CFRX: Interim Futility Analysis for Phase 3 DISRUPT Trial in 2H21…

By David Bautz, PhD

NASDAQ:CFRX

READ THE FULL CFRX RESEARCH REPORT

Business Update

Composition of Matter Patent for CF-370

On May 3, 2021, ContraFect Corporation CFRX announced that the U.S. Patent and Trademark Office (USPTO) issue U.S. Patent 10,988,520 for CF-370. The patent, entitled "Lysin-Antimicrobial Peptide (AMP) Polypeptide Constructs, Lysins, Isolated Polynucleotides Encoding Same and Uses Thereof", contains composition of matter claims covering CF-370 as well as claims for treating Gram-negative bacterial infecitons, including those caused by Pseudomonas aeruginosa, Klebsiella pneumoniae, Acinetobacter baumannii, Enterobacter cloacae, and Escherichia coli.

CF-370 is the company's lead engineered lysin development candidate targeting Pseudomonas aeruginosa, a Gram-negative bacterial species. The following figure shows how lysins are effective against Gram-positive bacteria due to their ability to easily interact with the peptidoglycan layer. However, Gram-negative bacteria have an outer membrane that acts as a barrier against most lysins, thus preventing them from reaching the peptidoglycan layer. While the majority of purified Gram-negative lysins have no antimicrobial activity, there are a select few that have some activity in low ionic strength buffers (indicated by the asterisk in the following figure on the right). It is these lysins that ContraFect used as lead compounds to modify in order to increase their anti-microbial activity, with CF-370 emerging as the lead candidate from this research.

In mid-2020, ContraFect announced an award of up to $18.9 million from CARB-X (Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator), a global non-profit partnership dedicated to supporting the development of new antibacterial treatments, to support the IND-enabling activities for CF-370. The award is for an initial funding of $4.9 million, with additional funds dispersed based upon project milestones. IND-enabling studies are currently ongoing and we anticipate a Phase 1 trial initiating in the first half of 2022.

In addition, ContraFect also entered into an initial funding agreement with the Cystic Fibrosis Foundation to study the effect of using direct lytic agents against Gram-negative pathogens that commonly afflict cystic fibrosis (CF) patients. The following chart, derived from the 2019 Cystic Fibrosis Foundation Patient Registry, shows that P. aeruginosa makes up a considerable proportion of lung infections in CF patients, particularly as they get older. These infections are very difficult to treat, thus necessitating the need for improved therapeutics.

BARDA Contract to Support Development of Exebacase

In March 2021, ContraFect announced an $86.8 million contract with the Biomedical Advanced Research and Development Authority (BARDA) that will support the ongoing Phase 3 DISRUPT (Direct Lysis of Staph aureus Resistant Pathogen Trial) trial of exebacase in patients with Staphylococcus aureus bacteremia, including right-sided endocarditis. The company will receive an initial tranche of $9.8 million with up to $77.0 million in future support being dependent on progress and clinical success in the DISRUPT trial. Following completion of the trial, and assuming a positive outcome, the BARDA funding can be used to support additional development work that may be necessary for FDA approval, including manufacturing and regulatory activities. It could also cover any post-approval commitments, such as the completion of the pediatric study.

The DISRUPT trial is a randomized, double blind, placebo controlled study being conducted at over 40 centers in the U.S. and will enroll approximately 350 patients randomized 2:1 to receive either exebacase or placebo, with all patients receiving standard of care antibiotics. The ongoing coronavirus pandemic has resulted in a delay in patient enrollment due to hospitals struggling with an influx of COVID-19 patients in intensive care units. However, the rollout of highly effective COVID-19 vaccines should lead to a decrease in hospital burden as the year progresses and an increase in patient enrollment into the DISRUPT trial. A preplanned interim futility analysis is scheduled to take place after the first 60% of patients enrolled into the trial are evaluable for efficacy. We anticipate the interim analysis occurring in the second half of 2021.

The primary endpoint of the trial is clinical response at Day 14 in patients with methicillin-resistant S. aureus (MRSA) bacteremia, including right-sided endocarditis. Clinical response is defined using objective clinical criteria including: 1) resolution of S. aureus bacteremia/right-sided endocarditis signs and symptoms that were present at baseline; 2) no new signs or symptoms of bacteremia/right-sided endocarditis; 3) no complications of bacteremia/right-sided endocarditis; 4) no changes in anti-staphylococcal antibiotics after treatment with study drug due to persistence, worsening, or recurrence of signs or symptoms of bacteremia/right-sided endocarditis; 5) blood cultures negative for S. aureus by Day 14; and 6) the patient is alive. Clinical response is being determined by an independent, blinded clinical adjudication committee.

Key secondary endpoints include clinical response rate at Day 14 for all S. aureus bacteremia patients (including both MRSA and methicillin-sensitive S. aureus [MSSA]), 30-day all-cause mortality in MRSA patients, and clinical response at Day 60. The company will also evaluate the impact of treatment with exebacase on length of hospital stay, length of stay in the intensive care unit, and 30-day readmission rates for both all-cause and S. aureus infection readmissions.

The following table shows the statistical parameters for the primary efficacy endpoint and key secondary efficacy endpoints from the trial. The primary endpoint is 86% powered to show a 28% increase in clinical response rate at Day 14 with the use of exebacase plus standard of care antibiotics compared to standard of care antibiotics alone.

Financial Update

On May 14, 2021, ContraFect announced financial results for the first quarter of 2021. As expected, the company did not report any revenues for the three months ending March 31, 2021. Net loss for the first quarter of 2021 was $5.2 million, or $0.18 per share, compared to a net loss of $7.6 million, or $0.49 per share, for the first quarter of 2020. R&D expenses for the first quarter of 2021 were $8.0 million, compared to $5.1 million for the first quarter of 2020. The increase was primarily due to increased clinical costs associated with the ongoing Phase 3 DISRUPT trial, increased activities for CF-370 and other preclinical assets, and increased headcount. G&A expenses for the first quarter of 2021 were $2.8 million, compared to $3.0 million for the first quarter of 2020. The decrease was primarily due to decreased intellectual property and corporate legal fees.

As of March 31, 2021, ContraFect had approximately $87.2 million in cash, cash equivalents, and marketable securities. This was due in part to a public offering in March 2021 that resulted in net proceeds of approximately $53.7 million. As of May 10, 2021, the company had approximately 39.3 million shares outstanding and, when factoring stock options and warrants, a fully diluted share count of approximately 53.6 million.

Conclusion

ContraFect has a number of important milestones coming up with year and the recent financing has further strengthened the balance sheet to carry the company through those milestones and beyond. We anticipate the results of an interim futility analysis for the DISRUPT trial in the second half of 2021. In addition, we anticipate a Phase 2 trial in patients with S. aureus prosthetic joint infections initiating this year. With no changes to our model our valuation remains at $23 per share, and ContraFect remains one of our top picks in the anti-infective space.

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