Promising Italian Biotech With An Upcoming CHMP Meeting

| About: Gentium S.p.A. (GENTY)
This article is now exclusive for PRO subscribers.

Gentium S.p.A. (GENT) is an Italian biopharmaceutical company focused on leveraging active ingredients from natural sources as potential therapeutic agents. The company's flagship drug candidate is Defibrotide, which is based on single-stranded DNA extracted from pig intestines developed for the treatment of hepatic Veno Occlusive Disease ("VOD"). VOD is a rare condition where the veins in the liver are blocked as a result of cancer treatments, such as chemotherapy or radiation treatments, given ahead of a stem cell transplant.

In this article, I'll take a look at Defibrotide's end markets and clinical trials to see how the stock looks ahead of a key CHMP (Committee for Medicinal Products for Human Use) meeting on February 18th through February 21st of this year.

A Look at the VOD Market

Veno Occulative Disease is a disorder of the vascular system that stems from commonly used cancer therapies, including chemotherapy, radiation therapy and hormone therapy. Most of the severe cases occur after high-dose chemotherapy given before a bone marrow transplant, resulting in weight gain, increased liver size, and ultimately obstructed small veins in the liver. Based Gentium's review of more than 200 published papers, the company estimates that up to 17% of patients who receive blood and bone marrow transplants develop VOD. Of those patients, approximately one-third progress to severe VOD and approximately 80% of those patients die within 100 days of stem cell transplantation without treatment.

Bone marrow transplants are primarily used in cases of lymphoma and leukemia to enable the highest possible dose of chemotherapy and could expand to treat other forms of cancer, if clinical trials are successful. Given the fact that this condition affects such a large number of patients in this population, there could be significant demand for the drug moving forward, while some 53,000 people received bone marrow transplants in 2003, according the International Bone Marrow Transplant Registry. These figures suggest an end market that could already be near 3,000 severe VOD treatment-only cases in the U.S. and E.U each year.

Gentium's Mixed Clinical Trials

In mid-2009, Gentium's Defibrotide controversially failed the primary and secondary endpoints of its Phase III clinical trial. While the drug demonstrated "strong trends" in its favor, it failed to reach the protocol-specified levels of significance for the primary and secondary endpoints at 100 days, according to the company's press release. The primary endpoint used in the trial was complete response at 100 days following SCT and utilized historical controls as a comparator, while secondary endpoints included a survival rate at 100 days and six months post SCT.

However, investors should note that the study missed these endpoints just barely, with a p-value of 0.015 (0.01 specified) for the primary and 0.051 (0.05 specified) for the secondary. According to Dr. Paul Richardson, the principal investigator of the trial, "I am encouraged by the results of this trial, especially given the extremely sick patient population that was enrolled. The data generated from this trial confirms the activity of Defibrotide seen in earlier studies, and supports the benefit of Defibrotide for the treatment of sVOD in improving complete response rates and survival, as well as its potential in less advanced stages of the disease."

Meanwhile, a Phase II/III Pediatric Prevention trial should help allay some of these fears after showing a 40% reduction in the incidence of VOD at day 30, with a statistically significant p-value of 0.0488. Moreover, the incidence and severity of acute graft versus host disease ("GvHD") by day 100 in allogeneic SCT recipients was significantly reduced from 63% in the control arm to 45% for the prophylaxis arm, with a promising p-value of 0.0044. While the clinical trials had different endpoints (one prevention and one treatment), the second trials could demonstrate that the efficacy and mechanism of action remain durable.

Upcoming Catalysts to Watch

On May 18, 2012, Gentium submitted its Marketing Authorization Application ("MAA") to the European Union for Defibrotide to treat and prevent VOD in adults and children undergoing haematopoietic stem cell transplantation therapy. The company subsequently submitted responses to the second List of Outstanding Issues ("LoOIs") on December 18, 2012. Then, on January 17, 2013, the company was informed that its MAA would be on the agenda for discussion at the European Medicine Agency's ("EMA") Committee for Medicinal Products for Human Use ("CHMP") meeting on February 28th through February 21st. Notably, this body is similar to the FDA's PDUFA meetings and could signal near-term commercialization.

Gentium represents a favorable risk to reward ratio for several reasons. First, the company's clinical trials may have been mixed, but statistical significance seems clear from the p-values seen in both treatment and prevention trials. Second, the EMA has undergone two rounds of LoOIs with the company, meaning that most questions should be answered by now, setting the stage for a favorable CHMP decision. Third, any success with the EMA could result in more favorable odds moving towards an FDA approval, while it also has favorable fast track and orphan statuses on the drug in both key markets.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.