This could be the signal that tiny NervGen Pharma Corp. (TSX-V:NGEN; OTCQX:NGENF) is destined to be one of the top performing biotech startup stocks this year.
It came in a seemingly innocuous podcast interview about the company’s ongoing Phase 1b/2a “proof of concept” human trials. In online investment chat groups, they’re saying that the podcast offered up a bombshell revelation – that extraordinary therapeutic improvements are apparently being achieved by paralyzed trial volunteers.
Simply stated, at least a couple of trial participants may apparently be regaining the use of their limbs – albeit incrementally.
This sneak peek inside this randomized double-blind, placebo-controlled trial has major implications.
Something quite remarkable appears to be happening at Chicago’s Shirley Ryan AbilityLab – a global leader in physical rehabilitation for patients with severe nerve damage. This is where at least one of the initial trial patients – mindful that there are only a handful of trial volunteers in total so far – is apparently regaining some function of his extremities, even though he suffers from chronic spinal paralysis.
This stunning revelation was shared by a globally-renowned podcaster called Louise Phipps Senft, who runs a non-profit advocacy/support organization for spinal cord injury victims called Blink of An Eye, which is based in Baltimore. She said in a Dec. 20th podcast (minutes 42.10-42.41) that one of NervGen’s trial volunteers – who enrolled with the support of her organization – began to experience noticeable improvements after only a few once-a-day injections.
This volunteer has been administered NervGen’s experimental peptide called NVG-291 as part of a 12-week trial program that officially got underway late last year. It’s the first of its kind for humans. And that’s why the trial is being so closely watched by the medical community and investors alike.
Any suggestion that trial volunteers are getting remarkable results within weeks, rather than months, would not come a surprise to NervGen’s scientists. In the past, they have successfully used NVG-291 in numerous preclinical trials to achieve substantial and unprecedented recovery of functionality of laboratory rodents that had sustained severe spinal cord damage.
They also proved that NVG-291 is not toxic to these animals, even in high doses. This is one of the official reasons why this drug candidate has recently been fast-tracked by the FDA in human trials. Unofficially, it might be because FDA medical scientists have become aware that NVG-291 appears to be working already. Either way, this fast-tracking by the regulators represents another key signal to investors that the company’s share price may be getting primed for a sustained rally in 2024.
‘Proof of Concept’ Trial: Where there is smoke, is there fire?
Admittedly, it’s a big leap to hope for comparable results in humans to laboratory animals. But this seems to be what’s happening already with at least one of the trial’s first patients. This is mindful of the fact that he doesn’t know whether he’s being injected with the trial drug candidate or a placebo.
Importantly, these volunteers have a “chronic” injury that is between one and 5 years old. Apparently, there are no records of humans having significant recovery beyond 12-18 months post-injury. It would be almost miraculous if a patient getting the placebo experienced any noticeable improvement.
However, if a patient becomes able to move his digits during the trial, this represents a huge breakthrough for NervGen.
Consider the fact that the trial’s researchers set out with far more modest aspirations, which was to use electrical stimuli to detect subtle improvements in muscle functionality and limb mobility. Even the tiniest of improvements in that regard would be considered something of a success. But if patients can exhibit observable movement in response to the treatment, that’s by far a best-case scenario – one that appears to be playing out.
For anyone interested in the technical explanation of how trial results are measured, here it is: The primary endpoint is to show improvement of the body’s “electrophysiology,” or natural electrical impulses, according to NervGen’s trial scientists.
Functional improvements are secondary (even more desirable) endpoints. So if a volunteer is experiencing improved functionality, this means that the primary endpoint of increased electrical impulses has been successfully achieved, pointing to a successful trial.
Of course, no official comment can be expected from NervGen or from Shirley Ryan AbilityLab until much later this year after all the trial data readouts have been fully assessed. So the countdown has started to a pending trial outcome announcement that will surely have a major impact on NervGen’s share price. As of now, NervGen may then be just a few months away from a serious stock re-rating.
Here’s Why NVG-291 has ‘Blockbuster’ Drug Potential
In terms of the Big Picture, NervGen believes that NVG-291 has the potential to be a revolutionary “blockbuster” treatment for all kinds of nerve and neuron damage, not just spinal cord injuries. This is mindful of the fact that no drugs have ever before been approved anywhere in the world for nerve regeneration and for improving plasticity in damaged nerves.
NervGen is also hoping to treat other conditions like MS and stroke, thanks to an extraordinarily strong collection of animal data. This means that NVG-291 might also be able to treat conditions as devastating to society as Alzheimer’s disease – an affliction involving 6 million Americans, which costs the US $350 billion a year to manage.
NervGen should complete the Phase 1b/2a trial later this year, which includes a post-trial evaluation. The trial will involve 20 people, who each receive a once-a-day injection for 12 weeks. Half receive the drug candidate and the other half receive a placebo.
It’s statistically significant that more than just the one trial volunteer is making what is being referred to as exciting progress by Meghan Morrow, who is the project manager for NervGen’s trial.
This was Morrow’s assessment when she was being interviewed last December on Louise Phipps Senft’s podcast about NervGen. And even though Morrow is professionally obliged to keep her cards close to her chest about the trial’s progress, she did offer the following tantalizing insight as to its possible outcome.
“It is a double-blind trial. So no one knows anything, except the pharmacist … But I will say that obviously there is speculation when we see individuals making gains. And then we get really excited …”
Key investment takeaways
A few savvy investors were quick to digest the implications of this podcast’s revelations, and the share price shot up accordingly on heavy volume soon after it aired. But now the stock is settling down again on normal volume, forming a new, higher price base ahead of its next anticipated up-leg. Whether that happens before or after the announcement of Phase 1b/2a trial results remains to be seen.
For now, NervGen continues to remain under the radar for most investors due to the company’s low-key public profile. The stock is accordingly still undervalued considering how far NervGen has come in validating the efficacy of NVG-291. And the prospect of continued success in human trials would surely send the company’s share price surging to new multiples.
It’s also worth remembering that the U.S. federal government is encouraging NervGen’s progress too with its recent awarding of a Fast Track designation for trials. But this may not be such a surprise development to NVG-291’s co-inventor, Dr. Jerry Silver. He was quoted on a different podcast in late November 2023 as saying that he expects human trial volunteers to respond as quickly to treatment as the animals did, which produced remarkable results within just a few weeks.
“Now when we give the peptide or the enzyme, those connections that are smothered wake up very rapidly. Do you remember when you asked me how long it would take for people to get better? And I said it would happen very quickly within weeks. That’s what we’ve seen,” Silver said.
The following few months promise to be last chance for investors to see NervGen remain undervalued and largely overlooked by most risk-tolerant investors. But if paralyzed trial volunteers keep improving, the announcement of such stunning results later this year would surely thrust NervGen in the investment limelight – setting the stage for a remarkable performance.
Disclosure:
The author of this article or members of his household or family, do not own shares in NervGen at this time. However, he may from time to time buy or sell shares in companies that are profiled in his various investment articles. Additionally, he is not compensated by the company directly or indirectly. His commentary is therefore based solely on his personal research and understanding of the life sciences sector. It is not intended as investment advice.
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