Acurx Pharmaceuticals, Inc. (NASDAQ: ACXP) may be one of, if not the, most undervalued small-cap biotech stocks in the market. Sure, that's a bold assessment, but considering what ACXP is doing and how far along they are in that process, it's one that's justified. In fact, this year has been so transformative to the growth of ACXP that the value proposition is simply too big to ignore.

And not all investors are. Acurx shares surged higher by 10% earlier this month after it reached yet another milestone in its mission to bring a better and desperately needed C. difficile drug to market. That update highlighted its first patient enrolled in its Phase 2b clinical trial of ibezapolstat, its lead antibiotic candidate, against the standard of care to treat CDI, vancomycin. For most biotechs, that would mean that's the first of potentially thousands of patients needed to advance the trial. That's not the case for ACXP. They only need 63 more from a subset of patients that won't be hard to find.

Moreover, chances are they will be chomping at the bit to get into the study with no current treatment on the market able to effectively cure the C. diff's debilitating effects without recurrent infection. Not only that, they would be enlisting with science and hope on their side, with ACXP already posting stellar Phase 2a results that showed a 100% cure and 100% sustained cure after follow-up.

In fact, results were so compelling that an independent Data Oversight Committee recommended the company stop its 2a trial early and head straight into its Phase 2b study. That's what they did.

Video Link: https://www.youtube.com/embed/t9OuRThacR4

Ibezapolstat Shows Front-Line Potential

And the hits keep coming. The FDA granted QIDP and Fast Track Designations to prioritize review for its ibezapolstat candidate. If approval is expedited, it will help replace the C. diff drug Vancomycin that, at best, quiets symptoms short term. It certainly doesn't cure it in many cases with a 20-40% recurrence rate. ACXP's ibezapolstat, however, is proving that it can.

To date, they have the data to back up that claim. And if results from its Phase 2b trial, which should get published by the second halfof 2022, confirm the robust 2a data, ACXP stock would undoubtedly see an exponential surge in value. Deservedly so.

Moreover, confirmatory data could present several opportunities on the financial side, with legislation like the Pasteur Act and a Big Pharma investment program a conduit to potentially millions of dollars in funding to help accelerate development. Keep in mind, there's no shortage of interest in rooting on ibezapolstat, especially with the C. difficile bacteria high on the Centers for Disease Control and Prevention (CDC) Urgent Threat list. Thus, getting this life-saving drug to market can be a joint effort priority.

The better news is that ACXP has a running start to make that happen, and they aren't short on confidence about ibezapolstat's potential. Robert J. DeLuccia, Executive Chairman of Acurx, said, "With the excellent clinical results and very good safety and tolerability demonstrated in the Phase 2a segment of this ongoing trial, we validated the bacterial pol IIIC enzyme as a therapeutic target for ibezapolstat, our first product candidate in our new class of antibiotics. Additionally, this trial segment showed potentially beneficial effects of ibezapolstat on the intestinal microbiome and bile acid metabolism."

Keep in mind that companies tend to be a bit reserved when talking to the markets. But, they can allow data to shout from the rooftops when it's good enough. ACXP's is.

ACXP Passes Go, Moves Directly To Phase 2b Trial

Compellingly good. The completed Phase 2a segment of its trial enrolled, treated, and evaluated 10 subjects from study centers in the United States with diarrhea caused by C. difficile. Those patients were treated with ibezapolstat 450 mg orally, twice daily for 10 days, and each was followed for recurrence for 28± 2 days. Here's where it gets interesting. Per protocol, after 10 patients of the projected 20 Phase 2a patients completed treatment, the Trial Oversight Committee and Scientific Advisory Board assessed the safety, tolerability, and efficacy and recommended early termination of the Phase 2a study and a move directly to a Phase 2b trial. The Scientific Advisory Board includes the three infectious disease experts that write the IDSA treatment guidelines for C difficile.

And it wasn't a split decision. The Scientific Advisory Board (SAB) and Trial Oversight Committee unanimously supported the early termination of the Phase 2a trial after evaluating results from just 10 patients of the 20 planned to treat. Better said, they only needed to see half the planned enrollment to make a significant conclusion. Of course, ACXP's ibezapolstat earned the acceleration.

The early termination was based on the evidence of meeting the primary and secondary endpoints of eliminating the infection (100%), with no recurrences of infection (100%) and an acceptable adverse event profile. Further, except for the enrollment size, the 2b trial is expected to do much of the same, and that's excellent news for ACXP based on prior data.

There's even better news. The trial is a speedy one. Treatment cycles are only about 40 days in duration, and topline data follows pretty quickly. Moreover, with this double-blind, randomized, active-controlled, non-inferiority, Phase 2b segment conducted at 12 U.S. clinical trial sites, total enrollment may come sooner than planned.

That would be excellent news for ACXP, investors, and patients. For those liking specifics, the trial design is evaluating the clinical efficacy of ibezapolstat in treating CDI, including pharmacokinetics and microbiome changes from baseline. It will continue to test for anti-recurrence microbiome properties seen in the Phase 2a trial, including the treatment-related changes in alpha diversity and bacterial abundance and effects on bile acid metabolism.

Notably, it's going head to head with the current standard of care and front-line treatment, Vancomycin. And that's why investors need to take notice sooner rather than later. If ibezapolstat bests vancomycin, which 2a results showed, there will likely be little to no resistance by treating physicians to use the drug asap after approval.

Here's how the showdown will go.

Drug To Drug Comparison Phase 2b

The new trial is a double-blind, randomized 1:1 ratio to either ibezapolstat 450 mg every 12 hours or vancomycin 125 mg orally every 6 hours, in each case, for 10 days and followed for 28 ± 2 days following the end of treatment for a recurrence of CDI. The two treatments will be identical in appearance, dosing times, and the number of capsules administered to maintain the blind.

As noted, the Phase 2b clinical trial endpoints include results evaluating pharmacokinetics (P.K.) and microbiome changes and will continue to test for anti-recurrence microbiome properties, including the change from baseline in alpha diversity and bacterial abundance, especially overgrowth of healthy gut microbiota Actinobacteria and Firmicute phylum species during and after therapy. If the non-inferiority of ibezapolstat to vancomycin is demonstrated, further analysis will be conducted to test for superiority.

Remember this, though. While the trial language is difficult to understand, what isn't is that Phase 2a data demonstrated complete eradication of colonic C. difficile by day three of treatment with ibezapolstat as well as the observed overgrowth of healthy gut microbiota, Actinobacteria and Firmicute phyla species, during and after therapy. That's not all.

Importantly, emerging data also show an increased concentration of secondary bile acids during and following ibezapolstat therapy, which is known to correlate with colonization resistance against C. difficile. A decrease in primary bile acids and the favorable increase in the ratio of secondary-to-primary bile acids suggest that ibezapolstat may reduce the likelihood of CDI recurrence compared to vancomycin. That adds more firepower to its profile.

It's especially compelling because while C. difficile can be a normal component of the healthy gut microbiome; when the microbiome is thrown out of balance, the C. difficile can thrive and cause an infection. After colonization with C. difficile, the organism produces and releases the main virulence factors, the two large clostridial toxins A (TcdA) and B (TcdB). TcdA and TcdB are exotoxins that bind to human intestinal epithelial cells and are responsible for inflammation, fluid, and mucous secretion, as well as damage to the intestinal mucosa. Ibezapolstat inhibits and may even entirely shut down their survival.

Ibezapolstat temperament toward bile acids is also important. These bile acids perform many functional roles in the G.I. tract, with one of the most important being the maintenance of a healthy microbiome by inhibiting C. difficile growth.

Primary bile acids, secreted by the liver into the intestines, promote germination of C. difficile spores and thereby increase the risk of recurrent CDI after successful treatment of an initial episode. On the other hand, secondary bile acids, produced by the normal gut microbiota through the metabolism of primary bile acids, do not induce C. difficile sporulation and protect against recurrent disease.

Notable, too, ACXP highlights that since ibezapolstat treatment leads to minimal disruption of the gut microbiome, bacterial production of secondary bile acids continues, which may contribute to an anti-recurrence effect. Bottom line- ibezapolstat has an impeccable report card to date.

Ibezapolstat Targets A Massive Medical Need

Most importantly, its results can lead to a better treatment, which is desperately needed. According to a 2017 Update (published February 2018) of the Clinical Practice Guidelines for C. difficile Infection by the Infectious Diseases Society of America (IDSA) and Society or Healthcare Epidemiology of America (SHEA), CDI remains a significant medical problem in hospitals, in long-term care facilities and in the community. In fact, C. difficile is one of the most common causes of health-care-associated infections in hospitals, according to an article published in the New England Journal of Medicine. And the number of infections is substantial.

Estimates suggest C. difficile approaches 500,000 infections annually in the U.S. and is associated with approximately 20,000 deaths annually. Based on internal estimates, ACXP places the recurrence rate of two of the three antibiotics currently used to treat CDI at between 20% and 40% among approximately 150,000 patients treated. They also note they believe the annual incidence of CDI in the U.S. approaches 600,000 infections and a mortality rate of roughly 9.3%. Hence, it's a big problem that requires a better solution. Ibezapolstat may be the answer needed.

If so, investors are wise to expect a more appropriate share price valuation to follow in tandem with trial updates. There is, after all, an enormous valuation disconnect when comparing ACXP to peers doing similar studies, and here's an example.

Despite ACXP posting a substantially more compelling efficacy and safety profile than competitor Summit Therapeutics (NASDAQ: SMMT) C. difficile treatment candidate, ACXP is trading at about 1/10th the market cap of SMMT. Thus, the term "undervalued opportunity" more than applies to ACXP; it's a case study for proper use of the term. Still, the excellent thing about markets is that their imperfections in valuing companies also expose opportunities.

Acurx Positions For A Breakout In 1H/2022

And ACXP is one in play. Moreover, it comes with a side-by-side comparison to justify an 840% increase in market cap by matching SMMT. Sound unreasonable? It's not, and here's why.

ACXP's ibezapolstat proves to be a better treatment candidate in every measure to date. And more than that, it's leveraging a treatment profile that could lead to ibezapolstat potentially owning the C. difficile treatment market once approved. That's no exaggeration, either. The market needs better treatment options, and physicians would have every reason to respond favorably.

Thus, the value proposition in ACXP is more than attractive; it's compelling. And with topline results expected in about two quarters, being in the ACXP trade may be substantially more advantageous than not. With best-in-class Phase2a data in hand and a billion-dollar treatment market in play during 2022, that indeed may be the appropriate strategy for those wanting biotech exposure.

Consider this, too. There's not a whole lot of opportunities to invest in a biotech company whose trial only lasts about a month. Moreover, few are heading into that trial as well-positioned as ACXP. Taking that into account and knowing that a Phase 3 company can add multiples to a share price, at current levels, and even higher ones for the procrastinators, ACXP has exposed a trade opportunity too big to ignore.

Thus, the simplest way to respond is to not.

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