By Juan Rodriguez & Andrew McDonald, Ph.D.
In this article we examine some important upcoming catalysts for biotech companies that we have been following. The catalysts include PDUFA dates for Aegerion Pharmaceuticals (NASDAQ:AEGR) and ISIS (NASDAQ:ISIS) in collaboration with Sanofi (NYSE:SNY), as well as upcoming Phase III trial data for Ziopharm (NASDAQ:ZIOP) and Celsion (NASDAQ:CLSN).
Aegerion has a PDUFA date of December 29, 2012 for its only drug lomitapide. Lomitapide is an oral microsomal triglyceride transfer protein (MTP) inhibitor for the once-a-day treatment of homozygous familial hypercholesterolemia (HoFH). We have covered the company in previous articles here and here. When we first wrote our analysis on AEGR the stock had a price of $14.72 and a market cap of $316.6M. At the closing bell on November 30, AEGR was trading at $22.20 with a market cap of $565.31, a 50% increase in value. At the end of the third quarter of this year Aegerion had cash and equivalents worth $95.5M. With a cash burn rate of $12-13M per quarter, the company has cash runway into 2014.
But AEGR's share price has more upside. On October 17, the Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) of the FDA voted 13 to 2 that sufficient safety and efficacy data were presented by Aegerion to support the marketing authorization of lomitapide for the treatment of patients with HoFH when used as an adjunct to a low-fat diet and other lipid-lowering therapies. HoFH is an extremely rare condition and given the limited treatment options, AEGR will be able to set a high price tag for its drug that some analysts have suggested may be as much as $300,000 per year. There's a great deal of speculation on whether the drug will be used off-label in patients with Heterozygous Familial Hypercholesterolemia (HeFH) which is more common.
Panelists considered that the benefits outweighed the risks since the HoFH population has limited therapeutic options available for this life-threatening disease. The FDA will likely require a Risk Evaluation and Mitigation Strategy (REMS) so that the drug is used appropriately in the targeted population. Lomitapide's efficacy has been demonstrated in a single-arm, open-label, Phase III study in 29 patients. Latest data reported in November 2012 showed that LDL-C levels were decreased to 50% from baseline in 23 of the 29 patients treated and approximately one-third of patients were found to have less than 100mg/dL LDL-C levels in the 6 month trial. Further, the mean LDL-C levels were reduced to 38% at the end of the trial. Adverse events were gastrointestinal, increased liver enzymes in four patients and accumulation of hepatic fat. Dropout rates were also high; 21% of the patients discontinued treatment during the first 6 months, but the rest were able to complete at least one year of dosing. A liver monitoring program may be put in place, but it shouldn't hamper adoption of the drug since HoFH is a fatal disease if left untreated.
The company announced on March 20, 2012 that a Marketing Authorization Application (MAA) had been accepted by the EMA. Although the timeline in Europe is not as clear as in the U.S., we expect to hear from the Agency at the end of the first quarter or beginning of the second quarter of 2013 as it usually takes about a year for the EMA to complete the drug review process.
The FDA usually follows its Advisory Committee recommendation so will likely grant approval to Aegerion's lomitapide on or before the PDUFA date of December 29, 2012.
Aegerion plans to launch the drug on its own and for that reason, it's increased its headcount over the last few months to 70 people and has built a sales force. Going forward, investors will be focused on the company's ability to successfully launch the drug.
AEGR is not alone in the race to gain market share in the HoFH space. ISIS Pharmaceuticals and Sanofi's Genzyme have followed a similar path with their partnered drug Kynamro (mipomersen) . Kynamro is an antisense inhibitor of apoB-100 mRNA.
Just a day after lomitapide's panel, on October 18, ISIS went before the FDA's EMDAC which backed the drug's safety/efficacy profile with a vote of 9-6 in favor of approving Kynamro. However, some panelists were concerned that efficacy was not enough to outweigh potential health risks.
In two Phase III studies, it reduced cholesterol by 36% and 37%, compared to 13% and 5% for patients receiving placebo. The drop out rate due to adverse events was high - 31% and 43% - compared to 5% and 17% for the placebo group. In these studies, 10% and 15% of patients had persistent liver enzymes elevations above three times the upper limit of normal. Isis enrolled a larger number of patients than Aegerion including 58 patients already on lipid-lowering medication and 158 patients at high risk of coronary heart disease who were on maximally tolerated dose of a statin.
Investors are wondering which drug, lomitapide or Kynamro, will gain more market share. We published a market research study among lipidologists and found out that while there's market for both drugs, lomitapide is likely to come out on top. Lomitapide is an oral treatment, whereas Kynamro is administered via subcutaneous injections in which site reactions are common. Moreover, the safety profile is not more benign than that of lomitapide and the panel pointed to a potential higher risk for cancer. The FDA is expected to impose a REMS.
While the panel's vote was closer than lomitapide, we think that the FDA may follow the recommendation of its advisory committee and approve Kynamro on or before January 29, 2013. Also the company is slated to hear from the EMA with regards to its MAA before the end of this year.
Clinical data readouts
Ziopharm awaits top-line progression free survival (PFS) data from the Phase III PICASSO 3 clinical trial. The study is evaluating palifosfamide, a bi-functional DNA alkylator and cross-linker, plus doxorubicin versus doxorubicin alone in patients with first-line metastatic soft tissue sarcoma (STS). Initially scheduled for December 2012, results have recently been put off to the first quarter of 2013 following a review by the Independent Data Monitoring Committee (IDMC).
In February 2012, the company announced preliminary overall survival (OS) data from the Phase II PICASSO clinical trial that demonstrated a meaningfully positive trend favoring the palifosfamide arm with intent-to-treat (ITT) and modified ITT hazard ratios of 0.79 and 0.78, respectively. Approximately 40% of subjects treated with palifosfamide were alive at 2 years after starting treatment. A total of 30% in the control arm treated with doxorubicin (including those who crossed-over and received subsequent palifosfamide) were alive, compared to an expected 25% based on randomized data.
The stock has dealt with increased volatility the last few weeks, including a misleading article on Forbes that was removed after causing a more than 30% drop, although the share price later recovered.
The delay doesn't come as a surprise as the primary endpoint is event driven, so investors were aware that the read-out could come later. The historical median PFS for doxorubicin has ranged between 4 and 6 months. Based on previous data, we believe there is a good chance that the palifosfamide + doxorubicin arm will show a statistically significant benefit in the primary endpoint of PFS.
At the time of this writing, ZIOP sports a market cap of $344.69M with a share price of $4.38 and $95.3M in its coffers that should last until the second half of 2013, according to the company's most recent quarterly filing. We believe there's more upside for the stock in case data are positive.
Celsion has had quite a run-up over the last few weeks, reaching all-time highs of $8.35, a stunning 385% increase in share price year to date. CLSN closed at $7.50 on November 30, with a market cap of $262.57M. The company had $22.7M in cash and equivalents at the end of the third quarter 2012. CLSN has a burn rate of approximately $5-6M per quarter which should be enough to fund operations through data release and well into 2013.
Despite lack of interest from Wall Street and institutions in the stock, traders and retail investors alike have rushed to buy it in the last few weeks in anticipation of the Phase III HEAT study data release. The trial is testing the combination of Thermodox, a heat-sensitive liposomal form of doxorubicin plus radiofrequency ablation (RFA) or RFA alone in 600 patients with hepatocellular carcinoma (HCC).
Celsion is due to report the data in January 2013. The primary endpoint is PFS with a projection of 380 events of progression required to trigger the final analysis and submission for accelerated review and conditional approval. The secondary endpoint is OS. It's unlikely that the FDA will provide final approval of ThermoDox if it does not demonstrate a survival benefit.
Unfortunately, there are few data that investors can analyze to draw conclusions about the likely success of this trial. Celsion ran a single arm, open label, dose escalation Phase I study in 24 patients that included maximum tolerated dose (MTD), and pharmacokinetics (PK) among the primary endpoints and evidence of anti-tumor activity in its secondary endpoints. Escalating doses of Thermodox showed a statistically significant PFS advantage at the highest dose of 60 mg/m2. The MTD was established at 50 mg/m2 based on two dose-limiting toxicities at 60mg/m2.
Although we think Thermodox will likely produce an anti-tumor effect, it's difficult to predict to what extent it'll have a significant clinical benefit, hence we prefer to remain on the sidelines on this one.
Disclosure: I am long AEGR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Business relationship disclosure: LifeSci Advisors is a healthcare advisory firm. This article was written by Juan Rodriguez & Andrew McDonald, Ph.D., two of our interns. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.