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APHB: Meeting with the FDA Soon to Establish Path Forward for AB-SA01 and AB-PA01…

08/14/2018
By David Bautz, PhD

NYSE:APHB

READ THE FULL APHB RESEARCH REPORT

Business Update

Meeting with the FDA to Determine Regulatory Path for AB-SA01 and AB-PA01

On August 9, 2018, AmpliPhi Biosciences Corp. (NYSE:APHB) provided a business update concerning the development of the company’s lead bacteriophage assets, AB-SA01 and AB-PA01. The company reported that a total of 19 patients with serious or life-threatening infections have been treated with either AB-SA01 or AB-PA01 at a total of seven hospitals. As the company had previously guided, the goal was to get data on approximately 20 patients and then approach the FDA to get guidance on a regulatory path forward and design of Phase 2 trials for AB-SA01 and AB-PA01. AmpliPhi will be meeting with the FDA in August and September 2018 to do just that. Following receipt of the meeting minutes, there should be a clearer picture for what the development pathway will look like for each of the assets and potentially the lead indications for each drug.

Multiple Case Reports Presented for Patients Treated with AB-SA01 and AB-PA01

On June 7, 2018, AmpliPhi Biosciences Corp. (APHB) reported that multiple case reports on patients treated with the company’s lead bacteriophage development products, AB-SA01 and AB-PA01, were presented at the American Society of Microbiology (ASM) Annual Meeting and the 41st European Cystic Fibrosis Conference. Topline results from these cases had previously been announced by AmpliPhi with the presentations providing additional details.

At ASM, a presentation described four cases of severe Staphylococcus aureus infection treated with AB-SA01. Three of the cases involved patients with endovascular infection and one case of severe vertebral osteomyelitis with epidural abscess. For all the patients, medical and surgical therapy options had been exhausted. Patients were treated with 3x109 plaque-forming units of AB-SA01 intravenously twice-daily for two weeks in combination with the best antibiotic therapy available. The bacteriophage therapy was well tolerated in all patients with no reports of serious adverse events. Three of the patients had elimination of their infection while the fourth patient only received two days of bacteriophage treatment after suffering from uncontrolled septic shock and valve necrosis and passed away during surgery due to dehiscence of newly implanted valves. This is summarized in the following chart.



View Exhibit I

At the European Cystic Fibrosis Conference, a presentation described the case of a 26-year-old cystic fibrosis patient who was unable to get a double lung transplant due to recurrent bouts of pneumonia caused by multidrug resistant Pseudomonas aeruginosa infection. The patient had received multiple courses of antibiotics, including colistin, but due to renal failure the colistin had to be stopped. AB-PA01 was administered every six hours for eight weeks intravenously as an adjunctive treatment to systemic antibiotics. There were no bacteriophage-related adverse events reported. The following chart shows the patient’s baseline symptoms before bacteriophage treatment began and at the end of treatment. The infection resolved by Day 7 and there was no recurrent pneumonia or CF exacerbations during treatment or 90 days after the end of bacteriophage therapy.



View Exhibit II

Financial Update

On August 9, 2018, AmpliPhi announced financial results for the second quarter of 2018. R&D expenses for the second quarter of 2018 and 2017 were $1.7 million and $1.1 million, respectively, with an increase in clinical costs and professional and consulting fees primarily attributable for the increase. G&A expenses were $1.4 million for the second quarter of 2018 compared to $2.8 million for the second quarter of 2017. The decrease was primarily due to lower payroll costs and legal fees along with a $0.6 million non-cash decrease in stock-based compensation. Net loss for the second quarter of 2018 was $3.1 million, or $0.19 per share.

As of June 30, 2018, the company had approximately $5.8 million in cash and cash equivalents. Cash burn during the second quarter of 2018 was $2.2 million. AmpliPhi has completed two public offerings thus far in 2018: In January 2018 the company sold 4.0 million shares of common stock at a price of $1.00 per share for gross proceeds of $4 million and in March 2018 the company sold 2.7 million shares of common stock at $1.10 per share for gross proceeds of $3.0 million. We anticipate the company has enough capital to fund operations into the fourth quarter of 2018. As of Aug. 6, 2018, AmpliPhi had approximately 16.5 million shares of common stock outstanding and when factoring in in stock options and warrants a fully diluted share count of approximately 25.7 million.

Conclusion

We’re excited to see that AmpliPhi will be meeting with the FDA about the regulatory pathway for AB-SA01 and AB-PA01. We will be very interested to hear the outcome of those meetings as well as any additional details the company will be presenting on the treated patients, as the data that the company has presented thus far is very encouraging. Our current valuation is $4.00 per share. However, we believe there is likely to be significant upside to our model once we learn additional details about what indications the company will be targeting later in 2018 for Phase 2 studies, at which time we may also get a better sense of timelines for approval.

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