Excellent Safety Data For COVID-19 Drug Candidate Plus $15 Million In Cash Put NanoViricides In The Driver’s Seat

Anti-viral research has become one of the biggest priorities of the healthcare industry across the globe as the world awaits a potential solution to counter the COVID-19 pandemic. A number of pharma and biotech companies have their candidates going through different stages of trials as the coronavirus continues to spread with the total number of confirmed cases across the globe has crossed the 13 million mark and over 3.4 million in the U.S. alone. Governments have thus been putting increasing pressure on scientists and pharmaceutical companies to come up with a drug or a vaccine to handle the situation. The process has been slow, which was expected as a successful treatment has never before been developed for any other type of coronavirus, and some companies are performing better than others. One biopharma company which has emerged as a true dark horse in this COVID-19 drug race which has been extensively covered by us in the past is Connecticut-based anti-viral research specialist, NanoViricides, Inc (AMEX:NNVC).

NanoViricides’ COVID-19 Drug Progress Till Date

The NanoViricides research team has been working on the development to a drug treat the SARS-COV-2 infection since January, 2020. Apart from having a strong history of antiviral research, the company’s top management, specifically CEO Dr. Anil Dewan had been involved in R&D associated with the Middle East Respiratory Syndrome (MERS) in 2014. Since the MERS was also a coronavirus, NanoViricides has always had an edge in the drug development process for the SARS-COV-2. Its unique ‘nanoviricide’ technology of trapping virus particles the same way as a Venus-fly-trap captures and consumes insects has a very wide antiviral application. The company has gone ahead and developed broad-spectrum anti-coronavirus drug candidates and carried out initial tests using cell culture assays as well as through an animal model. In its tests using cell culture assays of two different coronaviruses, namely hCoV-229E, and hCoV-NL63, the company’s drug candidates have proven to be far more effective than favipiravir, a popular antiviral medication being used against the SARS-CoV-2 virus today. The fact is that while the coronaviruses used in the cell culture assays are different from the SARS-CoV-2, they have related cellular receptors, namely APN which provides a rational basis to the research team. It implies that even if the SARS-CoV-2 mutates, the drug candidates can be expected to continue to remain effective.

Animal Model Results Show Superior Performance To Remdesivir

After the testing using the cell culture assays, NanoViricides tested its candidates using an animal model of human coronavirus disease. This time the results were compared with remdesivir, the hugely popular broad spectrum antiviral medication that has been developed by Gilead Sciences (NASDAQ:GILD). It is worth highlighting that remdesivir is in huge demand across the globe today with the U.S. buying more than 90% of Gilead’s estimated production for the coming months. NanoViricides’ candidates showed significantly superior results to remdesivir in the animal model. For the animal study, the researchers employed the hCoV-NL63, the same coronavirus used in the cell culture assays as it to the same cell receptor, ACE2, as does the SARS-CoV-2 and the original SARS-CoV that spread in 2002. While this is milder than the SARS-COV-2, it acts as an excellent surrogate for the study that can be done in the company’s BSL-2 lab (carrying out similar studies using the actual SARS-CoV-2 strain require BSL-3 or BSL-4 labs) and the results appear to be really promising.

The Safety Test Results Are Also Rock Solid

The most recent update from NanoViricides came in the form the safety and tolerability test results. The company tested three different drug candidates at three different dosage levels and vehicle control through separate groups of mice intravenously in its safety and tolerability study, which provided excellent results. As a part of the test, sixteen mice in each group, half males and half females, were administered one of the three drug candidates at one of the three dose levels, and additionally, one group was administered vehicle control, for seven days by daily tail-vein intravenous infusion in this blinded study with additional evaluations on the eighth day. This non-GLP safety and tolerability study was conducted under GLP-like conditions by AR BioSystems in Tampa, Florida. The results indicated that tested drug candidates were safe and well-tolerated with no clinical signs of immune or allergic reactions. The results showed no observable changes in any organs, including the large intestine or colon, on post mortem in gross histology. The only reportable changes observed were, in the high dosage groups of two of the three drug candidates tested, associated with the non-absorption of water, in the colon. This is consistent with the clinical observation of very loosened stools in the same groups. The positive result has now cleared the path for NanoViricides for further development of its candidates and moving forward to human trials.

Recent Fundraising

After the recent surge in the stock price, the NanoViricides management announced that it has completed a gross fundraise to the tune of $11.5 million through an underwritten public offering. The company issued 1,369,863 shares and a fully exercised underwriters’ over-allotment option of 205,479 additional shares of NanoViricides’ common stock at the public offering price of $7.30 per share which was at a 17% discount over the stock’s closing price last week of around $8.71. The issue was underwritten by Kingswood Capital Markets, a division of Benchmark Investments, Inc., who acted as sole bookrunner for the public offering. The overall net proceeds with the company after the payout of commission and other transaction fees is approximately $10.53 million which add to the existing cash pile of close to $6.11 million. As a result of this fundraise, NanoViricides is flushed with over $15 million of cash which can comfortably be used for funding its COVID-19 research as well as the human trials process of its core product i.e. its topical cream for shingles.

Key Takeaways

Before going ahead with human clinical trials, the management plans on conducting studies to carry out clinical candidate selection and possibly request a pre-IND (Investigational New Drug) meeting with the FDA for regulatory guidance. The company’s progress has been truly remarkable, which is why its stock has seen a triple-digit appreciation over the past year.

NanoViricides has appreciated 140.63% in the past 6 months providing excellent returns to its shareholders. The company is currently trading at a Price to Book ratio of 4.03x which is well below the biotechnology industry median of 4.58x as per Gurufocus industry data. There is immense scope for multiples expansion with a strong potential upside not just from the COVID-19 drug but also from the topical cream for shingles, the company’s star drug candidate which will be entering the human trials phase very soon. The company could engage in strong collaborations in the future and can also expect cash flows expected through licensing once its candidates for shingles as well as the COVID-19 start clearing the initial phases of human trials. Overall, the company’s stock has the potential to become a true multi-bagger for biotech investors and certainly deserves a place on your watch list if not in your portfolio.


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