Scynexis (NYSE: SCYX) is a biopharmaceutical company that is currently developing an anti-fungal medication.
First a short background on antifungal infectious diseases:
The global antifungal market accounted for $10.7 billion in 2015 with the systemic antifungal drugs reaching $800 million in the U.S. Each year, there are over 600,000 cases of invasive fungal infections caused by various species of Candida and Aspergillus , the two most common invasive fungal pathogens, globally. The estimated incidence in the U.S. for these conditions is approximately 98,000 and 46,000 for invasive candidiasis and invasive aspergillosis, respectively. The rapid progression of disease and high mortality rates (20% – 50%) associated with documented invasive fungal infections often result in antifungal therapy being administered in suspected (unconfirmed) cases or as a preventative measure in patients at high risk. Most of the current therapies used require daily IV infusion in a hospital setting.
Compound: SCY-078 (triterpenoid glucan synthase inhibitor)
Targeted Indication: Invasive Candidis, Invasivie Aspillgerosis and VVS (ex. C. Auris)
Investor Presentation can be viewed here.
Pros: SCYX is developing an IV and Oral step-down formulation of SCY-078 with Fast Track and Qualified Infectious Disease Product (QIDP) designation and Orphan Drug Designation (ODD). In-vitro, In-vivo, phase 1 and initial phase 2 studies have supported the fact that SCY-078 is safe and well tolerated (no significant AE’s, just some Gastrointestinal events) in both animal models AND human studies. In addition, the drug has been tested in over 300 subjects and patients to date and has either comparatively or outperformed other anti-fungals currently available. Phase 2B studies are ongoing. Based on current studies to date, SCY-078 has proved clinically unique in the following:
- broad activity against Candida and Aspergillus strains;
- activity against azole and most echinocandin-resistant Candida strains, including multi-drug resistant strains;
- activity against azole-resistant Aspergillus strains;
- only glucan synthase inhibitor with both oral and IV formulations in clinical development, allowing first-line treatment and oral step down with the same agent;
- distinct chemical structure from other glucan synthase inhibitors, providing a unique spectrum of activity and pharmacokinetic profile;
- fungicidal (i.e., killing the fungi) capabilities against Candida species compared to azoles, which are fungistatic (i.e., inhibiting the growth of fungi); and
- high tissue penetration, allowing high concentrations in the organs commonly affected by fungal infections.
Cons: The stock price has been in a steep decline for some time now and much of the decline can be attributed to the FDA placing a clinical hold on the IV formulation due to mild thrombotic events. Many people believe that this is low risk since it is possible that this problem can be solved by diluting the dose or slowing the infusion of the formulation of IV (no thrombotic events identified in the oral formulation). The FDA and SCYX had a meeting in Q2 2017 and should be making a final decision on the IV formulation hold soon. There has also been an ongoing lawsuit against SCYX for releasing “false or misleading” information around their product (SCY-078) with regards to its health and safety risks. I am not entirely sure what specifics this lawsuit is referring to but I am not concerned about this and think it will blow over soon as there is plenty of data already available suggesting that it is very safe.
CDTX Due Diligence:
Compound: CD-101 IV (echinocandin)
Targeted Indication: Systemic Candida Infections (ex. C. Auris)
Investor Presentation can be viewed here.
Pros: CDTX is developing an IV formulation (CD-101) also with Fast Track and Qualified Infectious Disease Product (QIDP) designation and Orphan Drug Designation (ODD) that has a prolonged half-life which, in contrast to all other echinocandins, may allow for once-weekly IV therapy. This could potentially mean shorter and less-costly hospital stays. CDTX can achieve this through CD-101’s unique PK profile which allows it to have a longer than typical half-life with a large cMAX (maximum drug exposure) and AUC (area under the curve). In vitro, In vivo and initial phase 1 studies have supported CD-101 being safe and well tolerated (no significant AE’s) in both animal models AND human studies. Phase 2 (STRIVE) results are expected Q4, 2017 (90 patients being enrolled). CD-101 is marketing itself as unique in the following:
- Potential to treat resistant pathogens. We believe that CD101 IV can be used to treat fungal infections caused by drug-resistant fungi, including those currently resistant to echinocandins, due to its potency against resistant strains and its higher drug exposure early in the course of therapy.
- Single-agent treatment. Rather than treating patients with an IV echinocandin followed by an oral azole solely to enable earlier hospital discharge, CD101 IV would enable extended single-agent, echinocandin treatment for the full course of therapy, thereby enabling treatment that is consistent with current guidance in the United States and European Union.
- Shorter and less costly hospital stays, and lower outpatient costs. Physicians with access to a once-weekly echinocandin can potentially discharge appropriate patients earlier and thereby reduce hospital costs, which account for over 70% of the overall treatment cost of candidemia. Furthermore, early discharge from the hospital setting may reduce the risk for contracting nosocomial pathogens. For patients discharged on an echinocandin, once-weekly CD101 IV could eliminate significant outpatient infusion costs foronce-daily IV echinocandin therapy.
- Improved compliance. A once-weekly treatment of CD101 IV could facilitate compliance by eliminating the need for patients to return to a hospital or outpatient center for a daily dose of an IV echinocandin, and could eliminate the likelihood of patient non-compliance for those receiving oral step down therapy with a daily azole.
- Enabling or improving prophylaxis regimens. Some patients cannot receive azole prophylactic therapy due to drug interactions or poor tolerability. We expect that once weekly CD101 IV therapy could provide for better prophylactic therapy on an inpatient and outpatient basis, particularly for these patients.
Cons: CDTX was progressing a topical formulation of CD-101 for VVC which failed in comparison to oral fluconazole, this was discontinued in February of 2017 which is clearly identified on the 3-month stock chart. In addition to this shortcoming, most of the testing to date is associated with developing a safety profile (typical in phase 1) as opposed to efficacy. Much of the efficacy data against the current standard of treatment will be coming out in the coming months (STRIVE study). That said, if the efficacy can prove to be at least similar to the current therapy available, there is a VERY strong case for a once weekly treatment compared to once daily otherwise.
Additional info: CDTX is also developing CD201 (cloudbreak platform) for the treatment of MDR (Multi-drug resistant) bacterial infections. This drug is quite new but does have some in-vivo data available from animal models. The following info comes directly from their website:
- CD201 is the first development candidate from our Cloudbreak™ immunotherapy discovery platform. The Cloudbreak immunotherapy platform is similar to certain cancer immunotherapies in that it uses components with two binding sites, one that binds to a bacterial cell surface target and a second that binds to specific receptors on immune cells. CD201 works by binding to a target present on a wide range of Gram-negative bacteria, including MCR-1-positive strains, while simultaneously recruiting immune components to an infection site to coordinate localized host-mediated infection clearance.
- CD201 has demonstrated potent antibacterial activity in vitro against a number of clinically significant Gram-negative bacteria, including Klebsiella, Acenitobacter, Pseudomonas and Enterobacter spp., as well as against MDR pathogens, including those harboring plasmids containing the mcr-1 gene. CD201 has also demonstrated preliminary efficacy and safety in a number of animal models of infection.
Conclusion: Both of these companies are very attractive for current bio investment based on the information above. The market cap is tiny for both SCYX and CDTX (less than 150 million); if their drugs get approved they have the potential of generating more than 500 million a year. In my opinion, SCYX is the safer bet at the moment due to having two formulations (an oral and IV step down both capable of generating 500 million + a year) and more in-human data available.
Disclaimer: I have a position in SCYX.