Expect a Phase 3 trial for Appili Therapeutics’s (Appili Therapeutics Stock Quote, Chart, News TSXV:APLI) COVID-19 drug favipiravir, says Mackie Research analyst André Uddin, who gave clients an update on the company on Monday.
Uddin maintained his “Speculative Buy” rating and $1.60 target for Appili, which at press time translated to a projected 12-month return of 48 per cent.
Appili, which develops novel treatments to fight infectious diseases, targeting serious or life-threatening infections, announced on September 11 that it has submitted a new protocol with the US Food and Drug Administration (FDA) for a randomized, double-blind, placebo-controlled Phase 3 trial with favipiravir, a broad-spectrum antiviral discovered by FUJIFILM Toyama Chemical as a treatment for SARS-CoV-2 and one which has already been approved in Japan and China for some forms of influenza.
The Phase 3 trial will involve 826 out-patient subjects recently diagnosed as COVID-19 positive, with the patients to self-administer favipiravir in their homes with clinical investigators monitoring them remotely. A substudy will involve 136 asymptomatic participants to evaluate if favipiravir can shorten the period of viral shedding and thus diminish the infectivity of the COVID-19 virus.
Expected to start in six weeks, the Phase 3 study would then take about six months to complete, with results anticipated by the end of the second quarter 2021 and with the trial estimated to cost US$7 million.
“As the global incidence of COVID-19 cases continues to rise at alarming rates and we learn more about the virus and patient demographics, it is clear that we will need multiple approaches to effectively quell this pandemic,” said Dr. Armand Balboni, CEO at Appili, in a press release.
“As part of this global effort, Appili has focused on the outpatient setting with the first orally available antiviral for the potential treatment of COVID-19 in adults with mild to moderate disease. We look forward to working with clinical teams to rigorously study the utility of favipiravir, helping to determine if it can help reduce the spread and inhibit COVID-19 disease progression,” Balboni said.
Uddin said he expects Appili will be applying for an emergency use authorization (EUA) for favipiravir shortly.
“If the FDA potentially grants the EUA by the end of CY2020, it could make favipiravir an eligible and competitive candidate for U.S. government stockpiling contracts. The Canadian government could follow suit to stockpile the drug,” Uddin wrote. “To be conservative, we are maintaining our current assumptions that favipiravir would be stockpiled by the two governments in FY2022.”
At present, Uddin is using a sum-of-the-parts methodology to value APLI, with the analyst counting four main assets currently: favipiravir, ATI-2307, an antifungal, ATI-1701, a biodefence drug, and ATI-1501, an anti-infective.
“Investors should note several factors were not taken into consideration in our APLI valuation, including: the value of potential PRVs associated with ATI-2307 and ATI-1701, sales milestones and the majority of sales royalties of a potential ATI-2307 licensing transaction, the residual value of the four products after FY2032 and the value of ATI-1503. We believe those factors represent great upside potential to the company’s valuation going forward,” Uddin wrote.