Is Eupraxia Pharmaceuticals (TSX:EPRX) a buy?

Research Capital analyst Andre Uddin says Eupraxia Pharmaceuticals’ (Eupraxia Pharmaceuticals Stock Quote, Chart, News, Analysts, Financials TSX:EPRX) EP-104GI should be easy for gastroenterologists to use if approved.

In an Aug. 4 update, Uddin maintained his “Speculative Buy” rating and $14.00 target on Eupraxia.

Eupraxia hosted a virtual key opinion leader webinar on July 29 focused on how EP-104GI could be administered and reimbursed. The webinar did not include new clinical data.

EP-104GI is being developed for eosinophilic esophagitis, or EoE, a chronic inflammatory disease of the esophagus.

Uddin said the webinar suggested EP-104GI could fit into the existing endoscopy and biopsy process used for EoE patients. Dr. Waqqas Afif said preparation is simple, requiring two solutions to be mixed, and could be handled by a nurse. The reconstituted solution remains stable for four to six hours.

Afif said the injection would add about 10 to 15 minutes to a routine endoscopy, without requiring extra staff or new roles. He also said patients are not expected to feel discomfort from the injection because the esophageal submucosa does not have nerve endings.

Dr. Mark DeLegge discussed the reimbursement path, pointing to existing procedure codes that may apply to EP-104GI administration. He said the product would likely be reimbursed under a buy-and-bill model, which many endoscopy centres already use for other drugs.

Uddin noted that more than 60% of claims tied to the relevant endoscopy codes are reimbursed by commercial insurers, which generally pay more than Medicare.

“We continue to believe that the simplicity of the injection workflow, the lack of incremental staffing requirements, and favourable commercial reimbursement should support the adoption of EP-104GI, assuming the drug candidate continues to generate compelling clinical data and receives regulatory approval,” Uddin said.

Management also shared market research showing about 80% of EoE patients undergo routine diagnostic endoscopy at least once every two years, while about 60% do so annually. Uddin said that aligns well with EP-104GI’s once-yearly dosing schedule.

A survey of 28 stakeholders, including gastroenterologists, nurses, practice administrators and billing specialists, also produced favourable feedback. Respondents cited the simplicity of the procedure, no need for additional staff or equipment, and potential for added revenue at ambulatory surgical centres.

The analyst said his positive view is unchanged, but adoption still depends on continued clinical success and regulatory approval.

-30-