GTx: Promising Data At SUFU And Catalysts Suggest Additional Upside

Summary

• The stock has been on a tear.
• Results today confirmed that enobosarm has substantial potential in treating SUI.
• Downside appears to be somewhat diminished at this point due to the strength of the data.
• The potential of the drug to treat urge incontinence indicates broader potential and additional upside as well. A second trial should release results in the second half of the year.
• The stock could be due for a breather after an enormous run since last June. While not currently an ROTY Contender, additional upside is still likely and I will be keeping an eye on it.

Shares of GTx (GTXI) have practically doubled over the past six months.

The stock crossed my scans today after they announced additional data from a mid-stage study evaluating enobosarm in postmenopausal women with stress urinary incontinence (SUI). Results were presented in a podium presentation at the Society of Urodynamics, Female Pelvic Medicine & Urogenital Reconstruction (SUFU) meeting a couple days ago.

In the single-arm, open-label study, 19 postmenopausal women were enrolled to receive the study drug (should be noted was the first study to evaluate an orally administered selective androgen receptor modulator for SUI). 18 patients finished treatment while one dropped out after her first clinical visit.

As had previously been shown, every patient who was treated demonstrated a clinically meaningful decrease in the primary endpoint (stress urinary incontinence episodes per day). Mean stress leaks declined by 81% and from a mean of 5.17 leaks per day to 1 leak per day after 12 weeks of treatment. The durability of effect was also impressive, with no patient to date (including 9 who have passed seven months post treatment) returning to baseline level of SUI episodes. It's very important that several quality of life measurements also showed significant improvement (Patient Global Impression of Improvement, Urogenital Distress Inventory and Incontinence Impact Questionnaire). The safety profile continues to appear solid, with an absence of serious adverse events and other side effects being mild in nature for the most part.

New MRI data measured muscle in the pelvic floor of 17 women after 12 weeks of treatment as compared to baseline with a substantial increase in several measurements observed. These included mean levator ani muscle thickness increase of 1.15 mm (p=0.006), mean inner urethral muscle diameter increase of 0.7 mm (p=0.002), and mean outer urethral muscle diameter increase of 0.7mm (p=0.0003).

Another encouraging development was the potential of the drug candidate to treat urge incontinence (UI), which 11 of of the 18 women (61%) were determined to have at baseline. Mean reduction of UI episodes for these women was 68%, with urge leaks decreasing from 1.41 leaks per day to 0.45 leaks per day.

Lead investigator Kenneth M. Peters, M.D. had the following remarks to add:

Enobosarm’s overall treatment effect was consistent with previously announced results, and importantly, these new results demonstrate that enobosarm may address a broader treatment need since many women suffer from symptoms of both stress and urge incontinence, also known as mixed incontinence. In addition, with the MRI results, we are seeing anatomical changes supporting enobosarm’s mechanism of action on pelvic floor muscle.

I note that top-line results for a larger second phase 2 placebo-controlled study (ASTRID) evaluating enobosarm in postmenopausal owmen with SUI are due in the second half of the year. Considering that SUI is a large indication with no FDA approved treatments (blockbuster potential possible), it would appear that the stock has further upside ahead.

For the third quarter, the company reported cash and equivalents of $53.6 million, keeping in mind that during the quarter the company raised $45.6 million in a private placement of common stock and warrants. Research and development expenses rose to $5.9 million, while net loss also increased to $8.5 million. Be sure to stay tuned for their next earnings report on March 21st.

Keep in mind that the company is evaluating potential collaborations in Duchenne Muscular Dystrophy based on preclinical data and also looking to eventually initiate a trial in castration-resistant prostate cancer (CRPC).

GTx is a Buy

Readers who have done their due diligence and are interested in the story should purchase a pilot position. This appears to be a good situation for readers to take a "buy the dips" approach to adding to their positions. With around 33 million fully diluted shares, it's possible that this one could take a breather prior to resuming an uptrend into data in the second half of the end.

Risks to thesis include additional dilution, disappointing results in the second mid-stage study (unlikely but possible), setbacks with ongoing trials, concentration risk (most of value in one asset) and the fact that the stock could see a decent correction considering it's already run up quite a bit.

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