By John Vandermosten, CFA
READ THE FULL GRCE RESEARCH REPORT
Grace Therapeutics, Inc (NASDAQ:GRCE) will quickly submit its new drug software (NDA) to the FDA, which we anticipate within the subsequent few weeks. The corporate just lately held a pre-NDA assembly with the FDA and got here away feeling carefully 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 software 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 capable of construction these offers in order that the hooked up warrants may very well be referred to as upon reaching 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 workouts, Grace will have the ability to start commercialization actions. Its plan is to concentrate on the highest 250 to 300 hospitals that handle aneurysmal subarachnoid hemorrhage (aSAH), which is achievable with a gross sales drive of 15 to twenty. We anticipate to listen to extra in regards to the technique following NDA submission and the conclusion of promoting research the corporate is conducting.
Funding Thesis
Grace’s GTx-104 funding thesis is simple. There are about 40,000 aSAH instances per 12 months in the US that in lots of instances are inadequately served. Oral nimodipine is customary of care. The underlying drug has demonstrated its efficacy in rising blood circulation to the mind, lowering mind harm and bettering neurological outcomes. Nonetheless, nimodipine is just obtainable in oral kind which presents a number of shortcomings. The first weak spot is that the oral formulation is troublesome to manage to sufferers which are unconscious or have a tough time swallowing, which is a typical characteristic of aSAH sufferers. Oral nimodipine needs to be administered each 4 hours because of 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 intensive first-pass hepatic metabolism and poor solubility contributing to decreased systemic publicity. Increased blood plasma ranges may cause hypotension which is related to neurological impairment, organ harm, decreased kidney operate and different dangers. Europe presents 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 unfavorable results and prevented FDA approval of Nimotop. Grace’s IV formulation makes use of excipients usually acknowledged as protected (GRAS), and gives a product which is ready to enhance upon the ethanol-based European model and the oral formulation’s major 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 major endpoint of the variety of sufferers with at the least one episode of clinically vital hypotension moderately thought of to be attributable to the drug. Sufferers receiving GTx-104 skilled a 19% discount in at the least one incidence of clinically vital hypotension in comparison with oral nimodipine (28% versus 35%). Secondary endpoints embody security, medical and pharmacoeconomic outcomes. Extra element on the trial might be present in Grace’s press launch and in our report.
We assign Grace a $12.50 valuation which gives upside of over 4x. It’s a comparatively decrease danger improvement play because the underlying drug is already accepted, the brand new formulation addresses vital unmet wants and the entire improvement work is full, producing compelling outcomes. Whereas the corporate plans to develop GTx-104 itself, we expect that further worth may very well 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 are unconscious or unable to swallow, which is frequent for these affected by an aSAH. Nimodipine is accepted for subarachnoid hemorrhage because of its potential to stop vasoconstriction following an aneurysm. In a number of research, the drug has demonstrated that it could enhance neurological outcomes and increase restoration in aSAH sufferers. Regardless of its advantages, accepted nimodipine presents a number of shortcomings because of its oral formulation which makes it troublesome 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 US yearly and has a worldwide 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 embody 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 will likely be triaged to diagnose aSAH and to move them to a specialised heart corresponding to 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 following two or three weeks. This permits adequate blood circulation within the mind to guard mind tissue and permit for efficient therapeutic.
Grace just lately accomplished its Section III STRIVE-ON trial and is planning to submit its NDA by way of 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 season 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 accepted & above $3.39 – Fall 2026
- GTx-104 commercialization – late 2026
Sources
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 predict 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 expect it’s a simple promote to hospitals as it could considerably enhance outcomes and assist hospitals preserve their reputations and stroke heart certifications. With outcomes from its Section III security trial prepared and the pre-NDA assembly underneath its belt, Grace will quickly submit its NDA to the FDA and may see a goal motion date in mid-2026.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to obtain our articles and experiences emailed on to you every morning. Please go to our web site for extra info on Zacks SCR.
DISCLOSURE: Zacks SCR has obtained compensation from the issuer instantly, from an funding supervisor, or from an investor relations consulting agency, engaged by the issuer, for offering analysis protection for a interval of at least one 12 months. Analysis articles, as seen right here, are a part of the service Zacks SCR gives and Zacks SCR receives quarterly funds totaling a most price of as much as $40,000 yearly for these companies supplied to or relating to the issuer. Full Disclaimer HERE.
