SCYX: "Seeking Alpha" from a year ago
SCYNEXIS: An Update On This ~$2 'Lottery Ticket'
Jul. 13, 2018 11:54 AM ET|21 comments | About: SCYNEXIS, Inc. (SCYX)
Bret Jensen
Small antifungal stock SCYNEXIS has received several "buy" recommendations from analyst firms this week.
This high risk/high reward concern has a primary drug candidate that is aimed at several indications, and has some upcoming catalysts.
A full investment update is presented in the paragraphs below.
"I love sleep. My life has the tendency to fall apart when I'm awake, you know?" - Ernest Hemingway
We revisit an antifungal company called SCYNEXIS (SCYX) today. I have received a few inquiries on this ~$2 biotech "lottery ticket" this week and analyst commentary has also picked up around it in recent days.
Company Overview
SCYNEXIS is a New Jersey-based concern that is focused on delivering innovative anti-infective therapies for patients suffering from infections that are difficult to treat and often life threatening. The stock currently trades just under $2.00 a share and sports a market capitalization of $90 million. The stock rose more than 15% on Wednesday after announcing a dose regimen for key upcoming late stage trial for its lead drug candidate.
Pipeline
SCYNEXIS is pretty much a binary play as their near and midterm future will be determined exclusively by how the company's lead drug canidate SCY-078 proceeds in trial development.
SCY-078 is an oral and intravenous drug for the treatment of various fungal infections, and has been shown to be effective against a broad range of Candida and Aspergillus species in preclinical studies. These infections can be lethal, in many cases having mortality rates of 20% to 40% depending on the previous health of the individual.
As can be seen here, SCY-078 is targeting multiple "shots on goal" and is in mid- to late-stage development for a variety of indications.
In May of this year, the company announced that SCY-078 has received Qualified Infectious Disease Product (QIDP) and Fast Track designations from the FDA for the treatment of Vulvovaginal Candidiasis or VVC and prevention of recurrent VVC as well. The QIDP designation allows SCYNEXIS to have priority review and an additional five years of market exclusivity in the U.S. for SCY-078.
The company disclosed encouraging top-line data from a Phase 2 trial for this indication in early June. On its first quarter conference call, management stated that the company plans to initiate a Phase 3 registration program of oral SCY-078 in VVC in the fourth quarter of 2018, with a potential NDA filing for VVC expected in 2020.
Analyst Commentary and Balance Sheet
Maxim Group was out yesterday morning reissuing a "buy" rating and $6 price target on SCYX with the following commentary after the company decided on the dose regimen for a critical upcoming late stage trial:
Scynexis announced positive data from the P2b DOVE study evaluating anti-fungal candidate SCY-078 vs. fluconazole ('Flu' standard of care) in moderate-severe vulvovaginal candidiasis (VVC), demonstrating comparable or enhanced efficacy across multiple measures. Key takeaways from the data (600mg dose group vs. Flu group shown): ? Dosing: Lowest dose of 600mg (N=27) had best combination of efficacy and tolerability, will take into P3 studies. ? Test of Cure (TOC): Comparable to fluconazole, 52% vs. 58% at day 10, improved to 70% at day 25 vs. 50% for Flu. ? Sign and Symptoms (S&S), supports TOC data. At day 10 SCY-078 was 1.0 vs. Flu at 1.8, improved to 0.4 at day 25 where Flu worsened to 2.6. ? Mycological eradication: At day 10, SCY-078 was 63% vs. 63% for Flu and at day 25 was 48% vs. 38%. ? P3 studies next, 4Q18: Two studies, N=300 each, 600mg SCY-078 vs. placebo.
H.C. Wainwright also reiterated its buy rating and $5 price target on SCYX Wednesday before the bell. Late in June, Maxim Group initiated SCYNEXIX with a new buy rating. It cited valuation and the potential upside from antifungal SCY-078 as reasons behind its positive on the company.
The company raised some $30 million via a secondary offering in March and ended the first quarter with over $60 million (two-thirds of its market cap) in cash on hand. SCYNEXIS is burning approximately $7 million to $8 million per quarter so has adequate funding in place for near and medium term needs.
Verdict
SCYNEXIS remains a "lottery ticket" depending on how SCY-078 develops. That being said the stock has an attractive, albeit high risk/high reward profile and merits a small holding within a well-diversified biotech portfolio. Positive analyst commentary is on an uptick, funding needs have been addressed and SCY-078 development is proceeding on pace.
Bladerunner
