Pacific Trader: Why Eupraxia Pharma is the picture of health

Eupraxia is focused on a big problem: how to deliver drugs to the right parts of the body in the right dosage for the right amount of time.

Credit: Eupraxia Pharmaceuticals

Eupraxia Pharmaceuticals’ micro-thin polymers can release drugs in targeted tissues over months at a time

The Victoria biotech’s stock has risen six times over the last eight months


The stock: Canada’s relatively puny life sciences sector has been mostly ailing of late. Like some other future-focused sectors, the S&P/TSX Capped Health Care Index has come down with a case of inflation and high interest rates, sinking 43.6 percent over the past year. Not Eupraxia Pharmaceuticals (TSX:EPRX), however. The Victoria-headquartered biotech outfit is currently in tip-top condition. Since hitting a low of 90 cents last August, the stock has soared to $6.10 as of the close on April 25. 

The drivers: Still tiny, with just 21 employees and a market capitalization of $130 million, Eupraxia nonetheless is focused on a big problem: how to deliver drugs to the right parts of the body in the right dosage for the right amount of time. It has patented a micro-thin polymer for coating drug compounds that then dissolves in human tissues, releasing the medication over periods of up to a year from a single injection.

Helping demonstrate the delivery system’s capabilities, it has a lead drug candidate, EP-104, in Phase 2 development for treating both osteoarthritis in knees and eosinophilic esophagitis (EoE), a disease of the gastro-intestinal tract. Much of the stock’s gains over the past six months came as a result of identifying this new EoE market and initiating Phase 2 trials last fall. Eupraxia is also exploring other applications for EP-104, such as cancer treatment, as well as developing two earlier-stage drug candidates.

Word on the street: Comparing Eupraxia to Bellus Health (TSX, NASDAQ:BLU), a Quebec biotech recently taken out by pharma giant GSK PLC (NYSE, LSE:GSK) for US$2 billion, Raymond James analyst Rahul Sarugaser maintained his “outperform” rating and $11 price target on the stock in an April 19 report. “From our perspective, EP-104’s proprietary diffusion-driven drug release vehicle and its delivery of a well-understood corticosteroid has a good probability of yielding long-duration pain relief with a limited adverse event profile,” he wrote.

Coming & going: Geneva, Switz.-based MKT Capital is urging fellow shareholders of another Victoria biotech, Aurinia Pharmaceuticals (NASDAQ:AUPH), to vote out CEO Peter Greenleaf, chairman Dr. George Milne and compensation committee chair Joseph Hagan at the company’s annual meeting on May 17. The dissident shareholder wants Aurinia to put itself up for sale, which it claims could fetch US$28 a share. Its stock currently trades around US$11 on the Nasdaq exchange, up from a low of US$4.11 on Dec. 27.