Innovation Pharmaceuticals Inc (IPIX)

[olden_grumpini]

IPIX is facing a patent cliff for brilacidin. Based upon IPIX’s own information, the “useful life” of the brilacidin patent ends by 2028. IPIX has been giving us this information for years (see 10K for the period ended 6/30/14 that includes brilacidin [10K from 6/30/14]).

To complicate the matter, brilacidin was developed by Polymedix under a license from UPenn (Polymedix entered into this license in 2003). IPIX signed onto the terms and conditions of the license when they acquired the Polymedix assets, including conditions under which UPenn can terminate the license. It’s unlikely that UPenn will terminate the license, but not impossible. IPIX includes the following wording in their 10Ks:

All of our Polymedix drug product candidates are licensed from or based upon licenses from the University of Pennsylvania. Upon our purchase of the Polymedix Assets we assumed all contractual rights and obligations of the licenses. If any of these license agreements are terminated, our ability to advance our Polymedix product candidates or develop new product candidates will be materially adversely affected which could have a materially adverse effect on our business.

Taking this into consideration, how attractive is brilacidin to a pharma looking to fill holes caused by a patent cliff or looking for an “early-stage asset”? What does brilacidin have that these people would be willing to invest in?

The COVID panic presented a unique opportunity for brilacidin. IPIX capitalized on that opportunity and the stock increased about 9x from $0.06 to $0.54. Failing the COVID trial was a devastating blow and it's likely that future in vitro results will be discounted on the basis of the COVID failure.

I don’t know where this stock will go in the short term. I bought some in the $0.03s so I’m happy to see the recent increase. I posted a couple months ago about the need for IPIX to boost the share price to at least $0.10 to tap the Aspire financing (that’s now kaput). Seeing them invest $4 million in Squalus (for a minority stake) boggles my mind. The Fox Chase deal is unlikely to have provided much, if any, revenue. The Alfasigma deal has a glimmer of promise, but they too are challenged by the patent cliff and must take that into account when deciding how much money to invest in further development of brilacidin (the deal was signed 3 years ago next month).

This is all imo, of course.