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Acurx Pharmaceuticals’ Drug Candidate Ibezapolstat Continues To Score Clinical Wins In Treating C. Difficile (NASDAQ: ACXP)

Finding public companies that disrupt sectors often provide impressive returns. But, those changing a landscape by bringing to market products and services targeting unmet needs can deliver exponential ones. For most, finding the latter is the better choice. And Acurx Pharmaceuticals (NASDAQ: ACXP), a NASDAQ-listed biopharmaceutical company, is set up to deliver on the exponential side.

That plan is in motion now starting a Phase2b trial this month to evaluate ibezapolstat to bring treatment relief to millions of patients suffering from C. difficile. The drug, by the way, is an excellent one. In fact, Phase 2a results were so impressive that an independent scientific review board agreed with a decision allowing ACXP to terminate its Phase2a trial early because of overwhelmingly positive data.

But, here's the better part for investors wanting to capitalize on what looks like a massive valuation disconnect. Despite ACXP posting a substantially more compelling efficacy and safety profile than competitors 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.

The better news is that once investors learn about and understand the ibezapolstat story, it should help transform ACXP from a $57 million cap company to one closer to SMMT's valuation- $535 million.

Does an 834% increase in market cap sound too aggressive? It shouldn't, and here's why- in every measure, ACXP's ibezapolstat is a better treatment candidate. And not only is it proving to be better in clinical trials to date, but by meeting an unmet need, ibezapolstat could potentially own the C. difficile treatment market once approved. That's not an exaggeration, either.

Ibezapolstat Deserves Substantially More Interest

In fact, Phase 2a trial data is already showing that potential. It delivered a 100% cure and 100% sustained cure , with no relapse ever. Results like that should have physicians chomping at the bit to get ibezapolstat through the regulatory and approval processes. And their impatience is well-placed, considering that ibezapolstat is doing more than providing relief- it's a cure. Still, the data helps take things a step further. In addition to giving treatment promises to millions of patients, it also exposes a potentially massive share price to pipeline disconnect.

But, peer valuations could help to close that gap sooner than later. And again, investors should look toward SMMT. Consider this- if investors were willing to give SMMT a valuation above $800 million before its trial setback last month, ACXP, with a much better drug candidate and a market cap of roughly $57 million, is more than just undervalued; it's almost as if the pipeline didn't exist. That's certainly not the case. And, despite SMMT shedding $300 million in value after the FDA's unwillingness to change trial endpoints, it still makes a case for ACXP to surge.

Here's the best news. Although the comparison helps, ACXP isn't relying on SMMT for a valuation. Instead, they are earning it with trial updates and data that add additional firepower to an already exceptional scorecard for ibezapolstat. Best of all, every indication to date suggests that ibezapolstat is positioning to become the undisputed front-line treatment against C. difficile. Here's why:

Compelling Unmatched Results Treating C. Diff

Foremost, ibezapolstat demonstrated its ability to eradicate C. difficile in the GI tract within 72 hours of treatment. Sometimes in as little as 24 hours after dosing. And that's not all. It did more than treat the infection; it also killed the host cell.

Results were so impressive, in fact, that they led to an independent scientific advisory board agreeing with a recommendation allowing ACXP to terminate its Phase2a trial early. That decision should not be surprising, especially with a 100% positive patient response (sustained cure) and no relapse after follow-up evaluations. Furthermore, recent posters presented at the recent World Antimicrobial Resistance conference add more fuel to its best-in-class profile.

There, posters showed ibezapolstat is superior in a side by side comparison to current treatment Vancomycin. Moreover, the information presented makes a compelling case for why ibezapolstat should be fast-tracked for approval sooner rather than later. What did it show? A lot.

First, ibezapolstat only attacks and kills what it's supposed to kill. That means that despite its potent activity, it leaves healthy microbiota alone so they can continue to do their jobs. Killing them, which other treatments do, can often complicate matters worse than C. diff itself. On that basis alone, even if ibezapolstat was only as effective as Vancomycin, ibezapolstat should earn approval. However, that's not the case. As noted, it showed 100% effectiveness in cure and sustained cure, which instead should jump it to a front-line treatment. Still, ACXP took things a step further.

They completed a small study of healthy volunteers (non-CDI), with resulting data giving ACXP an advanced understanding of the microbiome and CDI pathophysiology. Better still, data indicates that from a pharmacokinetics, microbiology, and systems biology perspective, ibezapolstat is checking off all the right boxes. In short, data, including its better effects on bile acids, is doing everything it should to justify its case as a go-to antibiotic treatment against C. difficile.

Of course, with its Phase 2b trial starting, ACXP can soon confirm its stellar Phase2a results. And with a 28-day treatment cycle and review, ACXP could have topline results to share in mid-2022. Even better, assuming its Phase 2b trial confirms Phase 2a topline data, ACXP could find itself entering into a Phase 3 study with best-in-class front-line treatment potential. And that's where valuations can come into play.

Earning Its Just Rewards

As noted, SMMT enjoyed a more than $800 million market cap as it entered a Phase 3 trial for its C. difficile treatment candidate. However, disappointing topline results and the FDA's unwillingness to allow the company to change its trial endpoints have caused shares to lose more than $300 million in market cap. Still, the excellent news for ACXP is that it's still holding a more than half-billion-dollar valuation with an inferior drug candidate. Side to side, its data is nowhere near the efficacy, safety, and tolerability profile posted by ibezapolstat.

Thus, it makes sense that when ACXP advances to its Phase 3 trial that valuations be similar to that of Summit at its high. And it's not an unlikely scenario. Companies with Phase 3 drug candidates targeting unmet medical conditions can sport a massive premium. And if the endpoints are reached, it moves higher from there.

Here's the potentially best news. If institutional investors are shorting ACXP stock thinking they need money to complete its Phase 2b trial, they are wrong. ACXP has noted on several updates that it has the cash on hand to fund its Phase 2b trial to the conclusion, leaving a few million to spare. Moreover, ACXP is ideally positioned to capitalize on third-party funding similar to the $500,000 received from Health Holland. In fact, the Pasteur Act, which is making its way through the legislature, can be a funding game-changer for companies like ACXP.

Even better, the bi-partisan legislation is non-dilutive and designed to provide funding for new classes of drugs that meet unmet needs and provide relief from life-threatening conditions. Here's the better part. The approved Act could provide $750 million to $3 billion to stockpile U.S. hospitals based on a pharmacoeconimc argument to be made by each sponsor qualifying for this funding.. While that's excellent news for patients, the best part is that ACXP could be provided $75 million a year on the low end and $300 million a year on the high end with a strong argument to be made if clinical trial data continues to show exceptionally high cure rates while at the same time showing restoration of the microbiome. With C. diff life-threatening and with it meeting the criteria in the Act, earning a piece of that non-dilutive funding may be more likely than not if, in fact, this legislation becomes law.

And that's not all. Another funding program through the AMR Action Fund provides capital to promising development programs from a $1 billion funding treasury. Notably, ACXP's ibezapolstat again meets the criteria. While funding from that source can be dilutive, Big Pharma players may be especially attracted to ACXP's data showing 100X the concentration of ibezapolstat's bacteria-killing power being delivered into the GI tract without limiting the restoration of the healthy microbiomes needed for sustained cure. Put another way, ACXP could earn funding as well as attract suitors.

Well Connected Team

By the way, it's also important to mention that should the Phase 2b data confirm its already impressive results, ACXP has a Rolodex full of connections from members of its BOD team and Advisory Board consisting of former Johnson & Johnson (NYSE: JNJ) and Schering-Plough executives. Those distinguished members of the ACXP team can become particularly valuable ahead of a Phase 3 trial. Better still, they understand the space from top to bottom and could be instrumental in steering negotiations toward appropriate values. Currently, deals are closing at valuations of 35%-75% above a company’s market cap. Thus, if ACXP grew into even ½ of SMMT’s current valuation, the trajectory for share prices would steepen considerably.

Keep in mind, too, partnership potential is only one value driver. In addition to the programs mentioned, industry-wide calls from the CDC, NIH, BARDA, and CARB-X to treat underserved infections are getting louder. Thus with a stellar drug profile showing a unique ability to treat unmet needs, investors may be wise to pay attention to ACXP earning part of the billions in play from non-dilutive funding. Both options are excellent, but from an investor's perspective, the latter may be preferred. Partnership deals made after an already appreciated market cap may indeed be the best option for ACXP and its investors.

Near-Term Catalysts Are Driving Value

From the looks of the trading, investors are catching on. ACXP stock is higher by roughly 38% over the previous 30-days, and the trend has been decidedly bullish to start November. The better news is that the jump is happening like it should from investors recognizing the growing potential of ibezapolstat. So, it's no coincidence that shares are rising. Slow accumulation and wise investing are setting the proper trend for the stock- higher. And it would be appropriate for momentum to build.

After all, beyond being financially stable and having an impressive pipeline, ACXP is positioned to deliver topline results and potentially massive corresponding rewards in the next two quarters. Remember, too, ACXP has the cash on hand to complete its Phase 2b ibezapolstat trial with a few million dollars to spare.

Thus, with hopeful, positive results in hand, they could bargain from a position of strength heading into a Phase 3 trial. Still, that's assuming they don't get a share of the billions expected to be provided to companies like ACXP that are working on novel treatments meeting unmet medical conditions. If the Act passes, it's more likely than not that ACXP can earn some funding.

Hence, from an investor's perspective, ACXP is indeed doing its part to attract attention. They have an impressive drug, stellar clinical data to date, and cash to complete its Phase 2b trial. Beyond that, results will dictate the next move. And if they confirm what's already known from Phase 2a, investors probably won't need to worry about ACXP's access to funding. It's likely money will be thrown at them from every side. That is, after all, a result created from having a best-in-class drug candidate going into, at that point, a Phase 3 trial. And for ACXP, it will be a great position to leverage.


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