In a Oct. 5 research note, analyst Patrick Dolezal reported that LifeSci Capital initiated coverage on 4D Pharma Plc (DDDD:LSE), a United Kingdom-based developer of biotherapeutics.
Dolezal highlighted five of the company's advantages:
1. 4D Pharma's methodology differs from that of other microbiome companies.
Whereas others typically use "ecological approaches to broadly repopulate the gut," Dolezal noted, 4D uses live biotherapeutics, much like traditional small molecules or biologics, to tackle the cause of a particular disease.
The company does so by isolating key bacterial strains that "produce metabolites, proteins and other factors with therapeutic relevance to a particular disease target." That involves employing its proprietary tools, MicroRx, a screening and bacterial selecting platform, and MicroDx, a microbiome profiling technology.
2. 4D Pharma's Blautix showed efficacy in irritable bowel syndrome (IBS).
In a Phase 1b study, the company's lead candidate Blautix triggered "microbiome diversity and stability" in IBS patients, in which both tend to be significantly decreased. In the trial, after two weeks of twice-daily Blautix therapy, 82% of patients reported improvement. This year, 4D is expected to start a Phase 2 study of Blautix in IBS patients with either of the two disease subtypes, constipation or diarrhea.
3. 4D Pharma's Blautix could be a firstline treatment.
This would require it be able to eliminate symptoms and maintain a safety profile that is equivalent or superior existing over-the-counter treatments. Of note, Blautix did prove to be safe in the Phase 1 trial. "In our view, patients with less severe IBS who are experimenting with lifestyle changes, diet modifications and stress and anxiety reductions represent ideal treatment candidates for Blautix," wrote Dolezal. Also, Blautix could work well in combination with other safe, symptom-alleviating therapeutics.
4. 4D Pharma is developing a therapeutic for Crohn's disease.
Specifically, Thetanix could become a maintenance medication for patients with mild to moderate Crohn's, an inflammatory bowel disease. A Phase 1b study in children with Crohn's disease showed Thetanix to be well tolerated and safe. A Phase 2 study is due to start in Q4/18.
5. 4D Pharma has a robust pipeline of other biotherapeutics for various indications.
One is MRx0518, for treatment of solid tumors. As a monotherapy, it was shown to reduce tumor volume in preclinical models of breast, kidney and lung cancers. The company is developing it now in combination therapy, with PD-1 checkpoint inhibitors, for solid tumors. During this quarter, Q4/18, 4D will commence enrollment for the Phase 1b trial that will evaluate the safety and tolerability of MRx0518 in patients with multiple solid tumor types, who have not undergone treatment for whom resection is pending.
Also in 4D Pharma's pipeline are MRx0004 for asthma, for which a Phase 1b trial will start in Q4/18, MRx0002 for multiple sclerosis (MS) and MRx0006 for rheumatoid arthritis (RA). Phase 1 studies are planned for MS and RA but are in the preliminary stages.
"All of the aforementioned programs target conditions associated with autoimmunity, with rationale greatly driven by associations between gastrointestinal microbiota and immune dysfunction," Dolezal pointed out.
The analyst recapped the catalysts expected in Q4/18, all of which are study initiations: a Phase 2 for Blautix in both IBS subtypes, a Phase 2 for Thetanix in Crohn's disease, a phase 1/2 for MRx004 in asthma and a Phase 1b for MRx0518 in patients with multiple solid tumor types.
4D Pharma's current stock price is around $1.94 per share, converted at 1 GPB to 1.3 USD.[NLINSERT]
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Disclosures from LifeSci Capital, 4D Pharma, Initiating Coverage, Oct. 5, 2018
Analyst Certification: The research analyst denoted by an "AC" on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an "AC" on the cover or within the document individually certifies), with respect to each security or subject company that the research analyst covers in this research, that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or subject companies, and (2) no part of any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report.
LSC (or an affiliate) has received compensation from 4D Pharma for producing this research report. LSC is paid a monthly payment of $1,000 from the Affiliate for preparing and distributing research pertaining to each subject company under contract with the Affiliate. The subject company of this report is covered by this arrangement between LSC and the Affiliate, and LSC has therefore indirectly received compensation from the subject company for publishing this report. No explicit or implicit promises of favorable research coverage have been made to the subject company by LSC or the Affiliate. Neither LSC nor the Affiliate has promised any specific research content as an inducement for the receipt of business or compensation.
LSC (or an affiliate) has also provided non-investment banking securities-related services, non-securities services, and other products or services other than investment banking services to 4D Pharma and received compensation for such services within the past 12 months.
Neither LSC nor any of its affiliates beneficially own 1% or more of any class of common equity securities of the subject company.
This research contains the views, opinions and recommendations of LifeSci Capital, LLC (“LSC”) research analysts.
Additionally, LSC expects to receive or intends to seek compensation for investment banking services from the subject company in the next three months. LSC does not make a market in the securities of the subject company