In a Feb. 2 research note, Mackie Research Capital Corp. analyst Andre Uddin reported that Algernon Pharmaceuticals Inc. (AGN:CSE; AGNPF:OTCQB; AGW:FSE) launched a clinical program to repurpose the psychedelic compound DMT, or dimethyltryptamine, as a possible stroke treatment.
Uddin explained that based on successful animal trials, Algernon hypothesizes that DMT could bring about neurogenesis and neuroplasticity in humans, thus helping brain healing and patient recovery after a stroke and, potentially, other brain injury. Accordingly, the company intends to determine and test an effective and nonhallucinogenic microdose of DMT in ischemic stroke patients.
The next steps in this program, the analyst noted, are for Algernon to continue its preclinical studies of DMT, request a meeting with the U.S. Food and Drug Administration for guidance on moving forward and then submit to the agency an investigational new drug application. The Canadian company also intends to file a clinical trial application with Health Canada.
"A Phase 1 trial with DMT for stroke could commence in H2/21," Uddin highlighted.
He pointed out that Algernon's other clinical programs have catalysts approaching. Final data from its Phase 2b trial of ifenprodil in COVID-19 are expected at the end of February. Early results from its Phase 2b trial of ifenprodil in chronic cough and idiopathic pulmonary fibrosis are anticipated in about Q2/21 or Q3/21, with complete data to follow, likely in Q4/21.
Uddin also reported Algernon's financial results for Q1/21, the quarter ended Nov. 30, 2020. The company did better during those three months than Mackie expected, posting a net loss of $3.4 million, or $0.02 per share, versus $4.4 million, or $0.03 per share. At quarter's end, Algernon had $2.6 million in cash and no debt.
Mackie has a Speculative Buy rating and an CA$0.80 per share target price on Algernon. The stock is trading now at about CA$0.26 per share.
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Disclosures from Mackie Research Capital Corp., Algernon Pharmaceuticals Inc., Update, February 2, 2021
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