NASDAQ:COCP
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Business Update
Update on Influenza Program
Cocrystal Pharma, Inc. (NASDAQ:COCP) is developing CC-42344, a broad spectrum inhibitor of pandemic and seasonal strains of influenza A. CC-42344 targets subunit PB2, which along with PA and PB1 forms the RNA-dependent RNA polymerase. This polymerase is essential for viral replication in cells by replicating the viral RNA segments and transcribing their genes, thus making it an attractive target for therapeutic intervention. As the following figure shows, CC-42344 binds to the highly conserved active site of the PB2 protein.
Binding to this conserved active site leads to broad-spectrum antiviral activity against multiple Influenza A strains, including both pandemic and seasonal strains. The following table shows the strains that CC-42344 is active against, which includes strains that are resistant to oseltamivir and baloxavir.
In addition to showing activity against multiple strains, CC-42344 also shows superior activity at higher multiplicity of infection (MOI), which is a ratio of the number of virus particles to the number of host cells in the assay. In the following assay, CC-42344 shows greater activity even against MOIs up to 5 compared to oseltamivir, which only shows activity against a MOI of 0.005.
Cocrystal previously completed a Phase 1 clinical trial of CC-42344 in Australia. It was a single center, randomized, double blind, placebo controlled study that consisted of single ascending dose and multiple ascending dose arms. The following figure gives an overview of the study, with the topline results showing highly favorable safety and tolerability results, including similar levels of adverse events in both the placebo and CC-42344 cohorts along with no serious adverse events or drug discontinuations due to adverse events.
The company is currently conducting a Phase 2a human challenge trial of CC-42344 in the UK. It is a randomized, double blind, placebo controlled study that will evaluate the safety, tolerability, and viral and clinical measurements of influenza A infection in subjects dosed with oral CC-42344. We anticipate topline results from this study later in 2024. Cocrystal recently received feedback from the FDA regarding the regulatory requirements for a planned Phase 2b trial with CC-42344. The company is planning to submit an investigational new drug (IND) application that will include data from the ongoing Phase 2a trial.
In addition to oral CC-42344, later this year Cocrystal will be initiating a Phase 1 clinical trial of inhaled CC-42344, which is currently in preclinical development. An inhaled version of the drug would offer direct targeting of infected respiratory epithelial cells, a higher drug accumulation in the pulmonary system, and the potential for a rapid clinical response. Multiple preclinical studies have shown that CC-42344 exhibits a favorable safety profile in human upper airway epithelium and shows robust antiviral activity against H1N1 infection in vitro. The following figure shows the very high drug exposure in lungs, which may enable inhaled CC-42344 to be used as a prophylactic.
Update on Coronavirus/Norovirus Program
In October 2022, Cocrystal announced the selection of CDI-988 as the lead development candidate as an oral treatment for SARS-CoV-2. CDI-988 targets a highly conserved region in the active site of the main (3CL) protease required for viral replication. In August 2023, the company announced that CDI-988 would also be advanced as a potential therapy for norovirus. The compound has exhibited pan-viral activity against multiple norovirus strains, including the genogroup II, genotype 4 (GII.4) strain that is responsible for major norovirus outbreaks. A Phase 1 clinical trial of CDI-988 was initiated in September 2023 to evaluate the safety, tolerability, and pharmacokinetics in single ascending doses and multiple ascending doses compared to placebo in healthy volunteers. This study is serving as a Phase 1 study for both the coronavirus and norovirus programs. We anticipate topline results in 2024.
There are no approved therapies for norovirus infection, which is the most common cause of acute gastroenteritis. According to the Centers for Disease Control (CDC), there are an estimated 685 million cases and 200,000 deaths caused by norovirus infection each year worldwide. In the U.S., norovirus infection causes over 2 million outpatient clinical visits annually and approximately 100,000 hospitalizations. In addition to potentially being utilized as a norovirus therapy, CDI-988 may be tested as a prophylactic to be used in population dense areas to prevent norovirus outbreaks (e.g., cruise ships, nursing homes, day cares, military installations).
Financial Update
On March 28, 2024, Cocrystal announced financial results for 2023. As expected, the company did not report any revenues in 2023. R&D expenses in 2023 were $15.2 million, compared to $12.4 million in 2022. The increase was primarily due to advancing CC-42344 into a Phase 2a study and advancing CDI-988 into a Phase 1 study. G&A expenses in 2023 were $6.0 million, compared to $5.7 million in 2022. The increase was primarily due to increase professional fees and litigation. During 2023 the company received $2.6 million related to litigation with an insurer, which included a $1.6 million refund from the registry of the United States Court of Appeals for the Third Circuit, which reflected the recovery of funds following a successful appeal, and $1.0 in a settlement agreement with the insurer.
As of December 31, 2023, Cocrystal had approximately $26.4 million in cash and cash equivalents. We estimate this is sufficient to fund operations for at least the next 12 months. As of March 28, 2024, Cocrystal had approximately 10.2 million shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of 10.7 million shares.
Following transfer of coverage, we have added CDI-988 to our valuation model as it is now in a Phase 1 clinical trial. We model for an NDA filing in 2027, approval in the U.S. in 2028, and peak sales of $330 million. In addition, we model for the drug to be stockpiled as a potential pandemic coronavirus therapy. This leads to an NPV for CDI-988 of $20 million. Combining the NPVs for CC-42344 and CDI-988 along with the company’s current cash position leads to a total NPV for the company of $90 million. Dividing by the company’s current fully diluted share count of 10.7 million shares plus an additional 4 million shares to account for future financings leads to a valuation of $6 per share.
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