I recently published a report on Seeking Alpha detailing the key investment issues for Savient (SVNT) and its key drug Krystexxa and why I believe that the stock is attractive at current levels. This report is an informational follow-on to that initial report which discusses the efficacy and side effects of Krystexxa and how it could fit into gout therapy.
Gout is a form of inflammatory arthritis caused by excessive blood levels of uric acid, the end product of the metabolic breakdown of certain foods and internal body functions. Uric acid is poorly soluble so that as levels exceed 6.8 mg/dl in the blood, it crystallizes, forming lumpy deposits in tissues that trigger an inflammatory response. These crystalline deposits occur in joints, tendons, and surrounding tissues.
Over time, these deposits (larger and more noticeable deposits are known as tophi) can become quite large, unsightly and interfere with the functioning of joints. In over 50% of cases, the first joint affected is the big toe and the popular image of the gout sufferer is an obese person with his foot propped up and bandaged. Gout flares up at unpredictable times and these flares can be painful and debilitating. If not controlled, over several years gout can progress and cause joint deformities that debilitate the patient and put patients at risk for developing kidney stones, kidney damage and heart disease.
Diet related factors account for an estimated 12% of gout cases and genetic factors around 60%. It is often associated with metabolic syndrome and can be triggered by physical trauma and surgery.
Drugs Used to Treat Gout
Earlier and milder stages of gout can be treated with diet and exercise. As gout progresses, it is treated with two types of drugs. Pain relievers like the non-steroidal anti-inflammatory drug are used to treat the pain associated with acute flares. Colchicine may also be used to break down the urate crystals and keep them from forming deposits. In more severe cases of pain and inflammation, steroids may be used.
Another class of drugs is used chronically to reduce the amount of uric acid in the blood with the goal of getting blood levels to 6.0 mg/dl or less. Remember that at levels greater than 6.8 mg/dl, uric acid precipitates out of the blood and forms crystals. The mainstay and gold standard of chronic drug therapy is allopurinol. It inhibits the enzyme xanthine oxidase that is necessary for the body to produce uric acid. Physicians may also use a drug like probenecid that works through a different mechanism of action and causes the kidneys to excrete more uric acid. Alone or in combination, these drugs reduce the concentration of uric acid.
For over 40 years, there was no innovation in chronic gout therapy and allopurinol and to a much lesser extent probenecid were routinely prescribed by physicians. The pharmaceutical industry has rediscovered gout and there is frenetic development activity. About three years ago, the FDA approved Uloric (febuxostat). You may have seen the commercials on television that feature a man carrying a green jar that symbolizes uric acid. Uloric is a xanthine oxidase inhibitor like allopurinol.
The efficacy of allopurinol and Uloric is comparable and the major differentiation is that febuxostat is primarily excreted from the body through the feces and allopurinol through urine. There are a small, but meaningful percentage of patients that have impaired kidney function and for whom Uloric offers a crucial advantage. Uloric is priced at about 40 times the price level of generic allopurinol and has been able to capture only 5% of the market since its February 2009 approval. There are two other uric acid lowering agents that are nearing phase III development and are being closely watched by investors
Ardea’s (RDEA) lesinurad is a once a day oral drug that inhibits the URAT1 transporter in the kidney that regulates uric acid excretion from the body. Lesinurad increases renal excretion of uric acid by moderating URAT1. It is not a xanthine oxidase inhibitor like allopurinol and febuxostat and could potentially be used in combination with them. It is poised to begin phase III trials and if all goes smoothly, it could be approved in the US in late 2014 or 2015. Because lesinurad affects kidney function, any side effects related to the kidney will be closely scrutinized by the regulatory agencies.
BioCryst’s (BCRX) BCX4208 is a novel enzyme inhibitor that works upstream of xanthine oxidase. It is an oral drug with potentially once a day dosing. It should be synergistic with allopurinol and febuxostat and used in combination with them. It is nearing the end of phase II development and could enter phase III in 2012. If all goes well, it could be approved in the U.S. in 2015 or 2016.
Beyond 2017 there is the potential that these three drugs when combined with the current gold standard drug allopurinol could change the natural history for gout patients, reducing the number entering the refractory state and limiting the market potential for Krystexxa. However, none of these drugs promise to have the efficacy of Krystexxa and chronic refractory gout takes many years to reverse. Also, lesinurad and BCX4028 won’t be on the market until 2014, 2015 or 2016 and their clinical profile has yet to be defined in phase III trials. If this is a concern for Krystexxa, it is for the 2017 and beyond time frame.
Krystexxa Is a Breakthrough for Chronic, Refractory Gout
Krystexxa was approved for patients who have the most severe cases of gout and have failed to respond to allopurinol. These patients have high levels of uncontrolled uric acid and usually present with a number of disfiguring tophi.
The type of patient that Krystexxa is effective for was described at the Krystexxa FDA advisory committee by a physician. He said Mr. L, a 46-year-old engineer, came to him with the most severe case of gout that he had ever seen. Due to knee involvement, Mr. L had not walked in more than four years and got about in a motorized scooter. Mr. L sought out the doctor when he learned that he was participating in the phase III clinical trial of Krystexxa. Unfortunately, he was randomized to placebo and endured six months of ineffective therapy and pain without any results. However, he was eligible at the end of the trial to switch over to the open label phase of the program in which he could receive Krystexxa. After a few months on therapy, Mr. L walked for the first time in four years and made great progress toward becoming fully ambulatory. Striking, draining, crusted tophi on his hands resolved over a nine-month period.
The experts on the FDA advisory committee were also convinced of the efficacy of Krystexxa in refractory gout. One was a rheumatologist with a large gout patient population. He said that this was the first drug he had seen that could dissolve tophi. Another said that this was the most exciting data that he had ever seen in terms of resolving chronic gout. Of the 15 members of the committee, all were convinced that Krystexxa is uniquely effective in treating refractory gout. Only one member voted not to approve Krystexxa and this was due to concerns about safety.
Krystexxa Has Administration and Side Effect Issues
The efficacy of Krystexxa in some patients is extraordinary. However, its efficacy must be weighed against other issues. The development of Krystexxa was based on a novel biological observation by scientists at Duke University that mammals with the exception of humans and great apes have an enzyme called urate oxidase that is produced by the body to break down uric acid. Humans and great apes over the course of evolution have lost the ability to produce urate oxidase and rely on excreting uric acid in urine to maintain balance in the blood.
Krystexxa is a recombinantly produced version of pig urate oxidase that is pegylated to allow for longer circulation time in the body and to reduce the immune response. Because it is essentially a foreign (pig) protein, the body can create antibodies against it. These antibodies can lead to troubling side effects and can also inactivate the product. This sounds daunting, but bear in mind that for decades diabetics were treated effectively with pig and cow insulin.
The disadvantages of Krystexxa are its side effect profile and its administration requirements. Drug administration requires a two hour infusion every two weeks until uric acid levels reach targeted levels and in the clinical trials this could take 6 to 18 months. About 80% of patients experience a gout flare when starting on the drug; this is common for all uric acid lowering therapies. Infusion related side effects require prophylaxis with the antihistamine fexofenadine and a steroid to reduce inflammatory reactions. Krystexxa carries a black box warning on its label alerting physicians about the risk of anaphylaxis. In phase III clinical trials, 157 of 212 patients (on intent to treat basis) or 74% of patients completed therapy despite the administration and side effect issues.
Disclosure: I am long SVNT.