First Wave BioPharma (NASDAQ: FWBI) has reached another milestone, commencing its Phase2b trial evaluating topical niclosamide to treat ulcerative proctitis and ulcerative proctosigmoiditis. The news takes the FWBI value-proposition from excellent to compelling.

Pre-market on Thursday, FWBI announced dosing the first patient in a Phase 2b clinical trial investigating a topical formulation of niclosamide (FW-UP) as a potential treatment for patients with ulcerative proctitis (UP) and ulcerative proctosigmoiditis (UPS). UP and UPS are two types of ulcerative colitis, a chronic inflammatory bowel disease (IBD) consisting of fine ulcerations in the inner mucosal lining of the large intestine that do not penetrate the bowel muscle wall. UPS causes inflammation in the colon and rectum, while UP is confined only to the rectum. Both are debilitating and can cause life-threatening complications.

The milestone brings FWBI a step closer to getting to the market a potentially new therapeutic option for people suffering from UP and UPS, two debilitative GI diseases that often impacting young children and the elderly and for which there is no cure. The program also expands its development program for niclosamide to multiple ulcerative colitis indications, targeting a significant and growing patient population. In the U.S. last year, there were more than 825,000 ulcerative colitis diagnoses, with the combined annual UP and UPS treatment opportunity reaching about $5 billion.

The better news is that its proprietary formulations of niclosamide could expedite FWBI's intent to tap into that lucrative market. And with a proven safety profile and non-systemic mechanism of action, it could reduce or eliminate the need for steroids and immunomodulators entirely. That's a significant advantage over current standards of care.

The Phase 2b trial is a placebo-controlled study that will enroll up to 28 patients to compare FW-UP, administered as an enema twice daily at a dose of 450 mg, to placebo enemas twice daily. It builds on preliminary data from a previous Phase 1b trial evaluating a low-dose and a Phase 2a high-dose of FW-UP in patients with UP and UPS. 

Results to date are excellent, with the first 17 patients treated in the low-dose cohort showing niclosamide to be well tolerated, with a durable therapeutic effect and a clinical remission rate of 59%. Although these initial trial results should be considered "early-stage data," it compares favorably to the rates of 38% to 44% reported for the commonly used steroid, budesonide.

Enhanced Pipeline Targeting Multiple GI Conditions

But, that's only one opportunity in play from FWBI's recently enhanced pipeline of compelling treatment candidates. And the better news is that with its treatment trials relatively short term in duration, getting potentially best-in-class drugs to market can happen faster than typical decades-long trials. Further, with multiple ongoing trials and an impressive IP portfolio, FWBI is better positioned than ever to create long-lasting shareholder value.

Better still, after combining its assets with AzurRx last month, FWBI is now advancing one of the most promising and comprehensive clinical-stage programs to develop novel, gut-targeted, small molecule therapies for autoimmune inflammatory bowel diseases (IBD) and other severe conditions. And more than promising, its programs target a substantial patient population.

Even better, FWBI has no intention of slowing down. On the contrary, its clinical-stage pipeline is advancing new treatment candidates targeting additional IBD indications that bring more multi-billion dollar commercial market opportunities into its crosshairs. 

As noted, since last year, more than 825,000 ulcerative colitis diagnoses and 625,000 Crohn's disease diagnoses were made. And that's in the United States market alone. Moreover, while these markets are substantial today, these patient populations and needs are expected to surge over the next decade. If so, and if its trials deliver intended results, FWBI can become a revenue-generating juggernaut. 

Novel Treatments Using The Power Of Niclosamide

And it would be well-deserved. Its proprietary formulations of niclosamide, whose novel anti-inflammatory mechanism of action, non-systemic absorption, and safety benefits show extraordinary potential to treat significant unmet clinical needs for IBD patients, especially in the mild-to-moderate disease categories. More than exceptional, in fact, their treatment has the potential to quickly become front-line treatments to patients suffering debilitating IBD symptoms.

If that wasn't enough, FWBI owns a massive amount of IP as well, which not only complements the value of its programs but opens the door to strategic opportunities, including licensing, partnerships, or even asset sales. Keep in mind, FWBI has kept no secrets about its willingness to monetize assets if the price is right. Hence, investors shouldn't necessarily consider the end result of a clinical trial as being the only potential value driver. The reality is that up to hundreds of millions, milestone payments included, could be in play from Big Pharma or other interested parties wanting to take over a trial. 

Thus, with volumes of IP, FWBI could generate a headline event sooner than many expect. Keeping a core position in FWBI, therefore, makes sense. 

Actually, with all in play, that would be a wise consideration. After all, the coming weeks and months could include several clinical updates. Each could drive valuations significantly higher. And with all eyes on niclosamide as a potential best-in-class front-line treatment against GI-related conditions, share price pressure to the upside could come from multiple directions.

Still, while the blue sky valuation is indeed a bullish proposition, the potential rewards from a development pipeline that includes three new clinical IBD indications in ulcerative proctitis (UP) and ulcerative proctosigmoiditis (UPS), ulcerative colitis (UC), and Crohn's disease (CD) is the ultimate investor power play.

The more excellent news- there's still more to like.

Advancing Compelling Antiviral Studies And Platforms

First Wave BioPharma is also leveraging its wealth of data supporting niclosamide's antiviral and anti-inflammatory capabilities. The excellent news here is that recent data in treating ulcerative proctitis supported the broader potential for niclosamide in multiple inflammatory bowel diseases, where FWBI expects its niclosamide formulations to offer significant advantages over other currently available treatments. And that includes comparisons to steroids, 5-ASAs, and biologics – especially in the mild-to-moderate disease stage. 

Better still, FWBI believes its orally delivered niclosamide formulations can be a treatment game-changer by explicitly targeting areas of the GI tract where the disease-causing inflammation occurs. In doing so, the risk of steroid-related immunosuppressant complications is mitigated or even avoided altogether. And as far as manufacturing goes, FWBI has that covered, too, with scalable manufacturing processes in place to quickly produce niclosamide products to meet the needs of large populations. 

The best news from an investment perspective is that FWBI has multiple shots on potentially massive revenue-generating goals. Its pipeline interest in the IBD therapeutic space spans six indications, all making progress in clinical-stage programs. And from a cost perspective, which is the usual worry of biotech investors, the news is good as well. 

Its programs are built around its two proprietary technologies -- niclosamide, and adrulipase (FW-EPI), which, by the way, show promise in treating exocrine pancreatic insufficiency (EPI), a life-threatening digestive disorder seen in patients with cystic fibrosis and chronic pancreatitis. 

Thus, the news of its Phase2b trial launch is excellent, and the stock should attract new interest. However, it's the totality of FWBI that investors should focus on and understand that headlines from any of its ongoing programs have the potential to send its share price soaring. 

Indeed, there is much to like about FWBI. And while biotech stocks have an inherently higher risk, they can also deliver substantially higher rewards after success. Hence, the bottom line is clear- with multiple clinical trials advancing and others starting soon, along with a robust portfolio of long-lasting patents protecting niclosamide use for COVID-19 GI infections, ICI-AC, and the IBDs, FWBI stock is a near, short, and long-term keeper.

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