Market Cap Close To Net Cash, Low Cash Burn, And Promising Phase III Trial Indicate Potential Recovery Of Glycomimetic’s Share Price
Seeking Alpha Analyst Since 2020
- Uproleselan currently in phase III trial with Breakthrough Therapy Designation.
- 162m market cap vs. 150m net cash.
- roughly 40m cash burn/year, equals enough funding for approximately 4 years.
- high quality investor base (34% of shares held by biotechspecialists Nea and BVF) and a share purchase by one board member in March 2020.
After Glycomimetic’s drug Rivipansel did not meet its primary and secondary endpoints in last year’s phase III trial studying patients with sickle cell anemia, the company’s hopes in penetrating the market in the near-time now lie in another specific E-selectin inhibitor called Uproleselan. Uproleselan, or GMI 1271, demonstrated its efficacy and safety in a phase I/II trial, in which it was used as an add-on therapy to chemotherapy in patients with acute myeloid leukemia (AML). AML is a malignant blood cancer primarily affecting the elderly. AML harms blood cell development thereby leading to (i) a malfunction of the immune system predisposing patients to infections, (II) a coagulation disorder leading to recurrent bleedings, and (III) anemia. The standard treatment of AML consists of the chemotherapeutic agents cytarabine and idarubicin. In patients who do not achieve remission (no signs/symptoms of AML) after chemotherapy (= refractory AML) and in patients who achieve remission but who have new signs of leukemia (= relapsed AML) standard treatments are mitoxantrone, etoposide, and cytarabine. To increase the therapeutic efficacy of these agents, Glycomimetics developed GMI 1271 as an add-on therapy. After demonstrating its safety in its phase I trial, in its phase II trial, it was tested as an add-on in AML patients being treated for the first time (treatment-naïve patients, n = 25) as well as in patients with refractory and relapsed AML (R/R patients n = 47). Across both study groups, Uproleselan was safe and compared to literature reports in patients receiving chemotherapy in AML, it even seemed to reduce the frequency of mucositis, an infection of the mucous membrane commonly occurring in patients receiving chemotherapy. Regarding efficacy, Uproleselan demonstrated relatively high remission rates and low induction mortality. Even though phase II study groups were small (total n = 72), Uproleselan received Breakthrough Therapy Designation in patients with relapsed or refractory AML, in which Glycomimetics is currently conducting a phase III study and expecting top-line results in 2021. Even though the company is currently not pursuing a phase III study in treatment-naïve patients, the target patient population is still considerable as only “approximately 40-45% of younger and 10-20% of older adults with acute myeloid leukemia (AML) will be cured with current standard chemotherapy” (Bose et al. Curr Treat Options Oncol, 2017) and roughly 20,000 patients are newly diagnosed with AML each year in the US only. However, market shares in R/R AML are strongly contested as different therapeutic agents (Enasidenib (Idhifa®), Ivosidenib (Tibsovo®), Gilteritinib (Xospata®) were approved by the FDA in the preceding years in an attempt to increase survival and decrease morbidity in this patient population. In comparison to the previously mentioned therapeutic agents, Uproleselan seems to have a favorable safety profile, yet its efficacy remains to be demonstrated in the ongoing phase III study. In the phase II study, however, remission rates indicated a promising efficacy profile.
Next to Uproleselan, Glycomimetics has one other clinical-stage (phase Ib) drug in development (GMI 1359), which is intended for patients with metastatic breast cancer. The first patient was included in January 2020 but patient enrollment had to be paused due to COVID-19. Since this is a very early clinical-stage drug and Glycomimetic’s share price is currently largely dependent on the performance of Uproleselan, I will not go into detail regarding GMI 1359.
Overall, Glycomimetics may deliver promising results in 2021. Nonetheless, shareholders must consider that the company’s current market cap is largely based on a single drug (Uproleselan). Comparing a 162m market cap with a promising stage III drug and 150m in net cash, however, Glycomimetics seems to be a reasonable investment. With roughly 40m cash burn per year and expecting it to not increase dramatically over the next years, funding is secured until its phase III study is completed if the current study schedule is adhered to. Another potential positive indicator is the fact that a board member bought shares in March 2020 and 34% of shares outstanding are held by biotech specialists Nea and BVF. As indicated above, the main investment risk lies in the fact that current cash reserves are only sufficient to complete Uproleselan’s phase III trial. If the phase I and in a best-case scenario also the phase II study results of GMI 1359 turn out to be positive, Glycomimetics is highly likely to rely on further external investments to carry out a phase III trial.
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