By David Bautz, PhD

NASDAQ:NRBO

READ THE FULL NRBO RESEARCH REPORT

Business Update

SAD Part 1 of Phase 1 Trial Data Expected in 3Q24

NeuroBo Pharmaceuticals, Inc. (NASDAQ:NRBO) is currently conducting a Phase 1 clinical trial of DA-1726 for the treatment of obesity. DA-1726 is a novel oxyntomodulin (OXM) analogue that functions as a dual agonist of the GLP-1 receptor (GLP-1R) and the glucagon receptor (GCGR). Part 1 of the trial is a single ascending dose (SAD) study that enrolled 45 obese but otherwise healthy participants randomized into one of five planned cohorts in a 6:3 ratio of DA-1726 or placebo. Part 2 of the trial is a multiple ascending dose (MAD) study that is expected to enroll approximately 36 obese but otherwise healthy participants into four planned cohorts, with each to receive four weekly administrations of DA-1726 or placebo, randomized in a 6:3 ratio. The primary endpoint will assess the safety and tolerability of DA-1726 with secondary endpoints examining the pharmacokinetics (PK) of DA-1726. Exploratory endpoints include the effect of DA-1726 on metabolic parameters, cardiac parameters, fasting lipid levels, body weight, waist circumference, and body mass index. Topline results from Part 1 of the study are anticipated in the third quarter of 2024 while topline results from Part 2 are expected in the first quarter of 2025.

Following clearance of the updated IND application with the FDA, we anticipate Part 3 of the Phase 1 trial initiating in the third quarter of 2025 and an interim data readout in mid-2026 and topline results being reported in the second half of 2026. The following slide provides an overview of Part 3 of the trial, which will evaluate early proof of concept and maximum titratable dose of DA-1726.

Joint Research Agreement to Develop Once-Monthly Formulation of DA-1726

On August 6, 2024, NeuroBo announced a joint research agreement, together with Dong-A ST Co. Ltd. and ImmunoForge, to develop a long-acting, once-monthly formulation of DA-1726. ImmunoForge’s elastin-like polypeptide (ELP) platform technology is comprised of individual building blocks derived from a five-amino acid repeat motif found in the human protein elastin. The five-amino acid motif is repeated multiple times to form an ELP biopolymer and this biopolymer can then be covalently attached to a peptide or protein of interest. The ELP fusion proteins undergo a temperature-dependent phase transition, where at lower temperatures the ELP fusion proteins are completely soluble but at warmer temperatures (e.g., body temperature) the ELP fusion proteins are in a gel-like state, resulting in an extended circulating half-life and exposure of active molecules for extended periods of time.

Financial Update

On August 14, 2024, NeuroBo announced financial results for the second quarter of 2024. As expected, the company did not report any revenues in the second quarter of 2024. R&D expenses for the second quarter of 2024 were approximately $8.1 million compared to approximately $2.4 million for the second quarter of 2023. The increase was primarily due to higher expenditures for investigational drug manufacturing costs, non-clinical and preclinical services, clinical trials, and consulting. G&A expenses were approximately $2.0 million for the second quarter of 2024 compared to $1.4 million for the second quarter of 2023. The increase was primarily due to higher non-cash stock-based compensation and higher employee compensation.

As of June 30, 2024, NeuroBo had approximately $27.9 million in cash and cash equivalents. We anticipate the company currently has sufficient capital to finance operations into the second quarter of 2025. Assuming positive results from the MAD Part 2 portion of the Phase 1 trial, we expect the Series A warrants from the June 2024 financing could be exercised in the first half of 2025 resulting in gross proceeds of $20 million.

As of August 9, 2024, NeuroBo had approximately 8.5 million shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 23.3 million.

Conclusion

We look forward to the results of the SAD portion of the Phase 1 trial of DA-1726 in the third quarter of 2024 and topline results from the MAD portion of the Phase 1 trial of DA-1726 in the first quarter of 2025. Following the recent financing the company should be in a position to have the financial resources to fund operations through the end of Part 3 of the Phase 1 trial, assuming the exercise of the milestone-based warrants. With no changes to our model our valuation remains at $22 per share.

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