Ensysce Biosciences Inc. (ENSC:NASDAQ) caught the attention of H.C. Wainwright & Co., which just initiated research coverage on it, with a Buy rating and a US$9 per share price target, reported analyst Dr. Boobalan Pachaiyappan in a July 3 research note. Because Ensysce's current share price is about US$1.80, the return to target represents a significant potential gain of 400%.
The Southern California-based biotech has "game-changing platforms with high optionality," Pachaiyappan wrote.
Key Differentiating Factors
Its two proprietary platforms, Trypsin-Activated Abuse Protection (TAAP) and Multi-Pill Abuse Resistant (MPAR) are designed to protect patients from opioid abuse and overdose. TAAP controls how Ensysce's products are activated and released, and MPAR can turn off the activation if too much of a drug is ingested.
"The chemical reactivity and metabolism profiles of TAAP and MPAR technologies offer a unique way to address prescription drug abuse and minimize drug overdose at the molecular level — something the pain management community has never seen before," Pachaiyappan commented.
These capabilities are significant, given 140,000 opioid-related deaths were reported in the U.S. last year alone.
OxyContin Prodrug Candidate
Ensysce's lead product candidate is PF614, a chemically modified, extended-release prodrug that delivers oxycodone upon chemical activation by trypsin in the gut. It has been shown to decrease abuse potential with crushing, injecting, chewing, and snorting OxyContin and to have efficacy and safety profiles on par with those of OxyContin.
"Since trypsin is absent in the blood or saliva, TAAP-based prodrugs resist activation through external means, thus offering differentiation," wrote Pachaiyappan.
Also, the analyst pointed out PF614 has a longer half-life than OxyContin (12.7 hours versus 7.6, respectively). Therefore, pain relief is long-lasting, and PF614 dosing could be limited to twice instead of more times a day.
Upcoming Impactful Catalyst
The biotech plans to advance PF614 via the risk-mitigated and capital-efficient 505(b)(2) regulatory pathway for the treatment of acute surgical pain. It is a US$1.1 billion (US$1.1B) market opportunity that existing drugs inadequately serve. It is expected that by the end of this year, Ensysce will have an end-of-Phase 2 meeting with the U.S. Food & Drug Administration to finalize PF614's Phase 3 trial design and more.
"Positive feedback from the regulatory agency, establishing a clear, capital-efficient pathway to approval and market entry in the U.S. would constitute a significant value inflection point," wrote Pachaiyappan.
H.C. Wainwright's estimated timeline for PF614 has it launching commercially in the U.S. in H2/26 and reaching peak sales of US$1B-plus by 2032.
Ensysce's second drug candidate PF614-MPAR combines the abuse-preventing qualities of PF614 with the overdose protection of MPAR. Formulated with nafamostat mesylate, which acts as a potent trypsin inhibitor, PF614-MPAR stops opioid release when too much of it is accidentally or purposefully ingested.
"If proven in the clinic," wrote Pachaiyappan, "we believe such a groundbreaking combination could limit overdose in chronic pain (US$2.4B total addressable market)."
H.C. Wainwright estimates PF614-MPAR could be approved in 2028 and reach peak sales, of more than US$750 million, by 2040.
Next is an end-of-Phase 1 meeting in Q3 of this year, a potential stock-moving event.
Pachaiyappan pointed out that derisking of the TAAP and MPAR platforms in the clinic could lead to many more opportunities for Ensysce and "could transform it into a long-term growth story" involving portfolio expansion and outlicensings/partnerships.
For example, the analyst wrote, the biotech has created and patented an amphetamine TAAP-MPAR prodrug technology that controls the release of drugs in this class.
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- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
- This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
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Disclosures for H.C. Wainwright & Co., Ensysce Biosciences Inc., July 3, 2023
This material is confidential and intended for use by Institutional Accounts as defined in FINRA Rule 4512(c). It may also be privileged or otherwise protected by work product immunity or other legal rules. If you have received it by mistake, please let us know by e-mail reply to [email protected] and delete it from your system; you may not copy this message or disclose its contents to anyone. The integrity and security of this message cannot be guaranteed on the Internet. H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility.
H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. I, Boobalan Pachaiyappan, Ph.D. and Raghuram Selvaraju, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Ensysce Biosciences, Inc. and Collegium Pharmaceutical, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of June 30, 2023 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Ensysce Biosciences, Inc. and Collegium Pharmaceutical, Inc.. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report. The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. Mr. Selvaraju, who is [the][an] author of this report, is the Chairman of and receives compensation from Relief Therapeutics Holding SA, a Swiss, commercial-stage biopharmaceutical company identifying, developing and commercializing novel, patent protected products in selected specialty, rare and ultra-rare disease areas on a global basis ("Relief"). You should consider Mr. Selvaraju's position with Relief when reading this research report.
The Firm or its affiliates did not receive compensation from Collegium Pharmaceutical, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm or its affiliates did receive compensation from Ensysce Biosciences, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Ensysce Biosciences, Inc. during the past 12 months. The Firm does not make a market in Ensysce Biosciences, Inc. and Collegium Pharmaceutical, Inc. as of the date of this research report. The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results.
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