Acurx Pharmaceuticals, Inc. (NASDAQ: ACXP) shares are higher by more than 10% since last week after reaching another milestone. And it’s a big one. On Monday, the company announced that it enrolled its first patient in its Phase 2b clinical trial of ibezapolstat, its lead antibiotic candidate, against the standard of care to treat CDI, vancomycin. The 64 patient, double-blind, randomized trial is expected to be completed mid-2022.

And keep in mind as the enrollment continues, drug development stocks tend to run considerably higher ahead of a data release. That could be the case for ACXP.

And deservedly so.

Ibezapolstat Shows Best In Class Potential

Indeed, ACXP’s ibezapolstat is already attracting attention. The good kind. In fact, the FDA granted QIDP and Fast Track Designations that provide priority review. Thus, with those pieces in place, positive results from its Phase 2b trial could set the stage for an enormous back half of 2022. Frankly, if results push ACXP toward a Phase 3 trial, as expected, multiples of its current share price are likely based on peer valuations. But perhaps best of all, with C. difficile bacteria high on the Centers for Disease Control and Prevention (CDC) Urgent Threat list, getting this life-saving drug to market can be a joint effort priority.

Acurx management appears confident that will be the case. Robert J. DeLuccia, Executive Chairman of Acurx, said, “With the excellent clinical results and very good safety and tolerability demonstrated in the Phase 2a segment of this ongoing trial, we validated the bacterial pol IIIC enzyme as a therapeutic target for ibezapolstat, our first product candidate in our new class of antibiotics. Additionally, this trial segment showed potentially beneficial effects of ibezapolstat on the intestinal microbiome and bile acid metabolism.” He added, “Initiating this Phase 2b segment is a very important clinical development milestone for our company. We look forward to successfully completing enrollment in mid-2022.”

Investors are anxious as well.

ACXP Earns A Pass Directly To Phase 2b Trial

And a big attraction is that ACXP combines a promising drug with a speedy trial. Treatment cycles are only about 40 days in duration, and topline data follows pretty quickly. Moreover, with this double-blind, randomized, active-controlled, non-inferiority, Phase 2b segment conducted at 12 U.S. clinical trial sites, total enrollment may come sooner than planned.

That would be excellent news for ACXP, investors, and patients. As noted, the Phase 2b trial is designed to evaluate the clinical efficacy of ibezapolstat in treating CDI, including pharmacokinetics and microbiome changes from baseline. It will continue to test for anti-recurrence microbiome properties seen in the Phase 2a trial, including the treatment-related changes in alpha diversity and bacterial abundance and effects on bile acid metabolism.

Here’s the part investors need to pay attention to. The completed Phase 2a segment of this trial enrolled 10 subjects from study centers in the United States. In this cohort, 10 patients with diarrhea caused by C. difficile were treated with ibezapolstat 450 mg orally, twice daily for 10 days. All patients were followed for recurrence for 28± 2 days. Per protocol, after 10 patients of the projected 20 Phase 2a patients completed treatment, the Trial Oversight Committee assessed the safety, tolerability and efficacy and recommendedearly termination of the Phase 2a study. They recommended a move directly to the Phase 2b trial. It can’t get any better than that.

That also saves time and resources. Moreover, it wasn’t a split decision. The Scientific Advisory Board (SAB) and Trial Oversight Committee both unanimously supported the early termination of the Phase 2a trial after 10 patients were enrolled in the trial. In other words, they only needed to see half the planned enrollment to make a significant conclusion. Of course, ACXP’s ibezapolstat earned the acceleration.

The early termination was based on the evidence of meeting the primary and secondary endpoints of eliminating the infection (100%), with no recurrences of infection (100%), and with an acceptable adverse event profile. The better news is that except for the enrollment size, the 2b trial is expected to do much of the same, and that’s excellent news for ACXP based on prior data.

Phase 2b Design Puts Ibezapolstat Against Vancomycin

The new trial is a double-blind, randomized 1:1 ratio to either ibezapolstat 450 mg every 12 hours or vancomycin 125 mg orally every 6 hours, in each case, for 10 days and followed for 28 ± 2 days following the end of treatment for a recurrence of CDI. The two treatments will be identical in appearance, dosing times, and number of capsules administered to maintain the blind.

The Phase 2b clinical trial also will evaluate pharmacokinetics (P.K.) and microbiome changes and continue to test for anti-recurrence microbiome properties, including the change from baseline in alpha diversity and bacterial abundance, especially overgrowth of healthy gut microbiota Actinobacteria and Firmicute phylum species during and after therapy. If the non-inferiority of ibezapolstat to vancomycin is demonstrated, further analysis will be conducted to test for superiority.

Remember this, though. Especially those on the fence about taking a position in ACXP. Phase 2a data demonstrated complete eradication of colonic C. difficile by day three of treatment with ibezapolstat as well as the observed overgrowth of healthy gut microbiota, Actinobacteria and Firmicute phyla species, during and after therapy. That’s not all.

Importantly, ACXP noted that emerging data also show an increased concentration of secondary bile acids during and following ibezapolstat therapy, which is known to correlate with colonization resistance against C. difficile. A decrease in primary bile acids and the favorable increase in the ratio of secondary-to-primary bile acids suggest that ibezapolstat may reduce the likelihood of CDI recurrence compared to vancomycin. That adds more firepower to its profile.

It’s especially compelling because while C. difficile can be a normal component of the healthy gut microbiome; when the microbiome is thrown out of balance, the C. difficile can thrive and cause an infection. After colonization with C. difficile, the organism produces and releases the main virulence factors, the two large clostridial toxins A (TcdA) and B (TcdB). TcdA and TcdB are exotoxins that bind to human intestinal epithelial cells and are responsible for inflammation, fluid, and mucous secretion, as well as damage to the intestinal mucosa. Ibezapolstat does not incite their survival.

Ibezapolstat temperament toward bile acids is also important. These bile acids perform many functional roles in the G.I. tract, with one of the most important being the maintenance of a healthy microbiome by inhibiting C. difficile growth.

Primary bile acids, secreted by the liver into the intestines, promote germination of C. difficile spores and thereby increase the risk of recurrent CDI after successful treatment of an initial episode. On the other hand, secondary bile acids, which are produced by normal gut microbiota through the metabolism of primary bile acids, do not induce C. difficile sporulation and protect against recurrent disease.

ACXP notes that since ibezapolstat treatment leads to minimal disruption of the gut microbiome, bacterial production of secondary bile acids continues, which may contribute to an anti-recurrence effect. Again, a better alternative compared to the current standard of care.

C. Diff Cure Is Needed Now, Valuation Will Follow 

Perhaps most importantly, a better treatment is needed. According to a 2017 Update (published February 2018) of the Clinical Practice Guidelines for C. difficile Infection by the Infectious Diseases Society of America (IDSA) and Society or Healthcare Epidemiology of America (SHEA), CDI remains a significant medical problem in hospitals, in long-term care facilities and in the community. In fact, C. difficile is one of the most common causes of health-care-associated infections in hospitals, according to an article published in the New England Journal of Medicine. And the number of infections is substantial.

Recent estimates suggest C. difficile approaches 500,000 infections annually in the U.S. and is associated with approximately 20,000 deaths annually. Based on internal estimates, ACXP places the recurrence rate of two of the three antibiotics currently used to treat CDI at between 20% and 40% among approximately 150,000 patients treated. They also note they believe the annual incidence of CDI in the U.S. approaches 600,000 infections and a mortality rate of roughly 9.3%. Hence, it’s a big problem that requires a better solution. Ibezapolstat, to date, is it.

Moreover, a more appropriate valuation may follow in tandem with the trial. There is, after all, a significant valuation disconnect when comparing ACXP to peers doing similar studies, and here’s an example.

Despite ACXP posting a substantially more compelling efficacy and safety profile than competitor Summit Therapeutics (NASDAQ: SMMT) C. difficile treatment candidate, ACXP is trading at about 1/10th the market cap of SMMT. Thus, the term “undervalued opportunity” more than applies to ACXP; it’s a case study for appropriate use. Still, disconnects also expose opportunities.

Set For A Breakout In 2022

Does an 834% increase in market cap to match SMMT sound too aggressive? It shouldn’t, and here’s why. In every measure, ACXP’s ibezapolstat proves to be a better treatment candidate. And not only is it demonstrating a more durable treatment profile, but ibezapolstat could potentially own the C. difficile treatment market once approved by meeting an unmet need. That’s not an exaggeration, either. The market needs better treatment options, and physicians would have every reason to respond favorably.

Thus, there’s too much to like at ACXP. Moreover, the value proposition ahead of a Phase 2b trial is more than attractive; it’s compelling. And with topline results expected in about two quarters, sitting on the sidelines may not be the place to be. At this stage of the game, and with best-in-class Phase2a data in hand, being an investor in ACXP may be the proper consideration.

Indeed, there are few opportunities for investors to capitalize on near-term opportunities in biotechs that aren’t already in a Phase 3 trial. So, with ACXP set to complete its Phase 2b trial in about six months, this opportunity may be the closest one can get ahead of a Phase 3 trial launch.

And with the odds leaning in ibezapolstat’s favor to earn eventual FDA approval, and knowing that SMMT, with less favorable results, trades at a market cap 10X higher, catching ACXP at these levels, especially during the holiday season, may prove to be a gift that keeps on giving in 2022. And if all goes according to plan, it may give a lot.

 

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