Shares in micro-cap pharmaceutical company Oxygen Biotherapeutics (OXBT) are up almost 16.75 percent in early trading on Thursday. This comes one day after the stock shot up 87.33 percent Wednesday following news that researchers at Duke University had completed a meta-analysis of 14 different studies that evaluated patients using the cardiac drug levosimendan.
Levosimendan Study Drives Oxygen Biotherapeutics Higher
Levosimendan, a calcium sensitizer created for intra-venous use in hospitalized patients with acutely decompensated heart failurewas acquired from private corporation Phyxius Pharma by Oxygen on October 21 in a deal that also resulted in Phyxius co-founder and CEO John Kelley stepping in as the new CEO at Oxygen.
The Duke study demonstrated that, across 14 independent clinical trials, levosimendan was associated with reduced mortality and other adverse outcomes including heart attacks during and after an operation in patients undergoing heart surgery while experiencing reduced heart function.
“Our meta-analysis of 14 randomized clinical trials suggests that levosimendan, in conjunction with standard care in high-risk cardiac surgery patients with reduced left ventricular function, may reduce mortality and other adverse outcomes by as much as 50 percent,” said John Alexander, M.D., MHS, Director, Cardiovascular Research, Duke Clinical Research Institute.
"These findings are highly supportive of our definitive Phase 3 trial design which includes mortality, need for dialysis, peri-operative myocardial infarction, as components of the primary composite endpoint,” said new Oxygen CEO John Kelley. “With the support of these data and the FDA’s guidance we have designed a very modest sized and highly cost efficient trial of 760 patients. This is far smaller than other cardiac trials which typically require larger patient populations.”
Acquisition from Phyxius Pharma Proving Timely
The acquisition of leosimendan is proving to be a smart one with the Duke study and subsequent spike for Oxygen’s stock. The deal, which included $4.8 million worth of stock and convertible options, integrates two other key Phyxius executives into the Oxygen structure as well as Kelley.
“Upon closing of this transaction, Oxygen Biotherapeutics will be a Company that has a clear path to commercialization with a Phase 3 asset addressing a $600 million market. With Fast Track status and an agreed study protocol under the Special Protocol Assessment (SPA), we expect we are one trial away from approval,” said Oxygen’s interim CEO and CFO Michael Jebsen. “This acquisition and management transition is designed to offer us a tremendous opportunity to enhance shareholder value. We are thrilled that an industry veteran of Mr. Kelley’s stature will be taking the helm at Oxygen Biotherapeutics.”
“We look forward to concluding this transaction and swiftly moving forward on our product development path,” commented Kelley at the time of the deal. “By bringing these specific levosimendan rights with an SPA and Fast Track status to Oxygen Biotherapeutics, we’re creating synergies by building a portfolio of indications for the acute care hospital setting. My team and I have spent much of our careers bringing products through the approval process, generating revenues and building value at other public pharmaceutical companies. We look forward to contributing here at Oxygen Biotherapeutics.”
Potential Short Squeeze?
With today’s gains, the two day jump for Oxygen has reached 120 percent, giving the spike the look of a potential short squeeze. While the company’s short float of 2.65 percent remains modest, the positive news about levosimendan could have shorters running for the hills.
The company’s shares have experience extremely heavy volume the last two days, and it comes during a month where the company’s seen little movement punctuated by major swings. From October 1 to October 21, the company’s stock barely moved, declining a total of 4.76 percent over three weeks. News of the acquisition, though, resulted in shares gapping up over 60 percent to start the day, one it finished with a 30 percent gain. These gains slowly slid off, though, and by October 29 the stock was only up 7 percent from its October 21 price.
However, the recent spike has the stock well into the positive for the month. That said, Oxygen’s still more than 85 percent off of its 52-week high, and almost 95 percent off of its previous peak in early February of last year.
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