By John Vandermosten, CFA
READ THE FULL GRCE RESEARCH REPORT
Grace Therapeutics, Inc (NASDAQ:GRCE) will quickly submit its new drug utility (NDA) to the FDA, which we count on within the subsequent few weeks. The corporate not too long ago held a pre-NDA assembly with the FDA and got here away feeling intently aligned with the company when it comes to what’s required for NDA acceptance. The corporate is in a robust place because it makes its utility with a stability sheet with roughly $20 million as of March 31st, 2025 and a product that meets a profound unmet want. Throughout earlier fairness capital raises, Grace was in a position to construction these offers in order that the connected warrants might be referred to as upon attaining sure milestones. The corporate will have the ability to demand train of warrants that may probably generate about $7.6 million following NDA acceptance and about $15 million following approval of GTx-104 assuming the warrants are within the cash.
With the funds on the stability sheet and extra capital raised from the warrant workout routines, Grace will have the ability to start commercialization actions. Its plan is to deal with the highest 250 to 300 hospitals that tackle aneurysmal subarachnoid hemorrhage (aSAH), which is achievable with a gross sales power of 15 to twenty. We count on to listen to extra in regards to the technique following NDA submission and the conclusion of selling research the corporate is conducting.
Funding Thesis
Grace’s GTx-104 funding thesis is easy. There are about 40,000 aSAH instances per yr in the USA that in lots of instances are inadequately served. Oral nimodipine is customary of care. The underlying drug has demonstrated its efficacy in rising blood movement to the mind, decreasing mind injury and bettering neurological outcomes. Nevertheless, nimodipine is simply out there in oral kind which presents a number of shortcomings. The first weak point is that the oral formulation is tough to manage to sufferers which might be unconscious or have a tough time swallowing, which is a standard characteristic of aSAH sufferers. Oral nimodipine must be administered each 4 hours attributable to its quick half-life and it shouldn’t be taken with meals as this reduces its already low bioavailability. Nimodipine’s oral bioavailability is low and variable, with in depth first-pass hepatic metabolism and poor solubility contributing to decreased systemic publicity. Increased blood plasma ranges could cause hypotension which is related to neurological impairment, organ injury, decreased kidney operate and different dangers. Europe affords an IV formulation of nimodipine branded Nimotop; nonetheless, the product solubilizes the drug with excessive ranges of ethanol and propylene glycol. These excipients have quite a few unfavourable results and prevented FDA approval of Nimotop. Grace’s IV formulation makes use of excipients usually acknowledged as secure (GRAS), and supplies a product which is ready to enhance upon the ethanol-based European model and the oral formulation’s main weaknesses.
Outcomes from Grace’s Section III security trial discovered glorious relative dose depth, higher outcomes, fewer intensive care unit readmissions and fewer ventilator days for GTx-104 in contrast with oral nimodipine. The trial met its main endpoint of the variety of sufferers with at the very least one episode of clinically important hypotension moderately thought of to be attributable to the drug. Sufferers receiving GTx-104 skilled a 19% discount in at the very least one incidence of clinically important hypotension in comparison with oral nimodipine (28% versus 35%). Secondary endpoints embrace security, scientific and pharmacoeconomic outcomes. Further element on the trial will be present in Grace’s press launch and in our report.
We assign Grace a $12.50 valuation which supplies upside of over 4x. It’s a comparatively decrease danger improvement play because the underlying drug is already accredited, the brand new formulation addresses important unmet wants and all the improvement work is full, producing compelling outcomes. Whereas the corporate plans to develop GTx-104 itself, we predict that extra worth might be acknowledged if a longtime pharmaceutical firm buys the asset and folds it into its operations.
The Firm
Grace is a clinical-stage, biotechnology firm centered on uncommon illness. Its lead program is advancing GTx-104, a novel injectable formulation of nimodipine for the remedy of aneurysmal subarachnoid hemorrhage (aSAH). GTx-104 is an intravenous (IV) formulation of nimodipine that could be a higher different to the oral model for treating sufferers which might be unconscious or unable to swallow, which is frequent for these affected by an aSAH. Nimodipine is accredited for subarachnoid hemorrhage attributable to its capability to stop vasoconstriction following an aneurysm. In a number of research, the drug has demonstrated that it could possibly enhance neurological outcomes and enhance restoration in aSAH sufferers. Regardless of its advantages, accredited nimodipine presents a number of shortcomings attributable to its oral formulation which makes it tough to ship to unconscious sufferers. Low bioavailability and different drug traits contribute to extremely variable ranges of blood plasma ranges. The variability can result in hypotension and poor outcomes.
aSAH impacts as much as 40,000 people in the USA yearly and has a world incidence starting from 9 to 11 per 100,000 individuals. Ladies are extra seemingly than males to undergo the rupture and the very best incidence happens round an individual’s sixth decade. Signs of the situation embrace a sudden, extreme headache, neck stiffness, nausea and vomiting amongst others. The affected person ought to instantly go to the emergency room the place she or he shall be triaged to diagnose aSAH and to move them to a specialised middle reminiscent of a neurointensive care unit (Neuro-ICU). After analysis remedy consists of surgical clipping or endovascular coiling. After the affected person is stabilized with an emphasis on strict blood strain management, she or he is run oral nimodipine to stop vasospasm over the subsequent two or three weeks. This enables ample blood movement within the mind to guard mind tissue and permit for efficient therapeutic.
Grace not too long ago accomplished its Section III STRIVE-ON trial and is planning to submit its NDA through the 505(b)(2) pathway. Primarily based on the corporate’s commentary we see submission within the subsequent month, acceptance of the NDA by late summer time and a goal motion date by mid-2025.
Milestones
- Pre-NDA assembly with FDA – 2Q:25
- NDA submission to FDA – mid-2025
- $7.6 million warrant train if NDA accepted & above $3.00 strike – Fall 2025
- Goal Motion Date – mid-2026
- $15 million warrant train if GTx-104 accredited & above $3.39 – Fall 2026
- GTx-104 commercialization – late 2026
Assets
Abstract
Grace is valued at lower than $40 million, with half of this worth in money on its stability sheet. The corporate holds no debt and is on the cusp of submitting its NDA to the FDA within the subsequent few weeks. We expect product gross sales may peak at a number of hundred million {dollars}, which suggests substantial upside even with a low single-digit a number of of gross sales. GTx-104 addresses most of the shortcomings of oral nimodipine in treating aSAH and we predict it’s a simple promote to hospitals as it could possibly considerably enhance outcomes and assist hospitals preserve their reputations and stroke middle certifications. With outcomes from its Section III security trial prepared and the pre-NDA assembly beneath its belt, Grace will quickly submit its NDA to the FDA and will see a goal motion date in mid-2026.
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