The COVID-19 outbreak appears to be building toward a major pandemic, with the virus now breaking out from China and spreading to more countries, with confirmed cases and deaths reported in Italy, Iran and South Korea. A number of companies have turned their attention to quickly develop medicines to combat the infection. Indirectly, the public attention that COVID-19 has received has spilled over to antibiotics companies, and the BioWorld Infectious Diseases index has grown 14% in value since the beginning of the year.
The interest on individual companies that have therapeutics in their pipelines to combat the spread of the novel coronavirus infection that emerged in Wuhan, China, is reflected in the stock price rise of several index group members.
Investors jump on board
New member to the index, Vir Biotechnology Inc., of San Francisco, which is working on developing therapies targeting hepatitis B virus, influenza A, HIV and tuberculosis, saw its shares (NASDAQ:VIR) soar 119% last month, with investors jumping on board because it is working to rapidly determine whether its previously identified anti-coronavirus monoclonal antibodies bind and neutralize the newly emerged Wuhan coronavirus.
Today, the company said it is building on that research by establishing a development and manufacturing collaboration with Wuxi Biologics Co. Ltd., of Shanghai, to advance and produce human monoclonal antibodies for the potential treatment of COVID-19.
Wuxi Biologics will conduct cell line development, process and formulation development, and initial manufacturing for clinical development. If the antibodies receive regulatory approvals, it has the rights to commercialize therapies in greater China, and Vir will commercialize therapies in all other markets worldwide.
“We are acutely aware of the importance of moving rapidly in response to COVID-19,” noted George Scangos, Vir’s CEO.
Novavax Inc. has also benefited from an extensive history of working with coronaviruses and developing vaccine candidates, with its shares (NASDAQ:NVAX) up by more than 105% year to date (YTD). The company has initiated development of a vaccine candidate against COVID-19.
South San Francisco, Calif.-based Vaxart Inc. has also benefited from investor interest about its oral recombinant vaccines. Late January, it announced that it had initiated a program to develop a coronavirus vaccine candidate based on its vaccine platform. The company’s shares (NASDAQ:VXRT) have jumped 266% since the beginning of the year.
Thanks to those stellar performances, the BioWorld Infectious Disease index has broken out of its slump.
On the comeback trail
Antibiotics companies are also making a comeback. The shares (NASDAQ:CFRX) of Yonkers, N.Y.-based Contrafect Corp. have risen 39% this month (82% YTD). The company is focused on the discovery and development of direct lytic agents, including lysins and amurin peptides, for the treatment of antibiotic-resistant infections. It completed, this month, a 1-for-10 reverse stock split of its shares to satisfy the $1 minimum price requirement for continued listing on Nasdaq and also reported that the FDA had granted breakthrough therapy designation to exebacase for the treatment of MRSA bloodstream infections (bacteremia), including right-sided endocarditis, when used in addition to standard-of-care (SOC) anti-staphylococcal antibiotics in adult patients.
Last month, the first patient was dosed in the company’s phase III DISRUPT (Direct Lysis of Staph aureus Resistant Pathogen Trial) study of exebacase in patients with S. aureus bacteremia, including right-sided endocarditis.
Attracting capital once again
The changing environment has allowed companies developing antibiotics to attract much-needed capital to fuel their product pipelines. Iterum Therapeutics plc, for example, which is developing next-generation oral and I.V. antibiotics to treat infections caused by multidrug-resistant pathogens in both community and hospital settings, generated approximately $51.9 million from a January private placement, which the company plans to use to develop sulopenem, a penem anti-infective compound with oral and I.V. formulations. The compound has demonstrated potent in vitro activity against a wide variety of gram-negative, gram-positive and anaerobic bacteria resistant to other antibiotics. The company’s shares (NASDAQ:ITRM) are up 42% month to date.
Also, this month, Armata Pharmaceuticals Inc., of Marina Del Rey, Calif., a company focused on developing bacteriophage therapeutics, completed the first closing under a securities purchase agreement with Innoviva Inc., of South San Francisco, a company with a portfolio of royalties that include respiratory assets partnered with Glaxo Group Ltd. Armata issued 993,139 common shares and warrants to purchase 993,139 common shares in exchange for net proceeds of about $2.8 million. The company said it expects the proceeds to provide enough cash resources to achieve meaningful clinical milestones in 2020 and 2021.
Appili Therapeutics Inc., of Halifax, Nova Scotia, closed a public offering by issuing 12.8 million units at CA80 cents each for aggregate gross proceeds of CA$10.25 million (US$7.7 million). The offering will be used for prepping its new asset, ATI-2307, an antifungal agent for a phase II trial. The cash will also be used for developing their pipeline, which includes selecting a clinical candidate for its negamycin antibiotic program, delivering proof-of-concept one-year data on its biothreat vaccine candidate and working toward its first commercial product with partner Saptalis Pharma Inc. on ATI-1501 for treating bacterial infections.
San Diego-based Cidara Therapeutics Inc. raised gross proceeds of approximately $30 million from a rights offering. The company is progressing its echinocandin antifungal, rezafungin acetate, in a phase III trial for the first-line treatment of candidemia and/or invasive candidiasis. It is also advancing a second phase III trial of once-weekly rezafungin for prophylaxis against invasive fungal infections in patients undergoing allogeneic blood and marrow transplantation.
Spero Therapeutics Inc., of Cambridge, Mass., has also started a rights offering in order to raise gross proceeds of $30 million The company expects to use the proceeds to fund the advancement of lead product candidate tebipenem HBr (tebipenem pivoxil hydrobromide; formerly SPR-994), designed to be the first oral carbapenem-class antibiotic for use in adults to treat MDR gram-negative infections, and the initiation of a phase IIa trial of SPR-720, its oral candidate designed for the treatment of rare, orphan diseases caused by pulmonary nontuberculous mycobacterial infections. The company’s shares (NASDAQ:SPRO) are trading down 4% YTD.