Mesoblast’s heart failure drug works best on very sick patients

Mesoblast [$MESO] is a company developing a handful of stem cell therapies. Right now, they have Phase 3 trials running for heart failure, low back pain, graft vs. host disease, and rheumatoid arthritis. This article will focus on MPC-150, which is the treatment MESO is testing for congestive heart failure (CHF).

MPC-150 is currently in a Phase 3 trial. The trial is testing whether injecting  150 million stem cells into the heart can improve cardiac function. Specifically, the researchers will be monitoring to see how many heart-failure related major adverse cardiac events (HF-MACE) each study group suffers.

Data from the Phase 2 studies suggests that MPC-150 will probably get a pass in Phase 3, but there are some issues with the program overall which I’ll discuss below.

Effective at Treating HF-MACE

In Phase 2 studies, researchers found that a dose of 150 million stem cells was more effective than smaller doses. On the chart below, you should be able to see that the highest dose (labeled as “150M” on the x-axis) had the greatest effect. This chart is showing the “Left ventricle end systolic volume” (LVESV) and “left ventricle end diastolic volume” (LVEDV), which are measures of how much blood is left in the heart after it pumps. Less blood remaining means that the heart is stronger and pumping more efficiently.

Smaller doses were not statistically effective.
A dose of 150 million stem cells showed the greatest improvement in cardiac function

Here you can see that the control group had an increased end volume, whereas in the 150 million stem cell dose, end volume went down. That’s good news, and in Phase 3 the researchers are testing a dose of 150 million stem cells.

However, this treatment seems to work best in patients who are very sick. This next chart shows the difference in patients who had an end volume of less than 100 milliliters (“baseline LVESV < 100 mL”) and patients who had an end volume of more than 100 milliliters (“baseline LVESV > 100 mL”). Remember, less is better.

MCP-150 works best in patients with baseline LVESV of more than 100 mL.
Sickness of patients affects how well MESO’s drug works

As you can tell, the treatment seems to be more effective in the sicker patients. This isn’t necessarily a bad thing, but it’s important to know. What I would have liked to see here are some comparisons between treatment groups, instead of just showing that the treatment was more effective against the placebo. Still, the Phase 3 trial for MPC-150 is also going to be tested on the sickest patients, so this is again good news — and about 60% of patients fall into the “sickest” group.

And finally, over a 3-year period following the same group of sickest patients, 71% of patients treated with placebo had a HF-MACE event, while none of those treated with MPC-150 did. This last piece is the strongest bit of evidence for the efficacy of MESO’s drug.

No difference in cardiac function a year after treatment, did not improve other things

However, there are a few issues. First, while the Phase 2 trial produced some improvement in cardiac function at 6 months, at the 12 month mark the MPC-150 group was no longer statistically different from the control group. This fact was ignored during $MESO’s press briefings, of course.

Second, there was no significant improvement in any of the other measures that I had expected to see improve. The biggest of these was in functional exercise capacity. The MPC-150 group was no different from the placebo group in how far they could walk during the 6-minute walk test. Given that the treatment theoretically works by improving cardiac function and helping the heart regrow a bit, I had expected to see the walk test improve. This also means that there won’t be an improvement in quality of life for the patients.


Ultimately, I can’t argue with the result that MPC-150 is keeping the sickest group of patients from having HF-MACE events. Those data were excellent and hard to refute. However, the other issues mentioned above keep me from thinking that this is a slam dunk. Given that the Phase 3 trial is testing HF-MACE on the sickest group of patients, I think that MESO will probably get a Phase 3 pass. That said, I don’t like that cardiac function declined back to the control group at 12 months, and I don’t like that no other measures of effectiveness improved.

When I invest in a biotech, I prefer it to be something like $AKAO, where there’s no doubt in my mind that the treatment works.

Prediction: Probably Phase 3 Approval

Since the Phase 3 trial is testing the most successful parts of the Phase 2 trial, MPC-150 will probably get a Phase 3 pass. Still, my lingering doubts about the ultimate effectiveness of the treatment will keep me from investing in $MESO.

Eyegate Pharma’s Pipeline is Incredibly Exciting


Eyegate Pharmaceuticals [EYEG] has the most exciting pipeline I’ve seen in a long time. They currently have two very different products in the works, and both have the markings of success. The first product, currently titled “EGP-437,” is expected to submit a NDA in late 2017. The second product, “CMHA-S” (you have to love the way companies name their drugs..) is in what I would call Phase 1b trials right now, with data expected by the end of the year (so any day now.)

I don’t think it’s any secret that I tend to look at the science behind a drug first and foremost. I firmly believe that if the science is good — if a drug is truly effective — then the rest of the company will sort of fall into place. You can see this with our recent call on Achaogen Pharma. That drug was effective as all hell, so we predicted success, even though the company has some sales issues. If you had purchased AKAO’s stock on the day that article came out and sold it tomorrow, you would make over 150% profit.

I am hopeful that EYEG might be another Achaogen. Let’s talk about the drugs.

Drug One: EGP-437

EGP-437 is a corticosteroid (anti-inflammatory) designed to treat eye conditions. Currently, the standard of care is to use corticosteroid eye drops. Where EGP-437 differs is in the delivery. Instead of eye drops, EGP-437 uses something called iontophoresis. Iontophoresis uses an electric charge to gently “push” a drug through the surface of the eyeball. It’s not painful, and it means that patients don’t need to worry about the eye drops. Eyegate estimates that in a normal patient, the burden of treatment will drop from 154 eye drop treatments to 2 treatments with EGP-437.

EGP-437 is being tested on three different medical conditions. The first, anterior uveitis, is on the second Phase 3 trial. The first Phase 3 trial was a resounding success, with EGP-437 beating not just the placebo, but also the current standard of care — those eyedrops we were just talking about. (Probably because patients don’t take the drops as often as they’re supposed to.) The safety data looks good as well. At the risk of sounding too good to be true, EGP-437 actually looks a little safer than the eyedrops, because it doesn’t increase pressure in the eyeball as much (which is a common side effect of corticosteroids).

The second medical condition, cataract surgery, just finished Phase 1b/2a trials. Here, too, the drug is incredibly effective. 70% of patients were pain-free on the first day after surgery with EGP-437. 80% of patients on EGP-437 were completely recovered after four weeks. By contrast, 80% of the placebo group had to be rescued after two weeks. In this sense, “rescued” means that it was no longer safe for the placebo group not to be getting some sort of drug.

Trials for the third condition, macular edema, seemed to look good as well. The macular edema trials are in the very early stages, so all the researchers have done is to confirm that EGP-437’s delivery mechanism can safely get the drugs into the back of the eyeball. I won’t say more here, as I’m starting to get out of my depth, scientifically.

The caveat here is that in these latter two conditions EGP-437 hasn’t been directly tested against the standard of care yet. EGP-437 is performing better than the eyedrops did when they were being tested. And frankly, after the performance EGP-437 put in against eyedrops for anterior uveitis, I’m not too worried.

Drug Two: CMHA-S

CMHA-S is a totally different animal. What Eyegate has done here is make a sort of liquid eye-bandage. Initial tests were on dogs and cats, where CMHA-S was tested against a a type of eyedrop that’s probably most similar to those “liquid tears” eyedrops. CMHA-S was significantly more effective than the regular kind of eyedrop at helping the animals heal eye ulcers.

The second trial was with rabbits, and pitted CMHA-S against yet another type of regular eyedrops for treating chemical burns as well as abrasion (scraping on the eye). In this trial, the CMHA-S was even more effective than before – it beat the control in every measure.

The current study, from which we should see data soon, is on humans who have gotten PRK eye surgery. PRK is the predecessor of LASIK, and it’s still used by the military and by people who aren’t suited to LASIK.

If CMHA-S can successfully speed healing after PRK eye surgery, that would be a multi-million dollar opportunity by itself. If it can successfully speed healing after PRK, though, there will be a massive opportunity in helping to heal all kinds of traumatic eye injuries.

It’s very telling that the Department of Defense has given EYEG a fair amount of grant money (somewhere between $50k and $100k) to finish the development.


To sum up, there are a few big events coming soon.

CMHA-S should be reporting the results of the first human trial sometime in the next few weeks. The results from that study will determine the future of CMHA-S, and the animal trials leading up to it looked good.

Phase 3 confirmation data for EGP-437 should be out sometime next year, and if the second Phase 3 trial looks as good as the first Phase 3 did, the FDA has stated that they will support a new drug application.

Phase 2b trials for EGP-437 in cataract surgery should be beginning in the first half of next year.

EGP-437 — Phase 3 Pass 

The way EGP-437 kicked ass in the first Phase 3 trial leads me to expect another round of good data and a successful new drug application. 

CMHA-S — Initial Human Trial Pass

I’m still not really sure what “phase” to call this, but the great efficacy data from animal trials make me think this one will be a go.

Achaogen’s drug Plazomicin fights antibiotic-resistant infections; Phase 3 data due before 2017


Achaogen [$AKAO] is planning to release top-line Phase 3 data for their drug Plazomicin sometime before the end of 2016. Plazo is a new antibiotic designed to fight drug-resistant infections. Achaogen has been developing Plazomicin for a long time, and it’s good to finally see this drug getting closer to release.

The bottom line is that Plazomicin appears to be very effective and the safety data so far looks good. The biggest safety risks for most of these drugs are kidney toxicity and hearing damage. In the Phase 1 safety trials, there was no evidence of any kidney issues, which is good. A different study used monkeys to see if Plazo would work against a biological weapon, and there were no serious kidney issues in that study either.

AKAO might face some initial hurdles in making Plazomicin the standard of care, but I expect a Phase 3 pass and successful new drug application.

Plazomicin is Effective

There’s no doubt as to Plazomicin’s effectiveness. The drug works like crazy, against both regular and drug-resistant infections. This chart is comparing the effectiveness of Plazo and Levofloxacin in treating complicated UTIs. Levofloxacin is one of the most common antibiotics for treating complicated UTIs.


As you can see, Plazomicin is at least as effective as Levofloxacin against regular infections.

This next chart is comparing Plazomicin against a bunch of other drugs for drug-resistant bacteria. As you can see, it takes a lot less Plazo to beat the bacteria, and some of the drugs don’t even treat the bacteria at all. I’ve also circled the biggest competitor, Colistin. One of the Phase 3 trials pitted Plazomicin against Colistin, head-to-head, so it will be interesting to see what happens there.



Plazomicin is Probably Safe

Like I mentioned earlier, the biggest risk with Plazomicin is going to be kidney issues. I am hopeful on this front for two reasons. First, in the Phase 1 trials there were no severe kidney issues with Plazo. The authors had actually concluded that there were no effects at all, but I suppose I’m a little more cautious. A few of the participants had slightly elevated creatinine in their blood, which might mean that the kidneys were not filtering quite as much. No subject went outside of the “normal” range for creatinine, but there were definitely some trends in that direction. Even so, though, any potential issues were not serious.

The second reason I’m optimistic is the monkey study. The researchers dosed the monkeys with Plazomicin pretty heavily, and they didn’t see any serious kidney issues there either. A monkey study by itself doesn’t mean anything, but it’s nice to see a high-dose study alongside the (comparatively light) Phase 1 safety studies.

Other Stuff

Achaogen has about $61 million in cash or cash-equivalents on hand, which is more than enough to get them through the rest of the development period for Plazomicin. I expect that part of the reason they have more cash than is normal for a small-cap biotech is that a lot of the Plazo research ($124 million worth) has been funded by DARPA’s less-cool biologically-focused little brother, BARDA.

AKAO does estimate that they will need to put some serious sales efforts into making the drug commercially successful. I agree with that assessment. The problem with being a drug for special cases is that you don’t get used very often. However, antibiotic-resistant drugs are getting more and more press time. Five years ago, was anybody worried about MRSA? As the spectre of antibiotic-resistant drugs looms, Plazo and drugs like it will become more and more valuable. In fact, there are no drugs currently approved to treat the kind of infections Plazomicin is supposed to treat.


As always, there might be an unforeseen event which causes this drug (and this company) to tank. A serious safety issue with kidney toxicity might do it, for example. That’s the nature of investing — if it was sure money, it’d be called “working.” As it stands right now, though, I predict some good top-line data before the end of the year.

The company hopes for a New Drug Application (NDA) by mid-to-late 2017.

Prediction: Phase 3 Pass

Reasonable safety data and a very effective action make me think Plazomicin is a good bet for a Phase 3 pass.