Acurx Pharmaceuticals' (NASDAQ: ACXP, $ACXP) is stalking its opportunity to become the front-line CDI treatment against C. difficile (CDI). In fact, after Pfizer (NYSE: PFE) reported missing its trial primary endpoint in its CLOVER Phase 3 trial targeting treatment for C. difficile, ACXP'sopportunity to bring a best-in-class CDI drug to market has never looked better. Moreover, from the looks of things, ACXP's trial may present one of the last chances to get an effective CDI treatment to market anytime soon.

That's because Pfizer'smiss followed both Sanofi (NYSE: SNY) and Summit Therapeutics (NYSE: SMMT) trial misfortunes, which also posted disappointing topline results in their respective quests to capitalize on a more than $1.5 billion CDI treatment market opportunity. Now, a fourth company joins the list. Earlier this month Finch Therapeutics (NASDAQ: FNCH) announced pausing its Phase 3 trial enrollment after receiving a clinical hold letter from the FDA requesting additional information about its SARS-CoV-2 donor screening protocols.

With Finch now sidelined until addressing FDA concerns, ACXP is even better positioned to earn a front-line position to treat CDI. Moreover, what's coming into greater focus is that even if Finch's drug moves forward, it may still not outperform ACXP's ibezapolstat. Why? Because Finch's candidate focuses on the microbiome as a single dimension and has shown only a reduction in recurrent infection – far less impressive than the elimination of recurrent infection as ACXP can boast from its Ph2a trial data. In contrast, ACXP's ibezapolstat is a dual impact drug that addresses the direct infection, avoids recurrent infection altogether (so far) while at the same time restoring the microbiome. Thus, in a side-by-side comparison, ACXP's candidate is seemingly better than Finch’s one dimension drug in cases of multiple recurrent infection and the only choice between the two for first line treatment.

Thus, the more learned about ACXP's clinical program, the more deserving for its stock to react favorably to its strengthening clinical position.

Phase 2b Without A Blemish

Notably, for ACXP , the misses of others can lead to many options and, more importantly, positions them as one of the few, if only, known clinical-stage companies without a blemish on its trial record to treat the debilitating infection.

Thus, despite ACXP stock showing an ability to decouple from broader market weakness, a massive valuation disconnect still exists. But from an investor's perspective, that's not necessarily bad news. Current share prices expose more than an attractive proposition; they expose an opportunity too good to ignore.

Not only that, in addition to ACXP benefitting from a potential shrinking of the competitive landscape to treat CDI, its Phase 2 trial evaluating ibezapolstat also shows a probability to potentially change for the better an antibiotics drug landscape that hasn't seen meaningful improvements in more than three decades. Better yet, as ACXP advances its Phase 2b trial, they extend its competitive distance in its targeted CDI indication. Of course, that's good news for ACXP, its investors, and patients. Moreover, with Phase 2a data already suggesting ibezapolstat could become the go-to drug to treat CDI, the best news is that hundreds of thousands of patients per year may finally get effective treatment for the debilitating infection which may include substantially reduced risk of reinfection.

And here's more excellent news, impressive trial data from its Ph2a trial was compelling. It was so good that it led the Trial Oversight Committee and the Scientific Advisory Board to allow for an early termination of its Phase 2a trial and advance straight into a Phase 2b study after data on just ten patients showed 100% cure rate and 100% sustained cure after follow-up when treating patients with C. difficile.

Investors should like this part of the investment proposition, too. ACXP could move through its Phase2b trial quickly, with enrollment already underway and the duration of treatment relatively short. Treatment cycles can run as little as ten days, with follow-up done at 30 days. Thus, with ACXP powering through its Phase 2b trial supported with best-in-class data and a well-levered expectation to enter Phase 3, ACXP stock at current levels appears appreciably undervalued. More on that later.

For now, know this- ACXP is better positioned today than at any time in its history to create substantial shareholder value in the near term. Here's why.

Another Pharma C. Difficile Trial Results Miss Endpoints

As noted last month, Pfizer joined two other companies that showed less than impressive data from their late-stage C. difficile trials. All three had topline misses, often a death knell for a clinical trial. Further, all three appear to be evaluating ways to save its programs, knowing that the potential market in dollar terms to treat CDI is well worth the fight. Still, while admiring the ambition, expect PFE, SNY, and SMMT to have uphill battles. But, bad news for them is excellent news for ACXP.

In fact, new doors of opportunities could be opening for ACXP at this very moment, especially with big pharma now more accustomed to acquiring new drugs than developing them. Moreover, ACXP can make a case for why pharma's may want to pay attention, with a trial data set unrivaled in the rates of cure and sustained cure despite small patient numbers. Thus, despite ACXP having the capital to complete its Phase 2b trial, don't underestimate the possibility of at least one pharma company taking a closer look at ACXP. After all, the difference in valuation of a Phase 2 company compared to a Phase 3 company can reach the hundreds of millions of dollars. In other words, it may bein the best interest of potential partners to act sooner than later.

Pfizer itself might have reasons to take a close look at ACXP. They may have even tipped their hand to that effect. Its CLOVER trial update commentary made clear they are still interested in the billion-dollar-plus market opportunity. But, they likely realize at the same time that they need a better candidate, especially with hopes of its drug becoming a front-line treatment all but evaporating based on its data set. Still, the good news for patients, and potentially ACXP, is that ACXP may have what PFE needs. And that could lead Pfizer to look beyond niche indications and potentially partner with the new leader of the trial pack.

Even Pfizer knows its options are limited. As indicated in their press release last month, Pfizer said it intends to pivot toward treating high-risk and the most severe cases of CDI, which keeps them in the game and provides an opportunity to leverage what they do have to take advantage of revenue-generating opportunities in the "fringes" of the CDI treatment market. Those fringes aren't necessarily small opportunities. Still, they wouldn't replace Pfizer's original assessment of its market potential for an approved vaccine being over $1 billion if used as a front-line therapy and beyond. By the way, their market-size assessment validates the modeling generated by Acurx and is likely a contributing factor to Pfizer's decision to remain in the market in a niche segment for the most severe cases. With billions of dollars in play, why not.

But, Pfizer's ambition can't usurp ACXP's pathway to earning a front-line CDI treatment indication. Undoubtedly, navigating past potential competitors just got easier. However, with Pfizer still wanting broad exposure to the revenue-generating potential in the entire CDI market, ACXP may be wise to reach out for a handshake as well. After all, ACXP's ibezapolstat candidate may complement Pfizer's plan and, with a sales force in the space already, may be quite interested in picking up the much bigger market from having an interest in a front-line drug. So by leveraging its existing CDI sales force, PFE could boast sales to at least a plurality of the CDI market, if not more than that.

Acurx's Ibezapolstat- Last CDI Drug Standing?

Here's the best part of the ACXP investment thesis: ACXP now appears to be one of the few, if only companies still on target, to bring an effective CDI treatment to market. Remember, as noted, Pfizer's miss comes after other pharma players, Sanofi and Summit missed their endpoints. Thus, the casualties are mounting in a race to get a viable CDI front-line treatment to market – a market that has a seemingly vulnerable front-line therapy currently with oral vancomycin.

Notably, ACXP's data is about as good as it can get. Its Phase2a data showed 100% cure and 100% sustained cure after a 30-day follow-up. That not only bests Pfizer's known results, but it also goes layers deep to better additional indications that Pfizer targets in its secondary endpoint indications. Perhaps the best takeaway from Pfizer's update was that its candidate was safe. Again, so is ACXP's. Moreover, ACXP's CDI candidate demonstrates a restoration of the patient's microbiome during treatment, which is highly unusual for an antibiotic. Thus, management considers ibezapolstat somewhat of a "dual impact" therapy in that it restores the microbiome while tending to the acute infection.

Here's an interesting note, too. Despite falling short of expectations, analysts still give the Pfizer drug a shot at eventual approval. They temper that enthusiasm, though, by saying they may not capture all the $1 billion opportunities. Still, that optimism shows that even an inferior drug is so needed that analysts are still willing to provide a significant valuation to its potential.

Acurx Has Earned A Raise

So, similar logic dictates that ACXP deserves equal respect and attention. Frankly, having the last clinical-stage, unblemished, CDI drug candidate standing, they should be all over the industry press, especially with its Phase 2b trial staking its ibezapolstat against current front-line treatment, oralVancomycin. By the way, speaking of its Phase 2b trial, if oral ibezapolstat scores data more effective and keeps its excellent safety profile intact compared to Vancomycin, ACXP, and its stock, could be off to the races.

Now, assuming ACXP does want to partner, and assuming big pharma indeed knows it needs to change its tact, it becomes evident that the value proposition in a Phase 2 ACXP may be too big to ignore. Remember, with Pfizer's miss, ACXP's ibezapolstat may already be the best option to treat CDI and protect against recurrent infection. And that claim is backed by data.

Data published from ACXP's Phase 2a trial last month in Clinical Infectious Diseases, one of the most respected journals in the medical community, indicates that ibezapolstat is well positioned to earn the front-line treatment crown. According to the article, ibezapolstat showed ideal traits as an oral antibiotics candidate, demonstrating a highly potent response against C. difficile, good tolerability, and limited gastrointestinal absorption. That resulted in very high fecal concentrations, which may reach three orders of magnitude above the MIC for C. difficile.

Better still, the article noted that in addition to the ibezapolstat treatment being highly effective at killing C. difficile, it appears to do so while maintaining the populations of helpful bacteria in the gut microbiome. These signs indicate that the treatment may do more than cure CDI in the short term; it can significantly reduce the likelihood of recurrent infection. Actually, the article did highlight that the favorable early impressions are supported by ACXP's trial results, which found no recurrent infections in patients treated with ibezapolstat.

What's it all mean? Put simply, ACXP's trial data thus far indicates that ibezapolstat could be the much-needed first in class antibiotic - to change the way C. difficile infection gets treated.

Development Mission Expedited With QIDP and Fast Track Designations

Even better, that may happen quickly. The FDA has already granted ACXP a Qualified Infectious Disease Product (QIDP) and a fast-track designation to the company's ibezapolstat treatment to accelerate the drug's path through trials and review. This is likely a recognition by the FDA that Vancomycin, the current standard of care for CDI, has a recurrent infection rate of up to 40%, meaning it is not as effective in long-term treatment.

Of course, efficacy matters, and ACXP is also checking that box. According to Robert J. DeLuccia, Executive Chairman of Acurx, "With the excellent clinical results and very good safety and tolerability demonstrated in the Phase 2a segment of this ongoing trial, we validated the bacterial pol IIIC enzyme as a therapeutic target for ibezapolstat, our first product candidate in our new class of antibiotics. Additionally, this trial segment showed potentially beneficial effects of ibezapolstat on the intestinal microbiome and bile acid metabolism."

This is high praise for ACXP's candidate, but investors need not rely on the company's opinion alone.

Ibezapolstat Earns A Pass To P2b Trial Under Guidance of Oversight Committee

The results from ibezapolstat's Phase 2a trial justify the growing optimism. Data was so impressive, in fact, that after monitoring patients for recurrent infection for 26 to 30 days, an assessment of the safety and efficacy of the Phase 2a treatment by the Trial Oversight Committee and the Scientific Advisory Board, which includes three of the leading infectious disease experts setting Infectious Disease Society of America (IDSA) treatment guidelines for C. difficile infection, recommended to terminate the Phase 2a trial early and move straight on to a Phase 2b trial. Given it was partially a panel of experts on C. difficile that issued this recommendation, it seems as though Acurx is capturing the attention of critical medical experts.

Deservedly so. Acurx Pharmaceuticals' ibezapolstat completed primary and secondary treatment objectives in trial patients with a 100% success rate, successfully curing C. difficile infection in all participants while preventing 100% of recurrent infections. Compared to the recurrent infection rate of up to 40% with the current standard of care for CDI, this result is exceptional.

Incidentally, if the results of its Phase 2a trial are an indication, the expectation for confirmatory data from its Phase 2b ibezapolstat trial is a reasonable expectation. And remember, the trial has several targeted endpoints, examining efficacy in treating CDI and changes in gut microbiome and pharmacokinetics, allowing the company to confirm the additional upsides of the novel antibiotic. It will also test for recurrent infection rates, allowing ibezapolstat an opportunity to verify its outstanding success rate in long-term CDI treatment.

An Effective Treatment Intended To Help Millions

Consider this, too. An approved ibezapolstat would likely meet overwhelming demand if late stage clinical trial data is consistent with current results. Moreover, in addition to the likelihood of tremendous commercial success for ACXP and its investors, ACXP could help hundreds of thousands of patients per year needing better treatments. The 2017 update of the Clinical Practice Guidelines for C. difficile infection by the Infectious Diseases Society of America (IDSA) and Society or Healthcare Epidemiology of America (SHEA) indicates that C. difficile infection presents a significant problem to those in healthcare settings and among the general population. The disease is so prevalent in hospitals and long-term care facilities that the New England Journal of Medicine called C. difficile one of the most common causes of health-care-associated infections in hospitals.

As a matter of fact, C. difficile is estimated to cause over 500,000 infections each year in the United States, with about 20,000 of these cases being fatal. Across a sample of 150,000 patients, Acurx Pharmaceuticals estimates that the recurrence rates of three common treatments for CDI range between 20% and 40%. Overall, this means that C. difficile infections, which are climbing to an incidence of 600,000 with a high recurrence rate, are 9.3% fatal. If Acurx's treatment continues to post excellent results in its Phase 2b trial, ibezapolstat could very well be a treatment that changes the lives of hundreds of thousands of patients.

That would be excellent news all around. And with ACXP expected to provide updates throughout 2022, positive effects on ACXP's valuation could also be in the queue. And that upside potential is substantial and justified when putting ACXP's current valuation against peer companies. While putting ACXP's valuation side-by-side with Pfizer and Sanofi isn't a fair comparison, it is against Summit Therapeutics (NASDAQ: SMMT). After all, they, too, had a C. difficile treatment candidate in a Phase 3 trial that showed promise, and unfortunately for them, it missed its endpoints as well.

But despite that miss, SMMT still holds a market cap significantly higher than ACXP's. Even with ACXP's candidate showing layers of potential superiority, SMMT is still trading at a market cap of almost 6X ACXP's valuation. But the excellent news for ACXP investors is that that disconnect may be short-lived. Actually, with its Phase 2b trial in motion and potential competitors dropping, it's a gap that may tighten substantially even during the coming quarter.

ACXP Positioned For A 2022 Breakout On Phase 2b Results

Here's the bottom line: Pending the successful completion of its remaining clinical trials, ACXP's ibezapolstat has an extraordinarily high likelihood of capturing a significant part of a billion-dollar C. difficile infection treatment market. And with interim data suggesting that ibezapolstat is on a potentially expedited path toward approval, ACXP stock looks better positioned than ever to trend higher based on near-term updates or through value gained in a potential partnership.

Another thing to consider. It's rare to see a biotech publishing trial data as compelling as ACXP's to remain valued at under $100 million. And at roughly $41 million today, that suggests ACXP is appreciably undervalued. But markets correct. And ACXP is indeed ripe to move higher as investors digest the recent trial misstep by Pfizer and search for an investment opportunity providing that same billion-dollar opportunity from a CDI treatment market that needs a better standard of care.

Foremost, as one of the last clinical-stage companies standing without a blemish in its late-stage CDI treatment studies, ACXP has earned its share of respect. Moreover, they are close to potentially securing their spot to tap into the rewards of a front-line drug treating patients in a $1 billion market. Remember, if ibezapolstat can best Vancomycin in its Phase 2b trial, ACXP could be on its way to "owning" the CDI treatment market.

Thus, the rewards could be significant for investors catching ACXP during market weakness. In fact, from current levels and based on historical and recent peer comparison, the increase in ACXP stock could be exponential.

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