Shire Scores Another Rare Disease Win, But Will CSL Get There First?

| About: Shire PLC (SHPG)

Keenly awaited phase III data on Shire's (NASDAQ:SHPG) (OTCPK:SHPGF) hereditary angioedema (HAE) antibody, lanadelumab, appear to confirm that the UK drug maker has a very good chance of controlling this rare disease space for many years to come.

Still, with an FDA approval decision on a rival prophylactic treatment from CSL due in the coming weeks, Shire's path is far from clear. Both agents offer clear efficacy and convenience advantages over Cinryze, Shire's incumbent enzyme replacement therapy. Assuming it gets a green light, CSL will throw everything at making the most of its first mover advantage.

The Australian blood products specialist filed a BLA for Haegarda in August last year. The product is a subcutaneous follow-on to Berinert P, its blood-plasma derived C1-esterase therapy that is also already on the market.

But Shire has moved to block its rival's launch, suing CSL for infringement of the '111 patent, which covers the use of a subcutaneous C1 esterase inhibitor to treat HAE.

While these products seek to replace the missing enzyme that causes the inherited swelling condition, lanadelumab binds to plasma kallikrein and prevents the production of bradykinin, the peptide responsible for the inflammation cascade. The end result is the same, however, and the table below shows how effective these agents are at preventing debilitating and sometimes fatal attacks.


Compact study of Haegarda (n=90); NCT01912456
Haegarda (subq) Median reduction in attack rate over 14 weeks Response rate Placebo adjusted monthly attack rate
40 IU/kg twice weekly 89% 76% -2.42
60IU/kg twice weekly 95% 90% -3.51

Help Study of lanadelumab (n=125); NCT02586805
lanadelumab (subq) Monthly attack rate reduction
300mg every 2 weeks 87%
300mg every 4 weeks 73%
150mg every 4 weeks 76%

Study on Cinryze label (n=24)
Cinryze (IV) Median reduction in attacks over 12 weeks
1,000 units every 3/4 days 56%

The dangers of cross-trial comparison of course apply here; notably these trials recruited patients of varying disease severity. However it is clear that Haegarda and lanadelumab are much more effective than Cinryze, even before convenience is considered.

Only these top-line details are available on the Shire drug, but the full results of the Compact study of CSL's Haegarda have been published and make for impressive reading: a 90% reduction in the rate of attacks at the high dose, 90%-100% reduction in the use of rescue medications, and the common adverse events were mild and transitory.

Bring the hubris

On a conference call yesterday Shire executives did not hold back in extolling the virtues of lanadelumab - they clearly believe they have the safest, most effective and most convenient prophylactic treatment option. Howard Mayer, head of Shire's clinical development, proclaimed long-acting antibodies to be the future of HAE treatment.

Lanadelumab should be able to win on convenience, considering that the amount of drug that needs to be administered is much smaller - a point Shire is keen to stress - and the fact that it is given once or twice monthly versus Haegarda's once or twice-weekly dosing schedule.

What dose of lanadelumab ultimately wins approval is down to the regulator, and this could be a stumbling block. Should the FDA only approve a lower dose, landelumab might not compete well against Haegarda, although Shire will hope this outcome is unlikely in such a rare and devastating disease.

A considered view on safety and efficacy will have to hold pending further data and the FDA's ultimate verdict, but it is not inconceivable that lanadelumab will end up looking like the best product.

Speed to market is now crucial, and Shire hopes to file by the end of the year and have a decision on approval by mid-2018.

Coughing up

Shire shares rose 2% yesterday on the news that the Help study had met all its primary and secondary endpoints, adding $753m to its market cap, a reaction that perhaps also reflects relief that the $5.9bn spent to gain the asset 18 months ago was not a wasted bet. With a further $646m due to Dyax shareholders if lanadelumab wins US approval, the acquisition did not come cheap (It's not Baxalta, but Dyax will do nicely for Shire, November 2, 2015).

Even before these results emerged analysts had predicted great things - consensus forecasts show lanadelumab becoming the bestselling therapy for HAE by 2022, and these numbers are now likely to climb further. When Shire bought Dyax, it predicted peak sales of $2bn.

A consensus forecast for Haegarda is not available, but Credit Suisse analysts estimate that it could bring in around $600m in around five years' time, which would make it the number two HAE product in 2022.


Top five HAE products by 2022
Product Company Pharma class Route Use 2022e sales ($m)
Lanadelumab/ SHP643 Shire Anti-plasma kallikrein MAb Subcutaneous Prophylactic 936
Haegarda/CSL830 CSL C1 esterase inhibitor Subcutaneous Prophylactic 600*
Cinryze Shire C1 esterase inhibitor Intravenous Prophylactic 509
Firazyr Shire Bradykinin B2 antagonist Subcutaneous Acute 242
BCX7353 Biocryst Kallikrein inhibitor Oral Prophylactic 198
*Based on single Credit Suisse note, December 1, 2016; Source: EvaluatePharma.

Excitement about lanadelumab is justified. One wildcard could be cost - if CSL chooses to price Haegarda at a huge discount this could disrupt the market, Bernstein analysts note. The big question is how much of a mark CSL can make if it has a whole year on the market on its own.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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