November 1
2015
In search of a cure for BPH:
Sophiris Bio (NASDAQ: SPHS)
Sophiris
Bio, Inc. (NASDAQ: SPHS) is a clinical-stage bio pharmaceutical company that
focuses on the development of products for the treatment of urological
diseases. The company is currently developing a designer drug, PRX302, for the
treatment of the urological disorder known as benign
prostatic hyperplasia (BPH, or enlarged
prostate) as well as localized low- to intermediate-risk prostate cancer.
Preliminary
clinical results show that PRX302 offers a safe, simple, effective and
convenient approach for the treatment of BPH and prostate cancer. Urologists
can administer PRX302 in a single office-based procedure that involves
ultrasound-guided injection to the affected prostate tissue. This makes PRX302
an alternative to other approaches that target PBH and prostate cancer, such as
oral drugs and Minimally Invasive Surgical Techniques (MISTS) or Trans-Urethral
Resection of the Prostate (TURP).
PRX302
is currently in Phase 3 clinical trials for its treatment of symptoms of BPH.
PRX302 is also in Phase 2a proof-of-concept testing for the treatment of
localized low- to intermediate-risk prostate cancer. Sophiris Bio began enrolling
patients in this study in the first half of 2015.
Since
PRX302 still has not received FDA approval, there is the usual uncertainty
about the future direction of the company expected with any clinical-stage
biopharmaceutical company. For the three-month period ended June 30, 2015, the
company posted a net loss of $3.7 million as a result of $2.6 million in
R&D expenses and $1 million in general & administrative expenses.
Throughout
the first 10 months of 2015, the company’s stock price has mostly traded at or
below the $1 mark. Over a 52-week period, the low was $0.42 and the high was
$3.23. In December 2014, the company’s stock lost nearly 80 percent of its
value after interim results for PRX302 were not as promising as hoped. As of
the close of trading on October 30, 2015 the company’s stock price stood at
$0.74, giving the company a total market capitalization of $12.47 million.
Analyst
expectations about future stock price performance are based on the ability of
PRX302 to successfully complete Phase 3 clinical trials. A key milestone will
occur by the end of 2015, when Sophiris Bio will receive 12-month data for its
first Phase 3 study.
According
to preliminary data, PRX302 offers a potential targeted treatment solution for
urologists to treat BPH. In completed Phase 2b clinical trials, Sophiris Bio
reported clinically meaningful improvement of symptoms of moderate to severe
BPH, as well as efficacy through 12 months after a single treatment. In
completed clinical trials, there have been no reported serious drug-related
complications, such as sexual dysfunction or cardiovascular side effects.
What
makes PRX302 different from other competitors on the market is its localized,
targeted solution to addressing urological disorders. Unlike MISTS or TURP,
PRX302 can be completed in a simple, short office-based procedure. Moreover,
unlike orally administered drugs, PRX302 shows rates of higher efficacy without
the risk of patient dropout over the course of treatment or the risk of side
effects.
Going
forward, PRX302 could help address the needs of a large, growing market with a
significant unmet medical need. BPH currently affects 70 percent of men over
age 60, with 36 million men estimated to be affected. Of these 36 million, only
3.2 million are being treated, offering a clear market opportunity for Sophiris
Bio.
Given this broad market opportunity and the upcoming
results of the company’s Phase 3 clinical trial (which we believe will be
favorable for the company), there exists significant upside potential for the
stock to rise above the $1 mark.
SPHS is currently undervalued and is a BUY at current
price levels.
Salman Aziz
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