Hoth Therapeutics (NASDAQ:HOTH) could see a huge move to the upside

Hoth Therapeutics (NASDAQ:HOTH), a clinical stage biopharma companies are well-known for having certain standard characteristics, such as no revenues, a constant ongoing cash burn from research investments, consistent fundraises, and a pipeline consisting of one or two drug candidates that could make or break the game. Few development-stage biotech players have the know-how or even the resources to have an immensely diverse pipeline of drugs in clinical trials or pre-IND (Investigational New Drug) stages in such a way that the relative risk for a biotech investor is significantly lower due to pipeline diversification. Today we will take a deep dive into one such player that is dedicated to discovering, researching, and developing early-stage therapeutics to revolutionize the ways through which diseases are managed and treated.

Company Overview

Hoth Therapeutics is a clinical-stage biopharmaceutical company focused on developing next-generation therapies for various blue oceans in the biotech industry. Its pipeline contains nearly nine drugs that can treat a wide range of diseases, including atopic dermatitis, chronic wounds, and skin toxicities associated with cancer therapy, psoriasis, acne, pneumonia, and asthma. In addition, the company has entered into agreements to progress the development of therapeutic prospects for the prevention or treatment of Covid-19. Hoth Therapeutics’ pipeline includes the BioLexa lotion (eczema and skin conditions), HT-002 and VaxCelerate (Covid-19), HT-003 (acne/ psoriasis), HT-001 (skin toxicity associated with EGFR inhibitors), HT-004 (asthma and allergies), HT-005 (cutaneous lupus), HT-KIT (cell-derived cancers and anaphylaxis), and HT-006 (VAP/HAP). The company pursues scientific research to find the best indications for each asset and seeks partnerships with leading pharmaceutical companies to bring the therapies to market.

Hoth Therapeutics (NASDAQ:HOTH) could see a huge move to the upside

The above snapshot is an accurate depiction of the progress of Hoth’s current pipeline. It is worth highlighting that the company already has license agreements with the George Washington University, Isoprene Pharmaceuticals, the University of Maryland, Chelexa BioSciences, North Carolina State University, University of Cincinnati, a partnership agreement with Zylö Therapeutics, and a research collaboration agreement with Weill Cornell Medicine. This New York-based company was founded in 2017.

The BioLexa Lotion

The BioLexa lotion is one of the most critical elements of Hoth Therapeutics’ pipeline and the reason why it has recently been in the news. It is the company’s patented and proprietary antimicrobial topical formulation for treating diseases mediated by staphylococcal biofilms. Bacterial biofilms are specialized communities made up of bacteria that adhere to biological and abiotic surfaces as well as bacteria that have a protective extracellular matrix. Bacterial biofilms that have matured cause chronic and recurring infections that are difficult to treat. Hoth Therapeutics’ BioLexa formulation is a novel combination of two previously approved compounds targeting the underlying staphylococcus aureus infection that is hypothesized to potentiate atopic dermatitis or eczema flares. The first compound inhibits biofilm formation, protecting against underlying disease and allowing the second compound, an antibiotic, to treat the underlying conditions effectively. On December 9, 2020, the BioLexa Lotion received HREC approval to conduct a Phase 1b clinical trial in Australia. The site recruitment is complete, and the company has finished dosing Cohort 1. According to the interim safety review of BioLexa, it was well tolerated, with no serious adverse effects and no drug-related treatment-emergent adverse events observed. The Cohort 2 submission and screening of BioLexa is expected to begin in the autumn of 2021, and management is encouraged by the promising results thus far.

Hoth Therapeutics (NASDAQ:HOTH) could see a huge move to the upside

The above snapshot shows the design for BioLexa’s Phase 1b study. It is worth highlighting that the global market for atopic dermatitis is expected to nearly triple from $6.4 billion in 2017 to $18.3 billion by the end of 2027. Overall, BioLexa appears to be the most promising product in Hoth’s pipeline, with a high potential to be licensed out soon or leading to the company being acquired by big pharma.

The HT-001 Offering

Hoth Therapeutics’ second core drug which is at advanced stages, is the HT-001 treatment for cancer patients suffering from cutaneous toxicities (skin, nails, scalp) caused by EGFR inhibitor therapies. The company successfully completed the formulation for HT-001 with the assistance of Scientific Advisor Board Members Dr. Jonathan Zippin, Dr. Adam Friedman, and Dr. Mario Lacouture to ensure that the key inputs in the formulation development were patient-focused attributes. The HT-001 formulation contains a proprietary excipient blend that promotes skin barrier function after application. Moreover, the company completed the pre-IND submissions in December 2020 and received the pre-IND WRO from the US FDA in February 2021. Hoth began IND-enabling studies in the second quarter of 2021, intending to begin an IND application/clinical trial by the beginning of 2022. It is predicted that the EGFR Inhibitor Skin Toxicity market will double over 7 times from $52 million in 2018 to $391 million by the end of 2030. The management’s studies show that HT-001 topical application significantly reduces erlotinib-induced cutaneous toxicities, implying that EGFR inhibitor-induced cutaneous toxicity can be treated with HT-001 as a topical intervention.

Hoth Therapeutics (NASDAQ:HOTH) could see a huge move to the upside

Currently, the market lacks a product that explicitly treats EGFR inhibitor cutaneous toxicities, which occur in nearly 90% of patients who receive EGFR inhibitor therapy. The animal study that looked into the efficacy, safety, and tolerability of topical HT-001 to treat skin toxicities caused by EGFR Inhibitors found that administering HT-001 either orally or topically is effective in significantly reducing EGFR inhibitor-induced skin toxicities in rats. Furthermore, In-vitro permeation testing on human skin revealed high Active Pharmaceutical Ingredients (API) permeation and retention after application of the chosen HT-001 formulation. Overall, the company appears to have a very good chance of seeing significant success with HT-001 in clinical trials.

Strong Macro For Atopic Dermatitis & EGFR Inhibitors-Induced Skin Disorders

Atopic dermatitis is the most common type of eczema, impacting many of the global population. Although atopic dermatitis can appear at any age, it is most common in infants and children and gradually fades. According to some research, the market’s primary growth driver is the rising prevalence of Alzheimer’s disease. In 2016, the global atopic dermatitis drugs market was valued at USD 4.1 billion. During the forecast period, it is expected to grow at a CAGR of 6.6%. The exact cause of the condition is unknown; however, it is thought to be caused by a combination of environmental and genetic factors. Moreover, approximately 60% of patients with Alzheimer’s disease develop symptoms within the first year, and approximately 90% of patients develop symptoms by the age of five (atopic march). Also, the introduction of more biologics and small molecules, the substitution of premium-priced drugs for generic first-line and second-line therapeutics, the rising incidence of Alzheimer’s disease, and improved diagnostics are expected to fuel market growth. It is worth highlighting that the increase in awareness about the availability of treatments for the disease has aided the market’s growth in recent years. Additionally, the government initiatives to provide better and more affordable treatment, as well as the presence of favorable reimbursement policies, are likely to provide an upthrust to the market. Currently, the only targeted therapies in the market are Eucrisa and Dupixent which are gaining acceptance but one of the major impediments to the market’s growth is the high cost of therapeutics. However, affordable healthcare measures are being implemented in all major regions, influencing company pricing strategies as well as reimbursement scenarios. Given this background, we believe that BioLexa can generate huge revenues while catering to this market.

The epidermal growth factor receptor (EGFR) is a transmembrane protein that controls a variety of cellular processes. The EGFR inhibitor is a targeted antitumor agent that binds to the EGFR and inhibits its activity. It is worth highlighting that the total number of cases of EGFR Inhibitors-induced Skin Disorders was 106,119 in 2020 and is expected to grow at a CAGR of 4.37% till 2030 as per DelveInsights data. While many drugs in this class have been approved by the US FDA, the EMA, and the PMDA, they include many side effects including dermatologic toxicities such as skin rash, xerotic skin, hyperpigmentation, pruritus, nail changes, skin fissures, and mucous membranes, eyes, and hair disorders. Thus, there is immense scope for a new drug with fewer side effects like HT-001.

Recent & Upcoming Milestones For Pre-clinical Drugs

Hoth Therapeutics has a highly diversified pipeline over and above BioLexa and HT-001. It has achieved various milestones for pre-clinical drugs development in 2021 and has planned some pre-clinical programs for the upcoming years. The company’s late-stage pre-clinical programs include HT-003 (acne, psoriasis), HT-004 (asthma and allergic inflammation), HT-005 (cutaneous lupus erythematosus or CLE), and Vaxcelerate (Covid-19 vaccine). Their first pre-clinical drug development plan includes HT-003, which has shown the ability to inhibit TLR2 signaling pathway signifying that HT-003 is a potentially effective therapy for acne. More animal model studies are being conducted to investigate additional inflammatory-driven dermatological symptoms.

Hoth Therapeutics (NASDAQ:HOTH) could see a huge move to the upside

The above snapshot is an accurate depiction of the HT-003 dermal preclinical studies. For the HT-004, a mouse asthma model study shows that the candidate delivered by inhalation is effective at reducing inflammatory cell recruitment around the bronchioles, allowing for a robust therapeutic response with no signs of tissue irritation. A humanized mouse model is currently being developed in order to finalize the lead actives for further development. Their third key pre-clinical drug is HT-005 Z-Pods. Lupus rat model with cutaneous lesions revealed over 10 weeks, HT-005 Z-Pods provided a long-term therapeutic response to prevent the development of lesions. Vaxcelerate is the last pre-clinical drug in their development list. As a matter of fact, Hoth Therapeutics has made a minority investment in the development of Vaxcelerate to counter the Covid-19. In a near-GLP pre-clinical mouse study, the self-assembling vaccine constructs significantly increased both helper and cytotoxic T cell responses to the vaccine’s target antigens when compared to controls. IND-enabling studies are being planned, with a request for a pre-IND meeting scheduled for Q4 2021. If these are successful, it would result in an excellent return on investment for Hoth Therapeutics.

Strong Management Team

Hoth Therapeutics (NASDAQ:HOTH) could see a huge move to the upside

Hoth Therapeutics is spearheaded by Robb Knie who has served as Hoth Therapeutics’ President, CEO, and director, since May 2017. He also worked as the President of Lifeline Industries Inc. since its inauguration in 1995 and worked as a Semiconductor Expert for PAW Partners from 2002 to 2010. Mr. Knie was the Northeast Regional Manager of American Express Financial Advisors from 1993 to 1995. He also has been a member of the American Chemical Society, The National Alliance for Youth Sports, as well as Institute of Electrical and Electronics Engineers. Stefanie Johns, the Chief Scientific Officer of the company, joined as a full-time employee in September 2020. She is a scientific research veteran and has previously worked as the Director of Regulatory Affairs at Enable Injections, Inc., where she supervised the global regulatory strategy for the subcutaneous drug delivery device platforms. Stefanie provided strategic regulatory and development guidance on over 30 505(b)(2) drug and drug-device combination product programs spanning the Dermatology, Gastroenterology, Cardiovascular and Renal, Pulmonary, Oncology, Neurology, Anesthesiology/Pain, Urology/Gynecology, Psychiatry, and Rare Disease Divisions at FDA as a consultant at Camargo Pharmaceutical Services. Moreover, she contributed to developing the Hoth BioLexa Platform technology, scheduled to enter clinical trials in Q4 2020 and has worked with the Hoth Scientific Advisory Board since March 2019, providing strategic regulatory guidance across the pipeline portfolio.

Hoth Therapeutics has a strong scientific advisory team. Jonathan Hale Zippin, one of the senior scientific advisors is vastly experienced and has worked in general medicine at Mount Sinai Hospital in New York City, followed by a dermatology residency at Weill Cornell Medical Center – New York Presbyterian Hospital. Dr. Zippin is an Associate Professor of Dermatology as well as Pharmacology and Assistant Attending Dermatologist at Weill Medical College of Cornell. He also serves as the Vice Chair of Research for the Department of Dermatology. He is also the founder of a biotechnology company that is working on developing antibody-based cancer diagnostics. Apart from them, the company has other highly experienced team members, including Hayley Springer, the V.P. of Operations, who has over 6 years of experience in operational management and MaryBeth Jones, who joined Hoth in May 2021 as the Director of Project Management. MaryBeth led in vitro diagnostic development projects for immunoassay, molecular, and blood chemistry platforms and was also in charge of several site integrations, rebranding initiatives, lean product development initiatives, and other organizational improvement projects. Overall, it is safe to say that the company’s business is in safe hands.

Key Risks

There are a number of important risks that investors must be aware of before investing in the Hoth Therapeutics stock. For Example: The industry that Hoth Therapeutics is operating in is highly competitive, and in case the management unable to proceed with commercialization of its drugs rapidly, it will negatively impact their business and operations.

One of the biggest risks that the company is facing currently is the ongoing impact of Covid-19 around the world, because of which the Hoth Therapeutics’ research and operations could be affected materially given the rapidly spreading Delta variant. That being said, it is likely that the management encounters unforeseen expenses, complications, delays, and other unknown factors that can increase its capital needs leading to a rapid cash expenditure. Hence, there are no assurances that future funding will be available on favorable terms or at all. If the management fails to raise additional capital, they may need to reduce, defer, curtail or cease their operations, including the product design, development, and marketing.

Final thoughts

Hoth Therapeutics (NASDAQ:HOTH) could see a huge move to the upside

Given the typical volatility associated with development-stage biotech companies, Hoth Therapeutics’ stock price is low today. The biggest selling point for Hoth is its massive pipeline and the untapped market opportunities worth billions of dollars that the BioLexa lotion and the HT-001 address. The company’s intellectual property portfolio is strong, with exclusive licenses to patents and trademarks. After the recent fundraise, its balance sheet is flooded with sufficient cash to take itself through the clinical and pre-clinical programs in the current pipeline. Overall, the company appears to be an excellent choice for investors who are willing to take on some risk. The potential for reward though is huge so add this one to your watch list!

This article was written by u/SmallCapsDaily.

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