ENSC: Test Results Encouraging in Opioid Fight

By Brad Sorensen, CFA



Ensysce Biosciences (NASDAQ:ENSC) is a California-based clinical-stage pharmaceutical company behind programs that could provide hope for the millions impacted by opioid addiction and potential addiction. Ensysce’s major drug candidate, PF614, is currently in the Phase 2 trial process where the company aims to demonstrate the correlation between PF614 and Oxycontin and how Ensysce can begin to make the drug available to the general public. The drug has been granted Fast Track status by the FDA, which is clearly a positive, but, as with most pharmaceutical companies at this stage, funding the research, development and testing until the drug can be sold commercially is a major hurdle. At the present time, Ensysce Biosciences looks to us to be in a better funding position than many other clinical-stage pharmaceutical companies.

Ensysce Biosciences released 1Q earnings results and a business update—the highlights are following:

ENSC reported a 1Q 2022 loss of $0.06 per share—roughly in line with expectations.

Cash – Cash and cash equivalents were $8.4 million as of March 31, 2022, as compared to just over $12 million at year end. In the fourth quarter of 2021. Cash used in operating activities in 1Q 2002 totaled $3.4 million.

Federal Grants – Funding under federal grants was $0.6 million for the first quarter of 2022 compared to $0.25 million in the comparable year ago quarter.

Research & Development Expenses – R&D expenses were $3.1 million for the first quarter of 20225 compared to $0.3 million in the same period a year ago.   According to management, increases for the quarter were primarily the result of increased external research and development costs related to the clinical programs for PF614 and PF614-MPAR™.

General & Administrative Expenses – G&A expenses were $2.3 million for the first quarter of 2022 compared to $0.5 million for the same period a year ago. Management notes the quarterly increase reflects increased costs from operating as a public company.

Net Income (Loss) – Net loss for the first quarter was $1.0 million compared to net loss of $0.9 million for the comparable year ago period.

ENSC announced clinical trial results from trial PF614-102 that confirmed the safety and longer-lasting profile of PF614 versus Oxycontin.

◦ The company is currently analyzing the bioequivalence data from the study, which should be available by the end of 2Q 2022.

ENSC also announced initial results from trial PF614-MPAR-101, which provided the first human data showing the potential for overdose protection with MPAR.

◦ The data showed how the combination product PF614-MPAR could reduce the trypsin activation (see below picture for a more detailed look) and reduce the release of oxycodone in a simulated overdose situation.

▪ The data also demonstrated the PF 614 in the systemic circulation did not convert to oxycodone.

▪ The study is continuing to enroll additional subjects, with results expected by the end of 3Q 2022.

These developments, in our view, continue to bolster the case for investing in Ensysce Biosciences and further supports our enthusiasm for a company pursuing a technology meant to tackle the scourge of opioid addiction. We are anxiously awaiting results from the ongoing trials described and, at this point, are expecting those results to reveal more positive results—further bolstering the investment case for Ensysce.

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