OraSure's Emergency Use Authorization, And Other News: The Good, Bad And Ugly Of Biopharma

OraSure receives emergency use authorization for OMNIgene

OraSure Technologies Inc. (OSUR) announced that the FDA has given Emergency Use Authorization to OMNIgene ORAL saliva collection and stabilization device in COVID-19 testing. With this authorization, the devices may now be used for the self-collection, transport and laboratory testing of saliva specimens.

The FDA authorization marks the first instance for allowing the unsupervised use of the device in at-home or in a healthcare setting provided it is used as part of a validated and approved at-home test kit. Stephen S. Tang, Ph.D., OraSure President and Chief Executive Officer. “The DNA Genotek team quickly leveraged its innovative spirit and expertise with molecular sample collection to address this need with OMNIgene®·ORAL and the unsupervised, in-home sample collection that it supports when used as part of a validated at-home test kit.”

OraSure is currently working on various projects pertaining COVID-19 and provided updates about them. It provided details about the use of DNA Genotek collection kits in back-to-work settings, back-to-school programs, and laboratory testing. DNA Genotek has also increased the manufacturing levels of saliva collection. It will also ramp up the production capacity in the first quarter of 2021.

The SARS-CoV-2 virus kits have been made part of six different customer EUAs. The OMNIgene®·ORAL device has been made part of EUAs accorded to Clinical Reference Laboratory (CRL) and P23 whereas the OraCollect®·RNA device is a part of EUAs awarded to Biocerna LLC, MiraDx and Quadrant Biosciences. The Oragene®·Dx device is included in an EUA granted to Phosphorus Diagnostics.

DNA Genotek devices may be used for both sequencing-based and PCR based COVID-19 tests. These collection kits are designed to be used at home and may be used by individuals or healthcare professionals.

OraSure Technologies mainly works through its subsidiaries such as DNA Genotek, Diversigen, CoreBiome, UrSure and Novosanis. It is mainly invested in the development and production of rapid diagnostic tests, molecular services solutions and sample collection and stabilization devices.

DNA Genotek Inc. is a subsidiary of OraSure Technologies, Inc. and engages in developing microbiome and human genomics applications. It has Oragene®•Dx and ORAcollect®•Dx product lines in its product portfolio. These products are the first and only saliva-based DNA collection devices authorized for in vitro diagnostic use via FDA 510(k) clearance. The company also offers Research Use Only products aimed at collecting and preserving DNA or RNA from multiple sample types.

Analysis: OraSure is a $1.06 billion revenue earning company at $13.94 per share, a little above the midpoint of 52 week range between $5.23 and $19.75. Shareholding is over 93% institutional, over 5% hedge funds, and 1.52% insiders. The company has a debt of $6.91 million and cash reserves of $256.54 million. OraSure’s projected revenue for 2020 and 2021 is ~$155 million and ~$186 million respectively with a 3-year revenue CAGR of 2.95%. The COVID-19 diagnostics market is nearly $20 billion in 2020.

Investment Thesis: The company is scheduled to report its quarterly earnings on November 4 and the announcements may provide positive push to the stock price. The approval is also expected to push the price upward.

Keros Therapeutics initiates Phase 2 clinical trial for Myelodysplastic Syndromes

Keros Therapeutics Inc. (KROS) reported the dosing of first two participants for its Phase 2 clinical trial of KER-050. The trial seeks to evaluate the drug candidate for treating anemia and thrombocytopenia in myelodysplastic syndromes. The company expect the initial data from Part 1 to be out by mid-2021.

The Phase 2 clinical trial is an open-label, multiple ascending dose study. The trial includes patients with very low-, low-, or intermediate-risk MDS who either have previously received treatment with an erythropoiesis-stimulating agent or have not received such treatment. Jasbir S. Seehra, Ph.D., President and Chief Executive Officer of Keros said, “The majority of patients with MDS develop anemias and other cytopenias and we believe that the differentiated mechanism of action of KER-050 provides a potential benefit not only in addressing ineffective erythropoiesis, but also in increasing platelet counts.”

The Phase 2 study comprises 2 parts where Part 1 will have up to 4 cohorts. Each cohort will have nearly six participants and will have ascending doses of KER-050 administered by subcutaneous injection every four weeks for up to four cycles.

The Part 2 will test the dose selected by Part 1 and will likely test it on nearly 30 participants. The primary endpoint of the study is to confirm the safety and tolerability of the drug candidate in MDS patients with and without ring sideroblasts.

KER-050 is a lead drug candidate for Keros. It is an engineered ligand trap and contains a mutated ligand-binding domain of the Transforming Growth Factor-Beta receptor. KER-050 is aimed at treating low blood cell counts, or cytopenias, including anemia and thrombocytopenia, in patients with MDS or with myelofibrosis.

Analysis: Keros is a thinly traded $1.03 billion company, near 52-week high at $52.14, with debt of $1.09 million and cash reserves of $144.69 million. Nearly 64% of the company is held by PE/VC firms, nearly 28% by institutions, nearly 7% by hedge funds, and 1.46% by insiders. About 67% of myelodysplastic syndromes (MDS) patients are diagnosed with thrombocytopenia. The global MDS market is estimated at $1.7 billion in 2020.

Investment Thesis: The company stock has good prospects ahead with strong development pipeline and an array of catalysts coming up. However, it may be worthwhile to wait for a meaningful pullback.

Affimed to collaborate with NKMax America for SNK01 natural killer cell therapy

Affimed NV (AFMD) has inked a new deal with NKMax America Inc. for investigating the combination of AFM24, a CD16A/EGFR-targeted ICE®, with the autologous NK cell product SNK01. The companies will also work together to investigate the combo in patients with EGFR-expressing tumors, as a first-in-human proof-of-concept trial.

The clinical trial under this collaboration will use NKMax America’s SNK01 with AFM24 in the autologous setting. The companies will also have the option to augment the clinical trial to include allogeneic setting. Dr. Adi Hoess, Affimed’s Chief Executive Officer said, “By combining AFM24 with the autologous NK cell product from NKMax America, we intend to provide clinically meaningful benefit to more patients suffering from EGFR-expressing solid tumors where mortality rates remain high.”

Affimed has leverage its ROCK platform for developing a robust pipeline of ICE products. Its AFM24 is a tetravalent, bispecific epidermal growth factor receptor and CD16A-binding ICE. It is currently carrying out Phase 1/2a open-label, non-randomized, multi-center, multiple ascending dose escalation/expansion study. This trial evaluates AFM24 as monotherapy for treating solid EGFR-expressing malignancies where disease has progressed after previous treatments.

NKMax America Inc. is a clinical stage biotechnology company. It is engaged in using its proprietary natural killer cell expansion and activation technology for infinite fold natural killer cell expansion. Its lead product SNK-01 is currently undergoing Phase 1 clinical trial for advanced refractory solid tumors. It is also in a Phase I/IIa combination trial for treating Stage IV non-small cell lung cancer.

Analysis: Affimed’s candidate is targeting a global market set to add $2.36 billion during 2020 to 2025 at a CAGR of 9%. The $286 million revenue earning company is trading at $3.26, midway in a 52 week range of $1.42 to $4.91. Major shareholders are institutions holding nearly 45% and the public over 37%. 3.06 million shorted shares are to be covered in 3 days. Affimed has ~$104 cash reserves and a debt of $2.04 million.

Investment Thesis: The company has strong fundamentals with good liquidity position. However, it also has high risk profile and may be suitable for investors with high tolerance for volatility.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.