BioCorRx Inc., the developer of a medication-assisted treatment program that to date has largely focused on substance abuse, has a new business line and a notable new investment partner.
The Anaheim-based company (OTCQB: BICX)—whose nearly $15 million market value is eclipsed by an about $55 million accumulated deficit—is expanding its offerings to combat weight loss.
Craving, whether for a drug, a drink or a food, is the same, according to Chief Executive Brady Granier.
“Food is an addiction,” Granier told the Business Journal at the company’s roughly 2,000-square-foot headquarters at the Axis creative office campus in Anaheim and across the street from Angel Stadium.
BioCorRx has developed an alcoholism and opioid addiction treatment program “that empowers patients to succeed in their overall recovery,” according to its latest annual report.
The treatment combines non-addictive medication with cognitive behavioral therapy and peer recovery support and tracking.
It’s a program that translates well to weight loss, a huge market in the country, according to Granier.
The company’s main product involves the use of naltrexone, which “is a fascinating medication with many potential uses and we feel that it will have a positive impact on weight management by reducing food cravings,” he said.
DoubleLine Duo
BioCorRx’s potential in the weight-loss sector, as well as its ongoing efforts in its line of business treating substance abuse, has earned the attention of two co-founders of DoubleLine Capital, a Los Angeles-based investment firm with $121 billion in assets under management.
“BioCorRx has developed an innovative approach that I believe will help countless Americans in dealing with this epidemic” of opioid and alcohol use disorders, DoubleLine co-founder Joe Galligan said in a statement earlier this month.
Galligan, who was also a portfolio manager at DoubleLine, has become an adviser to BioCorRx where he’ll help the over-the-counter traded company uplist to Nasdaq.
Galligan also owns 7.7% of BioCorRx.
Louis Lucido, who was also a co-founder at DoubleLine and he retired earlier this year as chief operating officer, joined BioCorRx’s board of directors in February.
He apparently liked what he saw because this month, Lucido and another unidentified investor made a $6 million private placement in BioCorRx to acquire shares at $15 each.
The price paid by the two investors was a 282% premium to the market price of $3.93 per share, as of the market close on April 1.
It’s not just the 400,000 shares that the investors bought. They will also receive royalties for each future sale of the company’s weight loss program for up to 15 years, according to regulatory filings.
The $6 million investment comes at a crucial time for BioCorRx. The company’s latest annual report, filed earlier this month, has a note from its auditors that indicates “substantial doubt in our ability to continue as a going concern due to the risk that we may not have sufficient cash and liquid assets.”
Biodiesels, Then Addictions
The company dates back to 2008 when it sought to develop biodiesel fuels.
A few years later, it dumped that industry to focus on alcoholism and opioid addiction treatment. It changed its name to Fresh Start Private Management and underwent a reverse merger to begin publicly trading.
In 2014, it changed its name again to BioCorRx, with a stated goal of developing products to treat opioid addictions.
The company was for years a penny stock, with daily volume swinging from as little as 5,000 to almost a million shares exchanged.
In January, it effected a 1-for-100 reverse stock split and last week traded at $5.75 with an average daily volume around 12,000.
Granier feels his company stands apart from other drugmakers developing treatment for addiction control.
“We are not just a pharmaceutical company developing a drug; we understand the behavioral side [too],” he said.
Granier, who has a background in media companies, joined BioCorRx in 2013 as chief operating officer and became chief executive in 2016.
The first product the company is developing is a prescription-based naltrexone implant, BICX102.
AÂ licensed physician surgically inserts a marble-sized pellet under the skin in the lower abdomen. The pellet is absorbed into the body and typically dissolves within months following the procedure in most patients depending on their metabolism and other factors.
Naltrexone is a non-addictive, non-narcotic medication used to treat addiction and was approved by the Food and Drug Administration for opioid addiction in 1984 and alcoholism in 1994.
Over time, naltrexone has also shown that it can be used to treat a variety of disorders, including compulsive eating, Granier said.
The company initiated a pilot six-month weight management program in 2017, enrolling 18 people. Of the group, two dropped out before three months, 12 lost statistically significant weight in the first three months, eight did not follow-up, and 10 maintained a significant positive weight loss over the six-month course.
It said the combination of the single administration, multi-month sustained release naltrexone implant and its cognitive behavioral therapy program have helped patients lose on average 22 pounds.
Licensed Program
BioCorRx doesn’t operate substance abuse clinics nor provide healthcare services to patients. Instead, it licenses its recovery program to physicians and addiction treatment providers.
In the past six years, the program has treated more than 1,000 patients at an average cost of $12,500 each. A portion is sometimes covered by insurance.
Revenue last year fell 43% to $377,000 because of lack of payer reimbursement for treatment. It reported a $6.5 million loss for the year.
The company spent $152,000 in research in 2018, down from $451,000 in 2017. The annual report valued its patents at $15,200.
The vast majority of its expenses are in selling general and administrative costs and interest expenses on its loans.
It had $278,000 in cash on hand as of Dec. 31.
FDA Approval Sought
BioCorRx is currently seeking FDA approval for BICX102 for the treatment of alcohol and opioid addiction.
Management explained that both the drug and the implant are FDA-approved and it’s seeking regulatory approval of a new implantable naltrexone product that combines the two. The company owns multiple naltrexone implant formulations; BICX102 is one of several, it confirmed.
In January, the company announced a two-year $5.7 million grant from the National Institute of Drug Abuse to develop the implant.
NIDA said the naltrexone implant “has a high likelihood of progressing to an approved treatment in the U.S.,” according to BioCorRx.
It also has an injectable version of the same product, BICX101, which has yet to move forward on FDA approval.
The $6 million raised from investors will fund the launch and expansion of the company’s weight loss program this year and further its product development pipeline in the addiction treatment field.
Weight loss is a much bigger source of potential business than treating opioid addiction.
The U.S. weight loss market totaled a record $66 billion, according to a report from Research and Markets. More than one-third of U.S. adults have obesity, according to the Center for Disease Control and Prevention.
By contrast, the industry to provide opioid addictions treatments was $1.4 billion in the U.S., according to an Addiction Treatment Advisory Group report.
