Nymox Pharma (NASDAQ:NYMX) is a biotech with only one drug candidate, Fexapotide Triflutate (NX-1207), which it is applying to get approved to treat benign prostatic hyperplasia (BPH) or enlarged prostate. Three years ago Nymox announced that fexapotide failed two phase 3 trials with 1,000 participants. But instead of giving up on the drug, in 2015 the company announced it is doing follow-on studies of participants in the trial, and then released positive data that gave some investors hope for an approval. Although approval is a long shot in the EU and the US due to the failed phase 3 trials, Nymox is pressing forward. The company submitted its marketing application for NX-1207 to five European countries in May 2017.
We advise investors to sell or short NYMX into the CHMP’s opinion on fexapotide, given the drug’s weak efficacy in trials, unreliable follow-up data, and how strict Europe's drug approval has become as evidenced by the CHMP’s negative vote on Puma Biotech’s neratinib on January 23rd. As far as we know, Nymox is now out of cash and will likely continue issuing private placements like it has been doing to raise funds. For what we believe to be an extremely likely negative CHMP vote and subsequent rejection, NYMX market cap is lofty at over $150M. We expect the CHMP will give its opinion on fexapotide in April or May of this year, about 11-12 months from Nymox’ application submission. The following is the EMA timetable from this CancerWorld article:
(Note: we contacted Nymox investor relations to get more information for this article but they have not responded.)
Nymox had been working with the FDA for many years on its trials, and reported its fexapotide (NX-1207) trial design on clinicaltrials.gov as shown here. However, after fexapotide failed its phase 3 trials, and Nymox started the follow-up studies, it didn’t report those follow-up studies on clinicaltrials.gov. Oddly, Nymox decided to now apply for fexapotide approval with five European countries instead of continuing with the FDA.
The company is only applying for approval in a part of the European Union comprising the Netherlands, the UK, Germany, France, and Spain. We have not seen this partial application before, and after speaking to some biotech analyst colleagues, we believe the process and timeline to approval is similar to as if the company applied to the entire EU. So far, the timeline has been the same, as the marketing authorization application (MAA) was validated in September, four months after submission. That is the same amount of time it usually takes the EMA to validate an MAA application.
This is strange for Nymox to ditch the FDA, because it had already been working with them for many years with its trial designs. It’s not uncommon to post a follow-up trial on the clinicaltrials.gov website, there are many listed. We did a search for “follow up study” and found over 14k results.
The latest completion date for NX-1207 trials shown is May 2014, which was the failed phase 3 study. Nymox started issuing PRs on its follow-up data on fexapotide in 2015. This follow-up trial design was not reported on clinicaltrials.gov, and neither the design nor the data are written in any medical journals.
It's possible that Nymox did originally meet with the FDA to seek a path for approval. The company stated in its positive follow-up studies in July 2015:
"The Company now intends to meet with authorities and to proceed to file where possible in due course for regulatory approvals for fexapotide triflutate in various jurisdictions and territories."
If Nymox follow-up data was clearly significant and showed strong efficacy over placebo, then one would logically assume since the company has already been working with the FDA, then it would submit the data to get approval there first and then later Europe. But since Nymox did not do this, then we assume that the company doesn’t believe the FDA would consider the data acceptable enough to approve NX-1207. The company’s switching over to Europe and discontinuing seeking marketing approval in the US is a big bearish sign in our opinion.
Perhaps Nymox decided to shift gears to Europe because they think it’s easier to get drugs approved there? Well, recent events have showed it might be tougher to get drugs approved in Europe than the US. Just recently, the CHMP gave a negative vote on neratinib, which is a drug that treats breast cancer. This was shocking to many biotech analysts because neratinib recently got approved by the FDA with a broad label. We’ve also spoken to some biotech specialists who say that it is in fact harder to get drugs approved in Europe than in the US.
Nymox Pharma is thought by many to be nothing less than a scam and that fexapotide is worthless. Respected Stat News biotech analyst Adam Feuerstein wrote in August 2016:
Nymox will not be successful convincing the U.S. Food and Drug Administration (or its counterpart in Europe) to approve fexapotide to treat men with enlarged prostates.
How do I know this? Because regulators don't approve new drugs that fail large clinical trials.
Well-known short seller Richard Pearson wrote in August 2016 a detailed history of Nymox and its CEO, and he believes that the stock is going to zero. He also highlighted the lack of institutional ownership and the company redomiciling from Canada to the Bahamas to limit transparency and legal liability.
However, despite failing its phase 3 trials and receiving a variety of criticism by analysts, the stock has managed to maintain a market cap of $150M-$200M over the past few years. This means that some investors believe fexopotide does have a chance to get approved. Of course, we have the opposite viewpoint and the result will come in a few months.
In November, 2014, Nymox announced that both of its BPH pivotal Phase 3 studies of fexapotide failed to meet primary efficacy endpoints. The trials design details can be found on clinicaltrials.gov here and here. Both trials were huge, with 500 participants each and one trial had 35 locations, the other had 41 locations.
Both trials had the same treatment: a single injection of 2.5 mg of NX-1207 versus a placebo injection, and both were blinded. Both required that patients not take any BPH medication for a year after the injection. Both followed up on patients a year later and found no difference between the placebo injection and the NX-1207 injection. It’s clear with that large number of patients and the long amount of time for follow-up that this result was not an error - fexapotide was shown to be an ineffective treatment for BPH.
Furthermore, there were secondary outcome measures in each trial, to test the patients after 90, 180, and 270 days. Nymox didn’t mention any results from these secondary endpoints, so we can assume that they also didn’t show benefit over a placebo.
After Nymox’ announcement of the failed phase 3 fexapotide studies in November 2014, a few months later in April 2015, the company announced it will do follow-up studies with some of the same patients that participated in those trials. The announcement only said that “additional new blinded protocol data from the same pivotal studies is being prospectively captured”. The company didn't say what they were looking for and measuring. Months after the announcement, the company published positive data from the studies, but didn’t go into detail about the way in which the data was collected, or if there was any negative data found in addition to the positive data.
On July, 2015, eight months after announcing both phase 3 trials failed, Nymox announced that an extension study of the phase 3 BPH studies, a median of 3.5 years later, met its “pre-specified” primary endpoint. The original endpoint for the phase 3 pivotal trials was how well the patients scored on the AUASI (American Urological Association Symptom Index) which is a screening tool to track the symptoms of BPH. Nymox claims that the score was statistically significant after the median length of 3.5 years, whereas it wasn't statistically significant after one year.
It isn’t logical that fexapotide would finally work many years after the trial is over, since it didn’t show significance at the one year test. There was no difference between fexapotide and placebo when the AUA BPH symptoms were measured after one year. But then after an additional 2-4 years, fexapotide apparently finally kicks in and beats the placebo. Basic science says that drug effects wear off, not take effect many years later after originally not working. We asked many biotech analysts if they have ever heard of a drug that somehow didn’t show any improvement after being taken only one time a year ago, and then showing improvement several years after that. None of the analysts we spoke to said they have ever heard of a drug working anything like this. It’s also likely patients are taking other pills after the trial year was over to treat their BPH. The follow-up data contained no information on what kind of drugs the patients were taking post-trial that might have also contributed to the positive AUASI score. Nymox can’t make the claim that it was fexapotide alone that was making the positive difference.
BPH trials are historically not very long. According to Adam Feuerstein, in his 2011 article where he interviewed Nymox CEO Paul Averback, all BPH drugs to that date have been approved based on data demonstrating superiority over placebo after 90 days of treatment. The 365 days that fexapotide had in its trial is uncommonly very long for a BPH trial that only has one dosing at the beginning. That is much more than enough time to test the efficacy of fexapotide.
Looking at other BPH phase 3 trials on clinicaltrials.gov, here, that were done later than 2011 and were a single dose, most trials were only for a 90 day duration. Some lasted longer, like this BPH trial is for four years, but it’s the daily administration of a pill. This BPH trial is for one year, but it’s also from repeat dosing, taking two tablets twice a day.
“The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has communicated a negative trend vote after meeting with the Company today to discuss the Marketing Authorisation Application for neratinib for the extended adjuvant treatment of early stage HER2-positive breast cancer. A negative trend vote means it is unlikely that CHMP will provide a positive opinion related to the Company’s at the formal CHMP decision vote scheduled in February 2018, and that additional steps would need to be taken to gain marketing approval in Europe.”
“CHMP indicated that, in its opinion, the benefit risk assessment is negative as the study results are based on evidence from a single pivotal trial and the 2- and 5- year invasive disease free survival ((iDFS)) benefits observed to-date may lack sufficient clinical relevance.”
Neratinib is to treat breast cancer, while fexapotide is to treat BPH. These are different diseases but one can still compare the opinion of CHMP to neratinib and predict how it will think about fexapotide.
Comparing Neratinib And Fexapotide Phase 3 Trials
First, let’s look at the above statement by the CHMP about neratinib’s “single pivotal trial.” Neratinib hit the primary endpoint of its ExteNET phase III trial for neratinib. Yet the CHMP said it still might not be sufficient because it’s only data from one trial.
Fexapotide failed to hit the primary endpoint of both of its phase 3 trials. If a phase 3 trial that succeeded is insufficient for the CHMP, then it’s almost assuredly so that two failed phase 3 trials are also insufficient for approval.
Comparing Neratinib And Fexapotide Follow-Up Data
Neratinib Follow-Up Data
Next, it says that the 2 and 5 year follow-up observations of patients who took neratinib in the trials “may lack sufficient clinical relevance.” Nymox released many PRs of follow-up observations of fexapotide on patients in its trials. It’s likely that Nymox’s trials “may lack sufficient clinical relevance” as well to the CHMP.
The 2-year DFS rate for the neratinib arm was 93.9%, and the 2-year DFS rate for the placebo arm was 91.6%. That difference was sufficient for the FDA to approve neratinib, but isn't a wide enough difference for the CHMP to give a positive opinion.
The study demonstrated that the trial hit its primary endpoint and that treatment with neratinib resulted in a 33% reduction of risk of invasive disease recurrence or death versus placebo. The neratinib study can be found on clinicaltrials.gov here. It was done in 493 study locations, was published in Pubmed here, and was funded by Pfizer, Wyeth, and Puma. Despite hitting the primary endpoint, the CHMP is skeptical of the clinical relevance.
Fexapotide Follow-Up Data
If the Committee is skeptical of neratinib’s follow-up study, then certainly it will be skeptical of Nymox’ follow-up studies. There are lots of reasons why this data might not be considered “clinically relevant.” The primary reasons are: 1. There was no pre-specified objective or endpoints and 2. There was no independent third party verification.
A recent example to illustrate the importance of these trial design aspects, is biotech Aradigm. On 1/29/18, Aradigm announced that it received an FDA rejection of its drug Linhaliq. The CRL stated that “it cannot approve the NDA (new drug application) in its present form” and provided recommendations needed for resubmission. The recommendations by the FDA is for the company to conduct an additional phase 3 trial with an independent third party verification of the results and clinically meaningful endpoints. These are what Nymox lacks in its follow-up trials.
The CHMP would not look highly on this. Without objectives, then the company can just search for any positive data in their studies and report that and not report the negatives. A lack of objectives leads to data mining.
Given that the data was negative in Nymox’ formal phase 3 trials where they had the endpoints and independent investigators, investors should be skeptical about the company’s positive follow-up data.
2. There was no independent third party verification of the data. Of course, the company is biased towards their drug succeeding. This is why an independent third party verification is necessary to ensure the non-biased quality of the data.
In the July, 2015 PR, Nymox said it plans to file for regulatory approvals for fexapotide. But it wasn’t until May, 2017 that the company finally filed, almost two years later. Soon judgement time will come for the company as we expect the CHMP to submit its opinion on fexapotide in April or May of this year.
Nymox is likely out of cash and will need to do an offering or private placement soon. In its latest quarterly report, the company reported having $1.7M in cash on September 30, 2017. Historically, the company burns around $3M per quarter.
The way the company sustains itself with this cash burn is it constantly issues private placements to raise money. The company doesn’t always report these private placements when they happen, but reports them in the subsequent quarterly report. On page 5 of the latest quarterly report, the company reported a slew of small private placements. The following are some of them:
On June 23, 2017, the Company completed one private placement for an amount of $437,500 and 125,000 shares were issued.
On July 7, 2017, the Company completed one private placement for an amount of $1,224,965 and 350,000 shares were issued.
On September 21, 2017, the Company completed one private placement for an amount of $500,000 and 151,515 shares were issued.
On September 26, 2017, the Company completed one private placement for an amount of $804,055 and 229,730 shares were issued.
On September 28, 2017, the Company completed one private placement for an amount of $372,999 and 113,030 shares were issued.
The private placements are issued at a discount to the day’s share price. For example, the September 28, 2017 private placement issued shares at $3.30 per share. The stock closed that day at $3.94, making the shares issued at a 16% discount. On June 23, 2017, NYMX closed at $3.83. The private placement issued shares at $3.50, for a 9% discount.
We believe the private placements are issued in small bites so the investors can easily sell their shares in the open market without moving the stock price very much. We also believe Nymox hasn’t been publically reporting these private placements when they happen because investors will see it and might sell their holdings down to the offering price.
For the reasons stated in this article, we don’t believe Nymox BPH drug fexapotide will get the marketing approval in Europe that it is seeking. The NYMX share price has been trading in the low $3s for the last month or so after trading in the high $3s and low $4s for much of 2017. We believe this is the beginning of a downtrend, as the CHMP will likely give its opinion on the drug within the next few months. As the date is getting closer for the CHMP opinion, we predict more short sellers will get short the stock, and insiders will sell their positions, as we expect a negative vote will cause a big selloff in the stock, which still has a hefty market cap of above $150M.
This article was written by
Disclosure: I am/we are short NYMX. 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.
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