RedHill Biopharma sees growing revenues and significant progress in its pipeline that's more than a COVID-19 play

With the world’s focus currently on COVID-19, you might be forgiven for thinking that RedHill Biopharma Ltd's (NASDAQ:RDHL) (FRA:2RH) development of a promising Covid treatment is the only thing that matters for this interesting company. But this would be far from the truth as the specialty biopharmaceutical company has three gastrointestinal (GI) products already on the market and a strong pipeline of late-stage drug candidates. “We're really at an inflexion point, both R&D-wise and commercially,” explains Guy Goldberg, RedHill’s Chief Business Officer. He starts with opaganib, also known as Yeliva. It is an oral treatment whose antiviral, anti-inflammatory and recently demonstrated anti-thrombotic activities look to hold promise for the treatment of severe cases of COVID-19. READ: RedHill Biopharma says its Phase 2/3 COVID-19 drug candidate opaganib reduces thrombosis in preclinical study Some encouraging signs of efficacy were seen from a small group of hospitalized severely ill COVID patients given opaganib under compassionate use and also impressive pre-clinical data showing the drug completely inhibits viral replication. But now it is down to the clinical trials to prove the point, with a phase II/III global study more than half-way done, while a US phase II trial is already fully enrolled with top-line data expected very shortly by the end of the year.  If the late-stage clinical trials come close to the results seen in the compassionate use program, RedHill could be onto a winner. None of the patients treated with opaganib under compassionate use required mechanical ventilation compared with 33% of the case-control group. The median time to weaning off oxygen was also reduced by a third in the opaganib patients, down from 15 to 10 days. As Goldberg points out: “The preclinical data and the compassionate use data give us confidence - they are supportive that the drug should work in COVID patients, and now we have to prove it in these two clinical studies.” Production of opaganib is being ramped up with the company hoping to receive the green light for the drug’s emergency use in the first quarter of next year, if the studies are successful. While wholesale vaccination programs are set to get underway worldwide in the coming weeks, it will take considerable time before a majority of people are vaccinated and it is unlikely infection rates will fall immediately. And even when they do, disease mutation and the threat of a new strain closely related to SARS-CoV-2 could see drugs such as opaganib stockpiled. “We've been signing partnerships with manufacturers in Canada, in the US and Europe, so we have plans to scale up; we have plans to have supplies in place quickly,” says Goldberg. Mentioned earlier was the fact the company has three GI products on the market – Movantik, Talicia and Aemcolo – supported by a sales team of 100 and additional field support team of 30. “Movantik was bought in from AstraZeneca in April and is the category leader for opioid-induced constipation. After two quarters of RedHill promotion, prescription trends are positive and, we are working hard to continue that trend,” says Goldberg. “AstraZeneca did a great job of launching Movantik and establishing it as number one drug in its class. Our goal is to build on that success, and to grow the revenues and expand the patient-doctor base. There is still a lot of education that can be done regarding the value of Movantik.” Talicia, meanwhile, was developed in-house to treat an infection of the stomach called Helicobacter pylori (H. pylori), which is very common but not always effectively treated, often due to antibiotic resistance, which this all-in-one capsule addresses.  The worldwide addressable market is close to $5 billion and Talicia’s ability to grab a significant chunk of global sales will be enhanced if it is adopted as the standard of care for H.pylori. “We believe that the data behind this product is clear, and supports its use as the new standard of care in eradicating H.pylori. The potential there is enormous,” says Goldberg.  Aemcolo, for travelers’ diarrhea, is also a promising drug that will come into its own when international travel restrictions are lifted.  Turning to the pipeline, the start of a Phase 3 study of RHB-204 in pulmonary NTM disease is exciting. “With no FDA-approved first-line therapy for this difficult-to-treat orphan disease, we believe we can bring an important and valuable first-line therapy to patients in need,” the RedHill Chief Business Officer says.  Equally interesting is RHB-104 for Crohn’s disease. “This is a unique program with a new approach to treating this terrible disease and it has already delivered impressive Phase 3 data. This is definitely one to keep an eye on in the near future. These are just two programs that underline our focus and ambition in gastrointestinal and Infectious diseases,” Goldberg explains. It doesn’t end there. With six late-stage drug candidates in development advancing through the pipeline for a range of conditions such as COVID-19, gastroenteritis, NTM disease, IBS and cancer, together with growing revenue-generating commercial products, the platform is strong and exciting. Turning to the financials, nine-month results pointed to a picture of sustainable growth as revenue increased to $43 million from $4.7 million a year earlier. Goldberg expects RedHill to become operationally profitable on a quarterly basis as early as 2021. Analysts at Edison are predicting the company will deliver $137 million sales and a $3.2 million pre-tax profit next year. “Commercially, we are on the right trajectory,” says Goldberg. Around him is an experienced team, many of whom have been here before with a company called Salix Pharmaceuticals, which had significant success in the gastrointestinal space before being acquired by Canada’s Valeant in 2014. “In building our team we have been able to tap into a pool of very talented GI commercial executives that built Salix from a very small company to a multi-billion-dollar business,” says Goldberg. “RedHill aims to follow that lead and become a leading specialty pharma company in the US.” Disclaimer: This content has been provided pursuant to an agreement under which RedHill Biopharma pays an annual fee to the publisher.(https://www.proactiveinvestors.com/pages/terms)