RLFTF remains one of our favorite COVID-19 plays here at Insider Financial. In our last profile of the company, we focused on the science and background of RLF-100™, also known as Aviptadil. In this article, we are going to take a look at the latest developments and how we think the rest of 2020 is going to play out for RLFTF and its shareholders.
First up, here’s a little background info for those not familiar with RLFTF. RELIEF THERAPEUTICS Holding AG focuses primarily on clinical-stage projects based on molecules of natural origin (peptides and proteins) with a history of clinical testing and uses in human patients or a strong scientific rationale. Currently, Relief is concentrating its efforts on developing new treatments for respiratory disease indications.
Relief Therapeutics holds orphan drug designations from the U.S. Food and Drug Administration and the European Union for the use of VIP to treat ARDS, pulmonary hypertension, and sarcoidosis. Relief Therapeutics also holds a U.S. patent (US8178489 formulation for aviptadil) for RLF-100 and proprietary manufacturing processes for its synthesis.
RELIEF THERAPEUTICS Holding AG is listed on the SIX Swiss Exchange under the symbol RLF and in the US on the OTC Markets under the symbol RLFTF.
RLFTF and NeuroRx
RLFTF and NeuroRx just finalized their partnership for the commercialization of RLF-100 worldwide. NeuroRx will lead commercialization in the United States, Canada, and Israel, while Relief will lead commercialization in Europe and the rest of the world. Profits from sales will be allocated to Relief and NeuroRx on a 50/50 basis in the U.S., Canada, and Israel, 85/15 (in favor of Relief) in Europe, and 80/20 (in favor of Relief) in all other territories.
For those that were expecting a bigger pop, what Mr. Market missed with the latest PR is two-fold. One, RLFTF and NeuroRx needed to finalize the revenue split before commercialization. Second is the second paragraph of the PR.
The two companies have now taken steps to increase manufacturing of the aviptadil drug substance and are in the final stages of contracting with a fill/finish manufacturer, along with a national distribution partner. By January 2021, Relief and NeuroRx expect to have manufacturing, distribution and logistics capacity in place to deliver sufficient drug quantities to treat 150,000 patients per month with RLF-100. The companies continue to anticipate reporting top-line data from the ongoing randomized, double-blinded, placebo-controlled trial of intravenously-administered RLF-100 before the end of 2020. The trial of inhalation-administered RLF-100 is slated to begin enrollment within the coming weeks.
We are only three months away from treating 150,000 patients per month with RLF-100! This is huge news. Let’s do some back of the napkin numbers.
- 150,000 patients per month
- $500 royalty price per dose
- 5 doses per patient
- $375,000,000 revenue per month
- $4,500,000,000 in revenue per year
- Half for RLFTF is $2,250,000,000
- Small-cap biotechs trade for 3x to 5x sales
- At 3x that is a $6.75 billion valuation
- There are 2,383,168,581 shares outstanding
- Target price on the low-end is $2.83
Note we are being conservative with our numbers here and going with the low-end valuation estimates. Either way, there is substantial upside for RLFTF from current levels.
NeuroRx, Inc. has submitted a request for an Emergency Use Authorization (EUA) with the US FDA for the use of RLF-100™ aviptadil in patients who are receiving intensive care and who have exhausted all approved treatments. Jonathan Javitt, MD, MPH, Chairman and CEO of NeuroRx, said:
“The EUA application covers the same type of patients whom FDA has already allowed to receive treatment under the Expanded Access protocol authorized by the Agency in July. Tragically, we have found that many patients who might benefit from the Expanded Access protocol are hospitalized in centers that do not allow patients access to investigational drugs. Our staff is working around the clock to address requests for RLF-100™ under the appropriate mechanism. All too often, patients of color and those of lower socioeconomic status are denied access.”
The submission is the first step. We expect approval to be granted as the FDA’s guidance to industry identifies the criteria for EUA as safe and “may be effective,” in contrast to the far more stringent requirement of “safe and effective” required for traditional drug approval. EUA may only be granted in circumstances where the Secretary of Health and Human Services has declared a Public Health Emergency, as is true in the COVID-19 pandemic.
Research Paper Update
We got a 10-page update on September 18th. Here are the highlights:
Background: Vasoactive Intestinal Peptide (VIP) is known to bind to and protect Alveolar Type II cells by blocking replication of the SARS-CoV-2 virus, inhibiting cytokine synthesis, preventing cytopathy, and upregulating surfactant production. RLF-100™ (aviptadil), a synthetic form of VIP has been granted Fast Track Designation for treating Critical COVID-19 with Respiratory Failure and is currently in phase 2/3 placebo-controlled trials.
Methods: Case series of 21 consecutive patients with Acute Respiratory Failure in Critical COVID-19 and multiple co-morbidities, treated with intravenous VIP. Sixteen patients were treated with mechanical ventilation and five with extracorporeal membrane oxygenation (ECMO).
Results: So far, 19 of 21 patients have survived. Improved radiographic appearance was seen in both lungs of 17 patients and in one lung of 2 patients. A mean 292% increase in PaO2:FiO2 ratio was seen with complete remission from respiratory failure in 9 patients and ongoing improvement in 10. Seven patients were discharged from the hospital, 7 sent to intermediate care, and 5 remain in the ICU. Three of 5 patients on ECMO have been decannulated and two have been discharged. A 75% (95% CI±3%: P<.001) reduction in IL-6 was seen with corresponding decrease in C-reactive protein. A median 4 point reduction in the NIAID Ordinal Scale was observed (P<.01).
Comment: The short term outcomes in these 21 patients represent a dramatic response in patients who are excluded from all other trials of COVID therapeutics. Improvement in radiographic appearance, oxygenation requirement, and inflammatory markers is consistent with in vitro evidence of direct anti-viral effect.
Congressman Andy Harris
RLFTF has some inside the beltway help with Congressman Andy Harris taking an unpaid position on the RLF-100 trial. Harris, a medical doctor and Republican representing Maryland’s first district, has publicly challenged the efficacy of mask-wearing and severity of Maryland’s stay-at-home orders during the COVID-19 pandemic.
Harris and other board members are responsible for monitoring safety and efficacy data on an ongoing basis to ensure the trial is ethical and should continue, with the ability to call a stop to the study if ever deemed necessary. Harris is now formally involved with a company regulated by FDA, while being a member of the House appropriations subcommittee controlling that agency’s bottom line.
In other words, Congressman Andy Harris can get RLFTF Operation Warp Speed funding!
RLFTF just completed fundraising and now has approximately CHF 48,000,000 on its balance sheet and the funds will be used primarily to fund the ongoing Fast Track FDA trial of RLF-100 (IV) in COVID-19 acute respiratory distress syndrome (NCT04311697) and the RLF-100 (inhaled) trial for the treatment of non-acute lung injury in COVID-19 (NCT04360096) as well as to run a phase 3 study in Europe. Relief believes that with the conclusion of this raise, its capital resources will be sufficient to support its planned operations through 2022, without taking into account potential revenues generated from sales of RLF-100. Execution of the SSF, together with the latest exercises of stock options, will bring the total amount of shares outstanding to 2,580,068,581.
Supply and Distribution Agreement
RLFTF and NeuroRx, Inc. have established supply chain agreements and ordered sufficient drug substance (RLF-100TM) to prepare to treat 1 million patients with COVID-19, should the pandemic continue. They have now contracted with Nephron Pharmaceuticals, Inc. to manufacture commercial supplies of RLF-100™, in order to ensure that adequate drug inventory will be immediately available, should the clinical trials demonstrate safety and efficacy.
NeuroRx and Relief have similarly contracted with Bachem Americas to manufacture sufficient RLF-100TM drug substance to treat 1 million patients. Bachem was the first peptide manufacturer to synthesize RLF-100TM and has played a leading role in the development of the drug substance over the past 20 years.
NeuroRx and Relief have additionally contracted with a leading nationwide pharmaceutical logistics partner in order to ensure overnight supply to US hospitals, should RLF-100™ continue to succeed in clinical trials.
No other treatment has shown the rate of improvement as RLF-100, not Remedisivir, and not Leronlimab. This is huge news and why RLFTF stock is a bargain at a $1.54 billion market cap. All indications are that RLF-100 is effective and we are waiting for the next results to hit the tape.
RLF-100™ is still in FDA-approved phase 2b/3 clinical trials for the treatment of critical COVID-19 in the US. A readout by the study’s Data Monitoring Committee is expected within the next month. European trials with RLF-100TM are in preparation and are scheduled to start in Q1 2021.
Unlike expensive-to-produce monoclonal antibodies and difficult-to-scale convalescent plasma, VIP can ultimately be produced at a cost of pennies per dose, if moved from peptide synthesis to yeast fermentation, as is done for insulin. As such, it may represent a critical therapeutic for COVID-19 and possibly other viral infections for both the developed and the developing world.
No doubt the White House has taken notice because of Republican Congressman Andy Harris. With the upcoming election and Trump needing a win, we could see emergency fast-track approval under Operation Warp Speed along with federal funding for RLF-100. For all these reasons, we believe RLFTF is a must-own.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in OTCMKTS:RLFTF or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.