For investors looking for new disruptive biotech companies in the liver space it is worth taking a close look at BioVie Inc. (BIVI, Financial). BioVie’s lead asset BIV-201 is going after major indications in the liver space, which is in need of great new therapies.
BioVie’s platform technology revolves around its proprietary structure in its lead asset BIV-201. The technology is designed to tackle ascites formation by blocking neurohormonal signals to the body. The long and short of it is that BioVie is targeting ascites formation at its mechanistic source. The company’s first clinical trial will address refractory ascites in which there are no current products on the market to effectively treat this deadly disease. The clinical impact of refractory ascites is that it is associated with increased mortality. For instance, two-year survival in patients with diuretic-resistant ascites is approximately 25%.
Additionally, BioVie is not only looking to advance its new treatment for refractory ascites but is also looking to leverage its platform technology to help patients with other forms of liver disease such as esophageal variceal bleeding (EVB) and hepatorenal syndrome type 1 and type 2.
Like many microcap biotechs, BioVie would probably sell out to a major. The past few years have seen major M&A activity in the liver space. For example, Allergan (AGN, Financial) acquired Tobira for $1.7 billion and Akarna for $50 million, Gilead (GILD, Financial) acquired Nimbus for $1.2 billion, and Shire (SHGP, Financial) acquired Lumena for $600 million. Many of these deals were done while the drugs were in Phase I.
BioVie has many inflections coming up as it recently received orphan drug designation and filed its IND to begin clinical trials on its lead drug. The company further strengthened itsef by signing a deal with Aspire Capital.
BioVie’s management is strong led by CEO Jonathan Adams, who worked on the Celebrex launch. BioVie’s President Dr. Amrid Shahzad worked for Amgen (AMGN, Financial) and Roche before going into venture capital. BioVie’s directors are rock solid. Jim Lang was part of Boston Heart Diagnostics which sold for $140 million and AlphaImpactRx which sold to IMS Health. BioVie’s director Cuong Do is currently executive vice president of the Corporate Strategy Group for Samsung and was formerly the chief strategy officer for Merck (MRK, Financial), Tyco Electronics and Lenovo (HKSE:00992). That’s impressive.
BioVie is in the right space with fellow impressive liver companies. Recently, Conatus Pharmaceuticals (CNAT) received $50 million from Novartis (NOV, Financial) for drug combating inflammation of the liver. Conatus' main asset is emricasan. This compound is an orally active protease inhibitor designed to reduce inflammation in the liver by interfering with certain biochemical pathways and is being targeted at NASH. Another promising company in the liver space is PhaseRX (PZRX), whose lead product candidate PRX-OTC has been designated an Orphan Drug in the U.S. for the treatment of ornithine transcarbamylase deficiency. PRX-OTC is an intracellular enzyme replacement therapy designed to replace the defective or missing ornithine transcarbamylase. PRX-OTC is not even in Phase 1 yet.
So what are the risks? Where do I start? BIV201 may take longer and cost much more to develop. It’s a microcap so don’t lever up to buy shares. Who knows what Donald Trump is going to do with health care? If Medicare and Medicaid negotiated with pharma, it would be great for the taxpayer but bad for the industry. No doubt this is a high-risk high-reward kind of stock.
I like the board. They are experienced and have a track record of making money for investors. They have worked for reputable megacaps and raised money in venture capital. I’m going to follow this stock.
Disclosure: We do not own any stocks mentioned.
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