Bioxytran
Biotech

Bioxtyran (OTCMKTS: BIXT) Licenses Phase 2 Asset for COVID-19 Patients After Finding Smoking Gun Journal Article

Bioxytran Inc. (OTCMKTS: BIXT) has a development stage hypoxia drug that that was initially targeting Acute Respiratory Distress Syndrome (ARDS) and stroke.  Today they announced the licensing of a potentially phase 2 ready viral inhibitor which is designed to bind to a receptor on the protein spike of the virus.  In 2015 when the Chinese were working on a cure for the SARS Coronavirus they essentially decoded the coronavirus protein spike.  In 2015 the Journal of Virology, Fang Li wrote Receptor Recognition Mechanisms of Coronaviruses: a Decade of Structural StudiesThere were some key findings.  He identified a receptor that was shielded from antibodies on the side of the protein spike.  He called it the galectin fold as it was a binding side hidden from the antibodies and likely evolved to evade them.  It ends up that this recognition domain was universal to all coronavirus geneses including influenza.  He also correctly identified the ACE2 which is now also a viable target for COVID-19.  Recent reports cite 2 promising compounds are undergoing testing for the ACE2.  This journal article is the smoking gun in terms of ground breaking research against COVID-19.


Receptor Recognition Mechanisms of Coronaviruses: a Decade of Structural Studies

Galectin Inhibitors

Most investors have never heard about galectins or what they do.  After doing some brief analysis they seem to be responsible for the “pathogenesis of many chronic diseases.” The only other publically traded company with a galectin inhibitor is Galectin Therapeutics (NASDAQ: GALT) and they have indications in NASH, cancer, psoriasis, and atopic dermatitis.  Although their focus is NASH they seem to have amazing data in cancer. In one cohort of patients that had a 100% objective response rate and a 33% complete response at the optimal dosing.  With only a few press releases over the past year it unclear if they abandoned the cancer trial to pursue NASH.  In NASH they seem to have spent the past 1.5 years trying to ready their phase 3 protocol.  In November the FDA gave them guidance regarding their trial design for Phase 3 which has not been completed to date.  With over $48 million in the bank it seems like they are poised to start a clinical trial in NASH.

Efficacy Inhibiting Galectins

There is a quite a bit of research from Galectin Therapeutics that demonstrates the efficacy of galectin blockers.  They however are not alone.  There is a private company called Galecto, Inc. that has a novel compound for Idiopathic Pulmonary Fibrosis (IPF).  They are currently in a phase 2b study that has already shown that their drug GB0139 is well tolerated and has efficacy.  Since this works on IPF they might also be working on a COVID-19 treatment, but it’s a private company with very little transparency.

Providence Medical Center – Before and After Melanoma

Galectin Therapeutics has stunning before and after pictures.  The company has generated efficacy in cancer and psoriasis.  These pictures tell the story.

Drug Development and Delivery

What is most intriguing is that the company doesn’t care about their cancer drug.  People with metastatic disease are dying every day and it appears they have dosed only 20 people in the past 4 years.  The point of these pictures is that galectin inhibitors do in fact work and they are for the most part completely devoid of side effects.  So taking a safe galectin inhibitor and trying it on COVID-19 patients who are dying by the thousands doesn’t seem like that much of a crazy idea after all.

Galectin Therapeutics – Before and After Metastatic Melanoma

Expected Mechanism of Action in COVID-19

In their press release they tried to map out the mechanism of action. Dr Juan Carlos Lopez-Talavera explained

“Our galectin inhibitor can potentially reduce viral entry, help clearing the virus from the blood, and restore homeostasis to the immune system.”

It appears that they are going to reduce viral entry by taking their galectin inhibitor and basically coating the virus with their polysaccharide.  Ever hear of sugar coating something, well it appears they are sugar coating the virus with their inhibitor.  By binding to the entry mechanism to the cell they prevent entry.

This graphic is demonstrated how viruses can enter the cell.  This is from a journal article on HIV.  The blue represent the Galectin-1 glycoprotein.  Those pink glycan ends are attracted to each other and hinge the virus close to the surface in preparation for cell entry.

They also mention clearing the virus from the blood.  The viral load is basically the amount of virus in the blood.  If the virus is sugar coated the liver will eventually filter the sugar out and the virus is attached to it.  Just like the liver filters out alcohol it should use the same mechanism to rid the body of the virus.

Restoring immune system homeostasis was the final point.  In viral infections it appears that galectins are upregulated and downregulated depending on the galectin and the type of virus so more than a quick analysis is needed.  There was research that pointed to Galectin-3 causing T-cell anergy.  This shows that galectin-3 made T-Cells less effective than they would normally be.  So the idea is that by binding to the galectin-3 the T-Cells would regain their vigor and fight the viral infection better. It follows that if T-Cells worked better it would help to overcome the cytokine storm which is characterized by macrophage suppression of the adaptive immune system.

Financial Analysis

Bioxtytran Inc. is a development stage company showing little cash in the bank to do a development deal.  There is great risk in this name.  They have some convertible notes, but they are not due for about another 6 months and appear to be looking for partnership deals to raise money.  They have an effective S-1 looking to raise $10.0 million at $1.00.  There is overhang and considerable financial risk if they are unable to raise money.  They are not as well capitalized as their competitors.

Valuation Analysis

A phase 2 ready asset in cancer is typically worth anywhere from $100- 500 million.  That is what just plopped into Bioxytran.  So essentially over $1.00 + per share in value just entered into the company in exchange for a percentage of the royalty.  This was a sweetheart deal for investors because now this is a clinical instead of a preclinical stage company with richer valuations.  This makes it easier for the company to raise money and makes it easier to seek regulatory approval because safety is less of a factor.  Just recently CytoDyn (OTCMKTS: CYDY) filed for a Phase 2 in COVID-19.  It looks like the company may be following the same model to approval.

The other companies in the space are relatively good metrics of valuation but GALT seems downright depressing.  They have a business enterprise value of just over $50 million and trading just over cash but this seems to be a function of very little press.  Galecto has raised hundreds of millions of development dollars.  In 2014 they had a buyout valuation option from Bristol-Myers Squibb (NYSE: BMY) for $444 million.  So based on the value of a phase 2 ready cancer compound and what the valuation of 2 other galectin inhibitors companies it’s reasonable to think that this license is worth over $100 million or $1.00 per share.

Investment Summary

Bioxtran seems to have a drug that has been through phase 2 that they are repurposing for COVID-19.  We have seen a lot of that happening but what keeps BIXT in the game is that should they get money quickly they can breeze through safety because it appears the compound has been dosed in many other clinical trials.  They key is safety and galectin inhibitors as a class of drugs are non-toxic.  The key to their efficacy seems to me the fine tuning of dosage.  This is definitely a stock to watch.  In terms of science it appears they found COVID-19’s Achilles heel.  Literally on the heel of the protein spike.  They are the guest speaker on the Perfusion Network on Thursday March 26th and this puts them in front of 10,000 eyeballs on live you tube TV.  It appears that more information is coming but most importantly there seems to be a very cogent and real scientific basis for the drug.  Should they attract investment this could be worth many multiples of the current stock price.

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Disclosure: Insider Financial and its owners do not have a position in the stocks posted and have posted this article for free without editorial input. This article was written by a guest contributor and solely reflects his opinions.

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Bioxtyran (OTCMKTS: BIXT) Licenses Phase 2 Asset for COVID-19 Patients After Finding Smoking Gun Journal Article
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