Small-cap bounce back – pharma stocks fighting COVID-19
Founded in February 2014, AIM-listed 4D Pharma (LON:DDDD), is a company focused on the development of live biotherapeutics. These are a novel and emerging class of drugs, defined by the US Food & Drug Administration (FDA) as biological products that contain a live organism, such as a bacterium, that is applicable to the prevention, treatment or cure of a disease. This offers a new way to create safe and effective treatments for patients and the opportunity to treat diseases that existing therapies are unable to effectively address.
The company’s live biotherapeutic products are strains of gut bacteria which have been isolated from healthy human donors. A proprietary library of several thousand strains has been built up over the years. These are grown in the company’s 1,500 m2 CGMP-certified manufacturing facility, then encapsulated, administered orally and delivered selectively to the gut, where they exert their therapeutic effects.
To speed up the development process, 4D Pharma has developed a proprietary platform called MicroRx® that identifies live biotherapeutics in the company’s library that have therapeutically relevant effects, based on their efficacy and ability to be rapidly translated into a drug. Using the platform, the company has generated development programmes in a number of therapeutic areas including immuno-oncology, gastro-intestinal, respiratory, autoimmune and CNS disease. A number of clinical trials on various candidates have been completed or are currently ongoing.
On 20 April, shares in 4D Pharma surged by over 60% after the company announced it had received expedited acceptance from the UK Medicines and Healthcare products Regulatory Agency (MHRA) to commence a Phase II study of its candidate MRx-4DP0004 in patients with Covid-19. The drug is an orally administered, single-strain live biotherapeutic, which is currently in a Phase I/II clinical trial for the treatment of patients with partly-controlled asthma.
The new trial will be a randomised, double-blind, placebo-controlled study looking to evaluate the efficacy and safety of MRx-4DP0004 in up to 90 patients in the UK hospitalised with symptoms indicative of Covid-19. Eligible participants will be randomised 2:1 to receive 14 days of treatment with either MRx-4DP0004 or a placebo and be monitored daily for improvement or progression of Covid-19 symptoms and adverse events.
The company’s key focus over the coming weeks will be initiating the trial as soon as possible, with its chief scientific officer, Alex Stevenson commenting: “If MRx-4DP0004 is successful in this study it would represent a highly significant breakthrough in the global fight against the novel coronavirus pandemic.”
MRx-4DP0004 is seen as a particularly attractive candidate for Covid-19 patients as it may potentially prevent or delay their progression to requiring ventilation and intensive care. While it is very early days, encouraging results have already been seen in the asthma trial, where 20 patients have been dosed to date, with no drug-related, serious adverse events. In pre-clinical studies MRx-4DP0004 has shown it can significantly reduce lung inflammation and impact particular immune cell types and pathways which have more recently been implicated in the hyperinflammatory response to Covid-19.
Shares in 4D Pharma have surged from 23.5p in March (an all-time low) to a current 60p, capitalising the company at £65.70m − yet the shares remain well down on recent levels, having reached more than 100p as recently as early February.
Investors will be keenly awaiting news on the Covid-19 trial. But elsewhere there should be a healthy flow of news from five other clinical studies in progress, along with a number of pre-clinical stage programmes. The main study is a Phase II clinical trial evaluating the safety and efficacy of repeated oral doses of drug Blautix in irritable bowel syndrome (IBS) patients. Interim analysis of the data revealed in mid-April showed that Blautix has a safety profile comparable to placebo, with a report on the full data expected in Q3 this year.
It is also noteworthy that US pharma giant MSD, the tradename of Merck & Co, is a large shareholder in 4D Pharma (with a 7% stake) and the two companies have a research collaboration agreement to discover and develop live biotherapeutics for vaccines.
To finance its activities, 4D Pharma raised £22m via a placing back in February at 50p per share. Encouragingly, certain directors put in a total of £2m. The net proceeds along with existing cash are expected to support ongoing clinical studies in IBS and oncology and to fund operations to at least two clinical study readouts.
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