Atorum Group: Advancing Disease Therapies (NASDAQ:APM)

Here is that company, Aptorum Group Limited (APM), with a market cap of just $80 million and a dwindling cash reserve of $20 million, with over 20 products listed in its pipeline. It’s weird. I don’t like buying companies that have early stage data. Usually, serious early-stage biopharmaceutical companies focus on one or two actives and one or two indications. Companies that are ten times bigger than that can’t do well with just one indication, and here is this company with no discernable pedigree, very little money and no history, and with this huge list. I don’t like investing in such companies.

I am somewhat reassured by the fact that insiders own 75% of the company. That’s a good thing in that if I lose money buying Atorum, so do they. So they have a stake in their game.

On the other hand, it doesn’t help me that the institutions have almost completely ignored this company. With a stake of just over 1%, I have to say that I have never seen such low institutional stake in any of the companies I cover. It doesn’t look good.

This company caught the attention of investors earlier this year on several press releases from 1/10/2022. The Company advances therapeutic programs to address unmet needs in orphan diseases, infectious diseases, metabolic diseases, women’s health and other areas. Atorum has completed Phase 1 clinical trials of its two lead candidates – SACT-1 and ALS-4. The Company also launched its discovery and development platform for oncology and autoimmune therapies, initially focusing on non-small cell lung cancer (‘NSCLC), lupus, rheumatoid arthritis (‘RA ), inflammatory bowel disease (IBD), etc. also began clinical validation of its Rapid Pathogen Identification and Detection (‘RPIDD) diagnostics of viruses, bacteria, fungi and parasites using liquid biopsy technology.

Main applicants

SACT-1 is a repurposed small molecule drug discovered using the company’s proprietary SMART-ACT platform. The orally administered drug candidate targets neuroblastoma (‘NB). Preclinical investigation has shown that SACT-1 enhances tumor cell death and suppresses MYCN expression. Usually seen in high-risk or relapsed NB patients, MYCN amplification can spread NB throughout the body and is less likely to respond to treatment. SACT-1 is designed to be used in conjunction with standard chemotherapy (‘SoC). The recently completed Phase 1 clinical trial was a first-in-man, open-label, randomized, single-crossover, bioavailability and dietary effect study of SACT-1 in healthy adult volunteers. No serious adverse events (SAEs) were observed during the trial. The United States Patent and Trademark Office (‘USPTO) recently granted the first patent for the repurposed drug SACT-1 for the treatment of various cancers, including but not limited to New Brunswick.

The SACT-1 invention provides a composition and method for treating or preventing the growth of cancerous tumors and/or delaying the onset of cancer from tumor initiating cells. The composition is administered alone or in combination with one or more chemotherapeutic agents, biological agents and/or anticancer agents by various routes of administration and dosage forms.

SACT-1 also recently received orphan drug designation from the US Food and Drug Administration (‘FDA). Company plans to file an Investigational New Drug (IND) application for SACT-1 for the treatment of NB and, upon approval, begin a Phase 1b/2a clinical trial in NB patients in the United States in 2022 , under the 505(NYSE:B)(2) regulatory route.

NB is one of the most common solid tumor cancers in children, accounting for 8% to 10% of all childhood tumors, accounting for 15% of all cancer-related deaths in the pediatric population. For the high-risk group of patients, the 5-year survival rate for this condition is approximately 40-50%, as observed by the American Cancer Society based on existing treatments.

The global New Brunswick treatment market, which was worth $2.6 billion in 2016, is expected to grow at a CAGR of 3.7% through 2027. Competition includes Baxter, Bayer, NANT, Novartis, Pfizer, United Therapeutics, etc.

The Company’s second lead candidate, ALS-4, is a first-in-class small molecule drug targeting infections caused by Staphylococcus aureus, including but not limited to methicillin (“MRSA”). The recently completed Phase 1 trial of ALS-4 was a first-in-man, randomized, double-blind, placebo-controlled, single ascending dose (‘SAD) and multiple ascending dose (‘MAD) study to assess the safety, tolerability and pharmacokinetics (‘PK) of orally administered ALS-4 in healthy adult volunteers. No SAEs were observed and no participants dropped out of the studies. ALS-4 should replace or combine with established generic antibiotics like vancomycin, which bacteria are now resistant to. The Company plans to submit an IND to the FDA in 2022 and initiate a Phase 2 clinical trial to assess the efficacy of ALS-4 in patients. MRSA Drugs Market valued at approximately $2.9 billion in 2016 is expected to grow at a CAGR of 3.2% through 2025. Competition includes Allergan, Merck, Pfizer, The Medicines Co., Theravance , etc

Aptorum’s third core program is RPIDD, co-developed with Accelerate Technologies Pte Ltd, the commercialization arm of the Singapore Agency for Science, Technology and Research, through its subsidiary, Aptorum Innovations Holding Limited.

Proprietary technologies are being developed to enrich pathogenic DNA/RNA for analysis by harnessing the power of next-generation sequencing platforms and proprietary AI-based software analyzes to quickly identify and detect any foreign pathogenic agent (virus, bacteria, fungus, parasites). ) unbiased through its genomic composition and to identify other unknown pathogens and novel mutated pathogens.

Ongoing clinical validation in Singapore with 12 participants has achieved a sensitivity of 99.99% and a specificity of 90%, with the goal of reaching over 95%. Further clinical validations are planned for 2022 in Singapore and the United States.

finance

Aptorum has a market capitalization of $80.52 million on a price of $2.26 at the last close on 02/07/2022. Shares outstanding were 35.6 million, of which 75.05% were held by insiders, 1.48% by institutions and 23.47% by the public. The company earned $1.22 million in revenue from the AML Clinic TTM it has run in central Hong Kong since June 2018. In addition to this revenue stream, sales of NativusWell, a new nutraceutical supplement for menopause for women, may also bring in revenue in 2022 from the UK, EU and Hong Kong markets, and in 2023 from the US, but these are not expected to contribute to the trail cash flow, which is currently secured for at least 12 months with a cash and cash equivalents balance of approximately $20.6 million as of 06/30/2021.

Risks

The cumulative deficit as of 06/30/2021 was $46.6 million. The Company’s flagship products are in their infancy and it will be years before they are commercialized and cash flow positive is achieved. The Company may need to raise additional funds in 2Q/2H-2022, coinciding with the start of further trials of SACT-1 and ALS-4, which will dilute the stock.

This stock has not been very liquid lately. On Seeking Alpha I see a 3 month average volume of 2.8 minutes, which is very good, but their current volume is around 150,000. That could be a problem if things don’t change; investors will find it difficult to buy or sell the stock if it remains so illiquid.

Conclusion

The market for NB and MRSA treatments is small and competition is tough with big players like Merck, Novartis, Pfizer and United Therapeutics candidates in later stages than the Company’s leading candidates. The Company’s advantage lies in the broad applicability of proprietary SACT-1 in other cancers such as colorectal cancer and triple negative breast cancer. A Wall Street analyst is bullish with a strong Buy rating and $15 price target. We would, however, await IND approvals and data from the planned Phase 1b/2a trial for SACT-1 and the Phase 2 trial for ALS-4. As I said at the start, unless this company cancels the noise and focuses on something and then produces solid data there, there’s nothing interesting here.