It has been almost eight months since we last covered Bellerophon Therapeutics Inc (NASDAQ:BLPH) as part of this piece back in April. At the time, the company had just put out some data from a trial rooted in its lead development program and, on the back of the news, had taken something of a hit to its market capitalization.
We took a look at the data and while, admittedly, it wasn’t superb, we outlined the fact that it certainly wasn’t negative in its implications for the asset under development (something we’ll look at in a bit more detail shortly) and that basically nothing had changed between prerelease and release other than the company’s share price.
In turn, therefore, we put forward the thesis that the dip in market capitalization was an opportunity to pick up some cheap shares ahead of what we saw as an inevitable recovery for the company longer-term.
During the subsequent months, Bellerophon traded essentially flat to reach lows in around $1.10 during the middle of September. Subsequent to these lows, however, and especially over the last few weeks, the company has really started to pick up pace and validate our previously outlined long-term expectations. At their most recent close, Bellerophon shares go for $2.22 apiece – a more than 100% run on the above-mentioned lows and a 90% appreciation on the price at which we suggested it was a cheap allocation.
The question now is, what’s next?
For anybody new to this one, the lead development asset referenced above is what’s called INOpulse and it’s a proprietary technology developed by the company.
It’s applicable to a whole host of different target indications but the lead program, right now, is for the treatment of pulmonary arterial hypertension (PAH).
The current standard of care in the space is a nitrous oxide delivery system that basically involves a patient wheeling around a large and heavy canister of nitric oxide and breathing through a tube attached to the canister. In these patients, the walls of the arteries become thick and stiff, narrowing the space for blood to pass through and increasing blood pressure. The idea is, therefore, that by increasing the rate of nitric oxide in the blood, the blood pressure will lessen as the walls of the arteries become more flexible.
We know this works but, with INOpulse, Bellerophon is essentially trying to make the whole treatment experience better for the patient by removing the necessity to carry around a large nitric oxide canister, while at the same time trying to increase the volume of nitric oxide that gets into the blood with each inhalation.
Early to mid-stage trials have demonstrated that an inhalation system based on the INOpulse technology can achieve both of these aims and, as part of a phase 3 study that is ongoing, Bellerophon is trying to build on this early stage data with some late-stage numbers that it can then use to submit for approval to the FDA in the US.
And it’s this study on which any future upside potential and, in turn, our long-term bullish thesis for this company, rests.
The protocol for the trial is available here at clinicaltrials.gov so, for anybody looking at picking up an exposure, it might be worth checking it out before jumping in. As far as catalysts are concerned, however, and for those not wanting to click away, study completion is expected for December next year meaning there is around 12 months’ worth of speculative loading likely to influence share price ahead of Bellerophon’s binary catalyst.
The company raised around $23 million a couple of months ago meaning any near-term dilution risk is mitigated but keep in mind that, ahead of registration submission, we may see a secondary raise in anticipation of commercialization costs.
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Image courtesy of Libertas Academica via Flickr
Disclosure: We have no position in BLPH and have not been compensated for this article.