2023-08-22 03:28:20 ET
Summary
- Humacyte develops regenerative human tissue for various medical uses, with upcoming BLAs and interest from the US military.
- Their core technology, Human Acellular Vessel (HAV), addresses problems with current standards of care and has low infection and amputation rates.
- The company has completed enrollment in a pivotal trial for HAV in vascular trauma and a Phase 3 trial for HAV in hemodialysis access.
Humacyte (Humacyte, Inc. (HUMA) Stock Price Today, Quote & News) develops universally implantable regenerative human tissue for trauma and other uses. I covered Humacyte in January in a positive article, and since then, the stock has more than doubled, but then gone down to where it was back in January.
I said I liked HUMA because it has two upcoming BLAs, show of interest from the US military, decent cash runway and solid science. The company was founded by Yale’s Laura Niklason, a world expert in bioengineered tissues. Humacyte’s bioengineered tissues have markets in indications as diverse as dialysis, peripheral artery disease, trauma, diabetes, coronary bypass,, and they do not need any immuno-suppression before implant and can regenerate with human tissue. The company said earlier that it plans a BLA in mid-2023, and one more in AV access for dialysis.
Humacyte’s core technology is called Human Acellular Vessel or HAV. HAV competes with current standards of care, which are ??Saphenous Vein Grafts and ePTFE Grafts. Like I noted before, these SoCs have a number of problems. Vein grafts need long harvesting time and have delayed revascularization. ePTFE grafts have high infection rates. Both come with up to 15% amputation risks. HAV can address many of these problems. Being off-the-shelf with a shelf life of 18 months, it has immediate availability. It also has low infection and low amputation rates.
Humacyte’s lead indication is vascular trauma, and the second indication is AV access for dialysis. I discussed these in some detail earlier. Just yesterday, there was a major update. The company completed enrollment in the phase 2/3 pivotal trial of HAV in vascular trauma. Top-line results are planned for release in the third quarter, and these will support a BLA in the fourth quarter.
From Tickerbay, the primary endpoints are as follows:
HUMA primary endpoints (TickerBay)
More details :
The V005 trial is a single-arm, open-label, pivotal study of patients suffering from vascular trauma injuries, conducted at Level 1 Trauma Centers in the U.S. and Israel. The primary efficacy assessment will be based on a 30-day HAV patency (presence of blood flow) in patients who have vascular trauma of the extremity, as compared to historic benchmarks reported in literature.
Such single arm, nonrandomized studies often have problems. I have observed that sometimes a company will tell you that they have discussed the design with the FDA, and received a green light, only to later get rejected by the FDA because of the lack of randomization. This is even more true when standards of care are available, like here. So we shall have to wait and see.
The company also completed enrollment in a trial for its second indication. This trial, known as the V007 trial, is a Phase 3 trial in hemodialysis access with HAV in patients with end-stage renal disease (ESRD) as compared to autogenous arteriovenous fistulas. Unlike the other trial this is a randomized trial. “Efficacy assessments include useability of the conduit for dialysis at six and 12 months and a comparison of secondary patency, evaluated at 12 months. The rate of dialysis-related infections in both HAV and fistula subjects will also be tracked as a secondary endpoint.” Primary completion date is August 2024. 240 patients have been enrolled since the trial started in 2017. There is no phase 2 study or another clinical study in the background.
Another important bit of news is the publication in Nature Health about the use of HAV in war-torn Ukraine. Key data:
Since June 2022, 18 patients (13 at time of publication submission) in Ukraine have been treated with the HAV to repair vascular trauma and thereby prevent amputation. Three patients received the HAV to treat arterial wounds after failure of their initial vascular repairs using vein or synthetic grafts. Most patients had sustained major vascular injuries to their limbs from blasts and shrapnel on the battlefield. As of April 2023, all HAVs remained patent with no incidents of infection of the conduits, or amputation of the affected limbs. Follow-up procedures post-surgery found no occurrence of mechanical failure in any of the HAVs implanted.
More than anything else, this real world data in a compassionate use scenario convinces me about the viability of the program. The market is large, and there’s a major unmet medical need here. I think the next few months will be very interesting for Humacyte.
Financials
HUMA has a market cap of $296mn and a cash balance of $114mn. This figure does not include the $160mn in funding arrangement that Humacyte signed with Oberland Capital. The details are:
$40 million upfront, $20 million upon FDA acceptance of HAV BLA in vascular trauma, $40 million upon FDA approval of HAV in vascular trauma, $50 million upon achievement of certain sales milestones, and $10 million equity option
Research and development expenses were $20.5 million for the second quarter of 2023, while general and administrative expenses were $6.2 million. At that rate, and with the funding, Humacyte has a cash runway more than 10 quarters.
Nearly 50% of the stock is held by the retail public. The rest is spread more or less equally among institutions, PE/VC firms and insiders. Keyholders are Fresenius, the world’s largest dialysis provider and a potential key beneficiary of the ESRD access program, and Laura Niklason the founder. As I have said before, I like when keyholders also have an insider stake in the company.
Risks
One problem as I noted is that single arm study. I don't like them, and worse, neither does the FDA. Also, I worry about the robustness of the real world data in war-torn Ukraine.
I also prefer a 25-75 split between retail and smart money. Here, the retail ownership is higher.
Bottomline
I like Humacyte. They have a good cash runway, solid science, keyholders have major interests in the company, and while they have no clinical data, preclinical data and real world data are both excellent. They also have major upcoming catalysts. Overall, HUMA is a buy at these prices, trading as it is in the middle of its 52 week range.
For further details see:
Humacyte: Major Catalysts Ahead, Solid Prospects, Low Prices