By Brad Sorensen, CFA

NASDAQ:MITO

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Stealth Biotherapeutics (NASDAQ:MITO) is a clinical-stage biopharmaceutical company developing therapies to treat mitochondrial dysfunction associated with genetic mitochondrial disease and many age-related diseases.

The primary candidate from Stealth to make this breakthrough is with a compound called elamipretide. Elamipretide is a peptide compound that readily penetrates cell membranes and targets the inner mitochondrial membrane where it binds reversibly to cardiolipin. Elamipretide is being investigated in the treatments of various conditions, including:

• Barth Syndrome

• Duchenne Muscular Dystrophy (DMD)

• Friedreich’s Ataxia (FRDA)

• Dry Age-Related Macular Degeneration

• Leber’s Hereditary Optic Neuropathy (LHON)

• Neuromuscular nDNA-related Primary Mitochondrial Myopathy

In our view, several key issues lead us to believe that Stealth may ultimately be able to bring new therapies to the market. The first thing to remember is that, despite the disappointments in some recent attempts, mitochondrial treatment research is creating exciting possibilities. Stealth, for example, is currently pursing treatments for such diseases as dry AMD, which causes blindness for millions, heart conditions of varying names that are impacting thousands of lives and conditions plaguing many in the United States and around the world such as Alzheimer’s and dementia. And while the treatments Stealth is pursuing aren’t across the finish line yet, clinical results that show at least some level of success while proving to be safe for patients to use, allowing the approval processes to move forward.

We are also of the opinion that larger biopharma and drug companies will be interested in partnering with, investing in, or acquiring Stealth due to the advances they have made in the mitochondrial research and the delivery system they have developed. Additionally, Stealth has a proprietary delivery system that solves the problems other companies have had getting their therapies to the appropriate location in the body. We believe this system may be the first “product” that Stealth is able to market and begin to bring in revenue to the company.

The therapy that we currently believe has the most potential to come to market and garner substantial interest from patients is the dry AMD therapy involving elamipretide. Discussed in more detail above, the dry AMD market is a large one with more than 10 million people being impacted in the United States. There are no current treatments for dry AMD and it is the leading cause of blindness for older adults in the developed world, leading us to believe that there would be a solid demand for a treatment that could improve and extend the sufferers eyesight. As such, we are anxiously awaiting the results of the current Phase 2 trial that was recently completed.