Enlivex Therapeutics (ticker: ENLV), which just went public this year on the NASDAQ, is the latest company led by this rock star team of biotech executives with a proven track record of identifying blockbuster drugs and selling companies to Big Pharma. Executive Chairman sold his last company for almost $500 million and thinks ENLV could be worth a lot more than that.
Shares of ENLV have traded from $10 to $30 a share in just the past few months. However, with major clinical trial milestones coming out over the following year, shares could trade much higher from here.
Enlivex has completed a Phase 2a Clinical study for Post Bone Marrow Transplantation Complications (Post-BMT), and expects to initiate a Phase 2/3 study for Post-BMT and a Phase 2 for Sepsis in the coming months.
Multiple, near-term clinical data readouts, if positive, could be major catalysts for stock price appreciation due to the massive $40 billion addressable market in Bone Marrow Transplantation, Sepsis, and Solid Tumor Treatment.
Immunotherapy has been the hottest biotech investment trends in the last five years.
Some of the biggest blockbusters have come from targeting cancer. Consider Keytruda (pembrolizumab), one of the new “PD-1” class of immunotherapies, which has generated Merck (MRK) massive revenues …to the tune of $7B in sales last year for Keytruda alone!
Immunotherapies have also shown incredible potential in their ability to mediate abnormal immune systems. The best selling drug in 2018 was the immunotherapy Humira, used to treat conditions such as rheumatoid arthritis and Crohn’s disease, bringing in nearly $20 billion in revenue.
Unfortunately, an immunotherapy for treating out of control immune system activity has yet to be found. Medical experts agree that this is one of the most pressing needs in the medical system today. Out of control immune systems lead to rapidly fatal conditions such as sepsis and organ transplant rejection. This is an unaddressed market worth over $40 billion dollars.
Enlivex Therapeutics (ENLV) is a newly public, NASDAQ-listed company taking a unique approach to this unmet medical need. Their lead therapeutic, Allocetra, utilizes unexplored biological mechanisms to relax runaway immune system responses. Enlivex is expecting to report clinical data from their clinical trials over the coming year. The kicker? Enlivex’s Executive Chairman has gone down this road before, having sold one of his previous companies for almost $500 million six years ago.
With data from clinical trials expected in the following year and a proven Executive Chairman at the helm, Enlivex Therapeutics could be one of the biggest immunotherapy breakout companies in 2020.
The Massive Multi-Billion Dollar Opportunity in Re-balancing Immune Systems
When immune systems truly go out of control, the first responding cells of the immune system can unleash a cascading inflammatory response called a cytokine storm, also known as a Cytokine Release Syndrome (CRS). Once a cytokine storm is set into motion, it can quickly escalate to the incredibly life-threatening conditions of sepsis and septic shock. At this point, the immune system begins to launch an all-out attack without impunity, severely attacking even healthy cells, quickly leading to organ failure and death.
In fact, cytokine release syndrome and its progressed states is the third leading cause of death in the United States, and and modern medicine is in desperate need of an effective treatment.
Enlivex’s lead clinical stage product, Allocetra, utilizes the human body’s own clearance mechanisms to possibly avoid or reduce the severity of cytokines storms and rebalance the immune system.
So far, clinical results have been seen in patients receiving a bone marrow transplant (BMT), a treatment notorious for the risk of post-transplant complications such as GvHD (Graft versus Host Disease).
Strong results were seen, where the study demonstrated that higher doses of Allocetra infused 1 day before a BMT resulted in no major adverse safety events likely related to the product. And, of the 6 patients treated at these higher doses, the trial’s study authors found that the patients were discharged from the hospital after an average of 21 days of hospitalization compared to an expected 41 days with historical controls. Allocetra may have helped cut hospitalized recovery time nearly in half!
All of this suggests that Allocetra may improve outcomes for patients. More trials will tell, but the researchers believe these signals are encouraging which is why the company is planning a Phase II/III study that could lead to a rapid approval by regulators based on the need for new options.
The company is also pursuing studies in sepsis, as another key target indication, and they began a Phase II study in 2019 with results in the first patients could be released in late 2019.
What Could It Be Worth?
Sepsis and post-BMT GvHD affect millions of patients worldwide each year. According to the Leukemia and Lymphoma Society, 30-70% of transplant recipients develop acute or chronic GvHD. In the U.S. alone, there are over 22,000 transplants each year, and over 50,000 worldwide for a variety of blood disorders. This means as many as 35,000 people could be treated each year with something like Allocetra. Meanwhile, the World Health Organization believes sepsis affects over 30 million people each year globally, and believes sepsis is potentially responsible for 6 million deaths each year.
Even treating a tiny segment of the massive sepsis market would result in significant recurring revenue.
Even if just 1% of the severely ill sepsis market, or 60,000 out of the 6,000,000 patients were treated at a conservative cost of $10,000 per patient, this would yield over $600 million in yearly revenue! The conservative figures utilized goes to demonstrate the substantial revenue opportunity in a quality solution to treating cytokine storms and acut inflammatory responses.
Enlivex’s Executive Chairman Has A History Of Biotech Excellence
As mentioned earlier, Enlivex’s Executive Chairman, Shai Novik, is a rock star in biotech. Novik sold his previous company, Prolor Biotech to OPKO Health (OPK) for for $480 million in 2013.
A year after Prolor’s acquisition by OPKO, Novik was responsible for driving the licensing deal between OPKO and Pfizer. OPKO licensed the rights to Prolor’s lead drug to Pfizer for $295 million in cash up front, and an additional $275 million downstream, contingent on the achievement of future regulatory milestones.
Clearly, Novik has done the M&A dance before.
Based upon the massive revenue opportunity in the unmet medical needs targeted by Allocetra, clinical data readouts over the following year, and a proven management team, ENLV could be the breakout immunotherapy name of the year to come.
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