Aviragen Therapeutics, Inc. – A Due Diligence

It seems like a risky bet, but can AVIR produce the next "Tamiflu" for the common cold?

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Aviragen Therapeutics (AVIR) is a pharmaceutical company that specializes in antiviral therapies.

Pipeline

Right now, AVIR currently has two treatments on the market for influenza that have been bringing in some revenue, and they are currently working on three separate works in the pipeline:

Vapendavir
For the Common Cold

Vapendavir is currently a therapeutic agent that is in the pipeline to treat the common cold, caused by a virus called Rhinovirus.  It’s not designed to be a cure, but is designed to lessen the symptoms of the cold if taken within 24 hours of the onset of symptoms.  It works by binding to the viral capsid and interfering with its receptor binding, thus not allowing it to replicate as well.  This allows the immune system to fight off the remaining replications.

They conducted a phase 2b study SPIRITUS on patients with moderate to severe asthma to see if the drug will alleviate symptoms of the common cold in patients. Though the trial failed to meet primary endpoints, in February 2017, they discovered that there is evidence that showed there is antiviral effect in patients that received the medication within the first day following symptoms.  Thus, they are testing to see if it does, indeed, shorten the duration of cold symptoms.
What’s interesting is that there seems to be a possible alternative indication for this particular capsid binder, especially for enterovirus (colloquially known as stomach flu/bug).  Feel free to read about it HERE

BTA585 – RSV
(another virus that causes cold like symptoms as well as pneumonia)

BTA585 is another capsid binder that is designed to attach to the capsid of the virus in order to inhibit replication.  So far, it’s shown to be active against both subtypes of RSV.  It did indeed show some antiviral activity, but failed to meet primary endpoints in decreasing viral load.  As of right now, they are reviewing the data in order to see how to move forward.

BTA074 – HPV treatment

BTA074 is in development for the treatment of genital warts caused by HPV, specifically HPV 6 and HPV 11, the two subtypes that are known to be low risk in developing cancer.  It works by inhibiting the DNA replication, and thus, viral replication and production.
Currently in phase 2 trial of testing a topical gel that can be applied.

Financials

From a cursory look at their quarterly report from March 2017, they have roughly $12m in cash with $46m in assets.  They do have a debt running at $22m which may not be too attractive to others.  The other two drugs on the marketplace are currently generating $5m in revenue per quarter.  They seem to grow quarter after quarter in decreasing their burn rate and increasing their revenue, and with a low market cap of $20m, it’s relatively attractive.

Conclusion:

With past failures, I can see their vapendavir possibly doing well and becoming the next “Tamiflu” for the common cold.  With that said, with low amounts of cash, it seems like a risky bet, as they will need to acquire capital, either by offering or partnership.

Recently, Aviragen has retained Stifel, Nicolaus, and Company to serve as financial advisors in reviewing of strategic alternatives, which can mean multiple things in the biopharmaceutical world.

Disclosure Statement
I have a very small position in AVIR at an average of $0.54.