JAGX Stock Price Increases Over 50%: Why It Happened

By Amit Chowdhry ● December 1, 2020
  • The stock price of Jaguar Health, Inc. (NASDAQ:JAGX) is trading at more than 50% today. This is why it happened.

Today the stock price of Jaguar Health, Inc. (NASDAQ:JAGX) is trading at over 50%. One of the biggest triggers for the increase in trading volume and the share price is due to Jaguar Health and its wholly-owned subsidiary Napo Pharmaceuticals announcing that they are planning to develop and commercialize crofelemer — which is the company’s novel proprietary drug for an indication of prophylaxis and/or symptomatic relief of inflammatory diarrhea (initially to be studied in a ‘long-hauler’ COVID-19 recovery patient population in Europe). This is a significant development since a major percentage of COVID-19 recovery patients are suffering from long-term diarrhea or other gastrointestinal dysfunctions.

Plans For A Potential SPAC Merger

And as part of this plan, the Jaguar Health is engaged in preliminary discussions with Swiss Growth Forum, a sponsor of a European special purpose acquisition company (SPAC) called Post Pandemic Recovery Equity, regarding the SPAC’s potential merger with an operational subsidiary of Jaguar Health to be established in Europe with an exclusive license to crofelemer and Mytesi for the indications of inflammatory diarrhea and HIV-related diarrhea. 

The preliminary terms under discussion include an upfront cash license fee to Napo ranging from approximately $2 million to $10 million and funding for the European operation of at least $20 million to pursue clinical development of crofelemer for inflammatory diarrhea in a long-hauler COVID-19 recovery patient population along with equity ownership in the European subsidiary by Napo ranging from 30% to 49.9% post-acquisition by the SPAC, with lower equity ownership in conjunction with a higher up-front cash license fee received by Napo.

The other customary financial terms include royalties and transfer pricing on the supply of crofelemer and Mytesi to the European operation. And the management of Jaguar is currently on a roadshow in Europe with the Swiss Growth Forum seeking support for the anticipated European operation identified as a target for the Post Pandemic Recovery Equity SPAC — for which the Swiss Growth Forum is a promoter.

The terms “long-hauler” and “chronic COVID” refer to COVID-19 survivors who suffer from symptoms — which may include gastrointestinal distress (i.e. diarrhea, constipation, nausea, pain), fatigue, brain fog, forgetfulness, cardiovascular effects, and arthritis, for an extended period after recovery. And it is theorized that these symptoms may result when the immune system in COVID-19 survivors continues to overreact even though the infection has passed. The long-hauler syndrome appears to be predominant in younger COVID-19 recovery patients and those who experienced a mild/asymptomatic case.

Inflammation in the GI track often manifests as diarrhea and chronic diarrhea may be an observable symptom that can provide for early diagnosis of long-hauler syndrome. And early diagnosis of chronic COVID syndrome could help limit the burden of long-term chronic illness in COVID-19 recovery patients. The endpoints being explored for possible clinical trials of crofelemer would include prophylaxis and/or symptomatic relief of diarrhea, reduction in inflammatory gut markers, gut biome restoration, and reduction in viral fecal shedding.

Napo has conducted IP filings in support of the development of crofelemer for the potential indication of addressing inflammatory diarrhea, including specifically in a long-hauler post-COVID recovery situation. And as with all potential follow-on indications, Napo prioritizes IP protection. Currently, Napo holds approximately 144 patents, the majority of which do not expire until 2027 – 2031, and approximately 39 patents pending.

Mytesi (crofelemer) is a novel and first-in-class anti-secretory agent — which has a basic normalizing effect locally on the gut and this mechanism of action has the potential to benefit multiple disorders. And Mytesi is a non-opiate, plant-based, chloride ion channel modulating antidiarrheal medicine that is approved in the U.S. by the Food and Drug Administration (FDA) for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy.

Mytesi — the only oral plant-based prescription medicine approved under FDA Botanical Guidance — is also in development for multiple possible follow-on indications, including cancer therapy-related diarrhea, a rare disease indication for adult patients with short bowel syndrome (SBS), supportive care for inflammatory bowel disease (IBD), irritable bowel syndrome (IBS), and idiopathic/functional diarrhea. And as previously disclosed, Napo initiated its pivotal Phase 3 clinical trial of crofelemer (Mytesi) for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy this past October. Crofelemer in pediatric liquid formulation is in development for a rare disease indication for infants and children with congenital diarrhea disorders (CDD) and pediatric SBS.

KEY QUOTES:

“Our focus on the new potential indication of prophylaxis and/or symptomatic relief of inflammatory diarrhea for crofelemer is driven primarily by the emergence of the long-hauler COVID-19 recovery patients. Enteropathy, an inflammatory chronic syndrome typically affecting long-term HIV/AIDS survivors, brings on chronic diarrhea. We believe this situation is analogous to what we’re seeing right now in COVID-19 recovery patients who are suffering from long-term diarrhea or other gastrointestinal disfunctions.”

“Our exploratory discussions with Swiss Growth Forum in the European Post Pandemic Recovery Equity SPAC matches well to our intention to focus clinical exploration for this development project in Europe, where single-payer healthcare systems focus on preventative measures to diagnose and treat symptoms that can be a precursor to potentially chronic illness,” Conte said. “It is estimated that up to 25% of people in the United Kingdom, for example, have already been infected with SARS-CoV-2, the virus that causes COVID-19, and it appears to be the general consensus that around 30% of COVID-19 patients end up suffering from long-hauler syndrome. With infection rates growing the way they are, we believe it’s possible that 10% to 15% of the global population is at risk of experiencing long-hauler syndrome.”

— Lisa Conte, Jaguar’s president and CEO