CFRX: Direct Lytic Agents Show In Vitro Activity Against Gram-Negative Pathogens…

By David Bautz, PhD

NASDAQ:CFRX

READ THE FULL CFRX RESEARCH REPORT

Business Update

DLA Platform Shows Promise Against Gram-Negative Pathogens

On November 9, 2021, ContraFect Corp. CFRX announced the presentation of data featuring the company's direct lytic agent (DLA) programs, including lysin CF-370 and amurin peptide AM1. The data focused on the ability of the DLAs to exert bactericidal activity against various Gram-negative pathogens that can cause pulmonary infections in cystic fibrosis (CF) patients, including Pseudomonas aeruginosa, Stenotrophomonas maltophilia, and Achromobacter xylosoxidans. A copy of the poster can be found here.

The following table shows the minimum inhibitory concentration (MIC) for CF-370 against nine of the most common Gram-negative species that afflict CF patients. Up to 30 clinical CF isolates were tested for each species. The results showed that uniformly potent activity (denoted by green color) was seen against P. aeruginosa and S. maltophilia, while more variable activity was seen against A. xylosoxidans and A. ruhlandii. Limited activity was seen against Burkholderia species and Pandoraea apista.

MIC data for the amurin peptides AM1, AM2, and AM3 are shown in the following table. AM1 was active against all Achromobacter species tested, in contrast to CF-370, AM2, and AM3. Just like for CF-370, limited activity was seen against Burkholderia species and Pandoraea apista by any of the amurin peptides.

Interestingly, as the following tables show, there was no difference in activity for CF-370 or AM1 against multidrug resistant (MDR, Table A) or carbapenem-resistant isolates (Table B) compared to the overall susceptibility of each species.

To test the activity of CF-370 and the amurin peptides in the presence of CF sputum, a time-kill assay was performed in the presence and absence of 10% CF patient sputum. The following graphs show that each DLA retains activity against P. aeruginosa in the assay both with and without sputum. Meropenem showed poor activity against P. aeruginosa in the assay. Similar results were seen against A. xylosoxidans and S. maltophilia.

The results presented by ContraFect on the DLA platform are very encouraging and show they may have therapeutic potential against multiple pathogens that cause respiratory infections in CF patients, including those that are MDR and have very limited treatment options.

Financial Update

On November 15, 2021, ContraFect announced financial results for the third quarter of 2021. As expected, the company did not report any revenues for the three months ending September 30, 2021. Net loss for the third quarter of 2021 was $5.3 million, or $0.13 per share, compared to net income of $3.4 million, or $0.12 per share, for the third quarter of 2020. The net loss in the current quarter includes a $6.4 million non-cash gain from the change in fair value of the company's warrant liabilities, while for the prior year period the net income included a $10.7 million non-cash gain from the change in the company's warrant liabilities.

R&D expenses for the third quarter of 2021 were $8.7 million, compared to $4.7 million for the third quarter of 2020. The increase was primarily due to increased costs associated with the DISRUPT trial, increased non-clinical studies, and an increase in clinical development and manufacturing headcount. G&A expenses for the third quarter of 2021 were $3.0 million, compared to $2.6 million for the third quarter of 2020. The increase was primarily due to increased administrative personnel costs and professional fees.

As of September 30, 2021, ContraFect had approximately $63.3 million in cash, cash equivalents, and marketable securities. As of November 10, 2021, the company had approximately 39.3 million shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 53.2 million.

Conclusion

The company recently announced that the interim futility analysis for the Phase 3 DISRUPT trial is expected to take place in the first half of 2022, which is a bit of a delay caused by the ongoing coronavirus pandemic. While frustrating, we don't believe that there will be further delays and we continue to anticipate the trial completing enrollment in 2022. The data presented on the DLA technology against pathogens that cause infections in CF patients is very encouraging and we look forward to updates on those programs. With no changes to our model our valuation remains at $23 per share.

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