Biotech
AzurRx BioPharma: an undervalued company chasing a $2.3 billion market
June 20, 2020
4 min. read
Here's what you need to know
- The company has a strong patent family — with more than one patent, the company has a pipeline of intellectual property to fuel its growth.
- The market is sizeable, worth well over US$2 billion — the company believes it could capture 40 to 50 per cent of this market share.
- The stock is significantly undervalued — most of AzurRx’s peers are trading at three to four times their sales revenue.
Approximately 130,000 people in the United States have trouble digesting the food that they eat due to a condition called Exocrine Pancreatic Insufficiency (EPI), which affects 30,000 people living with Cystic Fibrosis and 100,000 people living with chronic pancreatitis.
“In some cases, patients have to take up to 40 pills per day,” explains James Sapirstein, President and CEO of AzurRx BioPharma, Inc. “The treatment typically includes Pancreatic Enzyme Replacement Therapy, or PERT, which gives patients the enzymes they need to survive. It’s been the only treatment available to patients — until now.”
AzurRx is a clinical stage biopharmaceutical company that will be competing within the PERT category.
“The company is on the precipice of showing investors significant data and it has a strong IP position”
Greg Beckett, Senior Analyst and Chartered Investment Manager for the Richmond Club
“We are developing MS1819 — a synthetic based treatment made of yeast enzymes that is safer, easier to take and well tolerated by patients,” says Sapirstein. “It has the potential to revolutionize how we treat EPI, or the inability to digest food properly.”
A billion-dollar market
The market for EPI is sizable. It ranges from US$1.4 billion in the United States to US$2.3 billion worldwide, and Sapirstein believes AzurRx has the potential to take between 40 to 50 per cent of that market share.
“That represents US$400 to US$500 million in revenue.” The stock is currently undervalued — another reason, says Sapirstein, to get in on AzurRx. “When you look at our competitors, they’re trading at three to four times their sales revenue. So, if you look at our current sales price we are extremely undervalued at this point.”
Saperstein took over the helm at AzurRx in October 2019. He says the stock was especially undervalued considering the market and the clinical data that will soon be released about the product.
“This is an unsatisfied market. The leading products right now are made from pig pancreases which have safety and supply chain concerns. Ours will be the first humanized model to treat EPI in patients with cystic fibrosis and chronic pancreatitis.
“MS1819 has the potential to reduce pill burden from the 25-40 pills per day currently taken by CF patients down to 8-16 per day and to improve patient compliance, with a higher safety profile.”
A robust patent pipeline
AzurRx has also protected its intellectual property with a strong family of patents.
“Our patents go well into the future and extend beyond this one form of therapy,” says Saperstein. “That means we have more than one type of pharmaceutical drug in the pipeline that helps to significantly de-risk our stock.”
“AzurRx is already a de-risked company,” explains Greg Beckett, Senior Analyst and Chartered Investment Manager for the Richmond Club. “The company is on the precipice of showing investors significant data and it has a good IP position.”
Beckett sums up the reasons for investing in AzurRx BioPharma as follows:
- The company has a strong patent family — with more than one patent, the company has a pipeline of intellectual property to fuel its growth.
- The market is sizeable, worth well over US$2 billion — the company believes it could capture 40 to 50 per cent of this market share.
- The stock is significantly undervalued — most of AzurRx’s peers are trading at three to four times their sales revenue.
