Sunday, February 23, 2014

An Opportunity to Good to Pass up: Rexahn Pharmaceuticals

I've been investing in biotech stocks for the past 18 years and occasionally will come across an opportunity that seems too good to pass up. I believe this is the case with Rexahn Pharmaceuticals (RNN). The company has a mere market cap of approximately $158 million yet they have five identified compounds in development, and a solid balance sheet to help fund operations through the next 18 months.

Rexahn is a biotech company focused on developing innovative therapeutics with first-in-class or market-leader potential in various cancer indications including pancreatic, ovarian, stomach, NSCLC, colon, renal, and other solid tumors. Their lead compounds include Archexin, Supinoxin, RX-3117, and a number of early stage compounds including RX-21101 and RX-0201N. These compounds are protected with a broad patent portfolio that extends up to 2025.

Archexin is an AKt-Inhibitor that recently completed a Phase IIa trial in pancreatic cancer. The trial results demonstrated treatment with Archexin in combination with gemcitabine provided a median survival of 9.1 months compared to historical survival data of 5.65 months (Burris et al., 1997, J. Clin Oncol 15:2403) for standard single agent gemcitabine therapy. This significant 61% improved survival benefit, combined with an excellent safety profile, shows that this compound has significant commercial potential. The company initiated a second phase II trial in metastatic rental cell carcinoma January 2014. There are also plans for a phase II trial in ovarian cancer and the company has already submitted the protocol to the FDA. The phase II study will assess the efficiency and safety of the compound when used in combination with both paclitaxel and carboplatin as a second-line therapy in subjects who are platinum-sensitive following their first relapse. The company is actively evaluating partnership opportunities to help fund the continued development of this compound.
RX-3117 is a DNA synthesis inhibitor targeting various indications including pancreatic, NSCLC, colon, renal, and other solid tumors. The compound has completed a successful exploratory phase 1 trial in solid tumors and initiated a phase 1b trial in cancer patients with solid tumors January 2014.  The company is actively in negotiations for a partner for this compound with a target date of mid 2014.  

Supinoxin is a best-in-class p68 RNA helicase inhibitor targeting solid tumors including NSCLC, colon, rental, and pancreatic cancers. The IND was filed in June 2012 and a phase 1 trial was initiated in August 2013 with results expected by the end of March.  There are also active partnership discussions to help fund the development of this promising compound.

Rexahn has two early stage signal inhibitor compounds that it hopes to advance in clinical trials in various cancer types in the next three years - RX-21101 and RX-0201N. They also have the potential to divest two CNS assets - Serdaxin for depression and Zoraxel for sexual dysfunction. Both compounds have completed phase II studies with mixed results and may be valuable to the right partner with expertise in CNS therapies.

The company reported a cash position of over $41 million and no long-term debt as of February 7th. Management projects that they currently have enough cash to fund operations through the next 18 months which should provide for a number of clinical catalysts before needing to raise additional capital.

A pipeline of five identified compounds in various stages of development, a market cap of only $158 million, and cash to fund operations for the next 18 months.  An opportunity to good to pass up? You make the call!

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