AZRX reported stellar topline results from its Phase 2 MS1819 Combination Trial. The study is evaluating MS1819 in combination with the current standard of care, porcine-derived pancreatic enzyme replacement therapy (PERT), to treat severe exocrine pancreatic insufficiency (EPI) in patients with cystic fibrosis (CF).

Results are about as good as it can get, with 100% of treated patients reaching both primary and secondary endpoints. Further, data showed clinically meaningful improvement in Coefficient of Fat Absorption (CFA) endpoints, and most importantly, showed that its combination therapy may benefit cystic fibrosis patients with severe EPI.

Moreover, data from its Phase2a arm of the trial was so compelling that regulators allowed for early termination and a progression directly to a Phase2b trial. Also, confidence at the company is high, which is always a good sign. The team is taking the next steps to accelerate potential marketing approval by finalizing the development of a new enteric-coated microbead formulation they believe can enable more medication to reach the small intestine and enhance its therapeutic potential. AZRX expects its formulation work to be completed by the end of this year. That puts another potential catalyst into view.

Another positive is its impressive cash position, which can be used as leverage for potential partnerships or as a means to accelerate trials on its own. Either scenario is a win for shareholders. AZRX noted its balances are sufficient to fund the next stages of its program development. In fact, AZRX is using some to commence developing a new enteric-coated microbead formulation for MS1819 and advance toward a bridging study in 2022 evaluating the formulation as a single-agent therapy. That initiative puts another revenue-generating shot on goal from its MS1819 program in the queue.

Combining the benefits from recent milestones reached, the back half of 2021 could be a transformative period for AZRX. As it stands, its already published data supports higher prices going into Q3 and Q4. Moreover, AZRX stock offers investors an early chance to own part of a company showing an ability to effectively treat a niche but valuable market to treat EPI in patients with CF. Moreover, its drug candidate is a safe and effective therapy showing no severe adverse events. Investors should note that MS1819 is one of the only known late-stage drug candidates in development showing the potential to fill the gap where PERT alone is insufficient.

While the value of its MS1819 program creates a compelling investment proposition on its own, investors would be wise to value the totality of the AZRX pipeline. Included in that evaluation should be a presumption that AZRX is likely to entertain potential licensing and partnership opportunities. At $0.58 per share, the stock price appears to be substantially undervalued. That’s especially true for AZRX heading toward a Phase 3 trial where the treatment duration is roughly 10-12 weeks of treatment. Hence, as the company nears that portion of its study, expectations are for its share price to respond in tandem to the upside.