Why CTIX?
#1 Brilacidin:
Since the Polymedix acquisition last year, the adding of their assets, and in particular Brilacidin, was not met by an expected increase in valuation. Instead, following the acquisition a long slide from 2.20 region to 1.40 ensued. This in spite of a $200 valuation of the Brilacidin asset prior to Phase 2b trial start. Even as the end of the trial is now official, and the announcement that B-ABSSSI performed at least as expected, the share price is only just now approaching the price just prior to the acquisition a year ago.
Add to the B-ABSSSI Phase 2b announcement that of a pending INDA for Brilacidin-OM, followed by Brilacidin-Ocular, Brilacidin-Otic, and Brilacidin-Diabetic Foot Infections/Ulcers and the Brilacidin value becomes something well north of $200 million. So, discounting and further increased valuation following the Phase 2b trial, the market still does not as of yet recognize any value in the rest of the platform. This will change.
#2 Kevetrin (many would put this at #1)
Kevetrin has long been the flagship drug for CTIX, though arguably recently replaced by Brilacidin. Kevetrin is the platform drug. Following successful Phase 1 studies, there are already 2 more studies planned at world class research centers, MD Anderson and University of Bologna, with a third trial planned at Beth Isreal, all at no, or almost no, cost to CTIX and its shareholders.
Drawbacks to Kevetrin are that it is in the most expensive development arena of biopharma, ontology, and the current trial could go on for at least another 6 months, possibly even a year. Then, there is some question whether or not it will be effective as a stand alone drug, which means to some that developing each combination therapy will mean each requiring a Phase 1b start. CTIX will need funding for these trials, which means partnering, even if a license with $50 million up front is reached for any drug in its pipeline.
On the other hand, as noted above, there is much available in support for a new, effective addition to anticancer therapies, and the efficacy that K targets is considered to be the holy grail of oncology, at least for 50% of all cancers. The high cost and high potential is the balance reflected in the shareprice and cap over the past 18 months, until last week. Nonetheless, the SP is still inside the extended flag reaching all the way back to January 2013.
The question for shareholders, current and future, looking back Brilacidin and the lack of added valuation since its acquisition, to what extent is the current cap reflective of total added values as Brilacidin and its many forms and Kevetrin as an emerging platform? I would postulate that we are currently not more than half way there at $2, and probably a third of the way.
#3 Prurisol
This drug was to be the "meal ticket" for Kevetrin clinical trials until Brilacidin knocked it off its perch. In nonclinical testing, Prurisol was a functional cure of psoriasis. Not just lesion clearance as measured by PASI, but total, full disappearance for the nonclinical trial life of the subject mice. Nonetheless, since Prurisol shifted from proof of concept to FDA trial, several new and effective drugs have won FDA approval. The question remains, with increased competition, will Prurisol prove to be as effective in clinical trials as it has been in nonclinicals? Currently, we would not expect it to add value to the bottom line as the other two drugs now dominate that aspect of CTIX. Still, should Prurisol prove to be what it was in preclinical development, expect a billion dollars in increased cap following such a successful 2/3a trial, a trial that should be short and sweet at about 1 year's duration.
Putting it all together
Should the results of the Brilacidin-ABSSSI trial turn out as many expect--high efficacy, low toxicity, short duration regimen--expect a breakthrough therapy designation with a straight to NDA and clinical approval. In the meantime, clinical trials against other infections as well as formulations are already ramping up. A partnership or license deal should also be in the works and in place in Q1 2015.
Here is the caveat to the partnership and timing, 30 kg of Brilacidin in its current formulation is a lot of product even at the higher dose of 1.8 mg/kg over 3 days. Given Leo's explanation, for future clinical trials, that would be enough product for 250K patients, or 250 trials of 1000 patients each. 250 trials? Really? He expects >200 Phase 2/3 trials over the next year? Sufficient material for 150K patients, enough to treat 25% of all hospitalized ABSSSI for the entire first year, would also have enough left over for another 100 trials of 1000 patients each. Still a lot of trials. Do keep in mind that the other forms of Brilacidin are reformulations, so Leo can't be including those in his future trials.
As for Kevetrin, while a successful Cohort 8 and approval of 9 should be viewed buy the market as a great success, 215 mg/m2 deemed safe, advancement of trials, all trials, are still a year away. Still, each advancing cohort should also add value. And, should Brilacidin result in a partner, those future trials will be fully funded and that will change the valuation metric substantially for the better.
Prurisol will be Prurisol, and once that is clinically proven, it should result in an additional $10 a share over and above any valuation for B and K, if only for its billion dollar market potential.
IMO-FWIW
