Investors needing a reason to take advantage of the Acurx Pharmaceuticals (NASDAQ: ACXP) investment proposition need to know one thing- its ibezapolstat drug candidate could fetch an $800 million valuation after its Phase 2b trial in mid-2022. That means from its current $49 million market cap, a more than 16X increase could be in play. Of course, such a lofty presumption deserves a predicate. And there is one to show.

In fact, it's an apples-to-apples comparison to Summit Therapeutics (NASDAQ: SMMT), a company with a current market cap of $484 that targets the same C. diff indication. Agreed, that's not the $800 million advertised, but its current cap is down from that level earlier this year. And it's not lower from less need of a better C. diff drug. It's down because its trial results are considered mediocre, at best. Moreover, trying do change its Phase 3 trials endpoints on-the-fly to possibly enhance its trial results didn't go over too well with the FDA. They declined to oblige. It was a strange request, too. Maybe they aren't sure the trial can meet endpoints at all.

And if that's the case, while having a market cap cut almost in half isn't great news for SMMT investors, it's potentially excellent news for those wanting exposure to the same market opportunity with a C. diff drug showing front-line potential. And AcurX's ibezapolstat drug candidate is not only demonstrating that ability but is also establishing itself as a better drug to deliver sustained relief. Better yet, not only relief, a cure.

Here's the better news, ACXP is expected to enroll for its Phase 2b trial starting next week. Thus, at roughly 1/10th the valuation of SMMT, its stock could soar once investors recognize the obvious factors in play. What should be the focus? Foremost, ibezapolstat shows clinically relevant and compelling advantages. Second, results from its 2b trial can come as early as Q2 of next year. And, thirdly, with the FDA's rejection of SMMT's request to change its primary endpoint for its C. diff trial, ACXP's ibezapolstat has been elevated to a potential front-line treatment. Deservedly so.

ibezapolstat Positions As A Front-line C. Diff Treatments

Ibezapolstat showed an ability to eradicate C. diff in the GI tract within 72 hours of treatment. Even better, it also killed the host cell. The data was so good that an independent scientific advisory board agreed with a recommendation allowing ACXP to terminate its Phase2a trial early based on data showing 100% positive patient response (sustained cure) and no relapse after follow-up evaluations.

More confirmatory data could come at the World Antimicrobial Resistance conference on November 5th. Those posters are expected to add more substance to already compelling Phase 2a data. Further, ACXP will likely include that with roughly $14 million on hand, it can complete its Phase2b trial without further funding. Thus, in addition to ibezapolstat being a potential best-in-class C. diff treatment, ACXP will show itself as well-positioned to capitalize on potential partnerships heading into a phase 3 trial. The better news is that if they wait until after its 2b study is completed, they could ask substantially more. However, even at today's value and with SMMT as a reference, ibezapolstat could be worth several hundred million dollars.

Better still, ACXP could benefit from a legislative wild card. Legislation making its way through the Senate could add substantially to ACXP's capital position. Currently, the Pasteur Act is advancing with bipartisan support to provide funding for new classes of drugs that meet unmet needs and provide relief from life-threatening conditions. The approved Act would provide upwards of $750 million to $3 billion to stockpile hospitals in addition to providing up to $100 million a year in funding to ACXP based on pharmacological arguments made. With C. diff life-threatening and with it meeting the criteria in the Act, earning a piece of that non-dilutive funding may be more likely than not.

Further, another funding program through the AMR Action Fund provides capital to promising development programs from its $1 billion arsenal. Again, ACXP's ibezapolstat meets the criteria. And with Big Pharma the backers in that fund, it's good to have promising data showing 100X the concentration of ibezapolstat's bacteria-killing power being delivered into the GI tract without limiting the restoration of the healthy microbiomes needed for sustained cure. Hence, ACXP could earn funding as well as suitors.

By the way, should the Phase 2b data confirm its already impressive results, connections to Big Pharma are already in the Rolodex. Members of its BOD team and Advisory Board consist of former Johnson & Johnson (NYSE: JNJ) and Schering-Plough executives. Expect those distinguished assets to become particularly valuable ahead of a Phase 3 trial. Better still, they could help steer negotiations as premiums paid for Phase 3 companies continue to soar. Thus, if ACXP can work into its more deserved valuation, say $250 million for starters, add another 35%-75% to that number to get a ballpark value for what Big Pharma may be willing to pay to play. Indeed, it's a considerable number.

Targeting Gram-positive Infections

Keep in mind, though, SMMT, with less compelling data, commands a market cap 2X that assumptive suggestion. Moreover, with ACXP's trial designed to show inferiority vs. non-inferiority as its endpoint, that, too, is a valuable consideration as it puts fewer hurdles in place ahead of an FDA approval pathway.

Most important, ACXP is in the right market at the right time by targeting not only C. diff but also gram-positive infections. Better yet, the industry is also paying attention to ACXP, with Health Holland recently providing $500,000 to ACXP in a collaborative venture to evaluate DNA Pol IIIC Inhibitors to treat gram-positive infections. That attention could put them ahead of others in the space as well, including Cidara Therapeutics (NASDAQ: CDTX), which targets treatment in the antifungal space. And more than private-sector help is coming on board.

Industry-wide calls from the CDC, NIH, BARDA, and CARB-X to treat these underserved infections are getting louder, resulting in potentially more grant funding in the near term. But it's not just the industry agencies paying attention; regulators are too.

As noted, ACXP's Phase2a results to treat C. difficile were so compelling that regulators allowed for early termination of that trial with a pass directly to a Phase 2b study. That allowance saves time, money, and resources. It also puts ACXP a giant step closer to getting an effective treatment for EPI in patients with C. difficile to market. And with ACXP successfully showing ibezapolstat able to meet a 100% success rate in meeting primary and secondary trial endpoints, and with treatment cycles only 28-days long, getting its drug to market can happen sooner than later.

Know this too. As compelling as its C. difficile treatment candidate is, ACXP isn't a one-drug company. They also have a scalable drug development platform that can potentially expedite the creation of other drugs to treat additional gram-positive infections.

Those markets, too, are substantial.

Pre-Clinical Programs With Blockbuster Potential

Its ACX-375C program is also a potential blockbuster drug. Like ibezapolstat, it targets front-line designation by providing best-in-class effectiveness to counter numerous multi-drug resistant (MDR) and sensitive gram-positive bacterial pathogens. And despite its pre-clinical status, data shows promise and a reason to pay attention.

The pre-clinical program is a collaborative effort with WuXi App Tec and is one of the few studies evaluating the DNA Pol IIIC inhibitor to treat multiple infections, including Staphylococcus, Streptococcus, and Enterococcal infections. Interim data support that ACX-375C can be effective against more than only those indications, and ACXP expects its treatment profile to extend to numerous other gram-positive resistant bacterial infections.

In fact, ACX-375C platform scalability could open its potential to treat numerous other infections beyond MRSA, VRE, and more common indications such as ear and sinus infections, urinary tract infections, bone/joint infections, and pneumonia. Its $500,000 grant from Health Holland may help expedite the collaborative venture. Still, while this program may take into 2022 to get into a more formal clinical setting, updates would be interim value drivers.

Hence, though early-stage, it adds to the value proposition.

Catalysts Already In-Play

The most excellent news for new and considering ACXP investors is that catalysts are already in play. And they make its share price and corresponding market cap an attractive investment proposition. In fact, it's a compelling opportunity. And trading ahead of its presentation in November, which could add more firepower to its ibezapolstat profile, would be a wise consideration.

Bottom line- it may be wise to take advantage of ACXP's under-the-radar valuation. Its fundamentals are strong, and its pipeline is positioned to deliver massive rewards as early as mid-2022. Moreover, near-term dilution worries are mitigated by ACXP having enough cash to complete its Phase 2b ibezapolstat trial with a few million to spare. If they need funding at that point, heading into a Phase 3 trial provides plenty of negotiating power when sitting at the table with Big Pharma interests.

Still, if ACXP wants to go it alone, an approved Pasteur Act could provide all the capital needed to complete its phase 3 trial. Thus, while ACXP presented a compelling value-investment opportunity at higher prices, current levels may be considered an early holiday gift.

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