now for the eventual trip to the mid $2.5s or higher.
Fast forward to January 5, 2021, when Aerpio announced that its board of directors had initiated a process to review a range of strategic alternatives for its pipeline programs. The company decided to take this step to maximize stockholder value from its clinical assets and significant cash resources. The programs that will be incorporated in the review include razuprotafib and its entire line of Tie2 activating antibodies. Tie2 receptor tyrosine kinases are key regulators of blood and lymphatic vessel development and of pathological processes including tumor angiogenesis, atherosclerosis, and vascular leakage, e.g., in sepsis. According to Aerpio website:"Razuprotafib is a novel small molecule Tie2 activator that enhances endothelial function and stabilizes blood vessels, including pulmonary and renal vasculature."
The press release stated as part of its strategic review the company will be looking for:
- Partners for its drug candidates,
- Possible sale of the company or parts thereoff
- Buyout or merger.
- In-license, out-license or other strategic transactions that will bring value for the company and its shareholders.
The decision to look for strategic alternatives came about following the disappointing reaction to the announcement of the positive top-line results in December 2019 from its phase II study of lead compound, razuprotafib, in glaucoma patients as mentioned above.
In summary, the study was designed to evaluate the safety and efficacy of a topical ocular formulation of razuprotafib as an adjunct to standard of care latanoprost. The primary endpoint of the study was mean diurnal IOP at day28 in the razuprotafib-treated groups compared to the latanoprost monotherapy group. The study met the primary endpoint and showed that the change from baseline in diurnal mean IOP at day 28 of study eyes treated with razuprotafib twice-daily (BID) plus latanoprost was statistically significant compared to those treated with latanoprost monotherapy. The study also showed that razuprotafib had a larger IOP reduction after longer duration dosing.
Going into more details, the change from baseline in diurnal mean IOP at Day 28 of study eyes treated with razuprotafib BID plus latanoprost showed a statistically significant improvement, or drop in IOP, (two-sided p-value 0.0130 and LS mean difference of -0.92 mm Hg) compared to those treated with latanoprost monotherapy.
The market opportunity for razuprotafib in glaucoma is huge and it's expected to grow to $3B in 2025 at an estimated 10% CAGR. The current market leader Pfizer's Latanoprost (Xalatan) is the most prescribed medication for this condition. In 2018 Lananoprost was the 92nd most prescribed medication in the US in 2018, with over 7.5 million prescriptions filled
Commercial Opportunity in Glaucoma (Source: ARPO Corporate Presentation dated April 10, 2019)
Besides glaucoma, as mentioned reviously, Aerpio is also conducting two studies of razuprotafib to prevent or mitigate acute respiratory distress syndrome (OTC:ARDS) in COVID-19 patients. Patient enrollment and dosing in the two studies continue.
The company also has Tie2 activating antibodies in early development, including both a monospecific antibody that may be used to treat diabetic complications and a bispecific antibody that may be used to treat retinal diseases such as diabetic macular edema (DME) and wet age-related macular edema (wAMD).
Importantly, Aerpio has exclusively out-licensed AKB-4924 (now called GB004), a first-in-class small molecule inhibitor of hypoxia-inducible factor-1 (HIF). GB004 is being developed by AKB-4924’s exclusive licensor, Gossamer Bio, Inc. (NASDAQ:GOSS). On May 12, 2020 Aerpio and Gossamer announced the terms of an ammended agreement which included an immediate payment of $15M and $90M in milestone payments regarding regulatory approvals. Aerpio is also eligible to receive tieres royalties on sales of licensed at percentages ranging from low to mid-single digits.
The following is Aerpio's current pipeline:
Aerpio's COVID-19 Clinical Trials
On May 27, 2020 Aerpio and Quantum Leap Healthcare Collaborative announced that they've reached an agreement to evaluate razuprotafib in a new randomized, investigational treatment arm in the I-SPY COVID Trial for the treatment of acute respiratory distress syndrome (OTC:ARDS) in adult patients with moderate to severe COVID-19.
Joseph Gardner, PhD, Aerpio’s President and Founder, commented:
“We are very pleased to have razuprotafib selected for inclusion in the I-SPY clinical trial. It will allow us to evaluate the drug in severely ill COVID-19 patients and quickly assess both preliminary safety and efficacy and guide future development plans. If successfully developed, approved and commercialized, razuprotafib has the potential to help save lives and render the disease less life threatening in the patients most at risk.”
On August 4, 2020, the company and the U.S. Government operating through the Medical Technology Enterprise Consortium (MTEC) announced that an agreement has been reached to evaluate razuprotafib in a new randomized, investigational trial for the prevention and treatment of Acute Respiratory Distress Syndrome (OTC:ARDS) in adult patients with moderate to severe COVID-19 as part of MTEC-20-09-COVID-19 Treatment Military Infectious Disease Research Program (MIDRP) “Development of Treatments for COVID-19.”
Per the agreement, MTEC will provide up to $5.1 million in funding toward the clinical trial. Aerpio will support the trial with “in kind” spending in the amount of $2.8 million. The partnership between Aerpio and MTEC will provide resources to support a second COVID-19 Phase 2 clinical trial with razuprotafib, a drug candidate being investigated for its potential to prevent and treat the severe respiratory distress observed in COVID-19 patients.
Razuprotafib is a potent and selective small molecule inhibitor of vascular endothelial protein tyrosine phosphatase (VE-PTP) that restores Tie2 pathway activation in endothelial cells to stabilize blood vessels during vascular injury and inflammation. Emerging data indicate that SARS-Cov2, the virus that causes COVID-19, may attack vascular endothelium and destabilize blood vessels in multiple organs including the lung, kidneys and heart leading to substantial morbidity and mortality. Based on these findings, Aerpio and a distinguished team of clinical investigators have developed a plan to investigate the therapeutic potential of subcutaneous razuprotafib for the prevention and treatment of ARDS in patients with moderate to severe COVID-19.
In ARDS, the inflammatory infiltrate and lung edema drastically reduces gas exchange leading to multiorgan failure and death. While improvements in supportive care and ventilator management have reduced mortality over the last several decades in patients with ARDS, no effective pharmacological treatments for the prevention of ARDS in patients at risk or as treatment for ARDS due to any cause have been developed.
Razuprotafib represents a potentially unique, first-in-class, host-targeted therapy for ARDS and COVID-19. Razuprotafib restores Tie2 activation to stabilize the vasculature which may provide breakthrough potential for reducing the severity of COVID-19 associated pulmonary and vascular pathology resulting in more rapid recovery, fewer patients requiring mechanical ventilation, decreased time in ICU on ventilator support, and concomitant reduction in morbidity and mortality.
Additionally, razuprotafib together with emerging antiviral drugs could provide the optimal combination of host and virus targeted therapy for prevention and treatment of COVID‑19 and COVID-19 related ARDS. Considering the centrality of pulmonary and vascular pathology to coronavirus morbidity and mortality, a plan has been developed to test the efficacy of subcutaneous administration of razuprotafib in patients with COVID-19.
On October 26, 2020, Aerpio CEO Joseph Gardner commented:
“We commend our clinical team and the trial investigators who have established a close collaboration in this important program. Razuprotafib may also benefit COVID-19 patients who have not yet progressed to ARDS, and we hope that it may fill the need for effective therapeutics for this devastating disease while vaccine development advances. Additionally, therapeutics that can prevent or treat ARDS in COVID-19 may prove useful in other diseases where ARDS is the primary cause of morbidity and mortality.”
During the November 10, 2020 3Q 2020 conference call CEO Gardner commented:
"On the COVID front, we are also making progress with our subcutaneous formulation of razuprotafib in two ongoing COVID-19 clinical trials. First is the I-SPY trial for the treatment of acute respiratory distress syndrome or ARDS in COVID-19 patients. We are actively dosing patients and there have been no safety concerns or AEs associated with drug treatment. Therefore the trial is continuing."
"Our second COVID-19 trial is run in collaboration with MTEC, the Medical Technology Enterprise Consortium which is funded by the U.S. military. The goal of this study is to assess razuprotafib's potential to prevent the ARDS in patients with moderate to severe COVID-19 infections."
"The MTEC trial is a standalone study managed by Aerpio that will evaluate earlier stage patients, i.e. moderate to severe COVID-19. These are patients presenting prior to requiring high-flow oxygen or being on a ventilator. The trial is proceeding with active screening and enrollment of patients across multiple U.S. clinical sites."
"The two trials are complementary as they will assess razuprotafib across a range of disease severity in COVID-19 patients, potentially demonstrating the ability to prevent the ARDS in moderate to severe patients and/or treat ongoing ARDS in critically ill patients. The two-trial approach will optimize our ability to determine how best to utilize razuprotafib to potentially save lives in patients with COVID-19."
"Now, we have had significant scientific support from the scientific community on our COVID-19 program. Our scientific advisory panel believes that razuprotafib's Tie2 activating mechanism may be broadly applicable across other disease indications where the disease produces a severe acute respiratory distress syndrome. The broader application of razuprotafib may produce a life-threatening -- life-saving therapy for critically ill patients across a spectrum of ARDS producing infections, for example influenza and pneumonia."
"To further explain the scientific rationale, we will be featuring two ARDS experts as we are hosting a webcast with two thought leaders at 11:00 A.M. Eastern Standard Time this Thursday on November 12th. Information about this event is found in the Investors section of our website."
"We have two highly renowned physicians presenting on our behalf. The first is Dr. Wesley Self; he is Vice President of Clinical Research Networks and Strategy at Vanderbilt University Medical Center. Over the past decade Dr. Self has led numerous trials in ARDS, sepsis, and pneumonia and has been at the forefront of COVID-19 trials including the ORCHID trial which demonstrated that hydroxychloroquine was not effective."
"And he's now on the steering committees for multiple ongoing NIH-funded trials and a member of the scientific advisory unit for the NHLBI ARDS network on development of COVID-19 trials."
"The second physician will be Dr. Samir Parikh. He is Professor of Medicine and Director of the Center for Vascular Biology at Beth Israel Deaconess Hospital, Harvard Medical School. Dr. Parikh has made seminal discoveries regarding the potential vascular protective effects of the Tie2 pathway in ARDS which are particularly relevant to COVID-19. Dr. Parikh is also intimately involved in COVID-19 clinical trials as he currently chairs the Data Safety Monitoring Board for the NIDDK's COVID studies."
"On our call doctors, Parikh and Self will provide an overview of the vascular pathology in acute respiratory distress syndrome associated with the COVID-19 and the potential of its stabilization with our drug razuprotafib. We encourage everybody to attend that call as I believe it will be of interest to anybody in the COVID space."
The November 12, 2020 "Aerpio KOL Call: COVID-19: Evidence of Vascular Pathology and Potential of Vascular Stabilization via Tie2 Pathway Activation." is a fascinating presentaion by excellent scientists that explain in simple and understandable terms the complexities of COVID-19 infections in the various stages of the disease and the role of ARPO's potentially blockbuster COVID-19 therapy agent razuprotafib.
I also encourage investors interested in ARPO shares because of the COVID-19 therapy angle to go over the very interesting and informative company presentation entitled "COVID-19 Program; Scientific Rationale."
Some inquisitive investors might say "what value will COVID-19 therapies bring now that we have COVID-19 vaccines?"
COVID-19 Becoming Endemic Like The Flu?, Vaccine Rollout a Failure, New Strains Causing Havoc
The title is not a fiction but an unfortunate reality. For instance, Moderna's CEO Stephane Bancel warned Wednesday, January 13, 2020, that the coronavirus that has brought world economies to a standstill and overwhelmed hospitals will be around “forever.” He stated during a panel discussion at the 39th JPMorgan Healthcare Conference Healthcare Conference “We are going to live with this virus, we think, forever,”
Public health officials and infectious disease experts have said there is a high likelihood that Covid-19 will become an endemic disease, meaning it will become present in communities at all times.
Former FDA Commissioner, Dr. Scott Gottlieb commented: “If we can’t get more protective immunity into the population, we could be facing a situation where we have, sort of, a perpetual infection heading into the spring and summer as these variants get a foothold.”
Dr. Gottlieb warned that the variants could transform what could have been a relatively quiet spring and summer, into “a summer where we have more infection because these variants are now circulating and they spread more easily, even in the warm months, when we really shouldn’t have had a lot of coronavirus spreading.”
So far the vaccine rollout as planned by Operation Warp Speed has become "Operation Turtle Speed." In fact, only about 13million Americans have received their first dose of the vaccine, according to federal data, a far cry from the 30 million-plus people that the Trump administration had hoped to vaccinate by now. Logistical breakdowns have plagued the process; just more than one-third of doses distributed by Operation Warp Speed have been administered. At this rate, inmunizing 70% of the population will extend into 2021 in an effort to achieve "herd immunity."
And if you think that COVID-19 vaccination is moving too slow in the US, it is even worse in other countries, particularly in third-world countries where corrupt governments are making lucrative deals with suppliers but vaccinations are minimal or non-existent. Furthermore in some countries over 50% of the population now refuse to be vaccinated for fear of side effects. In Argentina there have reported numerous adverse reactions after people were inocculated with Russia's Sputnik 5 vaccine, and that vaccine is not recommended for people over 60 years old - the age group more at risk to survve COVID-19 infections.
Another huge issue is that the world’s most promising coronavirus vaccine candidates need non-stop sterile refrigeration to stay potent and safe. But despite enormous strides in equipping developing countries to maintain the vaccine “cold chain,” nearly 3 billion of the world’s 7.8 billion people live where temperature-controlled storage is insufficient for an immunization campaign to bring COVID-19 under control.
On Friday, January 15, 2020, the World Health Organization urged more effort to detect new COVID-19 variants. In fact, a spokeman for the US Centers for DiseaseControl and Prevention said that the new variant first detected in the UK may become dominant in the US by March. This variant is known to spread much faster and it's more easily transmitted thus leading to more hospitalizations and deaths, and as he called it, "a new phase of exponential growth is upon us."
The United States has sustained nearly 40,000 deaths in less than two weeks of 2021, according to a CNBC analysis of Johns Hopkins data. The pandemic is, on average, killing more than 3,300 Americans a day. All this doom-and-gloom scenario is actually a shot in the arm for companies like Trinity Biotech that offer a wide range of products to test for and to combat the effects of COVID-19 infections.
Having been in several South American countries in the last few weeks I can tell you that the COVID-19 vaccine programs in most countries (and even in the US) are a mess. It is widely known by now that over 25% of Americans don't want to get vaccinated against COVID-19. In other countries even more people don't want to get vaccinated because of fears to vaccine side effects. Even worse is the recent statement by Vladimir Putin that Russia's Sputnik V vaccine should not be used on people over 60 years old. This created a major confusion and anger in Argentina as those in that age range are most at risk to COVID-19 complications. Just about every one of the socialist contries including Venezuela, Bolivia, Argentina, Nicaragua, etc., are making deals with Russia to get their premature vaccine that has not even completed Phase 3 clinical trials. And the leaders of those countries are making shady deals where they are supposedly paying hundreds of millions of dollars for those vaccines and only a small segment of the population is expected to get vaccinated. But most people in those countries don't care much about vaccines and prefer to use therapies, many of them unproven and dangerous to their health. Also, many third-world countries don't have the infrastructure and equipment to manage vaccines programs like Pfizer's and Moderna's that require ultra-cold temperatures for storage, transportation, and handling.
The other unknown is regarding the effectivenes of current vaccines in new strains such as the apparently more aggressive strain first detected in the UK. According to recent reports, over 60% of the new cases are related to the new strain and this is one of the reasons why over 50 countries globally have banned UK travelers.
Since the coronavirus started to spread across the world, it is thought that it has been mutating twice a month to find the most effective way to infect humans.
New strains could affect how fast the virus spreads between people, which could explain why levels of the variant are higher in the places where there are more cases. SARS-CoV-2 is a RNA virus, which is more prone to mutations, unlike DNA viruses, like smallpox. There are fears that the vaccines will not work against the new strain and scientists are currently studying whether the current Pfizer and Oxford vaccines will work against the new strain. This situation is still very fluid which is prompting the scientific community to investigate issues related to new strains such as their response to vaccines, whether or not they create new symptoms, how they affect children and the elderly, etc.
One sad reality is that not all vaccines are effective against COVID-19. Merck announced this week that it is exiting the COVID-19 vaccination race. The company announced Monday that it's stopping the development of its two vaccines, after early data showed they generated "disappointing immune responses" against the virus.
Finally, the latest in new strains was just reported by Seeking Alpha.....Here is the summary:
- The COVID-19 variant first detected in South Africa could reduce the vaccine efficacy by half according to UK health secretary Matt Hancock.
- However, the tests were underway to confirm it, Mr. Hancock has said during a webinar with business leaders and travel agents last week.
- "We've got a clinical trial in South Africa to check that the AstraZeneca vaccine works. Nevertheless, if we vaccinated the population, and then you got in a new variant that evaded the vaccine, then we'd be back to square one." Mr. Hancock added.
- Earlier, Reuters reported COVID-19 vaccine developed by Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) appeared to work against a key mutation in new variants found in the U.K. and South Africa, citing a laboratory study conducted by the U.S. drugmaker. However, the study did not address another key mutation named E484K of the South African variant.
- Both Moderna (NASDAQ:MRNA) and AstraZeneca (NASDAQ:AZN) have said that their COVID-19 vaccines should be effective against the U.K. variant of the virus, and the tests were ongoing to confirm it.
Fast forward to today, the U.S. is fighting "an incredible scale of tragedy" as COVID-19 cases surpass 25 million, while worldwide infections near 100 million, according to experts at Johns Hopkins University. Epidemiologists are concerned that COVID-19 variants that surfaced in Britain, South Africa and the U.S. might slow or reverse strides in containing the pandemic, and they're investigating how effective available vaccines are on the altered virus. New projections from the Institute for Health Metrics and Evaluation (IHME) at the University of Washington predict nearly 569,000 U.S. deaths by May 1, 2021.
The bottom line is that there will be a huge need for proven COVID-19 testing and therapies globally to fill the gaps left by incomplete vaccination programs so that economies and societies can return to normality.....the new normal...because the world will never be the same after COVID-19.
The market is rewarding handsomely to companies with proven COVID-19 therapies such as Aclaris Therapeutics (NASDAQ:ACRS) whose stock price jumped from $2 to over $20 on news of positive clinical trail results last week. I first featured ACRS when the stock was $2/share: "ACRS - Positive Phase 2 COVID-19 Results Could Be Game Changing For This Well-Funded Biotech Trading Below Cash."
Current Financial Condition
At September 30, 2020 the company had $47.3M in cash and no debt. Company management expect that this cash will be sufficient to carry them through top-line data for the current clinical trials and through the fourth quarter of 2022. In addition to an advanced clinical pipeline with several shots on goal, management is convinced that this healthy amount of cash can be leveraged as an inducement for potential suitors to offer much in return during the ongoing strategic alternative review.
Insider Ownership
Fintel reports almost 30M shares of the 56M shares are being controlled by insiders as shown on the following table. Several directors own are 10%+ owners of common stock. Among large institutional insiders, Novartis and Orbimed Advisors are also 10%+ owners:
Analyst Opinion
According to analysts' consensus price target of $2.75, Aerpio Pharmaceuticals has a forecasted upside of 129.2% from its current price of $1.20. Aerpio Pharmaceuticals has received a consensus rating of Buy. The company's average rating score is 2.50, and is based on 1 buy rating, 1 hold rating, and no sell ratings.
Conclusions
- Unlike many biotech companies Aerpio (ARPO) has not joined yet the 2021 January Biotech Bull Market. I expect this to change quickly as the company expects to report results of its two COVID-19 clinical trials in February 2021. The country's military will provide up to $5.1M in funding towards one of the two COVID-19 trials.
- On January 5, 2021 Aerpio announced that its BOD initiated a process to review a range of strategic alternatives for pipeline programs and its substantial $47M cash with no debt.
- At September 30, 2020 the company had $47.3M in cash and no debt. Company management expect that this cash will be enough to carry them through top-line data for the current clinical trials and through the fourth quarter of 2022. In addition to an advanced clinical pipeline with several shots on goal, management is convinced that this healthy amount of cash can be leveraged as an inducement for potential suitors to offer much in return during the ongoing strategic alternative review.
- ARPO share price is starting to recover following a December 11, 2020 50% haircut after the company announced that its lead drug candidate razuprotafib met the primary efficacy endpoint at Day 28 with the twice-daily dose group in open angle glaucoma. The market overreacted to the other part of the announcement which stated stating that the once-daily dose group did not show a statistically significant improvement at Day 28.
- The market opportunity for razuprotafib in glaucoma is huge and it's expected to grow to $3B in 2025 at an estimated 10% CAGR. The current market leader Pfizer's Latanoprost (Xalatan) is the most prescribed medication for this condition. In 2018 Lananoprost was the 92nd most prescribed medication in the US in 2018, with over 7.5 million prescriptions filled.
- I expect a significant rally going forward in anticipation of COVID-19 clinical trial data and because the company may announce the results of the ongoing strategic review of alternatives to increase shareholder value.
- There will be a huge need for proven COVID-19 therapies globally to fill the gaps left by incomplete vaccination programs so that economies and societies can return to normality.....the new normal...because the world will never be the same after COVID-19.
- Most people in third-world countries don't care much about vaccines and prefer to use therapies, many of them unproven and dangerous to their health. Also, most thrid-world countries don't have the infrastructure and equipment to manage vaccines programs like Pfizer's and Moderna's that require ultra-cold temperatures for storage, transportation, and handling.
- A new, tougher COVID-19 variant first detected in South Africa could reduce the vaccine efficacy by half according to UK health secretary Matt Hancock. This trend will cause that more doses of vaccines will eventually be required globally as new strains which start in one spot are eventually found elsewhere in the globe. This in turn will require inexpensive and practical COVID-19 therapies such as the one being developed by Aerpio Pharmaceuticals.
- One sad reality is that not all vaccines are effective against COVID-19. Merck announced this week that it is exiting the COVID-19 vaccination race. The company announced Monday that it's stopping the development of its two vaccines, after early data showed they generated "disappointing immune responses" against the virus.
- Fast forward to today, the U.S. is fighting "an incredible scale of tragedy" as COVID-19 cases surpass 25 million, while worldwide infections near 100 million, according to experts at Johns Hopkins University. Epidemiologists are concerned that COVID-19 variants that surfaced in Britain, South Africa and the U.S. might slow or reverse strides in containing the pandemic, and they're investigating how effective available vaccines are on the altered virus. New projections from the Institute for Health Metrics and Evaluation (IHME) at the University of Washington predict nearly 569,000 U.S. deaths by May 1.
- The bottom line is that there will be a huge need for proven COVID-19 testing and therapies globally to fill the gaps left by incomplete vaccination programs so that economies and societies can return to normality.....the new normal...because the world will never be the same after COVID-19.
- The market is rewarding handsomely to companies with proven COVID-19 therapies such as Aclaris Therapeutics (NASDAQ:ACRS) whose stock price jumped from $2 to over $20 on news of positive clinical trail results last week. I first featured ACRS when the stock was $2/share: "ACRS - Positive Phase 2 COVID-19 Results Could Be Game Changing For This Well-Funded Biotech Trading Below Cash."
- Aerpio has exclusively out-licensed AKB-4924 (now called GB004), a first-in-class small molecule inhibitor of hypoxia-inducible factor-1 (HIF). GB004 is being developed by AKB-4924’s exclusive licensor, Gossamer Bio, Inc.
- On May 12, 2020 Aerpio and Gossamer announced the terms of an ammended agreement which included an immediate payment of $15M and $90M in milestone payments regarding regulatory approvals. Aerpio is also eligible to receive tieres royalties on sales of licensed at percentages ranging from low to mid-single digits.
- Fintel reports almost 30M shares of the 56M shares are being controlled by insiders. Several directors own are 10%+ owners of common stock. Among large institutional insiders, Novartis and Orbimed Advisors are also 10%+ owners.
- According to analysts' consensus price target of $2.75, Aerpio Pharmaceuticals has a forecasted upside of 129.2% from its current price of $1.20. Aerpio Pharmaceuticals has received a consensus rating of Buy. The company's average rating score is 2.50, and is based on 1 buy rating, 1 hold rating, and no sell ratings.
- I encourage investors interested in purchasing ARPO shares to read the related risks and uncertainties as detailed in the company's most recent filings with the SEC.