Acurx Pharmaceuticals' (NASDAQ: ACXP) competitive position in the race to bring an effective treatment against C. difficile (CDI) just got stronger. That's because another Big Pharma player, Pfizer (NYSE: PFE), missed its trial primary endpoint in its CLOVER Phase 3 trial targeting treatment for C. difficile. Their miss, by the way, follows both Sanofi (NYSE: SNY) and Summit Therapeutics (NYSE: SMMT), which also posted disappointing topline results in their missions to tap into themore than $1.5 billion CDI treatment market. But, for ACXP, the misfortune of others can lead to a windfall of opportunities 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, the recent beat down in small-cap biotech, ACXP included, has created more than an attractive investment proposition; it exposed a compelling one.

Actually, the proposition gets better. In addition to ACXP seeing the potential competitive landscape shrink, its Phase 2 trial evaluating ibezapolstat to treat CDI is showing more than an ability to earn front-line status; it may also change for the better an antibiotics drug landscape that hasn't seen meaningful improvements in more than three decades. Not only that, ACXP has a running start to extend its competitive distance in its targeted indication, with Phase 2a data already suggesting ibezapolstat could become the go-to drug to treat CDI, a debilitating infection that affects hundreds of thousands of patients per year. And here's more excellent news, impressive trial data from its Ph2a trial pushed 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 may like this part, too. ACXP could move through its Phase2b trial quickly, with enrollment already underway and the duration of treatment relatively short. In fact, 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 an expected ticket to enter Phase 3, the ACXP investment proposition at current levels is frankly getting too big to ignore.

Not only that, from an investors’ perspective, ACXP has never looked more ready to generate significant gains in the near term. Here's why.

Big Pharma C. Difficile Trial Results Fail To Impress

Last Tuesday, Pfizer joined two other companies that showed less than impressive data from their C. difficile trials. In fact, all three had topline misses, which is often a death knell for a clinical trial. Further, all three appear to be scrambling to save its programs, knowing that the potential market in dollar terms to treat CDI is well worth the fight. Still, 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, especially with big pharma players now more accustomed to acquiring new drugs than develop them. Moreover, ACXP can justify the consideration, with a trial data set unrivaled in the rates of cure and sustained cure. Thus, while ACXP has the capital to complete its Phase 2b trial, don't underestimate the likelihood 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.

Pfizer itself might have reasons to take a look at ACXP sooner than later. According to their commentary with its CLOVER trial update, they made pretty clear they are still interested in the billion-dollar plus market opportunity. But, they probably also realize they need a better candidate, especially with hopes of its drug becoming a front-line treatment all but evaporating based on the data. Still, the good news for patients, and potentially ACXP, is that PFE isn’t giving up the fight albeit in a niche segment of late stage CDI.

As indicated in their press release last Tuesday,Pfizer 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.  

Interestingly for Acurx, Pfizer announced their original assessment of its market potential for its vaccine being over $1 billion if used as a front-line therapy and beyond. This certainly 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.

So not only has ACXP’s pathway to front-line therapy gotten easier to navigate, but with Pfizer remaining in the niche, late-stage market, it would seem the products would be complementary and Pfizer, with a sales force in the space already, may be quite interested in picking up the much bigger revenue front-line. 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 Could Be Last CDI Drug Standing 

Another thing that those wanting a piece of the significant market share need to consider is that 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 another big pharma player, Sanofi, and Summit, missed their endpoints. Thus, the casualties are mounting in a race to get a viable CDI treatment to market.  

Know this, too. While Pfizer was earning headlines for its trial, data never really demonstrated any sense of superiority over ACXP's ibezapolstat. In no uncertain terms, Acurx deserved at least an equal share of attention. Maybe because they are a Phase 2b company, PFE got the headlines. But, despite the lack of recognition, what's now making headlines is that ACXP is the best-positioned company to bring an effective CDI treatment to market. 

Moreover, ACXP's data is about as good as it can get. Noted above, 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. In fact, ACXP’s CDI candidate is demonstrating a restoration of the patient’s microbiome during treatment, which is highly unusual for an antibiotic and 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 Deserves A Raise

So, the same logic dictates that ACXP deserves similar respect. Frankly, they should be earning major headlines, especially with its Phase 2b trial staking its ibezapolstat against current front-line treatment Vancomycin. Notably, if ibezapolstat emerges more effective and keeps its excellent safety profile intact, it could be a windfall for ACXP.

And as noted, investors may not need to wait long to find out the results. Acurx is moving forward with its Phase 2b trial evaluating a patient population of only 64 people. Moreover, the trials treatment duration is quick, roughly 10 days of dosing and a month-end check-up. A trial of this size and speed is in sharp contrast to typical clinical trials that enroll up to thousands of patients and take years to complete. In addition, from a cost perspective, ACXP needs no help completing its Phase 2a portion of the study, noting it has the cash on hand to see the Phase 2b trial to its end.

Said another way, knowing the difference for how Phase 3 companies are valued compared to Phase 2 companies, the clock is ticking for those that may want to pair with ACXP. And that's assuming ACXP wants a partner before concluding its current trial. Results indicate they could be well-positioned to publish positive results and watch its valuation climb significantly as it prepares for Phase 3. If that's the case, the cost to partner at the start of a Phase 3 can be exponentially higher. And with two big pharma's wanting exposure to the potentially lucrative CDI treatment market, the question now is, who will they pick as a partner. 

Choosing ACXP may Be A Wise Choice

Now, assuming ACXP does want to partner, and assuming big pharma indeed knows it needs to change its tact, it becomes obvious 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 can be backed.

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? Simply put, ACXP's trial data thus far indicates that ibezapolstat could be the much-needed next-gen drug to change the way C. difficile infection is treated.

Accelerating Development 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 Skips To Phase 2b Trial Under Guidance of Oversight Committee

The results from ibezapolstat's Phase 2a trial also tell volumes. Data there was so impressive 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, gave a recommendation 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.

Rightfully 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.

By the way, 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 assumption. 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.

A Novel Treatment To Help Millions

Consider this, too. An approved ibezapolstat would be well received. In addition to the likelihood of tremendous commercial success, ACXP could help hundreds of thousands of patients 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.

If that scenario holds, investors should expect to see positive effects on ACXP's valuation as updates get published throughout 2022. And that correction higher could be substantial. 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. In fact, even with ACXP's candidate showing layers of potential superiority, SMMT is still trading at a market cap about nine times ACXP's valuation. But the excellent news for ACXP investors is that that disconnect may be short-lived based. And with its Phase 2b trial in motion and potential competitors dropping, it's actually a gap that may tighten substantially by the coming quarters. 

Preparing for a Breakout Year Following 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 the path toward approval, ACXP looks better positioned than ever to track higher either on its own or through value gained in a potential partnership. 

Know this, too. 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 $38 million today, that suggests ACXP is significantly undervalued. But markets correct. And ACXP could be 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.

Indeed, as one of the last clinical-stage companies standing without a blemish in its late-stage CDI treatment studies, ACXP may become the company of choice for those wanting exposure to an untapped CDI market. Yes, untapped. Because if ibezapolstat can best Vancomycin in its Phase 2b trial, ACXP could own the market. And for investors catching ACXP during market weakness, the rewards may be significant. In fact, from current levels and based on peer comparison, the increase in ACXP stock could be exponential.

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