SLINGSHOT CONTRIBUTOR: Killian McKee
Moleculin's work with acute myeloid leukemia drug Annamycin should interest investors in light of Celator's recent success with a similar drug, VYXEOS, which helped further drive CPXX's share price up from ~$1.50 three months ago to north of $30 this week. Furthermore, on May 31, 2016, pharmaceutical companies Celator and Jazz (NASDAQ:JAZZ) announced entering into an agreement for Jazz to buy Celator at an 80%+ premium for $30.25/share (about $1.5 billion). The acquisition signals an interest in liposomal AML drugs by larger drug makers and their plausibility as a treatment option.
Moleculin, whose main product Annamycin also aims to treat AML, IPO'd hot on the heels of Celator's success (June 2, 2016), possibly trying to cash in on its momentum. MBRX raised approximately $9.5 million and this should allow it to proceed with Phase 2 trials for Annamycin. With MBRX still fresh on the publicly traded market, we are presented with a great opportunity to further investigate Annamycin and how CPXX's success will impact the AML drug scene. Currently, drugs treating AML have low success rates and haven't changed since the 1970s, meaning any products which have demonstrated significant improvements in patient health like VYXEOS or Annamycin have the potential to be blockbuster drugs. Talking with a hematologic expert could provide valuable insights into the landscape surrounding Annamycin, AML, and the chances of getting the drug approved.
CNS drug manufacturer Minerva's positive Phase 2b data for schizophrenia drug MIN-101 dropped May 25th, 2016, driving share prices up over 250% and leaving many investors anxious to glean what the future might hold for the company. MIN-101 could be the first drug to reach the market for treating moderately negative schizophrenia symptoms (reduced emotional responsiveness, socialization, motivation, movement, speech, etc.). With 51 million people suffering from schizophrenia worldwide, Minerva could have a blue chip on its hands. However, some questions remains about true market size and study design. An expert call could help clear the questions swirling around Minerva.
Option 1: Discussing Moleculin's promising drug Annamycin in the wake of Celator's successful Phase 3 trials for similar drug VYXEOS. What differentiates Annamycin, what does Celator's success mean for the market, and what are its chances of gaining approval?
AML is a complicated disease afflicting 11,000 new people each year and has presented drug makers with problems since the 1970s. The market for AML treatment in 2011 was $239.3 million and is expected to reach $731.1 million in 2018. AML is a type of cancer causing bone marrow to produce abnormal red blood cells, myeloblasts (white blood cell type), or platelets. Currently, a bone marrow transplant offers patients the best chance of long-term survival (~20%), but to receive one patients must first complete a risky induction therapy. Induction therapy works by using two combined chemotherapeutic drugs to simultaneously induce a remission of leukemic cells and destroy them. Current dosages are limited (and less effective) because the drugs cause severe cardiac damage as a side effect. To complicate matters, AML cancer cells quickly mutate and are able to build up a resistance to treatment.
Moleculin's liposomal injection Annamycin theoretically avoids these problems and could offer the market 4 key benefits over competition. Firstly, it serves AML patients for whom there are not currently effective treatments. Secondly, Phase 1 data suggests it avoids the multidrug resistances lowering survival rates. Thirdly, animal studies have demonstrated the potential for non-cardiotoxicity. Lastly, Moleculin cell line studies have shown the drug to be more powerful than current treatments.
Furthermore, the recent successes of CPXX's VYXEOS in Phase 3 could signal a promising future for liposomal AML drug treatments and smooth the path to approval for MBRX. With top competitors for current drugs making around $700 million in annual revenue, MBRX has an incentive to enter the market quickly. This, paired with the fact the drug was shelved by former company Callista, has raised some questions about the long-term validity of the company and whether or not it is attempting to slide through the approval process in CPXX's wake. Based on the findings of preliminary studies, the largely underserved AML population, the drug's turbulent history and the recent successes of similar pharmaceuticals, MBRX seems to merit further discussion with an expert.
Questions for a hematology oncologist with experience treating AML. This doctor should have experience with developmental agents and novel treatment concepts in AML, including MBRX's liposomal Annamycin.
1. Please describe your background in AML and the number of patients that you treat.
2. What's your impression of the drug being developed by Moleculin? Does a liposomal Annamycin sound attractive to you?
3. In the previous trials conducted by a company named Callisto Pharmaceuticals, the company had these findings from trials of Annamycin:
Annamycin demonstrated significant activity in 8 of 16 patients in a Phase I study in adult relapsed or refractory AML patients, with 6 of 14 patients completely clearing leukemic blasts. A 30 patient dose-ranging Phase I/II study in ALL demonstrated a similar level of activity, with 3 of 10 patients treated with the maximum tolerable dose clearing their leukemic blasts to a level sufficient to qualify for a bone marrow transplant. One of these patients went on to receive a successful curative bone marrow transplant. The other two of these three patients died of tumor lysis syndrome, a condition resulting from the overloading of their system with the debris from leukemic blast cells destroyed by the induction therapy.
What are your impressions of the Callista studies?
4. How likely do you think it is Moleculin could attain Orphan Drug Status or Special Protocol Assessment for accelerated approval?
5. Are there other major factors aside from cardiotoxicity and multidrug resistance keeping the survival rate of AML patients undergoing induction therapy low?
6. What type of pricing strategy do most anthracycline companies employ and does it place a major burden on most of your patients?
7. Are there any plausible alternative treatments on the market or the horizon of which you're aware?
8. How do you see the success of VYXEOS impacting Annamycin?
9. Does it surprise you to see VYXEOS and Annamycin reappearing after both were shelved for some time?
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In Conclusion: An interview with a hematology oncologist regarding MBRX's Annamycin would help investors determine if it can really be the next VYXEOS, what the market will look like if it emerges, and the overall efficacy of the drug.
Option 2: Examining Minerva's MIN-101 positive Phase 2b data. Could this be the first drug for negative schizophrenia symptoms to hit the market? What does the data say and what questions does it raise?
Schizophrenia is a serious, but highly treatable brain disorder currently affecting 51 million people globally. Those diagnosed with schizophrenia typically experience a mix of positive (hallucinations, racing thoughts, delusions), negative (apathy, poor social functioning), and cognitive (disorganized thoughts, difficulty concentrating, trouble completing tasks, memory issues) symptoms. The overall U.S. cost of schizophrenia was estimated to be $62.7 billion in 2002, with $5.0 billion coming directly from drug costs. There are currently 15 major drugs in development for schizophrenia, but MIN-101 is the only drug with positive Phase 2b data for moderate negative symptoms.
The MIN-101 study met its primary and secondary endpoints of demonstrating statistically significant improvement in individuals with negative symptoms on the Positive and Negative Symptom Scale (PANSS). Although the study demonstrated MIN-101's efficacy in both 32mg and 64mg dosages over a 3-month period, some aspects of the study raise questions. Firstly, the study was conducted exclusively in eastern Europe and Russia, somewhat odd (but not totally unheard of) for a drug seeking FDA approval. Secondly, the study design used a placebo as the control on patients with mental health issues. Thirdly, the drug exclusively targets those with moderate and below symptoms and the actual size of Minerva's market remains unclear. An expert call with a clinical psychologist or psychiatrist who works with schizophrenia could clarify questions about MIN-101 and help elucidate the drug's future.
Questions for a Schizophrenia expert that has knowledge of the latest MIN-101 data. Familiarity with the general development of schizophrenia drugs is important.
1. What is your background in treating Schizophrenia and how many patients do you currently treat?
2. What are your initial reactions to the Phase 2B trial results reported on May 26th?
3. Does a placebo control arm make sense in this case? Were the patients on other background therapies?
4. What proportion of patients do you typically see with moderate and below negative symptoms?
5. Do the patients you see typically have trouble affording treatment for their disease?
6. Are the numbers of patients you see with certain schizophrenic characteristics trending a particular way as time goes on?
7. Is there anything about the mechanism of action for MIN-101 that excites or concerns you?
8. The high dose (64mg) had 2 patients discontinued due to QTcF prolongation. How concerning a signal is this to you?
9. Does the fact the study was done entirely outside the U.S. (Eastern Europe and Russia) surprise or concern you?
10. Does this sound like a type of drug you could see being approved based on the results and past precedents?
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In Conclusion: Minerva's MIN-101 shows promise based on its Phase 2b results and the large potential market, but the way in which the study was conducted raises some questions an expert call would help clarify.
You Choose the Stock: Interactive Voting
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