Biopharma Companies Setting up for a Rebound in the Near Term

The stock market has taken a pounding thus far in Q122 and small cap biopharma stocks seem to have been hit the hardest. These small cap companies can have their fortunes pinned on one or two product candidate and risk is an inherent component of investing in them. Investors seem to be risk averse right now but that will eventually change when the stock market rebounds as it always has..

With that said, here are a few companies we feel could rebound in the near term.

Northwest Biotherapeutics, Inc. (OTCQB: NWBO), developing DCVax® for solid tumor cancers, has received certification of the manufacturing facility in Sawston, UK. To date, NWBO has developed Phase 1A of the facility, approximately 4,400 square feet of the overall 88,345 square feet planned. The company anticipates that Phase 1A alone will be able to manufacture DCVax-L products for 45-50 patients per month, or 450-500 patients per year, a significant increase from their current manufacturing capacity of four to six patients per month.

The manufacturing development comes on the heels of a $15 million, non-dilutive financing on November 22, 2021, which brought the Company’s cash reserves above $20 million. The financing was in the form of a 22-month loan which requires no payments for 8 months, and then provides for a subsequent 14-month amortization period. The lender has a conversion option exercisable upon announcement of the top line data from the Company’s Phase III clinical trial of DCVax®-L for Glioblastoma brain cancer. Seems to me like a large bet on a positive Phase III data report.

Last week saw a nice bounce (+14%) in Anavex Life Sciences Corp. (NASDAQ: AVXL) shares as the company announced its fiscal Q1 results and updates. Anavex reported positive top-line results from the second randomized, placebo-controlled AVATAR Phase 3 study (ANAVEX®2-73-RS-002) for the treatment of adult patients with Rett syndrome.

The company also advised that top-line results from the placebo-controlled Phase 2b/3 study ANAVEX®2-73-AD-004 for the treatment of Alzheimer’s disease is expected 2H 2022.The company reported cash and cash equivalents of $151.1 million on December 31, 2021.

The company reported positive updates on all its current clinical trials and indicated expansion of the ANAVEX platform pipeline for 2022 using gene biomarkers of response, applying precision medicine for neurological disorders with unmet medical need including:

Planned initiation of ANAVEX®2-73 imaging-focused Parkinson’s disease clinical study – Planned initiation of a potentially pivotal Phase 2/3 study in Fragile X Syndrome, the most frequent genetic cause of autism spectrum disorder – Planned initiation of a Phase 2/3 clinical trial for the treatment of a new rare-disease indication – Planned initiation of ANAVEX®3-71 Phase 2 clinical trials for FTD, schizophrenias and Alzheimer’s disease indications.

Though the company’s shares have fallen in step with the NASDAQ, Amarin Corporation plc (NASDAQ: AMRN), the makers of VASCEPA the first and only drug approved by the FDA for treatment of persistent cardiovascular risk after statin therapy, released their FYE 2021 outcome and their outlook for 2022 last month and it looks promising. Full-year 2021 total net revenue are estimated to be $580 million, and the company ended 2021 with approximately $490 million in cash and investments, and no debt.

Most of the company’s revenue for 2021 is U.S. based but the company is aggressively seeking expansion into the European and Asian markets and in fact, the company is looking to grow in twenty additional countries over the next three years through partnerships and achieving regulatory milestones. Revenues of over $1 billion don’t seem too far off for Amarin.

Last month, Enzolytics Inc. (OTCPNK: ENZC) announced plans to begin the production of Enzolytics IPF Immune™, an immune modulator that benefits the immune system by fortifying it against infections. With the North American dietary supplements market estimated to grow from $50.11 Billion in 2020, to $77.1 billion forecast in 2028 the company feels there is potential for their product. In 2020, immunity-boosting supplements had record sales, making up one-third of all new supplements sales.

The company has engaged a national marketing and branding agency as its distributor to advance the product through multiple distribution channels throughout the U.S. What I like even more about the company’s product is that the active components in the supplement have been registered with the FDA for use in the U.S. under NDI Reg. No. 1083, and the immune booster is being produced and sold pursuant to the Company’s exclusive North America license under U.S. Patent No. 8,309,072.

Consumers are looking for any supplements today that will boost their immune system, giving them an advantage over any future viruses or covid variants that may come. The company’s technology covers the use of Irreversibly Inactivated Pepsin Fragments (IPF) which has been shown in tests to perform an immune-modulating function. The primary IPF ingredient is a complex platform that modulates the immune system, making it stronger, and may be used alone or as a concomitant therapy for a variety of diseases. I think ENZC’s only trouble will be producing enough Enzolytics IPF Immune™ to keep up with demand.



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