NanoViricides Inc. (NNVC, Financial) is one of the emerging biotech companies that I have been following for a while now. Its stock price had more than doubled last month after a major update from the company with respect to the testing results of its drug candidate, which proved that it helped in enhancing the efficacy of Gilead’s (GILD, Financial) remdesivir for the treatment of Covid-19. The company’s drug candidate is undergoing a number of tests and is on the edge of commencing the human clinical trials process. Let us take a closer look at the most recent update provided by the company to see whether the stock is an attractive buy today.
Pan-Coronavirus effectiveness proven
In the company’s latest press release, it announced that its pan-Coronavirus drug candidate, also known as NV-CoV-2, was found to be effective against SARS-CoV-2 in a standard cell culture pseudovirion assay. This proves that NanoViricides’ drug indeed has broad-spectrum pan-Coronavirus activity and can remain active and effective irrespective of the evolution of variants of SARS-CoV-2. This ability to be effective despite mutation of SARS-CoV-2 is certainly a highly sought-after characteristic among medications, particularly given the fact that most modern-day vaccines have shown lower effectiveness against the Delta variant.
As a part of the latest testing process, the company’s drug candidate, NV-CoV-2, and a positive control antibody specific to the Spike antigen S1 of the SARS-CoV-2 virus were used to suppress the infection by the SARS-CoV-2-pseudovirions in cell culture studies. Through these rounds of tests, the company has proven that NV-CoV-2 is highly effective in cell cultures against SARS-CoV-2, human coronavirus NL-63 and human coronavirus 229E, all very different human coronaviruses. The test results indicate that the drug candidate will remain active in spite of the mutations of SARS-CoV-2 resulting in novel variants and neutralize the virus particles themselves, outside of the cells, validating the company’s design mechanism.
The Pseudovirion concept
The recent study carried out by NanoViricides is what one would term as a pseudovirion study. A pseudovirion is basically a virus particle made of a BSL2 virus shell, but with its original cell-binding protein replaced by the cell-binding protein of a BSL3 or BSL4 virus. In this study, NanoViricides used the S1 antigen of SARS-CoV-2.
A pseudovirion particle typically contains an mRNA that is packaged like the original virus, except that the mRNA is edited and redesigned so that it cannot produce infectious virus particles. In the company’s pseudovirion study, the mRNA allowed expression and production of the green fluorescent protein enabling visual detection of the infected cells in microscopy. It is a commonly used method for evaluating virus entry-inhibitors in BSL2 laboratories and is mainly used for viruses that would otherwise require high-security BSL3 or BSL4 laboratories.
The test results showed that NV-CoV-2 was as effective as the neutralizing antibody in reducing the coronavirus infection as it attacked the SARS-CoV-2 pseudovirion particles and rendered them incapable of binding to the ACE2 positive cells. Encouraged by the positive results, the company’s President and Chairman stated that the team is preparing submission documents to move forward with the initiation of human clinical trials.
We can see that NanoViricides’ stock chart is showing a very interesting trajectory. After the last corporate update pertaining to NV-CoV-2 enhancing remdesivir’s effectiveness, the stock price doubled and then witnessed a sharp level of profit booking. There has been some positive movement after the recent announcement as well.
It is understandable why the company’s regulatory processes have been particularly slow, as NV-CoV-2 is a novel drug and not a form of repurposed medication like remdesivir. Also, the company’s limited financial resources when compared to big pharma did slow it down as well. However, the recent testing results provided by the company do show a high level of promise.
At the end of the day, we must remember that development-stage biotech companies are not for the faint-hearted, given their absence of revenues and the high volatility of the stocks. These are typically high-risk investments in companies whose research appears promising, and the recent updates do show a lot of promise with respect to NV-CoV-2. I believe that the stock could easily trade at double-digits if the company passes Phase 1 of clinical trials successfully. In the meantime, biotech investors with a high risk appetite may give this company a shot.