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Trubion Pharmaceuticals (TRBN) develops products to treat autoimmune disease and cancer. These candidates are single-chain polypeptides, designed using the company’s custom drug assembly technology and are directed at validated clinical targets.

Trubion's programs include TRU-015, being tested in a Phase IIb clinical trial for the treatment of rheumatoid arthritis [RA], and a Phase I trial for systemic lupus and TRU-016 in preclinical testing for the treatment of non-Hodgkin's lymphoma [NHL] and chronic lymphocytic leukemia [CLL]. TRU-15 for RA is fully enrolled and results are expected later in 2007. The company has partnered with Wyeth for the worldwide development and commercialization of TRU-015.The Company has all the characteristics which should provide for future success (good management, innovative technology, an impressive later stage trial, a large corporate partner, large potential markets for its products, strong VC support in the past and strong balance sheet given its development stage). The stock is well positioned to move much higher if positive results from the TRU-015 Phase IIb trial are announced.

Company Description

Trubion Pharmaceuticals, based in Seattle, was founded in 1999 by current management and went public in October 2006. Major investors in the early pre-public rounds were Arch Venture Partners, Oxford Biosciences, and Prospect Ventures. The company has developed a technology platform which assembles single chain polypeptides directed against autoimmune disease and cancer. The technology is called SMIP or Small Modular ImmunoPharmaceutical. The SMIP drugs are expected to be highly-specific molecules characterized by optimized target binding and effector functions that overcome limitations of therapeutic antibodies and antibody alternatives.

The molecules produced seek to imitate the action of monoclonals but without the size and some of the side effects of these later very successful compounds. The SMIP molecules can be customized to have both biologic activity and a benign safety profile. The molecules consist of three sections as follows: the binding domain, which binds to the target and can consist of any type of molecule with known affinity for the target; the hinge domain, linking the front end “warhead” with the effector domain behind and which also creates the biologic activity of the whole molecule; and the effector domain which activates the immune cells involved. A group of molecules can be constructed with different effector domains but the same binding domain enabling a range of different molecules to be developed against the same disease. The company’s principal product candidate is TRU-015 for the treatment of rheumatoid arthritis, currently being tested in a Phase IIB clinical trial.

On January 16, 2007 the company announced that the trial was fully enrolled and that results would be forthcoming this year. A Phase III pivotal trial is planned based on the overall Phase II results. A successful Phase IIa trial was announced 2006, where in the first 24 weeks after receiving intravenous infusions of TRU-015, 72 percent of the subjects experienced a clinical response that is equal to or greater than that required to achieve an ACR20 (American College of Rheumatology) response, 28 percent achieved an ACR50 response and 14 percent achieved an ACR70 response. In these measures of clinical response, ACR50 and ACR70 indicate progressively greater responses from a baseline measure than ACR20. ACR20 is defined as an improvement of at least 20 percent from baseline in counts of both tender and swollen joints as well as in at least three of five other disease activity parameters.

In January 2006, Trubion and Wyeth announced a strategic alliance to develop and commercialize TRU-015 and certain other SMIP drug candidates aimed at major disease indications. Wyeth will be responsible for the worldwide development and commercializati!
on of TRU-015. Wyeth will pay milestones based on development and sales objectives for TRU-015 development and the development of other products against the CDC20 target. In addition, Wyeth will pay milestones for successful development of compounds against other mutually agreed upon targets. These milestones, if achieved, are could be worth more than $800 million. Royalties are also payable to Trubion based on sales.

Investment Thesis

Positives

  • Strong and experienced management; although additional drug development executives will need to be added soon, even with Wyeth as their development partner
  • An innovative technology which enables rapid drug discovery against validated targets; the first target CDC20 for RA is the same target used by Rituxan, the billion dollar Genentech/BiogenIdec drug. Other successful monoclonal targets can be used for future molecules
  • Promising Phase IIa results which give support for a positive outcome of the Phase IIb trial
  • Large markets for products being developed. Potential markets include all current monoclonals in immune disease and cancer (approximately 19 monoclonals are on the market with an equivalent number in trials at the moment representing multi billion dollar potential)
  • Strong balance sheet for an early stage biotech company
  • Good strategic relationship with Wyeth
  • Negatives

  • Unproven technology, in that there are no marketed products using this technology at this time, which leads to increased regulatory and operational risk
  • Very early stage company

  • Disclosure: Author has no position in TRBN.

    Source: Eye on Trubion Pharmaceuticals