Developing treatments for any disease is one of the most difficult tasks in the world. Companies need to prove that their treatments are not only safe, but also effective. Generally, biotechnology and pharmaceutical companies need multiple years before their treatments are able to be prescribed to U.S. patients. Now, AIT Therapeutics (OTC:AITB) is on its way to offering treatments for patients with serious lung infections, affecting hundreds of thousands of Americans, in less than three years.
What You Need to Know About AIT Therapeutics
Just around six years ago, Advanced Inhalation Therapies was formed and was able to develop a proprietary technology in order to safely deliver Nitric Oxide gas to patients with bronchiolitis and cystic fibrosis.
Over the years, the company has been conducting clinical trials to test its treatments, and for the most part, there were no serious adverse events (SAEs). However, there were significant improvements in oxygenation, hospital length of stay and reduction in bacterial loads, in the patients that participated in the clinical trial study.
With successful early stage clinical trials, AIT Therapeutics went public in 2017, under the trading symbol AITB and is now preparing for pivotal registration trials. That said, if and when, AITB’s treatments are able to reach the market, the company’s therapies could potentially save lives. Not only that, but if this occurs in the foreseeable future, the company would be able to generate higher earnings and reinvest those earnings into research and development (R&D) for other treatments.
Some comparable companies also started small, just like AITB, but since their early beginnings, they’ve grown to multi-billion dollar companies.
Source: AIT Therapeutics
Now, Ikaria and Alios Biopharma were bought out due to their attractive valuation and therapeutics. The market seems to be placing bets that the biotech industry continues to thrive, and with AITB’s attractive platform, many investors could rush purchase the stock at its current levels.
Things Are Looking Up for Biotechs
Biotechs have been on a tear, and AITB could continue higher with the sector. We see this all the time in the biotech industry, where stocks are up over 50% in a day due to positive clinical trial data or other company specific news.
Here’s a look at the iShares Nasdaq Biotechnology ETF (NASDAQ: IBB) over the past few months:
IBB has been up nearly 30% YTD. This isn’t an anomaly. Biotechs are known to be high-flyers, and when there’s good news, these stocks have the potential to double in a short period of time.
Insmed Inc (NASDAQ: INSM), a comparable company, has also been on a strong run higher. Just take a look at the daily chart on INSM. Over the past month, as of October 4, 2017, the stock has more than doubled.
Alnylam Pharmaceuticals (NASDAQ: ALNY) is another biotech that’s up significantly this year alone. ALNY is up over 200% YTD, and again, it’s not uncommon for biotechs to be up this much in just a matter of days or months.
Now, some comparable infectious disease companies have shown their ability to hit the market fairly easily, and AIT Therapeutics (OTC:AITB) could do the same with its experienced management team and treatments (more on that in a few minutes). For example, Paratek Pharmaceuticals (NASDAQ: PRTK) has a market cap of just over $700M. The company is looking to file in the U.S. and EU in 2018, with potential sales reaching more than $1B.
Tetraphase Pharmaceuticals (NASDAQ: TTPH), another comparable company, has just around $400M in market cap. Tetraphase filed for approval in EU, during the third quarter of 2017 and it’s looking to file for U.S. FDA approval in the first quarter of 2018. Since the beginning of the year TTPH has nearly doubled.
Moreover, Achaogen (NASDAQ: AKAO) has a market cap of approximately $700M, and it filed for U.S. FDA approval in the 4th quarter of 2017, and is expected to file for approval in the EU in 2018, and its treatments have potential sales of over $1B. AKAO went from $4 to $26 in just 3 months and investors who went along for the ride were able to secure gains of over 500%
Now, these comparable companies are just now filing for approvals in either the U.S. or EU, and they’ve seen meteoric rises. If AITB is able to execute, they will file for regulatory approvals in 2 indications before the end of 2019, and it could be a potential takeover candidate or run higher like IBB and other biotechs.
Since AIT Therapeutics is currently looking to treat rare diseases, and there is barely any competition in its industry, the company has immense upside potential to grow into a company with over $1B in market cap. With biotechnology and pharmaceutical companies, the market is not looking for similar treatments, it’s looking for innovative treatments. AIT Therapeutics is looking to do just that. That in mind, it wouldn’t be a surprise if AITB had similar moves to these biotechs that ran up recently.
Check out what AIT Therapeutics is all about
Source: AIT Therapeutics
There’s a need for the treatment of patients with serious lung infections, and AIT Therapeutics is looking to tackle this problem head first, potentially placing it at the forefront of the industry.
There’s A Need For Safe And Effective Treatments for Bronchiolitis
Although bronchiolitis is considered a rare condition, according to the U.S. Food and Drug Administration (FDA), there’s an unmet population that needs safe and effective treatments to survive. According to researchers with publications in Pediatrics (Official Journal of the American Academy of Pediatrics), there were 150K infant hospitalizations per year in the United States for bronchiolitis. Now, that figure should have grown since the publication, due to the increasing population.
Not only that, researchers who published studies in The New England Journal of Medicine noted that there were 180K elderly hospitalizations per year due to Respiratory Syncytial Virus infections, and implied that there were over 220K hospitalization for bronchiolitis.
Now, there is little to no competition in the space, and AIT Therapeutics (OTC:AITB) is looking to be the first to successfully develop nitric oxide treatments for bronchiolitis. If the company does this successfully, it could take a large piece of the more-than $2B market, in the U.S. alone.
AIT Therapeutics is Also Targeting MABSC and NTM MAC
AIT Therapeutics is initially targeting NTM abscessus (MASBC), which is the most aggressive and difficult to treat form of nontuberculous mycobacteria (NTM). In the Burden of Pulmonary Nontuberculous Mycobacterial Disease in the United States publication, scientists estimated that there were over 180K NTM cases in the U.S., in 2014, and NTM costs were estimated to be approximately $1.7B, with MASBC costs being more than two times that of mycobacterium avium complex (MAC).
Currently, there is no competition in the MABSC, and only limited competition in the MAC spaces. That in mind, AIT Therapeutics (OTC:AITB) is taking the initiative to treat MASBC, and it currently has first-mover advantage, allowing it to take a large chunk of the market.
How Can This Young Therapeutics Company Make Innovative Products?
Like any great company, an experienced management team could lead it to the pinnacle of its industry.
Just take a look at the company’s management team.
CEO and Chairman of the Board Steven Lisi has vast knowledge of the healthcare industry. Previously, Lisi served as Senior Vice President of Business and Corporate Development at Avadel Pharmaceuticals and was able to transform the company from a $100M enterprise value to $1B in only three years. Lisi has nearly 20 years of experience analyzing and investing in the global healthcare industry, and could potentially lead AIT Therapeutics to become the largest company in its industry.
President, COO and co-founder Amir Avniel has over 20 years of experience in leading biotech companies. Prior to founding AIT Therapeutics, Avniel co-founded Rosetta Green, which was acquired by Monsanto.
CFO Hai Aviv brings over 10 years of accounting and financial management experience, and has been able to help the company run with no debt.
Not only are the executives well-equipped with knowledge and experience, the company is also leveraging the experience of doctors in various fields of the medical industry.
Here’s a look at the company’s scientific advisory board:
Source: AIT Therapeutics
AIT Therapeutics Products Could be a Game Changer
Nitric Oxide is a critical and natural tool for the human body, and it has a proven safety record via an approved FDA product that’s been used to treat over 100K premature babies with no side effects. Moreover, long-term safety studies are not needed due to the FDA’s comfort with Nitric Oxide. At high concentration levels, Nitric Oxide breaks down biofilm, which reduces the mucus caused by lung infections, helping the immune system fight lung infections.
Source: AIT Therapeutics
*Note: The picture is not representative of the final external experience of the product.
AIT Therapeutics Was Granted Orphan Drug Designation
When a company is granted Orphan Drug Designation by the U.S. FDA, it means that the FDA believes the treatment could potentially treat underserved patient populations, or rare disorders. These disorders affect fewer than 200K people in the U.S. Now, AIT Therapeutics (OTC:AITB) was granted Orphan Drug Designation for treating infections caused by nontuberculous mycobacteria (NTM), and the designation provides AITB with certain exclusivity benefits, tax credits for certain research and a waiver of the New Drug Application User fees.
That said, AIT Therapeutics should be able to continue its operations and the development of its treatments for NTM, with little to no debt.
According to Chairman and CEO Steven Lisi, “Receiving orphan drug designation is an important regulatory milestone…NTM infection is a rare and debilitating pulmonary disease associated with increased morbidity and mortality. We are currently developing our nitric oxide therapy for two indications, and look forward to announcing data from our Phase 2 study in NTM abscessus during the fourth quarter of this year.”
The Bottom Line
AIT Therapeutics (OTC:AITB) is looking to break into the serious lung infection industry, and it could potentially treat hundreds of thousands of Americans with NTM or bronchiolitis. There’s an unmet demand for the multi-billion dollar market, and some patients with serious lung infections are being “neglected,” since there are only a handful of treatments out there.
AITB’s receipt of Orphan Drug Designation for the treatment of NTM shows that the FDA has faith in the company, and it could potentially have its product approved in the near future. AITB is looking to gain first-mover advantage in bronchiolitis and MABSC. If the company successfully gains FDA approval, it’s well-positioned to grow its market cap exponentially. Now, the company is newly listed, and investors may not have caught wind of the innovative company yet. That said, AITB has a compelling story and it’s looking to help patients, and some investors who want exposure to the micro-cap biotech market might want to consider an investment in AIT Therapeutics (OTC:AITB).