Appili Pharmaceuticals ($APLIF): The Last COVID-19 Stock With Massive Upside - Under $50 Million Market Cap

This article was originally posted on ScottyTrades

Appili Pharmaceuticals APLIF is a dual-listed U.S. and Canadian company (also trades '$APLI' in Canada). At the time of this writing, $APLIF is at $0.98 a share with ~ $56 Million market cap. I believe the market cap could easily be over $400 Million in the next few weeks and will lay out my reasons why in this post:

$APLIF just completed a presentation at the Bloom Burton Health Care conference (the same investment bank that founded this company and is the biggest shareholder). They announced that their Phase III trial results for Avigan are now being analyzed. The interim data should be coming out in the next two weeks.

Avigan is a drug whose active ingredient is Favipiravir. Avigan is a drug that is being co-developed by FujiFilm FUJIF (multi-national Japanese conglomerate), Dr. Reddys ("RDY" - $10+ Billion Company), and Appili Pharmaceuticals. Reddy's bought most of the rights to develop Favipiravir from FujiFilm, and Reddy's has engaged Appili Pharmaceuticals to get FDA approval for the drug.

For Appili's work, if successful, they will get royalties on all sales of Favipiravir in the United States, Canada, Europe, and South America. FujiFilm has retained commercialization rights in Japan I believe, while Reddy's is getting the rest. Assuming Appili's royalties are in the mid-single digit range, this imputes a massive earnings potential (multiples of their current market cap.) if Avigan is approved by the FDA.

In the past, Favipiravir / Avigan has failed in COVID-19 efficacy studies. This is because Favipiravir was administered mostly to patients who were already hospitalized, or otherwise exhibiting moderate to severe symptomology. The PRESECO Trial that was initiated by Appili Pharmaceuticals in November of 2020 however is studying the drug's use as a prophylactic drug, or in other words, used before the onset of symptoms.

Of note, in each trial where Favipiravir has failed there has been a footnote that further exploration of this drug may be warranted because of its efficacy in early symptom onset.

Even though prior studies have failed, that hasn't stopped Japan from stockpiling the drug in preparation for the drug being approved:

 

If Avigan proves to be efficacious as a prophylactic, it will be deemed "The Tamiflu for COVID-19":

This image was taken from Appili Pharmaceuticals' deck, the full deck can be found here: https://7343a5f0-1b48-4477-8577-969ff9b4ed06.filesusr.com/ugd/3d295b_1f46930ba5c145d0a6caacdccc93437d.pdf

If we assume that Appili has some kind of mid-single digit royalty on sales of the drugs in the U.S., Canada, South America, and Europe, we can easily extrapolate how $APLIF can sport a massive market cap just based on the royalty. Certainly much bigger than the current $50 Million market cap at 85 cents a share.

Last week, www.thesun.co.uk published an article titled: "Pill that could ‘kill’ Covid within HOURS could put end to future lockdowns, experts say" -- Here is a link to that article: https://www.thesun.co.uk/news/14764833/pill-kill-covid-could-end-future-lockdowns-experts-say/

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In addition to Appili's promising work on Favipiravir with FujuFilm and Dr. Reddys, the company also has 3 candidates for drug-resistant antifungal drugs. While this doesn't sound like the sexiest area, all three of the candidates qualify for something that is known as a Priority Review Voucher, or PRV.

A PRV, once granted, is a transferable asset by and among pharmaceutical companies to expedite the approval of a drug that has gotten through phase III. Based on their pipeline of anti-fungal drugs, the earliest $APLIF would be eligible to get their first PRV would be in about 20 months.

Why is this important?

Companies will pay upwards of $100 Million for a PRV:

Source - https://www.fiercebiotech.com/biotech/newly-acquired-alexion-pays-100m-for-rhythm-s-speedy-review-voucher January 2021

Appili Therapeutics has 3 shots on goal for a PRV, and a MASSIVE shot on goal with Faripiravir. At 85 cents a share, I will buy this all day (and have).

Disclosure, I have a LONG position in Appili Pharmaceuticals. This is not investment advice, it is an opinion on what I believe the future could hold for $APLIF.

Benzinga's Related Links:

• Appili Therapeutics Appoints Drug Development Executive Don Cilla to the Newly Created Position of Chief Development Officer
• Dr. Reddy's Laboratories, Global Response Aid, and Appili Therapeutics Announce the Filing of an Application for REEQONUS™ (favipiravir) Tablets for the Treatment of COVID-19 under Health Canada's Interim Order