AzurRx BioPharma CEO Issues Letter to Shareholders

Rhea-AI Summary

AzurRx BioPharma (NASDAQ: AZRX) announced significant clinical and corporate developments in a letter to shareholders dated April 15, 2021. The company outlined its progress on two major drug candidates: FW-1022, for COVID-19 gastrointestinal infections, which recently entered Phase 2 trials, and FW-420 for immune checkpoint inhibitor-associated colitis. The company also reported mixed results from its Phase 2b trial of MS1819 for pancreatic insufficiency, prompting a new formulation strategy. Additionally, AzurRx raised approximately $18 million in Q1 2021 through public offerings and private placements.

Positive

• Initiated Phase 2 RESERVOIR trial for niclosamide targeting COVID-19 GI infections.
• Engaged leading clinical research organization for Phase 1b/2a trial of FW-420 for colitis.
• Raised approximately $18.0 million in Q1 2021 from stock offerings and warrant exercises.

Negative

• Mixed results in Phase 2b OPTION 2 trial for MS1819, failing to meet primary efficacy endpoint.
• Need for new formulation of MS1819 following uneven efficacy performance.

DELRAY BEACH, Fla., April 15, 2021 (GLOBE NEWSWIRE) -- AzurRx BioPharma, Inc. (NASDAQ: AZRX), (“AzurRx” or the “Company”), a clinical stage biopharmaceutical company specializing in the development of targeted, non-systemic therapies for gastrointestinal (GI) diseases, today issued a letter to its shareholders from James Sapirstein, President, Chief Executive Officer and Chairman, highlighting the company’s corporate and clinical achievements during the first quarter of 2021 and recent weeks.

The full text of the letter, which has also been posted to the Company's website, is as follows:

Dear AzurRx Shareholders,

It was just a few months ago that AzurRx began 2021 with news of a transformative in-licensing deal with First Wave Bio that added a new asset, proprietary formulations of micronized niclosamide, with two new therapeutic indications, for COVID-19 GI infections and immune checkpoint inhibitor-associated colitis (ICI-AC), to our clinical-stage pipeline.

I am pleased to report that we are on track to launch both niclosamide programs in the clinic. In April 2021, we announced the initiation of RESERVOIR, our Phase 2 (Proof of Principle) clinical trial of niclosamide for the treatment of COVID-19-related gastrointestinal infections, and that we engaged PPD, Inc., a leading clinical research organization (CRO) to manage the Phase 1b/2a ICI-AC trial that we plan to initiate in Q2 2021.

Additionally, we continued the development of MS1819 as a potential treatment for exocrine pancreatic insufficiency (EPI) in patients with cystic fibrosis (CF). We reported topline data from our Phase 2b OPTION 2 monotherapy data at the end of Q1 2021 and expect to report topline data from our Phase 2 combination therapy trial using MS1819 in combination with the current standard of care, pancreatic enzyme replacement therapy (PERT), in Q2 2021. We continue to believe that MS1819 has the potential to supplant PERT as the gold standard treatment for EPI in patients with CF and chronic pancreatitis (CP).

These events are just the tip of the iceberg. AzurRx remains focused on its mission to develop valuable therapies with significant market opportunities into the GI space, and, as it does so, generate value for shareholders.

AzurRx – Focused on Targeted, Non-Systemic GI Therapeutics

Our most advanced clinical asset, MS1819, is a recombinant lipase enzyme designed to treat EPI in patients with CF and CP. EPI is a common complication of CF and CP caused by an enzyme deficiency that leaves patients unable to properly digest food and absorb nutrients. Our goal is to provide a safe and effective therapy to control EPI and improve upon PERT, which is primarily derived from pig pancreases and requires patients to take upwards of 40 capsules per day to control symptoms. The target market for EPI is substantial, at more than $1.4 billion in the U.S. and over $2 billion globally in 2019. We continue to believe that MS1819 has strong potential with the ability to attract partnership opportunities and licensing interest from Big Pharma.

With micronized niclosamide, we are exploring two separate indications -- COVID-19-related GI infections and immune checkpoint inhibitor-associated colitis in advanced stage cancer patients. We believe both indications are synergistic and a good fit for AzurRx, which also have high unmet need and sizable market opportunities.

Niclosamide – Launching Two Clinical Trials in 1H 2021

FW-1022: Phase 2 COVID-GI Infection Trial
In early April, we initiated our Phase 2 RESERVOIR trial, a two-part, two-arm, placebo-controlled study examining the safety and efficacy of FW-1022, an oral micronized niclosamide tablet, for COVID-19-related GI infections.

COVID-19 continues to impact hundreds of thousands of people worldwide every day in addition to the millions who have already been infected. For many, the after-effects of COVID-19 can be as bad as the disease itself, and this includes a growing number who experience “long haul” GI complications due to what many believe is the ability of the SARS-CoV-2 virus to hide in reservoirs within the GI tract. Gastrointestinal infection symptoms (severe diarrhea, vomiting and abdominal pain) have been reported in ~18% of COVID-19 cases, with viral RNA positive stool samples being reported in ~48% of all COVID-19 patients in a recent study.¹ Furthermore, approximately 10%² of patients who were infected with COVID have persistent symptoms months after their initial diagnosis. Approximately 86% of these COVID “long haulers” are reported to have GI infection symptoms, with 60% having diarrhea months after their initial infection.³

It is important to understand that despite all the progress made with vaccines that they are not going to end the COVID pandemic – the disease is becoming endemic. Vaccines have given us hope, but the emergence of new and more transmissible SARS-CoV-2 variants which keep cropping up all over the world, suggest that COVID-19 may remain with us for several years to come. Moreover, we will not be able to vaccinate everyone we need to. There remains a strong need to find therapeutics that can help most of the world’s population deal with the effects of COVID-19 infections and we believe that our niclosamide therapeutic has a strong and lasting role to play in treating patients.

There is a growing body of evidence supporting the potential of niclosamide as a COVID-19 therapy. Niclosamide was identified by the Institut Pasteur Korea as a potent inhibitor of SARS-CoV-2, the virus causing COVID-19, with potency 40X greater than remdesivir.⁴ A recent study published in the journal Nature found that niclosamide could prevent long-term lung damage in COVID-19 patients.⁵ We believe that our micronized oral niclosamide therapy has the potential to target SARS-CoV-2 directly in the gut and to become an important addition to the numerous therapeutics that may unfortunately be required by many who contract COVID-19. There currently is no targeted treatment for COVID GI infections and we are optimistic that we will be the first therapy to market in this indication.

Patient enrollment is underway for the RESERVOIR trial, with topline data anticipated in the first quarter of 2022.

FW-420: Phase 1b/2a Immune Checkpoint Colitis Trial
Meanwhile, we are preparing to launch a second clinical trial soon. This is a Phase 1b/2a study evaluating oral micronized niclosamide tablets, known as FW-420, for Grade 1 Immune Checkpoint Inhibitor-Associated Colitis (ICI-AC). Immune checkpoint inhibitors have been a major advance in cancer therapeutics, but the drugs can induce a serious inflammation of the bowels, which if left unchecked, can be life-threatening and force patients to halt treatment. There currently is no approved treatment for Grade 1 colitis. Our goal is to develop FW-420 as a therapeutic that halts ICI-AC from progressing and enables patients to continue their immunotherapy treatment regimen uninterrupted.

We recently announced that we engaged PPD, a leading CRO, to manage the clinical trial and anticipate initiation of the study in Q2 2021.

We believe that both niclosamide programs can be completed relatively quickly and have the potential for accelerated regulatory approval, either through the FDA’s 505(b)(2) approval pathway (COVID-19-related GI infections) or a potential breakthrough designation (ICI-AC). The result could greatly reduce development costs and timelines for FW-1022 and FW-420.

MS1819 – A Potential Advance in the Treatment of EPI

Phase 2b Monotherapy Trial
Recently, we announced topline results from our Phase 2b OPTION 2 clinical trial investigating MS1819 as a monotherapy in CF patients with EPI. As discussed on our March 31 conference call, results were mixed, although we did not consistently meet the primary efficacy endpoint of a coefficient of fat absorption (CFA) ≥80%. MS1819 demonstrated itself to be safe and well-tolerated and data from OPTION 2, and our other Phase 2 clinical trials, have clearly demonstrated drug activity. Some patients were able to achieve CFA at levels beyond what is required to demonstrate non-inferiority with PERT therapies, but the majority did not, and as such, we did not meet our trial goal.

We believe the underlying cause of the drug’s uneven efficacy performance in OPTION 2 lies with the formulation. In response, we are moving aggressively to develop a new formulation for MS1819 that utilizes a capsule filled with acid-resistant granules, or microbeads. Such a capsule is intended to dissolve in the stomach, disperse the beads, and then pass through to the small intestine where the beads would break down and release the lipase enzyme so that it thoroughly mixes with food and deliver the lipase enzyme in the duodenum.

We are now in a position to develop a microbead formulation similar to that used by the leading PERT brands in the market. Due to prior cost constraints, we were unable to develop a microbead formulation and conducted the OPTION 2 clinical trial using a powder formulation with different delivery mechanisms - both immediate release and delayed-release enteric capsules. This was a development pathway that certain PERT competitors initially pursued as well, because they too were unable to achieve a CFA ≥80% using powder immediate-release formulations. Once they reformulated their products using enteric-coated microbeads they were able to achieve CFA levels over 80%.

Furthermore, in addition to the acid-resistant microbead formulation, we have also been investing in several manufacturing processes designed to optimize production yields and incorporate more drug product into capsules - with the goals of reducing the cost of goods, improving competitive pricing, and further decreasing the number of daily capsules needed by patients. We continue to believe that we will be able to reduce pill burden and help improve patient compliance through process improvements.

Phase 2 Combination Therapy Program
In addition to the MS1819 monotherapy program, we continue to advance a Phase 2 clinical trial evaluating MS1819 in combination with PERT. Patient enrollment in this trial is complete, and we expect to report top line data in Q2 2021. As previously reported in August 2020, early data was encouraging, and we believe that the combination regimen has potential to help the approximately 25% to 30% of refractory CF patients with severe EPI who are unable to achieve adequate nutrition using PERT alone.

MS1819 -- A Clear Path Forward

We have already initiated discussions with contract manufacturers to develop the optimized microbead formulation of MS1819. We expect to have a product ready to advance into clinical studies by Q3 2021. This process will of course require more time and resources. However, to our benefit, we have sufficient capital on hand to fund this development.

We believe the cost-benefit profile with MS1819 is clearly in our favor. The drug has a proven mechanism of action and compared to PERTs, it offers numerous therapeutic, safety, and compliance advantages, while remaining relatively easy to manufacture. Based on these factors, we believe that if this optimized microbead formulation proves successful in the clinic and receives regulatory approval, MS1819 could eventually eclipse pig PERT as the standard of care, as similarly seen in the early 1980’s with the advent of synthetic “human” insulin which completely replaced the cow and pig derived insulin that had been used for treating diabetes.

Finance

During the first quarter of 2021, we raised aggregate gross proceeds of approximately $18.0 million from the sale of preferred stock and common stock in public offerings and private placement transactions, plus the receipt of aggregate cash proceeds of approximately $4.6 million from the exercise of warrants.

Outlook Ahead

These are exciting times for AzurRx and we anticipate several catalysts on the horizon. I look forward to working with my management team and fellow board members to execute a business and clinical strategy that has the potential to transform AzurRx and generate substantial returns for our shareholders.

We will continue to pursue our efforts to drive long-term shareholder value by delivering safe and effective GI therapies for patients who need them the most, raising our global visibility and broadening our shareholder base. We look forward to continuing what has been a productive 2021, and we thank you for your continued support.

Sincerely,
James Sapirstein
Chairman, President and CEO
AzurRx BioPharma, Inc.

About AzurRx BioPharma, Inc.
AzurRx BioPharma, Inc. (NASDAQ: AZRX) is a clinical stage biopharmaceutical company specializing in the development of targeted, non-systemic therapies for gastrointestinal (GI) diseases. The Company has a pipeline of three gut-restricted GI assets. The lead therapeutic candidate is MS1819, a recombinant lipase for the treatment of exocrine pancreatic insufficiency (EPI) in patients with cystic fibrosis and chronic pancreatitis. AzurRx is also advancing two clinical programs using proprietary formulations of niclosamide, a pro-inflammatory pathway inhibitor; FW-1022, for COVID-19 GI infections and FW-420, for Grade 1 Immune Checkpoint Inhibitor-Associated Colitis and diarrhea in oncology patients. The Company is headquartered in Delray Beach, Florida with clinical operations in Hayward, California. For more information visit www.azurrx.com.

Forward-Looking Statement
This press release may contain certain statements relating to future results which are forward-looking statements. It is possible that the Company’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements, depending on factors including whether results obtained in preclinical and nonclinical studies and clinical trials will be indicative of results obtained in future clinical trials; whether preliminary or interim results from a clinical trial will be indicative of the final results of the trial; the size of the potential markets for the Company’s drug candidates and its ability to service those markets; and the Company’s current and future capital requirements and its ability to raise additional funds to satisfy its capital needs. Additional information concerning the Company and its business, including a discussion of factors that could materially affect the Company’s financial results are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 under the heading “Risk Factors,” as well as the Company’s subsequent filings with the Securities and Exchange Commission. All forward-looking statements included in this press release are made only as of the date of this press release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.

For more information:

AzurRx BioPharma, Inc.
1615 South Congress Avenue
Suite 103
Delray Beach, Florida 33445
Phone: (646) 699-7855
info@azurrx.com

Media contact:

Tiberend Strategic Advisors, Inc.
Johanna Bennett/Ingrid Mezo
(212) 375-2665/(646) 604-5150
jbennett@tiberend.com/imezo@tiberend.com

References
¹ Gut Journal: Vol 69, Issue 6: 2020; Gut Journal: Vol 69, Issue 6: 2020; JAMA Network: Vol 3, Issue 6: 2020; Lancet Gastroenterol Hepatol: Vol 5, Issue 5: 2020; Cheung Gastroenterology: Vol. 159, Issue 1: 2020.
² Rubin, R. “As their numbers grow, COVID-19 “Long Haulers” Stump Experts”. https://jamanetwork.com/journals/jama/fullarticle/2771111 September 23, 2020.
³ Davis, et al. “Characterizing Long Covid in an International Cohort: 7 Months of Symptoms and their Impact”. https://www.medrxiv.org/content/10.1101/2020.12.24.20248802v2.full.pdf
⁴ Jeon S, Ko M, Lee J, Choi I, Byun SY, Park S, Shum D, Kim S. 2020. Identification of antiviral drug candidates against SARS-CoV-2 from FDA-approved drugs. Antimicrob Agents Chemother 64:e00819-20. https://doi.org/10.1128/AAC.00819-20.
⁵ Braga, L., Ali, H., Secco, I. et al. Drugs that inhibit TMEM16 proteins block SARS-CoV-2 Spike-induced syncytia. Nature (2021). https://doi.org/10.1038/s41586-021-03491-6

FAQ

What are the latest developments for AzurRx (NASDAQ: AZRX) as of April 2021?

AzurRx announced the initiation of the RESERVOIR Phase 2 trial for niclosamide targeting COVID-19 GI infections and plan to launch a study for immune checkpoint inhibitor-associated colitis.

What financial moves did AzurRx (AZRX) make in Q1 2021?

The company raised approximately $18.0 million from stock sales and warrant exercises during the first quarter.

What were the results of the MS1819 trial conducted by AzurRx?

The Phase 2b OPTION 2 trial for MS1819 showed mixed results, with the primary efficacy endpoint not consistently met.

When is the expected topline data from AzurRx's clinical trials?

Topline data from the RESERVOIR trial is anticipated in Q1 2022, with data from the Phase 2 combination therapy trial expected in Q2 2021.