Arrowhead Research (ARWR) raised as many questions as it answered this week when the company reported interim results from a mid-stage study of hepatitis B drug candidate, ARC-520. Not what Wall Street expected, initial results suggest that the magnitude of hepatitis B surface antigen knockdown achieved in humans receiving a 2mg/kg dose of -520 is similar to that seen in a single non-human primate tested with ARC-520 – a 0.8log reduction. Arrowhead’s working assumption is that HBsAG knockdown will result in a functional cure for HBV.
Arrowhead did not give mean knockdown figures in the study because the company remains blinded; the analysis comes from best estimates as to which patients received placebo or active therapy.
Wall Street analysts had hoped for a ≥ 0.5log reduction in HBsAG from ARC-520, while consensus among active investors (the buyside) widely considered “success” a ≥ 1.0log reduction. ARWR sold off in afterhours trading on Tuesday with the ambiguity of the company’s press release, but climbed in the next two trading sessions as investors got comfortable with the new scenario. Arrowhead is now enrolling a higher dose of ARC-520 in the ongoing trial (3mg/kg) and expects more data at or around AASLD’s Liver Meeting in early November (7-11). Investors will pin hopes on the 3mk/kg dose, and possibly 2mg/kg as HBsAG knockdown had yet to taper at 8 weeks. ARWR closed the week up 5%. Read more here.
Also in RNAi therapeutics, Tekmira Pharmaceuticals (TKMR) finally gave up the rally following the much-discussed Ebola outbreak in Africa. On Monday before the stock’s slide, PropThink recommended that Premium Subscribers take some equity off the table, or at the least, collect premium on out-of-the-money calls against a core position. We’ve been suggesting involvement in Tekmira since mid-2012, but not necessarily for the Ebola program. While we like the longterm story, taking some profit on this rally makes sense given the momentum that’s chased the Ebola trade.
Our suggestion was well-timed – TKMR slid 20% in the Tuesday trading session and closed the week at $18.00, from a high of almost $26.00 on Monday. All-in, buying TKMR in July when we suggested the clinical hold on TKM-Ebola was addressablewas good for 120%.
OncoGeneX Pharmaceuticals (OGXI), on which PropThink opined last month, reported second quarter results last week and clarified a few upcoming events.
The biggest takeaway: final results from the failed phase 3 SYNERGY trial, testing custirsen in metastatic castrate-resistant prostate cancer (CRPC), will be presented at ESMO 2014 at the end of September. OGXI indicated that a survival benefit was seen in a subset of patients in the study; this is new information and explains why OGXI jumped 9% with the earnings announcement. Additionally, an interim futility analysis of ENSPIRIT (custirsen in non-small cell lung cancer) will take place by year-end 2014, and OGXI will have phase 2 data on apatorsen in metastatic bladder cancer (BOREALIS-1) in the first quarter of 2015. Continue reading Mr. Phillips’ latest look at this left-for-dead stock.
For PropThink contributor Ivan Deryugin, Pharmacyclics (PCYC) has been a long-term bullish investment given a belief in the quality of Imbruvica’s clinical data, market potential, and the terms of the company’s collaboration with Johnson & Johnson (JNJ) (prior coverage can be found here and here). Mr. Deryugin revisited the long thesis and the company’s second quarter earnings this week, explaining why he still like the story, despite already being up 75% since he stepped in last year.
