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Ishan Majumdar
Ishan Majumdar
Articles (135)  | Author's Website |

NanoViricides: One Step at a Time

The company has contracted a research organization in the process of advancing its candidate to clinical trials

November 11, 2020 | About:

As the confirmed Covid-19 death toll nears the 1.3 million mark, pharma and biotech companies all over the world are making progress in their attempts to develop a cure for the disease.

Pfizer (NYSE:PFE) and their partner BioNTech (BNTX) are currently leading the vaccine race with their recent press release claiming an effectiveness of more than 90% for their vaccine candidate.

On the drug development front, Gilead's (NASDAQ:GILD) Remdesivir continues to be the go-to solution for Covid-19 patients, but drug makers continue to work towards finding more effective cures, as Remdesivir is more of a broad-spectrum antiviral drug.

One of the well-known antiviral drug developers that is an active participant in this race is NanoViricides, Inc. (AMEX:NNVC).

Covid-19 drug progress and the engagement of Calvert Labs

NanoViricides was recently in the news for finalizing its drug candidate, the NV-CoV-1, with respect to the Investigational New Drug (IND) application with the U.S. Food and Drugs Authority (FDA).

The company claims to have developed a therapy to counter the SARS-CoV-2 virus using a combination of its candidate, NV-CoV-1, and Gilead's Remdesivir, in which its candidate will act as an adjuvant to Remdesivir and will boost the immune response of the infected body through producing more antibodies to fight the viurs. The NanoViricides management claims that this therapy could prove more effective than Remdesivir alone in fighting the virus, and all their efforts are being directed towards receiving approval for this solution.

As per their most recent press release, NanoViricides has gone ahead and engaged Calvert Labs, a contract research organization, for the purpose of performing the Safety Pharmacology studies on NV-CoV-1. The management intends to perform some core safety pharmacology studies to ensure the safety of the drug candidates at Calvert Labs before going ahead with the IND application. It also intends to seek pre-IND guidance from the U.S. FDA as per its press release to ensure the smooth flow of the process and minimize the risk of failure of the application.

It is worth highlighting that NanoViricides' NV-CoV-1 is a novel drug candidate and not a repurposed drug like Remdesivir, which is why it has a significantly long process for approval and which is why each of these stages is critical in the company's progress.

Why is Calvert Labs relevant?

Contract Research Organizations (CROs) are known to provide support to pharma and biotech companies through the provision of outsourced research services for drugs as well as vaccines. They are known to guide small biopharma players like NanoViricides through their experience in pushing new drugs from the stage of conception to approval by the relevant food and drug authorities.

Calvert Labs is a particularly well-known CRO that has been working with pharma companies for nearly 40 years and assisted in the development of a wide variety of therapeutics. The company specializes in preclinical drug development programs, which is why it is a particularly relevant partner for NanoViricides at its current stage where it is working towards introducing a novel drug in the market.

NanoViricides' pipeline

Prior to the Covid-19 candidate development process, NanoViricides was in the process of filing an IND application with the U.S. FDA for its shingles drug candidate. This candidate was at the most advanced stage and the management intends to get back to this process once NV-CoV-1 enters clinical trials. The management will then have resources to spare for the shingles candidate, NV-HHV-101, and it can also continue its drug development against other viral diseases such as oral and genital herpes, swine flu, bird flu, seasonal influenza, HIV, hepatitis C, rabies, dengue and Ebola, to name a few.

It is worth mentioning that while its research appears promising, NanoViricides has no revenue currently and is yet to produce a treatment for sale. Investors must be aware of the risks of investing in zero-revenue companies before deciding whether to invest in this stock.

Final thoughts

As we can see in the chart above, the company's stock has lost more than a third of its value in the past three months owing to the slow process of drug approval and no significant update.

However, with the engagement of Calvert Labs, it seems the countdown towards the IND application of NV-CoV-1 has begun. A series of such significant updates could likely propel the stock in the future, but as of now, it is available for a price-book ratio of only 1.41, which is among the lowest in the biopharma industry. I believe that the company could prove to be a compelling investment proposition for risk-taking biotech microcap investors with a minimum investment horizon of three years.

Disclosure: No positions.

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About the author:

Ishan Majumdar
I am a qualified Chartered Accountant with a Masters in Management (Grande Ecole) from HEC Paris. I run a proprietary boutique financial advisory firm called Baptista Research (www.baptistaresearch.com) specializing in M&A, corporate advisory, equity research and valuation of listed companies.

I have nearly a decade of experience spread across investment banks, financial advisory firms, investment funds and other corporates in many different geographies, such as France, Spain, India and others. I was a part of the LBO Financing team at BNP Paribas where I worked on deals with a combined enterprise value of over $1 billion. I have also worked in mergers and acquisitions with Credit Agricole CIB and corporate strategy with Groupe Danone SA. Over the years, I have developed a strong specialization in corporate valuations, strategy and financial analysis.

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