Aurinia pharmaceuticals ($AUPH) has a likely winner in voclosporin

Aurinia Pharmaceuticals is a company putting all of their eggs into one basket. In this case, that basket is called “Voclosporin,” an immunosuppressant that hopes to treat lupus, a somewhat common – and nasty – autoimmune disease. Specifically, AUPH is hoping to treat a kidney-related complication of lupus called “lupus nephritis,” a malady that more than half of lupus patients suffer.

In the phase 2 trial, adding voclosporin to the current standard of care appeared to beat out the standard of care alone in treating lupus nephritis (LN).

Very Recent Phase 2 Trial Showed Promise

The phase 2 trial tested two doses of voclosporin (a low dose arm and a high dose arm) against the standard of care alone. The endpoints were chosen well and were actually rather stringent – the primary endpoint was complete remission of LN at the 24-week mark, and secondary endpoints were partial remission, time to response, and remission rates at the 48 week mark. As you can see in the table below, the low dose of voclosporin met the primary endpoint, with significantly more patients reaching complete remission by week 24. Voclosporin met all the secondary endpoints as well – and by week 48, significantly more patients on the high dose of voclosporin had also reached complete remission.

Significantly more patients on both doses achieved partial remission, as well – and, ultimately, the trial met every secondary endpoint.

Taken from Parikh et al., 2017

At first glance, the safety data may appear daunting. The low dose of voclosporin, in particular, had a huge number of patients die (10 out of 89). However, there are several mitigating factors. First, the high dose of voclosporin had a much lower percentage of deaths, which suggests that the drug itself was not entirely to blame – previous trials have found that voclosporin has a very dose-dependent response, so if the drug were particularly dangerous we would expect to see more deaths in the high-dose arm. Second, the sponsors and investigators of the study determined that all of the deaths were unrelated to voclosporin. Third, most of the deaths occurred within the first two months of the study, and appeared to be typical causes of death for patients with severe lupus.

As you can see below, overall, safety data from this study tracked well with safety data from the studies of other immunosuppressants.

Taken from Parikh et al., 2017

I will note, however, that there were a few things I noticed that were a little disquieting. First, AUPH has tested voclosporin on a few other immune-related diseases – with some good effect, actually – but haven’t brought any of those formulations to market. I’m not certain why (though I admit, I haven’t looked all that hard). Second, as I noted earlier, voclosporin appears to have a strong dose-dependent effect. Why, I wonder, did the lower dose see a greater and more rapid treatment effect? Given that the lower dose group also had more patients pass away, was there perhaps some issue with randomization?

Conclusion: Worth a Chance

Because volcosporin is the only drug in AUPH’s pipeline, the success or failure of the eventual phase 3 trial will be a remarkable binary event. When the final phase 2 data for volcosporin was released a few months ago, AUPH’s stock price increased more than 200%. If the phase 3 trial is a success, I’d expect an even larger price movement.

I think that AUPH have set themselves up well for the eventual phase 3 trial of voclosporin. Unfortunately, the estimated completion date for the phase 3 trial is currently December 2019 – so we have a long time to wait, which increases the odds of something weird happening, like AUPH running out of money.

I wouldn’t put a big chunk of your portfolio towards this one, but I plan on investing at least a little bit of mine in it.

Prediction: Phase 3 Success

I would take a pretty small stake, but given the data and the potential gain, I think it’s worth putting some money towards this one.

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Redhill Biopharma ($RDHL): Phase 3 Drug candidate RHB-105 likely to succeed, RHB-104 possible

This week I’m hoping to wrap up my two-part series on Redhill Biopharma ($RDHL). Previously I wrote about RDHL’s drug BEKINDA, which I believe is likely to pass its phase 3 trial. RDHL has two other late-stage drugs in the pipeline: RHB-105, which is designed to treat the bacteria which causes stomach ulcers, and RHB-104, which hopes to treat Crohn’s disease.

After doing some research, I believe that RHB-105 is also likely to pass the confirmatory phase 3 trial, which is scheduled to begin later this year. RHB-105 is a combination therapy designed to treat antibiotic-resistant strains of the bacteria that causes ulcers, known as Helicobacter pylori or H.pylori. Essentially, RHB-105 is a single pill containing two antibiotics and a proton pump inhibitor (acid reflux drug). The scientists at Redhill hope that the combination of drugs will be better than the current standard of care – one antibiotic and a proton pump inhibitor. It appears that they may be correct.

$RDHL’s Drug RHB-105: Likely to Pass Confirmatory Phase 3 Trial

Earlier this month, RDHL announced positive data from RHB-105’s initial phase 3 study. Redhill is planning to run a second confirmatory phase 3 study, which will probably begin sometime in June or July of this year. The initial study was well-designed: The placebo was a good match for the active intervention, they used two common methods of diagnosis to confirm the presence of H.pylori and patients who dropped out or did not complete the study were counted as failures.

In the study, RHB-105 eradicated H.pylori infection in 89% of the treated patients. This is significantly better than the standard of care’s success rate, which is roughly 70%. What’s more, at the end of the study they allowed the placebo group to be treated with the standard of care, and only 63% of that group were successfully cured of H.pylori, suggesting that 70% may have been an optimistic estimate.

So, with the first phase 3 trial RHB-105 demonstrated that it is significantly more effective than placebo (unsurprising) and significantly more effective than an estimate of the standard of care (somewhat surprising). As a follow up, the confirmatory trial will be about 4 times larger and will pit RHB-105 directly against the standard of care. There’s some room here for failure. Although I think it’s very unlikely that RHB-105 will perform worse than the standard of care, it’s possible that there won’t be a statistically significant difference between RHB-105 and the standard. I suspect that’s why the researchers are making this trial so much larger – statistically, a large trial is more likely to pick up on small differences between two conditions.

Even with that said, the strong study design and impressive results from the first phase 3 trial make me think that another pass is likely.

Prediction for RHB-105: Confirmatory Phase 3 Approval

Although it will be more than a year before we see any data from the confirmatory phase 3 trial for RHB-105, I believe that the ultimate result will be a success. I’ll update this post if something happens to change my mind.

$RDHL’s Drug RHB-104: Potential to Pass Initial Phase 3 Trial

Unfortunately, there’s not enough data for me to be certain about the third drug candidate, RHB-104. There is a strong theoretical grounding, and I believe it is highly possible that RHB-104 will pass, but I’m not quite confident enough to say “likely.” Part of the issue is the particular nature of Crohn’s disease – although we’ve identified some of the risk factors, nobody has yet proven exactly what causes Crohn’s. And because we don’t know what causes Crohn’s, nearly all of the treatments for the disease treat the symptoms, instead of the cause.

Redhill hopes to be one of the first companies with a treatment for the cause of Crohn’s. RHB-104 is, like -105, a combination therapy. In this case, the combination is of three separate antibiotics. There’s been some very recent research suggesting that combining antibiotics like this may lead to some synergistic effects; that using small doses of multiple antibiotics at the same time is better than using large doses of just one antibiotic. The sum, in effect, is greater than the parts – or at least, that’s what RDHL is hoping.

The three antibiotics in RHB-104 are all aimed at treating a particular strain of bacteria known as MAP. As you’ve probably guessed, the researchers at Redhill Biopharma believe that MAP plays an integral role in causing Crohn’s disease. It’s well-known that MAP causes Johne’s disease in cattle, which is a very similar ailment. Modern research has also conclusively demonstrated that people with Crohn’s have a much higher rate of MAP infection than people without Crohn’s.

Although none of the above is conclusive (or even demonstrates causation), there has been some research suggesting that treating MAP infection may help Crohn’s symptoms:

Effectiveness of RHB-104
Taken from Borody et al (2002), Digest Liver Dis 34:29-38

In addition, a statistical reanalysis of an Australian phase 3 study using anti-MAP therapy to treat Crohn’s disease suggested that anti-MAP therapy may be significantly more effective than placebo. However, there are some inherent issues in reanalysis, and I wasn’t able to find out whether the reanalysis was funded by RDHL.

RHB-104 Phase 3 data
Taken from Behr and Hanley (2008), Lancet Infectious Diseases 8:344

As you can see, there’s some fairly compelling evidence suggesting that MAP might be implicated in Crohn’s. If so, RDHL’s drug will probably be effective, as there’s some separate fairly compelling evidence suggesting that RHB-104 is effective against MAP. I never like to stack assumptions atop assumptions like that, though, which is why I’m ultimately going to say that this is possible, not probable.

Personally, I don’t think that MAP is exclusively responsible for Crohn’s. I suspect that Crohn’s disease is a combination of genetic susceptibility and infection from a handful of possible causes.  Even so, RHB-104 just might work. We should see interim data sometime within the next few months.

Prediction for RHB-104: Possibility for Phase 3 Approval

Unfortunately, I don’t feel comfortable putting the stamp of approval on this one. Even so, with BEKINDA and RHB-105 likely to receive approval, I think $RDHL is a buy.

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Redhill Biopharma ($RDHL)’s Drug BEKINDA will likely pass Phase 3 sometime in 2H2017

Today’s post took me much longer than normal to write. I had a lot of difficulty finding a company that fit my normal criteria – established, but not an industry leader; at least one phase 3 candidate in the pipeline; and so on. I think, however, that the effort was worthwhile. Redhill Biopharma ($RDHL) has a handful of drugs which are very intriguing to me, and I hope to cover their drug for Crohn’s Disease in a future post. Today, though, I’m writing about Redhill Biopharma ($RDHL)’s drug BEKINDA (not an acronym, just an all-caps name for some reason). As always, if you don’t care about the details, feel free to scroll to the end.

BEKINDA, formerly known as RHB-102, is an extended-release formulation of the generic drug ondansetron (commonly known under the brand name Zofran). Ondansetron is an anti-emetic (anti-vomiting) drug, and is used to prevent vomiting in patients undergoing cancer treatment or surgery. Ondansetron is also frequently prescribed off-label for children suffering from acute gastroenteritis (AGE). AGE is something of a catch-all term for “an upset stomach caused by some sort of bug.” When people say “stomach flu,” they’re talking about AGE.

Interestingly, although the use of ondansetron has been studied fairly extensively in children suffering from gastroenteritis, there is almost no data on the use of ondansetron in adults suffering from AGE. And even in children, the use of ondansetron is technically off-label. With all of that background, hopefully it makes sense that RDHL’s formulation of ondansetron, BEKINDA, is intended to be a better method of treating the stomach flu.

While I was evaluating the BEKINDA’s chances in the phase 3 trial, I decided that approval would come down to three things:

  1. Is the drug likely to be effective?
  2. Is the drug likely to be safe?
  3. Did RDHL establish a realistic study protocol?

Is BEKINDA likely to be effective in treating AGE in the phase 3 trial?

In short: yes. As mentioned above, ondansetron is already widely used to treat children with gastroenteritis. A well-designed study found that ondansetron was – in nearly every conceivable measure of effectiveness – statistically superior to both placebo and a European anti-vomiting drug known as Domperidone in treating AGE.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5120790/#pone.0165441.ref015
From Marchetti et al., 2016, PLOS one

The success of BEKINDA, which is simply a delayed-release pill containing ondansetron, is probably presaged by these results. Although the data above was for children, there’s no real reason why it wouldn’t hold true for adults, as well. The one caveat here – and I’ll return to this later – is that the data from the table above was taken during the emergency department (ED) visit, meaning it was short-term data.

Is BEKINDA likely to be safe in the phase 3 trial?

To summarize again: yes. There are a few contraindications for ondansetron, but the advantage of reformulating a well-known drug is that all of the kinks have mostly been worked out (or at least discovered). I forsee no significant safety issues in this trial.

Did RDHL establish a realistic study protocol? Will BEKINDA pass phase 3?

This is always the tricky one to answer. Earlier in this article I mentioned that most (if not all) of the data for ondansetron is collected over a very short time period – usually over the course of a few hours – while the study protocol is a bit longer than that. The primary outcome measures of the BEKINDA phase 3 “GUARD study” are the proportion of patients

  • without further vomiting,
  • without rescue medication, and/or
  • who were not given intravenous hydration

from 30 minutes after the first dose until 24 hours later.

The length of time might be a problem, because when the researchers from the study cited above followed up 48 hours after the emergency room visits, they found that there was no longer any difference between the three conditions.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5120790/#pone.0165441.ref015
From Marchetti et al., 2016, PLOS one

This isn’t really surprising, considering the nature of the drug and the fact that any kids taken to the emergency department for vomiting were likely too sick to get better in one day. The question, though, is whether BEKINDA’s extended release formulation will be enough to overcome this hurdle.

Without phase 2 data to draw on, I turned to the next best thing: a bioavailability study. The only study I could find tested RHB-102 (which became BEKINDA) against the dose of ondansetron used in chemotherapy. Over the course of 5 days, the bioavailability of BEKINDA was either equal to or better than the routine dose. And even better, when researchers tested blood concentrations 24 hours after the initial dose, BEKINDA beat out a non-extended release equivalent dose.

Ultimately, I think that yes, the GUARD study is realistic, and RDHL will likely take home a phase 3 approval.

Conclusion

If BEKINDA posts good data (expected to take place sometime in the second half of this year), it will become the first drug in its class to treat acute gastroenteritis. If the study posts particularly strong results, it may even be possible that just the one study will be sufficient for FDA approval. To summarize, ondansetron (the drug making up BEKINDA) is effective, the study protocol is achievable, and the extended-release formula appears to work.

Based on what I’ve written here, I believe that $RDHL is a buy, for at least until the BEKINDA data is released.

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Prediction: Phase 3 Approval

The drug underlying BEKINDA has already been demonstrated to be effective, and a bioavailability study suggested that the extended-release formulation works.

Paratek ($PRTK)’s Success Hinges on Oral-Only Trial for Omadacycline; Odds Look Good

As you probably know, the effectiveness of traditional “broad-spectrum” antibiotics has taken a sharp nosedive in the last decade. The widespread prescription and use of these drugs has led to a huge rise in the number of antibiotic-resistant bacteria, leaving manufacturers and researchers scrambling to formulate new versions of old medicine.

Paratek Pharmaceuticals ($PRTK) is one of these manufacturers. Their drug omadacycline is a chemical modification of an old class of antibiotics that hopes to overcome bacterial resistance.

Omadacycline has two successful phase 3 trials already on the books – once for acute bacterial skin infections (known as ‘ABSSSI’ and often caused by the poster child of antibiotic-resistant bacteria, MRSA) and once for community-acquired bacterial pneumonia (CABP). The methods, conclusions, and safety profiles of these studies all look fine, and the study design received a Special Protocol Assessment from the FDA – meaning that the FDA believes the design of the studies sufficient to warrant a new drug application. This is all good news, so why hasn’t PRTK submitted the new drug application yet?

Both of the trials of omadacycline started with an intravenous (IV) version of the drug. This is a problem because by far, the biggest commercial potential lies in oral-only antibiotics. Intuitively, this makes sense – an oral antibiotic can be prescribed and taken at home, while IV drugs require a hospital stay or expensive nursing care. Paratek, of course, is well aware of this, so a few years ago PRTK launched a third phase 3 trial testing an oral-only version of omadacycline.

The success of drug overall will, to a great degree, depend on how good the oral-only data look – data which will probably be presented sometime in the next few months.

The Study

The phase 3 trial for oral-only omadacycline is essentially an exact repeat of the IV + oral omadacycline trial which was already approved. The trials are treating the same disease and have the same “success” conditions.

Because the trials are nearly identical and the IV + Oral trial already received approval, I’m not going to look at the study design too closely for this article. The key question is this: will the oral version of the drug work as well as the IV version?

First, a fairly intricate pharmacokinetics study found that the 300mg oral dose is nearly exactly equivalent to a 100mg IV dose. That does come with a slight caveat, however: the great advantage of oral antibiotics is that they can be taken at home. This is also, of course, the great disadvantage of oral antibiotics – there’s nobody around to make sure you take them correctly. A study found that taking food with omadacycline significantly decreased the amount of the drug that went into the body. With this oral-only phase 3 design, there is a much higher risk of patients not following the protocol, which could result in the drug appearing not to work. I don’t think it’s a likely outcome, but I wanted to note it here.

I searched the previously published studies to see if any had segregated their data between IV patients and patients who had been transitioned to oral omadacycline. As far as I could tell, the only study with separate data was one of the phase 2 studies which had happened to segregate the data because they were looking at the first 72 hours of response. In that study, about a third of patients had switched to oral-only omadacycline within the first 72 hours of the study, and 96% of those patients had seen a clinical significant treatment response. That isn’t a perfect benchmark to use to evaluate the effectiveness, but it will have to be good enough.

The answer to the key question, then is yes. Previous antibiotics have been successful in moving from IV-oriented treatments to oral-oriented treatments; the oral dose appears to be equivalent to the IV dose (as long as people follow the protocol); and some fragmentary data from a phase 2 study appears to suggest that the oral drugs work effectively.

What next?

Assuming I am correct and the phase 3 trial for oral-only omadacycline is successful, expect to see Paratek submit a new drug application (NDA) before the end of 2017. Again, assuming I’m correct about omadacycline, I am confident that the NDA will be approved.

I think that $PRTK is a buy.

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Prediction: Phase 3 Approval

The oral version of omadacycline appears to work just as well as the IV version, and since the trials are functionally identical, I expect that oral omadacycline will receive a “go” just like the IV + oral version did.

PTLA Part 2: Andexanet Alfa

In Part 1, I took a look at Portola [$PTLA, currently around $40] and their drug betrixaban. In this, part 2, I’m going to look at PTLA’s other main drug candidate, andexanet alfa. Andexanet is a drug designed to reverse the effects of factor Xa inhibitors like betrixaban.

As you may recall from Part 1, factor Xa inhibitors are anticoagulants, a class of drug extremely useful for preventing dangerous blood clots. The trick, of course, is that anticoagulants prevent all blood clots; a patient on anticoagulants runs the risk of bleeding to death from even a minor injury. Imagine a small cut on your finger that just kept bleeding and bleeding, no matter what you tried to do.

Enter andexanet. PTLA calls andexanet alfa an “antidote” to factor Xa inhibitors, and in several senses, this really is the best description. As we’ll see, andexanet works rapidly, doesn’t seem to cause harmful effects, and (probably) effectively countered the factor Xa inhibitors it was deployed against. However, some concerns about the lack of a control group prevent me from recommending $PTLA as an investment.

The Data

I took the graph below from the first Phase 3 study of andexanet. It shows two groups of patients, both of which were using a factor Xa inhibitor. The “800mg bolus” group was given a large injection and IV drip of andexanet alfa, while the placebo group was not given any. The left side of the graph measures the effectiveness of the factor Xa inhibitors (anticoagulants). As you can see, the anticoagulants rapidly stopped working in the group given andexanet alfa, and stayed “off” until the end of the IV drip. There were no safety issues.

This graph shows andexanet's efficacy
Andexanet works rapidly on injection and can be sustained via an IV drip.

At this point, $PTLA asked the FDA for approval of the drug… and were denied. The FDA wanted additional data for two of the four Factor Xa inhibitors tested. As such, the researchers began a second phase 3 study which tested andexanet alfa in bleeding patients. This study is still ongoing, but in September 2016 researchers posted interim data: of 47 bleeding patients who received andexanet, 37 (79%) saw a clear clinical benefit.

This seems good, but there’s a snag – the study had no control group. Ultimately, it’s impossible to tell whether the andexanet stopped the patients from bleeding or whether it would have happened anyway.  In and of itself, this isn’t a show-stopper. I have seen drugs without control groups get FDA approval in the past. However, given that the FDA has already rejected $PTLA’s drug once, this study design makes me wonder.

Will andexanet get approved?

Given the data, I would say yes, it is likely that the application for andexanet alfa will be approved by the FDA. The lack of a control group is worrisome, but andexanet is addressing a completely unmet clinical need. Ultimately, andexanet appears to be almost entirely without side-effects, and I think that the FDA will approve the application, even given the somewhat marginal phase 3 study formulation.

That said, I cannot recommend buying stock in $PTLA at this juncture. As I mentioned in part 1 of my look at Portola, I think that the betrixaban study is going to fail. If I’m right, the share price of $PTLA could drop precipitously, and I can’t predict how much a successful application for andexanet might boost it.

Prediction: FDA Approval – but don’t invest at this time.

The unmet clinical need and safety data make me think this drug will probably receive FDA approval, but the issue with Betrixaban should keep you from investing at this time.

 

Nektar Therapeutics: Old Company, New Drugs

Near the end of March 2017, Nektar Therapeutics ($NKTR) will present data from their most recent Phase 3 trial. Nektar has already brought two drugs through the entire FDA process, so this is not their first rodeo.

As I’m sure you’ve heard, prescription drug abuse is becoming a huge problem across the world. Nektar’s newest drug, under the working title NKTR-181, is supposed to be an abuse-resistant opioid. If things go well, NKTR-181 will start to take market share away from drugs like oxycodone and morphine.

The success or failure of the NKTR-181 Phase 3 trial will hinge on two things:

  1. Whether it is at less risk for abuse than other opioids
  2. Whether it can significantly decrease pain (versus a placebo)

With that in mind, let’s dive into the data.

Question 1: Is NKTR-181 less likely to be abused?

The short answer to this question is “probably.” The ultimate answer to this question can only really come from seeing how the public reacts to the drug, but the researchers have done what they can by testing rats.

In the NKTR-181 Phase 1 trials, the researchers found that NKTR-181 probably enters the central nervous system (or “CNS”) much more slowly than drugs like Oxy or morphine. The idea here is that the “high” feeling from oxycodone comes from how rapidly it hits the CNS. If NKTR-181 takes hours (instead of minutes) to hit you, you’re much less likely to feel high from it.

NKTR enters the CNS much more slowly than oxycodone
From “NKTR-181 efficacy in multiple preclinical models of pain”, Choi et al.

The researchers also found that rats will stop trying to get NKTR-181 at about the same time that they will stop trying to get saline. Graph A below shows that if you make a rat press a lever more than 25 times to get NKTR-181, the rat will give up. For oxycodone, on the other hand, the rat will keep pressing that lever. Graph B shows that if you take a rat trained to press a certain lever when it “feels” oxycodone, the rats will only start pressing the correct lever once they get a pretty high dose of NKTR-181. That’s a bit dense, but essentially it means that it takes a lot of NKTR-181 to make a rat feel like it does on just a little Oxy.

Rats are much less likely to keep self-administering NKTR-181
From “NKTR-181 efficacy in multiple preclinical models of pain”, Choi et al.

On the whole, these are all reasonable ways for researchers to say that NKTR-181 is probably less prone to abuse and addiction than oxycodone. Self-administration and drug-discrimination studies are both very common in behavioral research. On to question 2.

Question 2: Does NKTR-181 significantly decrease pain (versus a placebo)?

This is where I got a little more worried.

The Phase 2 study design was a little curious, but not unusual for opioids. Every patient in the study started by taking the drug to establish how much of the drug they needed to decrease pain. After this short “titration” period, some of the patients switched from the drug to placebo. This is called a “withdrawal” study, because the researchers withdraw the drug and replace it with a placebo.

NKTR-181 failed the Phase 2 trial. It failed because when patients withdrew to the placebo, their pain never came back. This was great for the patients, of course, but not great for the researchers at Nektar Therapeutics. Such an event is actually not uncommon in Phase 2 opioid trials, as the trials tend to be pretty short and the patients don’t have a chance to rebound.

To their credit, the researchers noted all of this and doubled the length of the Phase 3 trial. Making the trial twice as long gives patients a lot of time for their pain to come back, and should take care of the issue that tanked the Phase 2 trial. However, the Phase 3 trial is also testing a different type of pain.

Low-back pain – the type of pain being treated in the Phase 3 trial – is probably the trickiest type of pain to treat. In many cases, patients who have real, measurable lower back disorders like bulging discs will be completely pain free. In other cases, patients who have no discernable pathology will suffer from chronic lower back pain. As such, low-back pain is also one of the most responsive types of pain to placebo treatments. I can remember at least one recent study (Carvalho et al., 2016) which found that giving patients a placebo and telling them it was a placebo still had a measurable beneficial effect on lower back pain.

All of that makes me worry that the final study is going to have the same placebo problem that caused the Phase 2 trials to bomb.

Conclusion: The NKTR-181 Phase 3 study will probably be long enough

I’m a little worried about the Phase 3 study, since they are using low-back pain and following the same withdrawal design that flummoxed the Phase 2 study. However, doubling the length of the trial will probably be enough to help NKTR-181 reach significance. I’m also encouraged by the fact that – as the researchers pointed out – only 3% of the patients in the Phase 2 trial were unable to achieve pain relief.

Prediction: Phase 3 Pass

Although I still have concerns about using lower back pain for the pivotal trial, a length of 12 weeks is probably enough to eliminate the weird placebo rebound issue that buggered Phase 2. With that, NKTR-181 answered both of my questions and I think there’s better than even odds of a pass.

 

 

 

Eyegate Pharma’s Pipeline is Incredibly Exciting

Summary

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.

Closing

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.

Predictions:
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

Summary

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.

plazomicin2

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

 

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.

Heat Biologics’ Phase 2 drug HS-410 is safe

Summary

On November 30th, Heat Biologics ($HTBX) plans to present the top-line Phase 2 data of their new drug HS-410. I read the data, and so far it looks good! HS-410 appears to be safe and the treatment makes sense. However, HTBX still hasn’t shown that HS-410 is actually an effective treatment — a Phase 3 pass might be difficult. For now, though, HTBX is a company worth watching.

The Drug

HS-410 is a drug designed to help the immune system fight cancer naturally. Normally I am very pessimistic about immune-oriented cancer therapies, but in this case it makes sense. HS-410 treats non-muscle invasive bladder cancer (NMIBC), and the current standard of care for NMIBC relies on the immune system as well.

Basically, the treatment for non-muscle invasive bladder cancer is to scrape the cancer cells out of the bladder, then put a bacteria that’s a lot like tuberculosis into the bladder so that the immune system comes in and fights any cancer that might be left over. This bacteria — called BCG — is supposed to activate a specific type of T-Cell (immune system cell) called CD8+. HS-410 is targeted to activate the same type of T-Cell, and the researchers seem to be hoping that the two treatments will stack.

The Research

Since HS-410 is activating the same type of T-cell as BCG, the researchers designed a multi-arm study, which is smart. Basically, it works like this: If a patient is going to get BCG, they get slotted into one of three groups. Group 1 tests a low dose of HS-410. Group 2 tests a high-dose of HS-410. Group 3 tests BCG by itself as a control group. Group 4 is for patients who won’t get BCG, to test HS-410 by itself.

 

Study Design
Study Design

 

There are a few ways that HS-410 could work. If 410 amplifies the response of BCG, that would be great! If 410 works by itself, that would almost be better, as patients would prefer to get an injection (HS-410) than get a drug pushed up through the urethra into the bladder (BCG). I don’t know about you, but that doesn’t sound like much fun at all.

The Results

Everything looks good, so far. The drug is looks like it’s quite safe. The researchers are reporting that recurrence-free survival (no cancer) was about 85% after a year, but didn’t mention which arm (or arms) that was. I took a look at some of the historical research behind BCG to see how that stacks up, and it appears to be about the same. We’ll have to wait for the complete data to see the differences between arms, but right now it looks like this is going to be a Phase 2 pass. The Phase 3 trial is where they will really need to demonstrate that the drug has an effect.

Potential Market

Bladder cancer is the 5th most common cancer in the United States. There are two paths to success for this drug: boosting the efficacy of BCG or being able to replace BCG. The FDA has granted HS-410 fast track status, which is also a good thing.

We will need to see the full set of Phase 2 data in order to make a prediction about Phase 3, but for now, a Phase 2 pass seems almost guaranteed.

Prediction: Phase 2 Pass

Genocea Biosciences

Genocea Biosciences [$GNCA, market cap $131M] is a company that researches immunotherapies, focusing on the T-Cell component of the immune system. They claim to use a proprietary research platform called ATLAS, but there’s not a lot of info available on how ATLAS works or compares to other platforms.

Their chief candidate (in phase 2b trials) right now is a drug called GEN-003, a vaccine aimed at decreasing the severity and viral transmission rate of genital herpes. They are working on some cancer stuff as well, but it’s all smoke at the moment. Two things are exciting about GEN-003, should it be a viable therapy:

1) Their drug has so far shown comparable results to daily oral medication (i.e. valtrex), but GEN-003 is an annual injection.

2) If GEN-003 is successful, it will be one of the first-ever T-cell vaccines for an infectious disease. Some T-cell therapies are used to treat leukemia/lymphoma, but as far as I know, this would be one of the first commercially available T-Cell therapies for something other than cancer.

The latter point especially makes GNCA a prime buyout target if GEN-003 is successful. Remember the ATLAS thing? If they’ve successfully used it to create a widely-applicable T-cell vaccine, a large company will want that technology.

Gen-003

Here’s where we’re at so far.

In 2012, Phase 1 trials established that the concept would probably work and was safe.

In 2014 they started the first part of Phase 2 trials, using 6 different formulations of the vaccine to see which one worked the best.

In 2015 they started Phase 2b, a closer look at the 2 best-performing formulations.

The Good

In March this year, GNCA announced that they had positive 12-month efficacy results for their drug. The presentation is here. This is big, though — positive 12-month efficacy will probably be their phase 3 endpoint and determinant of drug approval. Hitting it here means that the NDA is pretty likely to be approved.

The next step for Gen-003 is the phase 2b trial (ongoing), which is comparing the two most promising formulations of the drug. GNCA estimates that they will meet with the FDA in Q1 of 2017 to discuss the end of the phase 2 period. Given the strong results in Phase 2, if the drug passes phase 2, a phase 3 go seems extremely likely.

The Bad

Their research seems pretty solid, on the whole, but there are two problems so far. First, they rolled the placebo group into a testing group after the drug administration and first datapoint (on day 28 of the trial). Basically they confirmed that there was a significant difference with the drug and no change for the placebo group, then rolled the placebo group. Given that the rest of the trial was just following up to make sure the results stuck around, this isn’tterrible, but it’s not great. I don’t know why they rolled the placebo group. Potential explanations include a need for more test participants and a desire to give the patients access to the real thing after the first datapoints showed a statistically significant difference between the drug and the placebo.

Second, in every trial far, GEN-003 has outperformed the placebo in viral shedding, but matched the placebo in actual lesion outbreak [results album] Potential explanations: a) viral shedding is determined in a lab, but lesion outbreak is patient-reported. It’s possible that there are some reporting issues there. b) placebo effect can decrease lesion outbreak (external symptom and immune mediated) but not viral shedding (asymptomatic, less immune mediated).

Summary

Although I’m not thrilled about the lesion thing, even if the drug only decreases viral load it could still be considered a success, as viral shedding is necessary for herpes transmission. The company itself seems to have a very positive outlook on GEN-003’s chances, and if you’re looking for a biotech that might deliver some spikes in the near term (expect a spike in Q1 2017 if Phase 2 is completed successfully) with good potential for longer term (6mos – 2yrs), GNCA is a good target.

Prediction: Phase 3 Approval

Disclosure: I own a stake in GNCA.