By Phil Loria
This column focuses on two companies that saw significant growth in their stock prices this week, but still have plenty of room to grow in the near future. After announcing positive Phase IIb data evaluating ALD403, Alder Biopharmaceuticals (ALDR) jumped up 35% to a price of $24.36 a share, but still sits well below its 52 week high of $54.90. They are competing against much bigger names in migraine space--Teva Pharmaceutical (TEVA) and Amgen (AMGN)--but all three CGRP therapies have ongoing late stage trials and demonstrated positive results so far. Teva released Phase IIb data in September, and is actively recruiting for various Phase III trials. Amgen is also actively enrolling patients in two Phase III studies, and expects to read out Phase IIb data in the second half of this year. Alder is slightly ahead, initiating their Phase III PROMISE I study last October before PROMISE II starts in the second half of 2016. The 12-week Phase IIb data released this week along with the Phase I data investigating self administration through three different routes has important implications for Alder investors. ALD403 demonstrated 3 months of migraine prevention and 3 months of suppression of peripheral CGRP biology independent of route of administration. Overall it met all primary and secondary endpoints, and the results definitely contributed to the jump in their stock price this week. The company believes there is a potential market of 13 million patients nationwide, and whoever wins the majority of that space could see significant revenue growth in the future.
On Tuesday Keryx's (KERX) stock went up over 35% from $4.55 a share before settling back at $4.71 by the time the market closed Wednesday. This movement comes after their positive Phase III data readout for Auryxia in treatment of iron deficiency anemia (IDA) in adults with stage 3-5 non-dialysis dependent chronic kidney disease (NDD CKD). Auryxia would be the first iron treatment in tablet form that is available to these patients, and is already being sold in Japan for all stages of CKD. The drug is FDA approved for elevated serum phosphorus levels (hyperphosphatemia) in patients with CKD on dialysis, although its commercial launch last year was considered a failure. Keryx only had $10.1 million in net product sales and less than 20,000 prescriptions in 2015, but the company is hoping an expanded indication will help turn things around. They plan to submit a regulatory application to the FDA in Q3 for this indication, and to release detailed Phase III data at a Q4 medical conference. Although the data has largely been positive there are concerns over physicians' perceptions of the black box warning for iron, and questions over how Keryx will bounce back after a failed launch of the same drug last year. The 52 week high of $13.03 suggests that Keryx has plenty of room to grow, but there are still a lot of concerns and unanswered questions.
Option 1: Analyzing the market potential and chances of approval for CGRP therapies (Alder's ALD403, Teva's TEV-48125, and Amgen's AMG334) in the treatment of migraines. How are the products different and who will dominate the market?
Migraines are intense, throbbing headaches that last between 4 and 72 hours and and affect some patients almost every day. It is a debilitating neurological disease that prevents sufferers from functioning normally when they experience symptoms. There are varying estimates of how many people experience migraine, but Alder believes there are 13 million patients nationwide.
There are acute, preventative, and complementary approaches to treating migraine, and well over 100 drugs and approaches. NSAIDs, triptans, ergots, opioids, combination therapies, and other types of drugs are all used for pain management. However there are no approved CGRP therapies for migraines, and Alder, Teva, and Amgen all have promising products in this category. These drugs target calcitonin gene-related peptide, which is involved in pain signaling and inflammation. They appear to potentially have superior efficacy and safety to already approved products, and the competitors are trying to position themselves with easier administration and better dosing schedules. An expert interview would help investors get a better idea of the value behind a CGRP therapy for migraines, and which drug has the best positioning in that area. Here are some questions I would like to ask.
Questions for migraine specialist with vast experience treating patients and a knowledge of the three products being discussed. He or she will also be familiar with all clinical trails associated with these drugs, and have an understanding of the regulatory process.
Can you describe your experience treating patients, and what current treatment options are being used to prevent migraines? How do your patients respond to current treatment options?
How well validated and understood is the role that CGRP plays in Migraines?
What are the differences between current approved treatment options, and the CGRP therapies being developed by Alder, Teva, and Amgen?
What type of pricing could the migraine therapy market support or justify in your opinion?
Amgen and Alder are currently in Phase III testing, and Teva's TEV-48125 is in Phase II testing. Can you discuss the differences in the designs and standard measures of these trials?
Can you discuss the differences in the safety and efficacy profiles of ALD403, TEV-48125, and AMG334, and how each drug is administered? Do any of the drugs have an advantage over the others?
If approved, what type of patients would be most likely to use a CGRP antagonist therapy?
Given the current information, which drug do you think has the best chance to dominate the market assuming they all get approved? Which drug do you think you will give to your patients?
This interview will give investors a better understanding of the CGRP migraine therapies that are currently in the late stages of development from Alder, Teva, and Amgen. The expert will discuss chances of approval, and which drug they expect to become standard of care. This information should help investors create more accurate expectations of future value for each company.
Join the project here: bit.ly/1RsP21w
Option 2: Looking at the potential sales growth for Auryxia after a positive Phase III readout in IDA patients with NDD CKD. Can Keryx recover from a failed drug launch in 2015? Will expanded indication for Auryxia help change the attitudes of physicians towards the iron black box warning?
Auryxia was approved by the FDA in September 2014 for the control of serum phosphorus levels in patients with CKD on dialysis. The iron tablet works by binding with dietary phosphate in the gastrointestinal tract creating ferric phosphate. It increases serum iron parameters, and has demonstrated impressive safety and efficacy results.
After struggling with its commercial launch last year, Keryx is hoping that receiving approval for an expanded indication covering IDA in adults with stage 3-5 NDD CKD. IDA is one of the more common complications with CKD, and there are an estimated 1.6 million people in the U.S with stage 3-5 NDD CKD and IDA. A positive impact on iron could help overcome the drug's black box warning that it currently has for Iron overdose.
Following the positive Phase III data released this week, Keryx plans to submit for regulatory approval in the US in Q3 of this year, and release full data from Phase III in Q4. Both of these events could be significant value drivers for the company--an expanded indication would mean a much bigger target market for their only approved product, and more positive data would help Auryxia reverse its sales trends from 2015. Interviewing a nephrologist will help investors understand the data to get the most accurate prediction of future growth prospects. Here are some questions I'd like to ask.
Questions for a nephrologist with significant experience treating iron deficiency anemia in adults with non-dialysis dependent chronic kidney disease. He or she will have a deep knowledge of the trial and other treatment options.
Can you describe your experience treating iron deficiency anemia in adults with non-dialysis dependent chronic kidney disease.? With no FDA approved treatments, what do you currently do to help your patients?
How do patients respond to current treatment options, including over the counter iron supplements and intravenous iron (Feraheme or Venofer)? How do these treatments compare to Auryxia?
What are the relative benefits of these treatment options? Are some treatment options better fit for certain patient subsets?
What are the differences in costs between current treatment options and Auryxia?
Given the current data, what are the chances Auryxia is approved for the expanded indication?
Assuming it gets approved, what percentage of existing patients do you expect to start taking Auryxia? What percentage do you expect to stay on IV iron or supplements? What percentage of new patients do you expect will choose each treatment option
Assuming it gets approved, how will an expanded indication change the perception of the iron black box warning for physicians?
Is there a path forward for the drug to gain traction in its currently approved indication as a phosphate binder?
Please discuss the differences in how drugs are paid for and prescribed in the new indication vs. currently approved one.
This interview will help investors understand growth prospects in future sales for Auryxia, as well as the efficacy and chances of approval for the drug. This information will help investors predict how Keryx can respond to the failed drug launch last year, and if an expanded indication can change the perception of the iron black box warning for physicians.
Join the project and add your questions now: bit.ly/1SCWVk6
You Choose the Stock: Interactive Voting
Seeking Alpha readers can vote by commenting below which project they would like us to post on Slingshot Insights.
After the voting period ends, Slingshot Insights will interview a Subject Matter Expert, then post a transcript and recording of the conversation on our website.
Vote now in the comments below/direct messages to me within the voting period to express your interest. Seeking Alpha readers can also join and add questions on Option 1: ALDR, TEVA, and AMGN here or Option 2: KERX here and get expert insights to enhance your investment diligence.
Disclosure: I/we 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. I have no business relationship with any company whose stock is mentioned in this article.