Late-breaking abstracts from AASLD’s upcoming The Liver Meeting were published on Tuesday morning at 10:00 AM, and a number of companies with development-stage therapeutics in the space felt the impact.
Arrowhead Pharmaceuticals (ARWR)
First and foremost for many on the street was Arrowhead Pharmaceuticals’ (ARWR) late-breaking abstract on ARC-520, an RNAi therapeutic for the treatment of chronic Hepatitis B. Two events put incredible pressure on ARWR on Wednesday: data from a competing, development-stage product and seriously underwhelming data from its own therapeutic.
Replicor, a private biotechnology company developing REP-9AC’ for the treatment of chronic Hepatitis B, is scheduled to present data at the Oligotherapeutics Society meeting (OTS) on October 15. The abstract for the presentation went public on Tuesday afternoon and got significant attention in pre-market trading on Wednesday, causing a sell-off in ARWR prior to the open. REP-9AC’ mechanism of action can be summarized as a Hepatitis B surface antigen (HBsAg) release inhibitor, similar to ARC-520; ARC-520 prevents HBsAg protein from being produced (and released) in addition to all other HBV viral proteins.
The REP-9AC’ abstract summarizes the clinical data to date in a phase I trial of chronic HBV subjects who received REP-9AC’ in combination with an immunotherapeutic (Pegasys/Interferon-alpha). It is important to note that this is a small phase I trial in around 12 subjects in Bangladesh. Previous data from this trial presented at EASL 2013 demonstrated subjects had multi-log HBsAg knockdown with REP-9AC’ monotherapy. However, when subjects received REP-9AC’ in combination with immunotherapy, they demonstrated up to 5log10 reduction in circulating HBsAg and an 89% SVR off-treatment. This is very intriguing data.
At 10am, an abstract on ARC-520 at 1 and 2 [mg/kg] in the ongoing phase IIa trial in chronic HBV subjects went public. In chronic HBV subjects treated with 2 [mg/kg] ARC-520 produced a mean HBsAg reduction of 51% at nadir (0.3log10). Wall Street analysts expected 0.3-0.7log10 reduction at 2 [mg/kg]. Arrowhead has dropped over 40% on this news. This can be attributed to a few things:
- ARC-520 2 [mg/kg] HBsAg reduction was on the low end of expectations
- Chronic HBV competition stemming from Replicor’s REP-9AC’ data
- Arrowhead’s management has lost significant credibility. In the blinded phase IIa data release in August, management stated HBsAg reduction in humans was “similar” to the non-human primate model. By most people’s definition of “similar”, 50% is not similar to 80%:
- Non-human primate model demonstrated ~80% reduction in HBsAg
- 2 [mg/kg] cohort phase IIa data showed ~50% reduction
- Timeline for 1log KD of ARC-520 extended. ARC-520 will most likely have to be dosed up to 4 [mg/kg] to have even a shot at 1log10. Arrowhead won’t have that data most likely until mid-2015, meaning Tekmira (TKMR, read more) has significantly gained on Arrowhead in the RNAi race for HBV, not to mention REPLicor. In addition, it remains to be seen if 1log10 reduction of HBsAg will even be enough to facilitate seroclearance, seroconversion, and/or a functional cure.
We took a licking on Arrowhead but are moving on and taking the loss, for the reasons above (read our prior coverage). ARWR is dead money until 2015, and though the company’s one saving grace is around $170 million in cash and equivalents, now’s the time to take the loss for tax purposes – every fund will be doing the same this close to year-end. We would not look for a meaningful bounce in ARWR in the near-term.
Conatus Pharmaceuticals (CNAT)
Conatus‘ late-breaking abstract was accepted for poster presentation at The Liver Meeting. Entitled “Rapid and statistically significant reduction of markers of apoptosis and cell death in subjects with mild, moderate and severe hepatic impairment treated with a single dose of the pan-caspase inhibitor, emricasan,” the poster will be presented on Monday, November 10. CNAT jumped as high as $7 in early trading but has pulled back as small and mid-cap stocks continue to be sold broadly.
PropThink has written at length about emricasan, here and here.
Conatus outlines in the abstract biomarker data related to emricasan’s effect on biomarkers associated with advanced liver disease. Data will be included in the poster, but CNAT reports that statistically significant reductions from baseline were achieved on all biomarkers following a single dose of emricasan (50mg). All hepatically impaired subjects showed reductions in markers of apoptosis and caspase activity as well, both of which may translate to a clinical effect. This is still the biggest hurdle for Conatus: the company has a growing body of evidence that emricasan affects these numerous biomarkers, but ongoing phase 2 studies will be the arbiter of emricasan’s clinical impact. Read more on emricasan and Conatus in PropThink’s prior coverage.
Intercept Pharmaceuticals (ICPT)
A former Wall Street darling, Intercept Pharmaceuticals won’t be presenting data from the completed FLINT trial at AASLD – this is the study that sent ICPT higher by 400% in January of this year. FLINT tested Intercept’s bile acid analog/farnesoid X receptor (FXR) agonist, obeticholic acid, in nonalcoholic steatohepatitis (NASH).
According to an Intercept press release, the study’s sponsor (NIDDK) plans to publish the final FLINT results in a peer-reviewed journal in lieu of presentation at a medical meeting. ICPT is pulling back as some investors held out hope that the full data would be presented, and the next catalyst for ICPT has been kicked down the road. Analysts at RBC spoke with management this morning, who have seen NIDDK’s latest, updated manuscript for FLINT: management confirmed that data wasn’t actually submitted for presentation (so not rejected); there are additional cuts of the data in the revised manuscript, including on fibrosis benefits; NIDDK hopes to get published by year-end; and no changes to top-line data, as any major updates on efficacy or safety would have required an update. Intercept plans to begin a phase 3 NASH program in the first half of 2015.
One or more of PropThink’s contributors are long CNAT.
