Biosergen is developing an innovative drug that kills fungal infections – unlike most of the existing products on the market that can only inhibit the fungal infection. With a market size of USD 16 billion, Biosergen is an opportunity for investors who want to invest in a biotech company with blockbuster potential (sales of over USD 1 billion) with a breakthrough and innovative treatment targeting some poorly treated patient groups with a high need for new effective treatments that can save human lives.

Price triggers:

– BSG005: Phase I top-line results from SAD (single dose) (Q3 2022)

– BSG005: Phase I top-line results from MAD (multiple dose) (Q4 2022)

– Pipeline: Progression of new formulation development projects

Risks:

– BSG005: Poor Phase I top-line results from SAD (single dose) (Q3’2022)

– BSG005: Poor Phase I top-line results from MAD (multiple dose) (Q4’2022)

– Future financing of operations

Biosergen is developing BSG005, a pioneering and innovative antifungal drug for the treatment of invasive fungal infections, an area of very high medical need. Invasive fungal infection of the lungs, liver, kidneys or brain is a serious condition that can lead to death. The infection mainly affects people who have a weakened immune system for various reasons, such as transplant recipients, people with HIV or diabetes, or patients undergoing treatment for cancer. The mortality rate is 20-80% depending on the fungus causing the infection, and during the COVID pandemic there has been a resurgence of invasive fungal infections.

BSG005 has shown better efficacy and fewer side effects compared to competing antifungals and is also effective against a wider range of fungal spores.

The market for antifungals in general is USD 16 billion and growing at 6-7% per year. Biosergen is an opportunity for investors looking to invest in a biotech company with blockbuster potential (sales of over USD 1 billion) with a breakthrough and innovative treatment targeting resistant or difficult to treat invasive fungal infections that often cause death.

BSG005 has the potential for a paradigm shift in the treatment of invasive fungal infections

Unlike most existing products on the market that only inhibit the fungal infection (fungistatic), BSG005 (fungicide) kills the fungi that cause the infection. Fungistatic treatment allows for the development of resistance and thus increases the risk of lack of efficacy, not only in the individual patient but also in the patient population in general. In contrast, fungicidal treatment does not lead to the development of resistance and is therefore a more effective long-term treatment option for all these patients.

Unlike BSG005, other drugs in the same class (polyenes) have serious side effects which often limit the duration of treatment or the extension of treatment. Existing treatments with current polyenes lead to renal toxicity (poisoning of the kidneys), which could potentially lead to patients having to stop treatment of their invasive fungal infection. BSG005 does not cause renal toxicity, as shown in the toxicology studies.

The fact that BSG005 kills the fungi, is not renally (kidney) toxic and has efficacy on a wide range of fungi may mean that patients with invasive fungal infections will be treated with BSG005 earlier in the course of treatment. Not only as an alternative to other antifungal agents, but also as a substitute for antifungal agents to avoid the spread of resistant fungal spores which in turn may put increased pressure on healthcare systems worldwide. We therefore believe that BSG005 has the potential to be a paradigm shift in the treatment of invasive fungal infections.

Phase 1 top-line data expected in Q4’2022 – good data will be a price trigger

Phase 1 data from the ongoing study is expected in Q4 2022. The aim of the study is to evaluate the safety and tolerability of BSG005 in healthy subjects. Good data will, in our view, firstly reduce the uncertainty in Biosergen because polyene antifungals kill the fungi and therefore it is expected that if safety is good there is very little doubt about the efficacy of BSG005, and secondly it will ensure safe progression of the pipeline towards potential approval in 2026/27.

The total global market for all antifungals is USD 16 billion. It is expected that Biosergen will be able to address the part of the market for invasive fungal infections that currently counts the treatment categories: Polyenes (10%), Azoles (42%) and Echinocandins (32%). With a market size of USD 16 billion, this is a very lucrative market where only a small market share is required to be commercially attractive.

BSG005 is expected to be priced at a premium

The main competitor Amphotericin B is an old product which is available in cheap generic versions. Assuming good data, Biosergen expects that BSG005 could come to market at a premium price due to a significantly better effect that kills the fungus and not just inhibits it and especially if there is a better safety profile as expected on the kidneys in particular.

US likely to be primary market

BSG005 has patent protection until 2033 in the US and Japan, and until 2028 in the EU and China, but is working on several new patents on the base molecule BSG005’s production and formulation processes. Patent applications have already been filed on new special nano formulations.  We therefore see a small risk of competition from coproducers in the EU and China already two years after the potential launch of the initial finished product, and thus a good opportunity for Biosergen in these markets to maintain a premium price after 2028. Biosergen is also developing other formulations of BSG005 and new production processes that could potentially extend patent protection further. The US is likely to be Biosergen’s main market but with the effect on resistant and difficult to treat indications, other parts of the world (China, India, South America) will also be interesting markets.