This under-the-radar drug company might be a bargain hunter’s dream

Companies touting effective therapeutic candidates to fight COVID-19 are in the healthcare spotlight, attracting investor attention. Experimental treatments are being developed at a rapid pace by many companies of all sizes. This includes biotechnology companies such as iBio (IBIO -3.51%)an innovator specializing in the manufacture and production of antibodies and vaccines under development.

iBio’s share price soared in July last year following its inclusion in the Russell 2000 and Russell 3000 indices. news of its COVID vaccine candidates, leading to a 75% decline in biotech stock.

Today, a brief resurgence of interest from investors is the result of exclusive licensing agreements and positive preclinical studies involving its most promising candidates. Could this be a sign of future growth?

Image source: Getty Images.

Candidates to support to find an effective treatment

iBio has four candidates in its current pipeline, three of which focus on human disease. He is also developing a vaccine to treat animals against swine fever.

The three candidates for human health have reached the preclinical development stage, while the vaccine for animal treatment has progressed a little further in clinical development. Among the most promising candidates is what the company has labeled IBIO-202. It is intended to fight variant strains of the coronavirus by focusing on the neoclapside (N) protein, which is known to produce a high rate of immune response.

In July, iBio published the results of preclinical studies involving IBIO-202, showing that focusing on the N protein can help produce T cells that help the body fight off the virus. The study results support the idea that current spike (S) protein-focused vaccines may be effective but may weaken over time, requiring boosters. By focusing on protein N in combination with protein S, the vaccine could be more effective and longer lasting.

Kristen Kluska of Cantor Fitzgerald noted, “We believe the company’s approach is sound and could potentially support the ongoing global vaccine effort. Cantor currently has a price target of $3 on the stock, reflecting more than 170% upside potential.

A second candidate in development that the company is excited about is RTX-003 (renamed IBIO-101), an antibody developed by RubrYc Therapeutics that targets regulatory T cells (Tregs) used for immunotherapeutic treatment of cancer. In preclinical studies, it has shown evidence of generating strong anti-tumor responses both as monotherapy and in combination with checkpoint inhibitors.

iBio plans to launch a new investigational drug study within the next 10 months, with CEO Tom Isett saying the collaboration with RubrYc is a “critical step for iBio that can create value in multiple ways.” The company intends to use its proprietary FastPharming plant protein expression system, combined with RubrYc’s artificial intelligence platform, to produce other cancer therapeutic candidates that are safe and scalable, and to top speeds.

Unique plant-based system leads to increased capabilities

The FastPharming system is designed for rapid scale-up of vaccines and therapies and works by creating a targeted protein through the leaves of iBio’s proprietary plants. As the plants grow, so do the leaves, which are then harvested, and the proteins are separated, cleaned, and processed into a final product. By using plants as bioreactors, instead of stainless steel or single-use bioreactors, the system is more in line with green initiatives, and the company claims the production method cuts standard processing times by months.

In addition to its forward-looking pipeline of candidates, the company has used the FastPharming system to successfully produce vaccines against two influenza variants. The company has a 130,000 square foot facility with a two-story farm that now houses the FastPharming system.

Exclusive global license paves the way for a more robust pipeline

At the end of August, iBio disbursed $5 million to sign an exclusive worldwide license agreement with RubrYc, which will allow it to continue the development and commercialization of IBIO-101, as well as having the option of four new molecules developed with the artificial intelligence of RubrYc. Platform. An additional $2.5 million will be paid to RubrYc in December. As part of the deal, iBio also obtained a stake in the private company.

This agreement follows an exclusive license agreement signed with Planet Biotechnology last year, giving iBio the rights to Planet’s drug candidate ACE2-Fc. It is the foundational candidate that iBio is using as part of its current pipeline to develop treatments against the SARS-CoV-2 virus in its efforts to fight COVID variants.

The new hype does not justify an investment

The intrigue of investing early in an under-the-radar biopharma is alluring. But with the early stages of a therapeutic pipeline, there is the risk of declining revenues, increased expenses, and reliance on non-financial information to drive interest.

During the quarter ended June 30, all of these characteristics were visible. Revenue for the quarter was down more than 50% compared to the same period last year, and it was also down 37% compared to the previous quarter.

Expenses have also increased. Research and development costs soared 177% to $10 million for the full year, due to higher spending to support its pipeline and technology platform. Selling, general and administrative expenses also jumped in the quarter, doubling from the same period a year ago.

The company expects these expenses to continue to grow through 2022, but more slowly than in 2021. Meanwhile, losses continue to mount to more than $23 million for the year, or a 41% increase over 2020. The company has $97 million in available cash and cash equivalents, but noted that the current cash position will be depleted in the first calendar quarter of 2023.

For the bargain-seeking investor who isn’t afraid to take risks, a $1 share in a company building a pipeline to treat infectious and deadly diseases could be a big winner in five to 10 years. It could also be non-existent if the money runs out. For those looking for more solid ground, there are probably better options.

Comments are closed.