Yesterday, both obesity and radiopharmaceuticals had year end catalysts that unfortunately did not meet investor expectations.
Structure (GPCR) Weight Loss Update
GPCR traded down 42% on the Phase 1/2 update of SBR-1290, the company’s oral weight loss.
In the Type 2 diabetes cohort, SBR-1290 demonstrated a statistically significant reduction in weight at Week 12 of up to -3.51% placebo-adjusted (p=0.04). Weight loss continued to decrease through Week 12.
In the obesity cohort, SBR-1290 showed a statistically significant decrease in weight at Week 8 of -4.74% placebo-adjusted (p<0.0001). Weight loss continued to decrease throughout the eight weeks of treatment.
GPCR data was underwhelming on the efficacy, especially once you compare it to the overall market which includes subcutaneous injections. When compared to Lilly’s oral orforglipron at 8 weeks and 12 weeks, GPCR was in the 4-5% weight reduction range, whereas Lilly was in the 5-8%.
Once you take all forms of administration, including injections, into consideration, weight loss needs to be in the 7%-10% range to be competitive at 12 weeks.
On the brightside, GPCR did have a relatively clean adverse event profile. Only 1 participant discontinued due to an AE related to study drug in the Phase 2a T2DM cohort. No study discontinuations due to AEs in the Phase 2a Obesity cohort. This is superior to Lilly’s oral and also the subcutaneous injections.
GPCR needs to remain the cleanest oral option and get to ~10% reduction by week 36 to have a place in the market. The current 4-5% weight loss will not cut it. However, the charts above show that after 8 weeks you really start to see weight loss improvement accelerate into week 36-40. So there is a good chance that GPCR does hit this 10% goal to remain competitive in future data readouts. The company expects to have additional data by Q2 2024.
Bottom Line: GPCR drug is active. Its standing is still in question in a highly competitive market. Being an oral and tolerable to date is an advantage and gives company wiggle room to report weight loss data that is in 10% range, rather than the 15% expectation for injectables. After the 40% drop in price, and at a $1.2B enterprise value, GPCR has a more compelling risk/reward than it had prior to yesterday’s data readout.
Point’s (PNT) Phase 3 Topline Data in Radiopharma Space
PNT’s SPLASH trial met its primary endpoint, demonstrating a median radiographic progression-free survival (rPFS) of 9.5 months. To be competitive with Novartis’ already approved Pluvicto, PNT needed to report a median rPFS of at least 11 months. It didn’t. PNT2002 is still approvable, with an NDA expected to be submitted in 2024, however it seems unlikely that PNT’s drug will take meaningful market share from Pluvicto.
Keep in mind that Point handed PNT2002 over to Lantheus (LNTH) in exchange for $260M upfront, $280M on approval, up to $1.55B in milestones and a 20% royalty. In addition to that, Point is also in the process of being acquired by Eli Lilly for $1.4B in exchange for the PNT2002 milestones/royalties mentioned above, their manufacturing capabilities and an early FAP-alpha asset, PNT2004. Read more here.
Point had recently been trading above Lilly's $12.50 per share offer price, presumably in the hope of a better deal. However, after the Phase 3 readout, the is trading around the $12.50 deal price. The data does raise questions about whether Lilly will still be interested in acquiring Point, which is still a possibility. The $1B net price for Point is probably a good bet for Lilly to take control of Point’s radiopharmaceutical manufacturing capabilities and early stage PNT2004. PNT shareholders will hold a vote before the Dec 22 deadline, and most likely accept the Lilly offer.
Bottom Line: Novartis’ Pluvicto will likely remain the top player in radiopharmaceutical PSMA prostate cancer. Lantheus’ will enter the market with PNT2002 but not have the same commercial success that was initially expected. Point will be wise to take the $12.50 offer and hand over radiopharmaceutical manufacturing to Lilly, who is looking to take advantage of the rising interest in the space.
PropThink contributors do not hold positions in any of the names mentioned.
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