This Biotech’s Stock Has Been Under Pressure, Could Upcoming Clinical Trials of Its Nanotechnology-Based COVID Drug Candidate Be The Start Of An Upward March? - Sangamo Therapeutics (NASDAQ:SGMO)

A company that seems to have seen poor market sentiment lately is NanoViricides Inc. NNVC, a pharmaceutical company specializing in the development of nanomedicine drugs for treating viral infections.

NanoViricides' stock price has been under heavy pressure, going down from as high as $4.15 two years ago to as low as $1.17 recently. The company has not issued any new stock or raised new money in this timeframe, so this decline wasn’t because of dilution. This downward slide in stock price occurred simply because the company has focused its full attention on diligently pursuing the research and development of its COVID drug candidate “from scratch” using a patented, revolutionary platform, even sacrificing investor outreach.

The company has taken the time and resources necessary to develop a nanomedicine drug to treat COVID that has shown extremely strong safety and effectiveness in pre-clinical studies. It has even accomplished the very difficult task of developing orally available versions of its COVID drug. This is a big achievement – hardly any nanomedicines on the market today are available for an oral route, and now this COVID drug from NanoViricides is ready to enter the clinic.

The company operates in the very large antiviral drugs market. According to Market.us, the antiviral drugs market size is projected to surpass approximately $ 71.1 billion by 2032 from $ 49.8 billion in 2022, and it is poised to reach a CAGR of 3.73% from 2023 to 2032.

The application of nanotechnology to the medical field has a lot of promise. By employing nanotechnology to develop new drugs, nanotech’s potential for efficiently targeting specific cells or viruses could be exploited, significantly improving a drug’s efficacy. However, despite a recognition of the potential for medical nanotech, there are not many nanomedicines currently available in the market.

Antibiotics ushered in a revolution in medicine. They are broad-spectrum agents to treat bacterial infections. However, there are no similar broad-spectrum, safe and effective agents to treat viral infections.

NanoViricides believes it can fill both these gaps. If successful, it will revolutionize how we treat viral infections worldwide, and it may provide new tools to prevent viral pandemics from expanding at the outset. What would the company be worth then?

This biopharma company is creating a nanoviricides platform technology that it is using for drug development to treat viral infections. This technology employs a novel mechanism that acts on the virus particle to create highly effective, first-in-class antiviral medications. NanoViricides’s hard work is now culminating in bringing its first drug, NV-CoV-2, into clinical trials this May.

Could This Be The Start of A Major Upward March For The Fortunes Of NanoViricides And Its Shareholders?

NanoViricides started its journey back in 2005 and has been working on perfecting its nanomedicines platform since that time. Though some investors seem to have become impatient with such a long wait, it is not unusual for a drug development company to take many years before it finally brings a revolutionary, first-in-class product to market.

To put this in context, let us look at three examples:

Sangamo Therapeutics, Inc. SGMO was founded in 1995. It began its first clinical trials around 2017, after more than 20 years, for gene therapy of hemophilia A. This drug is now in Phase 3. This company has the distinction of having developed the first in-body gene engineering using its novel custom-engineered zinc-finger enzyme technology. Its current market cap is $335 million, with no approved drugs yet.

Another company, Sarepta SRPT, is now worth $11 billion. It was incorporated in 1980 as AntiVirals, went public in 1997 as AVI BioPharma and in 2012 changed its name again to Sarepta Therapeutics. Its first drug received FDA approval in 2016, after a 36-year journey. It has developed novel platform technologies for antisense therapeutics called Morpholino, and PPMO. Sarepta developed its own clinical-scale manufacturing facility so as to move rapidly.

Although Seagen SGEN is now a global pharmaceutical company with a market cap of $37 billion, before that, it spent many years as an insignificant start-up. It took Seagen years of frustration, disappointment and rejection before its first drug was approved, an approval that took the company from being relatively unknown to becoming a leading biopharma. Founded in 1997 in Seattle, Washington, the company didn’t initiate its first clinical trial for nine years, and it wasn’t until 2011 that its first drug received approval in the US. Seagen’s platform is based on a well-understood principle of attaching cytotoxic drugs to monoclonal antibodies in order to attack tumors, known as antibody-drug-conjugates or ADCs.

Clearly, all new drugs have to pass through many rigorous stages that test for safety and side effects, as well as efficacy. However, first-in-class drugs have a much greater burden of proof and take longer to develop compared to drugs based on well-understood technologies. As seen in the examples above, the research and development timeframe for first-in-class drugs based on novel platform technologies, like the ones from NanoViricides, adds many more years for such drugs to come to market.

It makes sense that when a company like NanoViricides is developing a drug in the nanomedicines field, where everything has to be developed “from scratch” because there aren’t many comparable candidates, it would take longer to bring a product to market.

Now the company is preparing to start clinical trials outside the U.S. for its drug candidate NV-CoV-2, an anti-viral to treat COVID. This is a broad-spectrum drug that uses a nanotech mechanism to maintain effectiveness across the constantly evolving variants of the coronavirus. NanoViricides is excited that trials for the drug will be beginning this May 2023. The company has already shipped the drug products to its collaborator in preparation for the clinical trials.

The three examples cited above demonstrate the classic “J-curve” of stock price and the market cap of successful biopharma companies. As companies advance their drug candidates from the pre-clinical stage into the clinic, a big jump in the stock price is generally found to occur. If the results of clinical trials continue to be positive, then additional big jumps with successive milestones are often seen as the drug approaches approval. The stock price usually continues to increase after approval as the new drug is commercialized and it captures increasing revenues. This is what has happened with many companies in the multi-billion-dollar market cap club.

Are the impending clinical trials the start of such a major upward march in the fortunes of NanoViricides and its shareholders? Historic precedents suggest it’s certainly possible!

Want to learn more about NanoViricides? Visit its website.