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CFRX: Awaiting Interim Futility Analysis for Phase 3 DISRUPT Trial…

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By David Bautz, PhD

NASDAQ:CFRX

READ THE FULL CFRX RESEARCH REPORT

Business Update

Phase 3 DISRUPT Trial Continues

ContraFect, Inc. (NASDAQ:CFRX) is currently conducting the Phase 3 DISRUPT (Direct Lysis of Staph aureus Resistant Pathogen Trial) trial of exebacase in patients with Staphylococcus aureus bacteremia, including right-sided endocarditis. The DISRUPT trial is a randomized, double blind, placebo controlled study being conducted at over 40 centers in the U.S. and will enroll approximately 350 patients randomized 2:1 to receive either exebacase or placebo, with all patients receiving standard of care antibiotics. With the recent surge in hospitalizations due to the Delta SARS-CoV-2 variant the rate of patient enrollment in the DISRUPT trial has slowed. How long this will endure and what effect it will have on timelines for the trial are difficult to ascertain at this point but will be something to keep an eye on as the year goes on. A preplanned interim futility analysis is scheduled to take place after the first 60% of patients enrolled into the trial are evaluable for efficacy. Whether the interim futility analysis can take place prior to the end of 2021 will depend on the length and severity of the current uptick in COVID-19 cases.

The primary endpoint of the trial is clinical response at Day 14 in patients with methicillin-resistant S. aureus (MRSA) bacteremia, including right-sided endocarditis. Clinical response is defined using objective clinical criteria including: 1) resolution of S. aureus bacteremia/right-sided endocarditis signs and symptoms that were present at baseline; 2) no new signs or symptoms of bacteremia/right-sided endocarditis; 3) no complications of bacteremia/right-sided endocarditis; 4) no changes in anti-staphylococcal antibiotics after treatment with study drug due to persistence, worsening, or recurrence of signs or symptoms of bacteremia/right-sided endocarditis; 5) blood cultures negative for S. aureus by Day 14; and 6) the patient is alive. Clinical response is being determined by an independent, blinded clinical adjudication committee.

Key secondary endpoints include clinical response rate at Day 14 for all S. aureus bacteremia patients (including both MRSA and methicillin-sensitive S. aureus [MSSA]), 30-day all-cause mortality in MRSA patients, and clinical response at Day 60. The company will also evaluate the impact of treatment with exebacase on length of hospital stay, length of stay in the intensive care unit, and 30-day readmission rates for both all-cause and S. aureus infection readmissions.

In March 2021, ContraFect announced an $86.8 million contract with the Biomedical Advanced Research and Development Authority (BARDA) to support the DISRUPT trial. The company received an initial tranche of $9.8 million with up to $77.0 million in future support being dependent on progress and clinical success in the DISRUPT trial. Following completion of the trial, and assuming a positive outcome, the BARDA funding can be used to support additional development work that may be necessary for FDA approval, including manufacturing and regulatory activities. It could also cover any post-approval commitments, such as the completion of the pediatric study.

Financial Update

On August 13, 2021, ContraFect announced financial results for the second quarter of 2021. As expected, the company did not report any revenues for the three months ending June 30, 2021. Net loss for the second quarter of 2021 was $5.4 million, or $0.14 per share, compared to a net loss of $17.6 million, or $0.88 per share, for the second quarter of 2020. R&D expenses for the second quarter of 2021 were $7.8 million, compared to $5.5 million for the second quarter of 2020. The increase was primarily due to increased non clinical studies of exebacase, CF-370, CF-296, and the amurin peptides, increased costs associated with the DISRUPT trial, and an increase in clinical development and manufacturing headcount. G&A expenses for the second quarter of 2021 were $2.9 million, compared to $2.6 million for the second quarter of 2020. The increase was primarily due to increased administrative personnel costs and professional fees.

As of June 30, 2021, ContraFect had approximately $74.7 million in cash, cash equivalents, and marketable securities. As of August 10, 2021, the company had approximately 39.3 million shares outstanding and, when factoring stock options and warrants, a fully diluted share count of approximately 54.5 million.

Conclusion

It looks like the increase in the number of COVID-19 cases in the U.S. brought about by the Delta variant is beginning to impact enrollment in the DISRUPT trial, however we are hopeful that this will not be a long-term problem for the company. Similar outbreaks of the Delta variant in India and Great Britain peaked within approximately two months of starting, thus we believe the U.S. may be near the peak and cases should begin to decrease over the next month or so. We had expected the interim futility analysis in the second half of 2021, however with the slowdown in patient enrollment we now await guidance from the company as to whether the interim futility analysis can take place by the end of 2021. With no changes to our model our valuation remains at $23 per share.

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