To exacerbate things, the Delta variant was first detected in October 2020 and by June, it had spread to 62 countries. Now, its surge continues to abate worldwide as shown by the World Health Organisation tracker below, but excludes Eastern Europe, with the hard-hit nations having low vaccination rates. In countries like Russia, Romania, Ukraine, Bulgaria, and Belarus, there are new cases and the death rate is high.
Source: WHO COVID Tracker
Furthermore, vaccinations offer time-limited protection and only rich countries have fully immunized their populations. The CDC has approved booster shots, but some people have become wary of the need to be repeatedly jabbed. At the same time, poorer nations have lagged behind with only nine of Africa’s 54 countries meeting the WHO’s vaccination targets.
These conditions together with the ability of the coronavirus to mutate rapidly are leading to a possible resurgence in infection rates as seen by the wave pattern of the chart above and could lead to more hospitalization. This calls for medication addressing severe cases where patients are put on ventilators. Here, aviptadil has enabled critically ill Covid-19 patients to recover quickly from respiratory failure, by blocking the replication of the SARS coronavirus in lung cells and human monocytes.
Looking at hospital-level medication, Regeneron (REGN) announced a deal in mid-September to provide 1.4 million additional doses of its COVID-19 antibody cocktail, REGEN-COV, to U.S. health authorities, while just in August during its earnings call, the company had downplayed prospects for record additional sales of its therapy in 2021. The value of the transaction was $2.6 billion.
Consequently, there is a need for treatments at the hospital level as evidenced by the U.S. government's action to provide Regeneron's antibody cocktails to state and territorial health departments.
For this purpose, NRx and Relief form part of many other biotechs developing cures for hospitalized patients, but the advantage of their experimental Phase 3 COVID-19 therapy is that it generated no new safety concerns, both as a monotherapy and in combination with Remdesivir (NCT04843761 in the table below).
This follows a review of 231 patients, with the study's Independent Data Safety Monitoring Board recommending continuing the enrollment. As a matter of fact, the ACTIV-3b Critical Care Phase 3 study is sponsored by the National Institutes of Health and aims for a total enrolment of 600 patients.
The above table also shows ZYESAMI at Phase 2b/3 clinical trials in patients with Acute Respiratory Failure due to Critical COVID-19. Now, clinical trials, if not sponsored by a third party imply high R&D and administrative costs, with the monetary aspect also being the subject of contention as per the lawsuit.
Finances and key takeaways
For NRx, operating expenses in the first half of this year soared at $42.7 million compared to just $1.1 million for the same period in 2020. As of June 30, 2021, it had $13,386,332 in cash. Subsequently, the company received $9,186,316 from the exercise of a warrant. On May 24, 2021, the company had announced a merger with Big Rock Partners Acquisition Corporation, a special purpose acquisition company (SPAC), valuing the company at $1.5 billion.
As seen by the chart below, NRx's stock has been most punished by the market, with its share price now below December 2020 levels by 34%.
Data by YCharts
Pursuing further, as per the SEC filings dated Aug. 16, 2021, NRx believed that it currently had sufficient funds to support operations through the next twelve months from the date the condensed consolidated financial statements were issued. In addition to aviptadil, the company has NRX-101, which focuses on suicidal bipolar depression and PTSD, also at Phase 3.
As for Relief, its shares have also been battered by the market, but to a lesser degree. It is also a loss-making company and as per a corporate update covering H1-2021, operating expenses were CHF15.4 million ($16.2 million), mainly driven by drug development activities. At the same time, cash used in operating activities has ramped up to CHF17.7 million from CHF3.2 million over the same period last year, but as a result of equity financing exercises, the company had available cash of CHF 40 million ($43 million) as of September 24.
Relief also has a collaboration with Acer Therapeutics (ACER) for the development and commercialization of ACER-001 for the treatment of Urea Cycle Disorders (UCDs) and Maple Syrup Urine Disease, with an NDA, submitted to the FDA in August, together with a Marketing Authorization Application for approval in the European Union on its way before the end of 2021. Pending a positive decision by regulators, management believes that ACER-001 could be launched in both the U.S. and Europe during 2022.
The company has raised about CHF30 million in two equity sales for effecting two acquisitions. One of these is AdVita, whose assets should help Relief in inhaled aviptadil in the treatment of Acute Respiratory Distress Syndrome ("ARDS") and Checkpoint Inhibitor-induced Pneumonitis (CIP).
Therefore, in addition to COVID, both plays are diversified in other therapies and have cash at hand to develop their respective pipelines, but going forward, they may face difficulties in raising cash. In this case, NRx seems to have made an opportunistic private placement for around $30 million of gross proceeds on August 24.
Finally, adopting a cautionary posture, despite tantalizing opportunities as seen by Regeneron's antibody cocktail, the key take for investors is to wait for corporate updates, especially ones from NRx, as the defendant, before buying any of the two stocks.
This article was written by
Chetan Woodun profile picture.
Investment Research and Analytics at Keylogin Information and Technologies Co. Ltd.Initially a systems impl...
Medium-Term Horizon, Multi ( Info+Fin+Bio) Tech, Telco, Value
Contributor Since 2018
Investment Research and Analytics at Keylogin Information and Technologies Co. Ltd.
Initially a systems implementer in virtualization and cloud. Also, worked as a supervisory position and later as a team leader and project lead. Spent a long time working in Telcos.
Initially with Tech stocks and now going Multi Tech : InfoTech, + Fintech and Biotech.
Preference for small tech stocks.
I have been investing since the last 25 years, initially in mutual funds where the "learned economists" would always advise you to "think long term". Learnt not to trust them in 2008/2009 downturn when I lost a lot. Since, then I do my own research and fell in love with Seekingalpha because of the unique perspectives it provides to someone investing hard-earned money.
We live only once but can have many "investment lives" especially when investing in individual stocks.