Nanoviricides: Phase Ia/b healthy participant dosing completed; pox virus data
Year end Jun 30 · 2022 · 2023 · 2024 · 2025
Underlying PBT (USD) · (8.1) · (7.0) · (6.8) · (7.6)
The current Indian trial is structured as in Exhibit 1. The healthy participant stage (Phase 1a/b) has completed dosing with the analysis of samples ongoing. There were two single ascending dose (SAD) arms (Phase 1a) for different formulations: gummy or syrup. These were followed by a multiple ascending dose (MAD, Phase 1b) study with six doses (the first dose was doubled) given on alternate days; both formulations were tested. These studies were run in a hospital unit with 36 participants. Neither arm showed any adverse events. Blood samples are in analysis; data is expected in H124. These results are crucial to confirm that potentially therapeutic doses of these large molecules have been successfully delivered. This is indicated by preclinical work but needs clinical validation.
The next Phase 1b stage could yield some indications of efficacy in addition to further data on dosing and safety. This stage will recruit 36 mild to moderate COVID-19 patients in India. These would not normally be hospitalized and do not require extra care — unless they deteriorate — but they will be housed in a hospital unit. NV plans to assess SARS-CoV-2 levels in the plasma of patients using RT-PCR. Management indicates that this trial is expected to start soon. Infections with a new SARs-CoV-2 strain, JN.1 are 62% of new US cases.
Phase I trial design
Exhibit 1 - Phase 1a and 1b design
Source: ProActive from NV sources
Nanoviricides operates as the top, public company for two separate private companies that hold the IP; NV has seven employees. The President and CEO, Dr Diwan, according to the 2023 10k filing, controls Theracour. Theracour carries out research work paid by and licensed to NV (value US$ 2.54mln in FY23). As of 30 September, NV owed Theracour US$ 897k offset by a prepayment of US$500k.
The trial is run by Karveer Meditech, a small Indian Pharmaceutical company owned by the Diwan family. Karveer is reimbursed for the trial costs by NV. On approval, Karveer will sell NV-CoV-2 in India and pay NV 70% of sales as a royalty. As of 30 September, NV owed Karveer US$ 305k for trial costs.
Corporate structure and related transactions
Financial projections
The financial projections cover FY24 and FY25. NV management indicates that 30 September 2023 cash is adequate till October 2024; that is, there is cash until Q1FY25. We assume this relates to core R&D being about US$4mln a year till FY26. A US$ 2mln loan facility from the CEO is available to help fund the business and could be used in H2CY24. The loan is at a 12% interest rate and is secured. However, more cash will be needed in FY25. A US$5.7mln ATM facility has been set up (August 2023). As we noted, additional capital or a funded collaboration on NV-CoV-2 would be needed to progress into Phase 2 in one or more indications.
Table 1 shows the revenue statement (Profit and Loss). Table 2 shows cash flows. Table 3 shows the Balance Sheet. These have updated FY24 forecasts and show historic FY23 results. The US$ 1.5mln milestone to Theracour due on 30 June 2023 was converted to 331k Series A preference shares at a total par value of US$3 in October 2023.
Table 1 - Profit and Loss
Source: NV reports, ProActive forecasts
Table 2 - Balance sheet
Source: NV reports, ProActive forecasts
Table 3 - Cash flow
Source: NV reports, ProActive forecasts
Value aspects
Nanoviricides is an interesting US company with a novel anti-viral platform now in clinical development. This opens up collaboration and partnering possibilities once full Phase 1 data is available. There remains a constant need across many disease areas for effective antiviral therapies. The NV platform is very versatile and adaptable as recent preclinical data on MPox shows. Oral delivery is important for mass-market products that might be stockpiled for rapid distribution in epidemics.
Nanoviricides is in effect the public company for two related party but separate private research US operations: Theracour and AllExcel plus the Indian pharma company, Karveer. Theracour invoices NV and will gain a 15% royalty on sales; it further deals with AllExcel. Karveer invoices NV for the Phase 1 trial costs and gains a 30% revenue share on future Indian sales; Karveer is stated to sell a variety of generic pharmaceutical products in India.
We are reviewing our valuation projections and will update them following the full phase Ia and Ib data. The current enterprise value based on Q1FY24 cash is US$5.2mln at a share price of US$1.06. However, with 890,124 Series A Preference shares converting to ordinary shares at 3.5:1, an extra 3.1mln ordinary shares would be issued on a change of control.
As noted, current cash levels exclude any value-adding Phase 2 investments so further capital (we estimate a further US$ 5mln at least to fund one US Phase 2) or a funded collaboration/partnership will be needed. This becomes plausible based on good Phase 1 data, but we are unclear on the timing of this.
The market for a new, acute COVID-19 therapy remains difficult to assess. In developed, high-priced countries, vaccination is widespread, organized, and relatively low-cost. In other countries, a low-cost, easily distributed acute oral therapy would be very useful. Some indication of efficacy is needed to assess the product. NV-CoV-2-R is an interesting preclinical combination iteration of this approach. A new SARS-CoV-2 variant, named JN.1, is becoming common although it does not appear to be more dangerous and is controlled by current vaccines. In India, cases are increasing but as reporting is not now mandatory, the incidence is not certain. The US Centers for Disease Control estimated on Jan 5 2024 that JN.1 accounted for about 62% (range 55-68%) of circulating SARS-CoV-2 variants.
In other viruses, RSV seems to be the current preclinical lead for NV-387 with a fast track possible to Phase 2. It would be a late, acute entrant into a market with two established adult prophylactic vaccines from major companies and a possible maternal vaccine indication. Hence, NV-387 acute therapy could have an important role, but the timeline is still unclear. Nonetheless, it provides a quantifiable current market opportunity (see our note of 12 July 2023).
The further shingles opportunity (see our previous notes) is on hold. This would be a cream for dermal use.
The new MPox preclinical indication of NV-387, based on a related virus in a standard preclinical mouse model, is interesting especially as a combination with tecovirimat as it appears synergistic. Tecovirimat as an acute MPox therapy has its human use based on animal data and by analogy with other orthopoxviruses. MPox was a minor healthcare scare over the summer 2023 as there were some transmitted cases in Western countries from a mild strain. A possible emergency use indication becomes likely once there is substantive Phase 2 data on NV-387 from other indications like RSV. There is a need identified by management, for further anti-viral medicines that could work against smallpox and be stockpiled. If NV-387 is selected, further work could be funded by BARDA (the US Biomedical Advanced Research and Development Authority).