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JMP on CNCE -thanks to ROBCOSJMP-CNCE,IDRA,MRNS,VNDA,ARNA,MDGL moreBiotechnology The Weekender INDUSTRY OVERVIEW • In this note, we highlight events and catalysts under our biotechnology coverage that we anticipate soon, as well as highlights from this week (11/12-11/16). American College of Allergy, Asthma & Immunology (ACAAI) annual meeting in Seattle (Nov. 15-19): Our relevant coverage universe includes: Aimmune Therapeutics (AIMT, Bayko, MO, $40 PT, risk-adjusted, DCF-derived), BioCryst Pharmaceuticals (BCRX, Bayko, MO, $16 PT, risk-adjusted, DCFderived) and DBV Technologies (DBVT, Bayko, MO, $30 PT, risk-adjusted, DCF-derived). • We will have boots on the ground at the meeting where BCRX has three posters covering its oral kallikrein inhibitor, BCX7353, for HAE while both of our peanut allergy-focused companies AIMT and DBVT will be in attendance with presentations, posters and non-investor focused events at the meeting. American Society of Hematology annual conference in San Diego (Dec. 1-4): Incyte (INCY, Bayko, MP, risk-adjusted, DCF-derived) has multiple poster and oral presentations at this year’s meeting. • Much of the data are incremental updates. We highlight the new interim data from the Phase 2 FIGHT-203 of pemigatinib in patients with myeloid/lymphoid neoplasms with FGFR1 rearrangement as potentially the most intriguing oral presentation. Concert Pharmaceuticals (CNCE, Aprilakis, MO, $26 PT, DCF-and SOTP derived): We preview the upcoming catalyst for Concert’s lead asset, CTP-543, in alopecia areata (AA) scheduled for later this month. • There have been a number of studies published on patients with AA receiving remarkable hair-regrowth when treated with Janus-associated kinase (JAK) inhibitors, albeit most individual studies are in small numbers of patients. We summarize findings from multiple JAK inhibitors as treatment in AA to draw from for our expectations of the upcoming November readout of CTP-543 in moderate-to-severe AA (note here). Idera Pharmaceuticals (IDRA, Aprilakis, MO, $32 PT): Expanded data from the ILLUMINATE-204 trial will be released later this quarter. • We discuss below additional analyses presented at ESMO from previously released cohort data. However additional data will be reported with up to 35 patients. Marinus Pharmaceuticals (MRNS, Butler, MO, $22 PT, risk-adjusted, DCF-derived): Results from two ganaxolone Phase 2 trials (IV and oral) in PPD on track to read out in 4Q18. With the last patient, last visit for Magnolia (IV) in late October and assuming a typical 4-6 week data analysis period, we expect results in late November or December. Completion of enrollment note here. Amaryllis trial results for oral ganaxolone in mild-to-moderate PPD are expected to be announced after the Magnolia results. We continue to view these readouts as transformational for the stock and remain enthusiastic about the probability of success for both IV and oral formulations. • For Magnolia, we expect a magnitude of benefit comparable to that seen in the Phase 3 trial for SAGE’s brexanolone (~3.5-6 point placebo adjusted improvement in HAM-D score after 60 hours). Based on management’s prior comments, we expect a total of approximately 60 patients have enrolled in Magnolia, with ~20 at optimal dose level. Given the small sample size, we do not expect the results to achieve statistical significance. Ovid Therapeutics (OVID, Butler, MO, $26 PT, risk-adjusted, DCF-derived): Results this quarter from the Phase 1b/2a trial evaluating OV935 in encephalopathic epilepsies. • While a small n is expected (~20 adult patients), this trial has enrolled a diverse set of epileptic conditions, possibly including CDKL5 deficiency disorder (CDD), duplication 15q (Dup15q) syndrome, Dravet (DS), tuberous sclerosis complex (TSC), and/or Lennox-Gastaut syndromes (LGS). Vanda Pharmaceuticals (VNDA, Butler, MO, $24 PT, risk-adjusted, DCF-derived): Results this quarter from the Phase 2 trial evaluating the NK-1R antagonist tradipitant for gastroparesis. Also, pivotal results from a trial for HETLIOZ in Smith-Magenis syndrome are expected before YE. • The tradipitant results we believe to be the major near-term driver for VNDA shares before YE. Recall a Phase 3 for tradipitant in atopic dermatitis is ongoing. We do not include gastroparesis in our valuation at this time, but estimate it could produce almost $200MM in annual sales at <10% market penetration if successful. Wave Life Sciences (WVE, Aprilakis, MO, $77 PT, SOTP and DCF-derived): First clinical results for the company slated for December, which will include safety and tolerability of lead Duchenne muscular dystrophy (DMD) asset WVE-210201. We intend to release a preview note in the coming weeks. Week in Recap Aimmune Therapeutics (AIMT, Bayko, MO, $40 PT, risk-adjusted, DCF-derived): Nestle’s $98M equity investment brings total investment in AIMT to $273M as the partners extend their strategic collaboration another two years (see our note here). • Nestle Health Science will hold an 18.9% stake in AIMT when the investment closes this quarter. AIMT now has $353M in pro forma cash – sufficient runway for the U.S. approval and launch of AR101, the EU regulatory submission while continuing to develop the pipeline. Arena Pharmaceuticals (ARNA, Butler, MO, $79 PT, risk-adjusted, DCF-derived): Arena announced a transformational global, exclusive partnership with PAH-leader United Therapeutics (UTHR, NC) for ralinepag in PAH. The deal brings $800MM upfront in cash, $400MM potential regulatory milestones, and tiered, low double-digit royalties (note here). Importantly, the deal allows Arena to enhance its focus on S1PR antagonist etrasimod as its lead franchise. Otherwise, the company had no major updates following the recent R&D day (note here). BioLineRx (BLRX, Aprilakis, MO, $3 PT, SOTP and DCF-derived): 3Q18 earnings announced, with a catalyst-rich 2019 to look forward to (note here). • BioLineRx is set to have a highly productive 2019 with multiple high-impact clinical trial readouts. Topline data from Genentech’s collaboration of BL-8040 in combination with Tecentriq. Top-line results from the COMBAT trial expansion arm of the triple combination therapy will be presented in 2H19. Phase II AML consolidation therapy study will post interim results in mid-2019. We will also see initial safety from its AGI-134 asset in patients with metastatic tumors in 2H19. Blueprint Medicines (BPMC, Aprilakis, MO, $103 PT, DCF-and SOTP derived): Presented data from the Phase I NAVIGATOR study at the Connective Tissue Oncology Society (CTOS) Annual Meeting on November 15 (note here). • The data readout covered multiple trial cohorts, including in patients with PDGFRα-driven GIST, 3L or later GIST, and 2L GIST. We see the data reported for avapritinib as further de-risking both the impending NDA submission for accelerated approval in PDGFRα D842Vdriven GIST, and the ongoing registrationenabling Phase III VOYAGER study (in 3L/4L KIT- and PDGFRα-driven GIST). • However, we consider the updated findings in ≥4L GIST as decreasing the likelihood for accelerated approval in that setting, and initial results for 2L GIST as too difficult to fully interpret/confounded by the concurrent announcement of a ctDNA-guided patient selection strategy in this line of therapy. ChemoCentryx (CCXI, Aprilakis, MO, $16 PT, SOTP and DCF-derived): 3Q18 earnings announced, and development of Avacopan and CCX140 discussed, remaining on track for a highly productive 2019 and 2020 (note here). • The registrational ADVOCATE trial in the AAV indication is scheduled for 4Q19 top-line data, which will be followed by top-line data from the C3G trial in 1H19 and the Hidradenitis Suppurativa (HS) trial in 2H19. Additionally, the company intends to initiate the HS trial by year end. Concert Pharmaceuticals (CNCE, Aprilakis, MO, $26 PT, SOTP and DCF-derived): Announced interim results from its ongoing trial of CTP-543 in alopecia areata (AA) (note here). • Results were highly favorable, surpassing our preview note’s expectations, with 47% of patients achieving a ≥50% relative reduction in their overall severity of alopecia tool (SALT) score from baseline at 24 weeks with the 8 mg BID dosing. A dose response was observed from the 4 mg to the 8 mg, and safety was reasonably clean. We noted the stock weakness following the results, which we considered an exceptional overreaction. Deciphera Pharmaceuticals (DCPH, Aprilakis, MO, $65 PT, risk-adjusted, DCF-derived): Reported 3Q18 earnings and announced that enrollment of the pivotal Phase III INVICTUS study of DCC-2618 in 4L/4L+ GIST is nearly complete (note here). • INVICTUS is a randomized, placebo-controlled Phase III study in 4L GIST (n=120), and a second registrational, randomized study comparing DCC-2618 to standard-of-care sunitinib in 2L GIST (INTRIGUE, n=358) is scheduled to initiate by the end of this year. INVICTUS data are expected some time in 2019. Erytech Pharmaceuticals (ERYP, Aprilakis, MO, $33 PT, risk-adjusted, DCF-derived): Reported 3Q18 earnings and updates on company progress (note here). • The Phase III TRYbeCA1 trial of eryaspase in pancreatic cancer is currently enrolling patients in the EU and an IND is expected to be filed in the U.S. by the end of the year. The company plans to enroll ~500 patients with a roughly 60/40 EU/U.S. split. • The company is also planning the Phase II proof-of-concept TRYbeCA2 trial of eryaspase in patients with TNBC. The trial is set to begin enrolling patients by the end of this year with an enrollment goal of 65, and initial data are expected in 1H19. Heron Therapeutics (HRTX, Bayko, MO, $55 PT, risk-adjusted, DCF-derived): AdComm votes against broad opioid-sparing labels for novel analgesics (see our note here). • AdComm voted against accepting any reduction in opioid use as sufficient to warrant an opioid-sparing label (1 Yes; 11 No; 1 Abstention) which leaves the door open for HRTX to negotiate for the specific reductions in opioid use with HTX-011. HTX-011’s label will include its clinical data showing the reduction in opioid use and opioid-free patients and whether or not the data are in the indication language or the clinical data section, HRTX will be able to promote that labeled data. Loxo Oncology (LOXO, Aprilakis, MO, $215 PT, risk-adjusted, DCF-derived): We updated our financial model for Loxo Oncology to reflect our latest thoughts on the prospects of each of its key pipeline candidates, including TRK inhibitors larotrectinib and LOXO-195, RET inhibitor LOXO-292, and BTK inhibitor LOXO-305, and introduced risk-adjusted NPV calculations based on probability of success (POS) estimates (note here). • Loxo also reported 3Q18 earnings and we estimate the company has a cash runway into 2021. Madrigal Pharmaceuticals (MDGL, Bayko, MO, $300 PT, risk-adjusted, DCF-derived): We have a few notes out stemming from the presentation of Phase 2b data of MGL-3196 at AASLD. • Following the meeting, we received direct feedback from management on their Phase 2 definition of NASH resolution which created confusion for investors (note here). The criteria of a change in NAS>/ =2 points and weight loss of <9.5% were pre-specified to reduce the potential bias of a small study with few sites. Without the latter criterion, NASH resolution in the study would have almost met statistical significance. Our other notes detailed our takeaways from the presentation (here) and subsequent analyst event (here). Wave Life Sciences (WVE, Aprilakis, MO, $77 PT, SOTP and DCF-derived): Reported earnings and anticipates the company’s first clinical read-out later this year. • The stereopure modified oligonucleotide WVE-210201 is intended to be the best-in-class antisense oligonucleotide (ASO) therapy in DMD, owing to its chemical optimization platform. The readout will pertain mostly to safety and tolerability, with 5-18 boys with DMD expected to enroll in the trial who are amenable to exon 51 skipping. Following an open-label extension to the trial, patients will be tracked and efficacy end points will be read out in 2H19 (note here). Select Upcoming Events Under Our Biotech Coverage (1/2) Source: JMP Securities LLC, Company Reports |
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