Biotech Stock On The Radar: Nabriva And Its Novel Antibiotic Portfolio

Nabriva Therapeutics PLC – ADR (NASDAQ: NBRV) shares have gained about 46% year-to-date.  With the average analyst target being $8.42, the shares are primed for further upside provided upcoming catalysts pan out in favor of the company.

Benzinga · 11/21/2019 00:51

Nabriva Therapeutics PLC – ADR (NASDAQ: NBRV) shares have gained about 46% year-to-date. 

With the average analyst target being $8.42, the shares are primed for further upside provided upcoming catalysts pan out in favor of the company.

Benzinga is profiling Nabriva for the benefit of investors ahead of some key catalytic events.

Dublin, Ireland-based Nabriva, founded in 2006, is a commercial-stage biotech developing antibiotics to treat infectious diseases.

The Pipeline

Lefamulin

Nabriva has a commercial product in lefamulin IV/oral, which was approved by the FDA in August for treating community-acquired bacterial pneumonia, or CABP.

It was commercially launched in September in IV along with oral formulations under the brand name Xenleta.

Lefamulin is a semi-synthetic compound that inhibits the synthesis of bacterial protein, which is essential for the pathogen to grow.

The mode of action is through binding to the peptidyl transferase center present in the ribosome of the bacteria, interfering with the interaction of protein production at two key sites — the A site and P site — that inhibit protein production and in turn the growth of bacteria.

What makes lefamulin stand out from the other antibacterial medication is the high affinity and high specificity with which the binding occurs and the molecular site at which the binding occurs.

"XENLETA is a safer alternative to the current standard of care (SOC) moxifloxacin, a fluoroquinolone that carries a 'black box' warning due to elevated risks of tendinitis and tendon rupture, especially in patients aged 60 or over, in patients who are taking corticosteroids, and in patients who underwent kidney, heart or lung transplants," HC Wainwright analyst Thomas Yip said in a note.

The analyst estimates peak sales potential of $460 million through 2028 for Xenleta in CABP.

The European Medicines Agency communicated in June that Nabriva's Marketing Authorization Application for lefamulin is valid, suggesting the submission is complete enough to begin a formal review process.

Lefamulin is being evaluated in a Phase 2 trial for acute bacterial skin and skin structure infection.

Nabriva is also evaluating the asset in early stage trials in pediatric indications as well as sexually transmitted infections, HABP/VABP, osteomyelitis and prosthetic joint infections.

See also: Biotech Stock On The Radar: Alkermes At A Crossroads

Contepo

A major product candidate in Nabriva's pipeline is Contepo, codenamed ZTI-01, an investigational IV epoxide antibiotic. Contepo came into Nabriva's stable through its acquisition of Zavanted Therapeutics in July 2018.

This antibiotic has a broad spectrum of gram-negative and gram-positive activity, including activity against multi-drug resistant strains that affect hospitalized patients.

Although Fosfomycin IV has been used for over 45 years in nine indications in countries outside of the U.S., Nabriva's Contepo uses a new dosing approach aimed at optimizing the compound's pharmacokinetics and pharmacodynamics.

Incidentally, Nabriva received the FDA's Complete Response Letter for Contepo in complicated urinary tract infections, or cUTIs, on April 30, and the shares reacted with a 27.4% move to the downside in the session.

Subsequently, the company had a Type A meeting with the FDA in July. Giving details of the proceedings of the meeting in its third-quarter release, the company said the FDA has classified the resubmission as "Class 2," which would mean a six-month review period from the receipt of the resubmission.

The FDA apparently did not seek new clinical or non-clinical data or analysis regarding the safety or efficacy.

The resubmission is now planned for the fourth quarter.

Contepo is also being tested in pediatric indications in a Phase 1 trial.

Nabriva also has a semi-synthetic compound codenamed BC-7012, which is derived from pleuromutilin and possesses the potential of being developed as a topical treatment of gram-positive infections, including uncomplicated skin and skin structure infections, or uSSIs. Phase 1 testing of the asset has been completed.

Market Opportunity

Nabriva estimates that about 5 million adults visit hospitals for CABP treatment in the U.S. each year, based on combined analysis of the U.S. Centers for Disease Control and Prevention's 2007 National Ambulatory Medical Care Survey and 2013 data from the Healthcare Cost and Utilization Project.

Of these, 3 million adult CABP patients are diagnosed in hospital setting, the company said. 

Financials

Nabriva's fiscal year 2018 revenues comprised mainly research premium and grant revenue, with product sales kicking in only by September, when it began commercializing Xenleta.

nbrvfinancials.png

Source: 10-K and 10-Q filings

For the third quarter of 2019, Nabriva reported revenues of $6.92 million, up from $460,000 in the year-ago quarter, with $5.05 million coming from milestone payments from Sinovant Sciences on Xenleta approval and $1.4 million from Xenleta net sales.

The net loss narrowed from 90 cents per share in the third quarter of 2018 to 24 cents in 2019.

Cash and cash equivalents and short-term investments totaled $78.32 million as of Sept. 30, down from $102 million as of Dec. 31, 2018.

As of Sept. 30, accumulated losses incurred by the company amounted to $453.7 million.

Upcoming Catalysts

  • Resubmission of Contepo NDA: fourth quarter of 2019.
  • EMA Committee opinion on lefamulin: second half of 2020.

Stock Take

Shares of Nabriva, an actively traded, micro-cap biotech, were on an extended downtrend since they completed a double-top formation in March 2017.

After bottoming at $1.12 on Dec. 26, 2018, the shares have been making a consolidation move.

The technical picture isn't quite positive. The recovery from the all-time low took the stock higher, although it has been bouncing out of the $1.72-$1.92 range, which is likely to offer strong support for the stock in the near-term. On the upside, the stock has near-term resistance around $2.42.

nbrv_yahoofinancechart.png

Source: Yahoo Finance

Suggesting bearishness, the longer-term 200-day SMA crossed over above the 50-day SMA in late September.

Nabrivo went public in September 2015, offering 9 million ADSs, representing 900,000 shares at $10.25 per ADS.

Short interest in the stock is not alarming, with roughly 7.4% of the float held short. The short ratio is at a manageable 2.7 days.

HC Wainwright has a Buy rating and $8 price target for the shares of Nabriva.

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