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On May 29, 2014 Benitec Biopharma (OTCPK:BNIKF), (OTCPK:BTEBY) announced that patient dosing had commenced in the clinical trial of its lead compound for the treatment of Hepatitis C (HCV), TT-034. The trial's protocol demands that the first patient in each dosing cohort (of which there are five) be treated and monitored before the rest of the cohort can be dosed. In the case of the first three cohorts the dosing and monitoring period is six weeks. In the case of the fourth and fifth cohorts the dosing and monitoring period is ten weeks. The remaining patients in each cohort have the same dosing and monitoring periods. The protocol also dictates that the independent Data Safety Monitoring Board (DSMB) reviews the safety data from each of the first patients in each cohort before approving the dosing of the remaining patients. The protocol also dictates that the safety data for all patients in a cohort must be reviewed before approval can be given for dosing of the following cohort.

If everything went smoothly i.e., all the patients were screened and dosed on time and the DSMB met immediately after the dosing anniversaries mentioned above, then the first three cohorts would each take 12-13 weeks from first dosing to assessment and the last two cohort would each take 20-21 weeks.

The trial is now at a stage where the first patient in the first cohort (of two patients) will, in the next few days, reach the six-week anniversary and the DSMB will be able to review the safety data.

As we are so close to this first milestone I thought that I would remind shareholders of the consequences of the outcomes for TT-034.

The company has committed to releasing data on each cohort as dosing progresses. This means that, if a second patient is dosed next week, after the DSMB meets (assuming it meets on time), then shareholders can expect to receive news about the first cohort in the third week of August. The company may elect to announce the dosing of the second patient before then. This would be a good sign regarding the issue of safety as such an announcement would confirm the DSMB approval.

In my opinion, the first announcement will only give an indication of the safety of TT-034 and safety is the purpose of the first cohort. Should no or inconsequential adverse events be recorded, then the second cohort will be approved. While this would cause a positive announcement, the market reaction may remain subdued as it may already expect that TT-034 will present no safety issues at this low dose. The market could instead be waiting for efficacy results to be tabled before it gets excited?

If safety was a major concern at this stage, then the trial would likely be put on hold by the FDA. This would be a significant setback to Benitec, however, it would not be the end of the world. The reason that this would not be the end of world is because the company has other pipeline products and management had the foresight to raise sufficient capital to progress one or more of these to the clinical trial stage. The results for TT-034 or therefore not binary i.e., good results mean we press on, poor results mean we fold, for Benitec. It is true that poor results would have a negative impact on the company's share price but, in the long run, this could be recovered if, for example, a trial of Tribetarna for Non-Small Cell Lung Cancer (NSCLC) was to prove safe and efficacious. The trial for Tribetarna can be funded from within the current capital available to the company and, as it targets a different gene compared to TT-034 and it does not use the AAV8 vector, the results for TT-034 will be irrelevant to the commencement of this NSCLC trial.

If the safety data was poor and this result was because of the AAV8 vector, then this would have implications for Benitec's Hepatitis B (HBV) program. However, this too has a different genetic target to TT-034 and Benitec has the option to use the AAV5 vector which it has licensed from uniQure instead of the AAV8 vector. Again, this means that poor safety data from TT-034 would not scuttle the HBV program but it may set it back in time as adjustments are made.

What about efficacy? If safety does not impress the market then will the first cohort announcement contain a surprise in terms of efficacy?

I am on record as saying that the pre-clinical data does not support this notion, however, anything is possible. If pre-clinical data was the only criterion for a successful treatment for HCV, then HCV would have been cured years ago and the 95% failure rate of clinical trials would not be the norm. The fact is that the symptoms of HCV can occur when the percentage of infected hepatocytes is very low (different studies show varying percentages). If the first patient had such a low percentage and the TT-034 vectors were lucky enough to encounter most of these cells, then who knows what could happen in terms of viral load reduction. This is why we have clinical trials and why the results from one patient are unreliable.

As far as comparing the trial data to the Non-Human Primate data is concerned, the first dose administered to cohort one is well below even the lowest dose administered to NHP's, let alone the therapeutic levels. The minimum dose administered to NHP is the same as that to be given to cohort two. So it is not until cohort two that any comparative efficacy data can be studied. I still think cohort three will give the first real indicative level of success when compared to NHP data and cohorts four and five will, hopefully, prove to be therapeutic.

In summary, positive safety results will see the trial go marching on, which may or may not rev up the market. Negative results will see a short-term reduction in the share price but management has been prudent enough to have in its pocket a very sound alternative plan, which is funded and does not rely on what happens with TT-034. Indicative efficacy results for TT-034 are not likely to be seen until cohort three has completed its monitoring stage but anything is possible; after all, this is the first in human trial of this kind of technology and so there really is no precedent.

Disclosure: The author is long BNIKF. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

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