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SCPH - Bull Thesis

  • Writer: BPIQ
    BPIQ
  • Jul 22, 2022
  • 3 min read

SC Pharma, is a microcap ($150M market cap) biopharma company with an Oct 8, 2022 PDUFA date. "SC" stands for subcutaneous and SCPH has a simple business model of inventing new formulations for well-established drugs that allow them to be delivered at home using subcutaneous devices, instead of at the hospital in an IV. This saves the healthcare system lots of money, saves hospitals from potentially losing money using hospital beds for patients that are in heavily cost-sensitive Medicare reimbursement situations, and let's patients remain home instead of in the hospital.

SCPH's first drug/device is FUROSCIX, which is a patented pH neutral formulation of the well-established diuretic furosemide for treatment of fluid retention in heart failure patients, delivered with a West Pharma wearable SC delivery device that is already approved for delivery of another drug. The addressable market is large, into the billions of dollars. Safety and efficacy of the drug/device has looked very good (at least as good as IV furosemide) and appears to already have been blessed by the FDA in prior approval cycles.

See our full Bull thesis below.


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Bull Thesis

  • Corporate

  • Focus on products against validated targets, designed to reduce healthcare costs

  • Leverage FDA 505(b)(2) (reduced trial requirement) pathway

  • Board includes insurance provider

  • High value play since MC/EV less than $150M with large market therapeutic possibly approved within 3 months

  • May see stock runup as PDUFA date gets closer especially if distribution partners announced

  • May see positive stock move if commercial partner announced^

  • FUROSCIX

  • Drug device combo for biphasic delivery of widely used diuretic furosemide for treating heart failure (HF)

  • Wearable delivery system for home use

  • Large ($5.9B) market opportunity in the US

  • Commercial positioning statement is simple and strong^^

  • Could be approved on/by PDUFA (10/8/22)

  • Significant cost savings for payers/hospitals by reducing patient hospital admission/readmission rates

  • $11,840 (to $20,000) vs. $2,800

  • Greater cost reduction shown in FREEDOM HF trial^^^

  • Efficacy and safety look very good

  • Pharmacokinetics look very similar to IV delivery

  • FDA has had no issues with efficacy or safety

  • Although has received 2 CRLs

  • no efficacy or safety issues - no new clin trials required;

  • Switched to West drug delivery system (1/29/19 Source) after 1st CRL

  • West system already approved for another drug/delivery

  • SCPH reported that all required testing from last CRL is complete^^^^

  • SCHP reported not anticipating any issues with West plant inspection because already approved for another drug/device^^^^^

  • Can cover >$2B market with only 40 sales reps

  • SCPH states patent coverage thru 2034

  • scCeftriaxone

  • 2nd major drug/delivery asset for SCPH

  • $4.5B market opportunity

  • Well established broad-spectrum antibiotic


EV/JM 7/22/22


Footnotes:

Bull (footnotes)

^CEO did not rule out possibility of commercial partnership announcement on recent investor call (Jefferies Healthcare investor call (June 2022))

^^Positioning statement is simple and strong:

FUROSCIX provides IV-equivalent diuresis at home, when it’s needed and where it’s wanted, to reduce heart failure hospitalizations and lower costs •When oral diuretic bioavailability declines, regain fluid control with FUROSCIX treatment at home •Avoid heart failure admissions and reduce readmissions due to fluid overload by intervening with FUROSCIX at home

^^^FREEDOM trial - HF

  • Stopped earlier due to efficacy success

  • Primary endpoint health care costs

  • Hospital vs furoscix: $35K vs $7.5K

  • High efficacy was demonstrated too, as expected

^^^^“We believe the NDA addresses all concerns and questions raised in the Complete Response Letter that we received from the FDA in December 2020. As a result, we are preparing for a commercial launch of FUROSCIX, if approved, in the fourth quarter of this year.” Source

^^^^^CEO stated on Jefferies Healthcare investor call (June 2022)

MV 7/22/22


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