Global Blood Therapeutics Gets A Quick Advance Surprise By The FDA

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About: Global Blood Therapeutics (GBT)
by: Terry Chrisomalis
Summary

Global Blood Therapeutics announced that it had received Accelerated Approval for its sickle cell disease drug Voxelotor.

Accelerated approval was based on updated 24-week data that showed those treated with Voxelotor saw a greater than 1 g/dL increase of hemoglobin at 24 weeks compared to placebo.

Current SOC treatment options work, but have some setbacks like being limited in possibility and with potential life threatening risks.

A pre-NDA meeting with the FDA for Global Blood Therapeutics is scheduled for Q1 2019, from there a potential regulatory pathway will be known in greater detail.

GBT has cash, cash equivalents and marketable securities of $482.1 million as of September 30, 2018, which would only fund it for at least the next 12 months.

Recently, Global Blood Therapeutics (GBT) announced that the FDA agreed to give its sickle cell disease drug Voxelotor accelerated approval. Shares of the stock surged as high as 55% on the news to $49.14 per share. This is good news for the biotech which is looking to quickly get this therapy out to patients that need a new form of treatment for their disease. This drug will likely get quick approval for this indication, but it will still need to run confirmatory studies to maintain approval. There is also a major potential advantage this drug may have over other competing drugs. For these reasons, I believe that Global Blood Therapeutics is a buy.

Phase 3 Data

The FDA decision to give Voxelotor accelerated approval was based on updated 24-week phase 3 data. The trial with the updated data was from Part A of the HOPE phase 3 study. These were updated preliminary results from 154 adolescents and adults with sickle cell disease (SCD) in the study. Patients were treated with either 1500 mg of Voxelotor, 900 mg of Voxelotor, or placebo. Both doses of Voxelotor in this study achieved a greater than 1 g/dL increase in hemoglobin at 24 weeks versus placebo. About 65% of patients that took 1500 mg of Voxelotor achieved a greater than 1 g/dL increase of hemoglobin at 24 weeks, compared to only 10% for those on placebo. Even the lower dose of only 900 mg, achieved a greater than 1 g/dL increase in Hemoglobin during the same time period compared to placebo. This effect was observed in 33% of patients. In addition, hemoglobin was seen to improve rapidly at 2 weeks (which was the earlier time period measured) and then sustained all the way through 24 weeks.

These findings are important, because they highlight the potential Voxelotor has to give patients a new treatment option. In addition, it also noted that increasing hemoglobin may have a profound effect of reducing strokes in patients with SCD. The biggest issue with SCD is that hemoglobin are impacted. Hemoglobin are important, because they are proteins found in red blood cells that carry oxygen within the patient's body. People with SCD have abnormal hemoglobin, which cause sickle shaped red blood cells. These cells as you can imagine don't last long and are eventually destroyed. In that case, the disease can lead to hemolytic anemia which is associated with a higher risk of morbidity and mortality. Having said that, the point is that increasing hemoglobin in turn can possibly cause an improvement in increasing red blood cells. This in turn should improve those with anemia. Those treated with the highest dose of 1500 mg of Voxelotor increased hemoglobin to 10 g/dL at 24-weeks. That is up from a baseline (when patients initially entered the study and measured) of 8.6 g/dL. This difference may not seem much, but for patients with SCD such an increase in hemoglobin does have an impact on improving their disease.

Quicker Path Forward

As you can see, Voxelotor has a pronounced effect at improving those who have anemia. Having said that, the FDA is very impressed as well. Therefore, it allowed Global Blood Therapeutics to file for accelerated approval of Voxelotor in patients with SCD. What exactly warrants the FDA to hand out accelerated approval for this therapy? I believe there are a few reasons exactly why the FDA would take this action. The first is that current treatment options treat the symptoms of the disease, but not the underlying issues associated with it. For example, SCD targets organs. Medicine can be given as a short-term treatment to deal with such issues, but they don't actually do anything to improve hemoglobins. It is always better to treat the root cause of a disease then the symptoms associated with it.

The FDA clearly saw the hemoglobin increase during the HOPE study and had no reason not to grant Accelerated Approval. The second reason is scarcity in the main forms of treatment. The best treatments for SCD are bone marrow or stem cell transplants. The problem with these methods are that it's very hard to see success in them because of many variables involved. There is an issue where a matching bone marrow from a donor is hard to achieve. On top of that it is preferred that match comes from a parent, brother or sister. There are many other problems with such treatments as well. For instance, these are many other issues that must be dealt with with before and after bone marrow transplant treatments.

  • You have to go through intensive chemotherapy and possibly radiation therapy to clear the abnormal cells, to make room for the new ones to be placed in.
  • Weakened immune system which stems from the chemotherapy taken beforehand, gives an opportunity for an infection to take place.
  • There's a very small risk for Veno-Occlusive disease (VOD) in children, while it is rare it can possibly happen. In essence, in VOD the blood vessels of the liver constrict causing no blood flow to get through. That in turn causes your liver to not be able to remove toxins, drugs, or other products.
  • Possibility of Graft-Versus-Host Disease (GvHD) in which your body goes against the new cells that were placed inside.

The positive is that a transplant can work in about 9 out of 10 patients, but it goes back to the first issue. That issue being there is a low chance of finding a successful matching donor. As you can see, SCD is problematic and a treatment like Voxelotor would definitely treat the underlying issue. With all that said, the FDA granted a quicker path to approval under the subpart H accelerated approval pathway. The risk is that Global Blood Therapeutics will have to run a post-approval confirmatory study. The primary endpoint for the confirmatory study will be transcranial doppler (TCD) flow velocity.

In essence, this endpoint will be used to potentially show that treatment with Voxelotor can reduce the risk of a stroke. Global Blood Therapeutics plans to request a pre-NDA meeting with the FDA for Q1 of 2019. That is when the company will have more information on when it will be able to file its NDA for approval. In addition, it will also likely give out more specifics on the confirmatory study, and what exactly it entails. The current results are solid for an NDA in my opinion, but just to be sure the biotech will still generate efficacy and safety data from another 118 patients from the HOPE study. I feel that all combined data should be enough to solidify accelerated approval for Voxelotor.

Financials

According to the 10-Q SEC filing, Global Blood Therapeutics has cash, cash equivalents and marketable securities of $482.1 million as of September 30, 2018. It believes that it has enough cash to fund its operations for at least the next 12 months. However, it's important to note that operating expenses have increased greatly in Q4 2018 due to both an increase in manufacturing and pre-commercial activities. This is especially true now that it had just received accelerated approval for Voxelotor for SCD. That means it is highly likely the biotech will have to raise cash a lot earlier than expected because of an earlier than expected approval pathway. That could put a potential cash raise possibly within the next few months.

Conclusion

Global Blood Therapeutics achieved positive results from its phase 3 HOPE study. It did so by showing those treated with Voxelotor achieved a greater than 1 g/dL increase of hemoglobin at 24 weeks compared to placebo. The point being is that the drug proved to treat the underlying cause of the disease, and not just the symptoms that occur as a result of it. There are still risks associated with this company. The first is that it must still pass the FDA for approval, and that remains to be seen. The second risk is financials, meaning that it will likely have to raise additional cash in the short term. This must be done in order to prepare for a potential commercial launch in anticipation of regulatory approval.

The final risk is the confirmatory study. Even though the drug will get accelerated approval after only the currently reported phase 2 study, it will still need to prove an improvement in a confirmatory study to be done post-approval. If that post-confirmatory study fails, then it's possible the FDA could rescind the approval. I believe that there is a good chance for accelerated approval based on the current phase 2 data. This was shown in terms of the efficacy that was achieved in the phase 3 HOPE study. In addition, approval should also occur based on the limited amount of therapies approved for SCD over the last few years.

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 (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.