Author’s note: I am grateful to President & CEO, Mr. Sujal Shah for granting me the call interview for this article.
CymaBay Therapeutics (CBAY) is a small cap ($567M) clinical-stage biopharma developing innovative therapeutics for rare/orphan diseases and chronic liver diseases with high unmet medical needs. Seladelpar, the lead investigative drug candidate, is currently in Phase 3 and Phase 2b clinical trials for PBC and NASH, respectively. It is an oral, once-daily potent selective PPAR- δ agonist and a master regulator of bile acid, glucose and lipid homeostasis. Seladelpar and its metabolites are mainly excreted/eliminated through the bile.
For over two decades, clinical development of innovative therapeutics for PBC was hindered by ineffectual progress by basic and clinical research into cholestatic liver diseases. FDA approval of ocaliva by Intercept in 2016 as second line therapy for PBC was a momentous advance in PBC research and therapeutics. However, the clinical adverse events of enhanced pruritus and dyslipidemia are problematic for a number of patients and this could be a hindering factor to its broad therapeutic use.
Biotech/biopharmaceutical industry is characterized by intense competition and ongoing innovation. Currently, only two drugs, ursodeoxycholic acid (UDCA) and ocaliva, are FDA-approved to therapeutically delay the progression of cirrhosis in PBC without improving pruritus (intense itching) and fatigue. More effective and innovative drugs are needed beyond UDCA and ocaliva. Perhaps, seladelpar could be the innovative anti-PBC therapeutic that fills the therapeutic void.
Based on the recent 52-week Phase 2b data, seladelpar could be an improved second-line therapy for PBC due to its potential anti-cholestatic, anti-inflammatory benefits together with possibly improved tolerability. With a lifetime therapy currently recommended for PBC patients, effective drug candidates with good safety and tolerability signals are needed.
My discussion with the CEO of CymaBay, Mr. Sujal Shah, focused on the encouraging therapeutic efficacy observed with seladelpar in PBC based on Phase 2b 52-week data.
The Clinical Data
The interview focused on the reported clinically meaningful benefits of seladelpar in PBC patients in the 52-week trial. Press release by CymaBay on the data can be found here.
Alkaline phosphatase (AP) is an accepted marker of cholestasis. For this reason, the anti-cholestatic potential of seladelpar in PBC was evaluated by measuring AP levels. As reported in the press release:
The primary efficacy outcome was the AP % change from baseline. At 52 weeks, the mean decreases in AP were -47% and -46% in the 5/10mg (titration dose) and 10 mg groups, respectively. A key secondary outcome was the composite responder rate measured at week 52 where a responder was defined as a patient with AP <1.67 x ULN, ≥15% decrease in AP, and total bilirubin ≤ULN. At 52 weeks, 59% and 71% of patients met the composite endpoint in the 5/10 and 10 mg groups, respectively.
Further analysis of the 52-week data showed that 24% and 29% of PBC patients achieved AP normalization at the 5/10mg (titration dose) and 10mg seladelpar groups, respectively (Fig. 1). Normal AP level in a healthy adult is 20-140 U/L. Furthermore, a high % of patients exhibited sustained meaningful AP levels at <1.67 upper limit normal ((ULN; Fig. 2 below) throughout the study after treatment with the high dose seladelpar (10mg).
Accordingly, the meaningful anti-cholestatic benefits of normalized AP levels and AP levels at <1.67 ULN were reflective of the high responder rate documented in the trial (Fig. 1). The primary efficacy outcome that comprises AP <1.67 ULN, a decrease of at least 15% in AP, and a total bilirubin less than or equal to ULN are prerequisites for regulatory approval.
In the Phase 3 POISE trial for obeticholic acid (ocaliva) in PBC, 47% of patients achieved AP levels at <1.67 ULN after high dose (10mg) obeticholic acid treatment (Fig. 3). Normalized AP level in PBC patients has been reported after obeticholic acid therapy. Normal bilirubin was also reported in the Phase 3 POISE trial in PBC after obeticholic acid (Fig. 3).
Fig. 3: Obeticholic acid 52 weeks Phase 3 POISE trial In PBC
CEO Shah commented that the 52-week data was really encouraging since it revealed the good effects of seladelpar on the cholestatic marker, AP. The fact that a high % of patients demonstrated normal range AP level showed the potential anti-cholestatic benefit of seladelpar in PBC. He also noted that a global epidemiological clinical study by Lammers and colleagues reported overall liver transplant free survival in patients who achieved lower AP levels (i.e. <1.67 ULN).
However, the CEO was quick to stress that comparisons of the meaningful effects of seladelpar in PBC to that seen with obeticholic acid by Intercept (ICPT) in the Phase 3 POISE trial are not based on head to head study, which is a limitation. Mr. Shah reiterated that he and management were very encouraged by the level of efficacy seen with seladelpar in this study with 71% of patients achieving the primary efficacy end-point (Fig.1).
My next question centered on clinical parameters (besides AP level) to assess what was happening in the livers of patients that achieved AP normalization. My reasoning was that patients with normalized AP levels must have some ongoing regenerative/restorative hepatic/biliary benefits histologically. The CEO confirmed that although the Phase 2b trial wasn’t specifically designed to evaluate the additional histological benefits of seladelpar in PBC, additional clinical parameters like that are being assessed in the ongoing Phase 3 ENHANCE trial in PBC patients. My discussion on the ongoing Phase 3 trial will be reported in a separate article.
Inflammation is an important pathogenic causal effect in PBC pathophysiology. A progressive normalization of alanine transaminase (ALT) levels was reported in the 52-week study. ALT is a well-characterized enzyme marker for liver damage/injury. Based on the data, seladelpar could potentially induce an anti-inflammatory benefit in PBC (Fig. 4).
Fig. 4: Lower ALT levels in PBC after seladelpar (Source: CymaBay)
Normal total bilirubin, which is one of the prerequisites for regulatory approval, was stable through the 52-week study. (Fig. 5). Bilirubin is a valid predictor of clinical outcomes in liver diseases. Specifically, serum bilirubin is a well-established independent predictor of prognosis in PBC regardless of treatment.
My next question centered on the 30% stock depreciation after AASLD. Some investors wanted me to address that. I couldn’t see anything in the AASLD presentation that would lead to a sell-off. Although I thought it was the “Viking effect,” I mean everyone was so excited about Viking’s presentation they sold everything else.
CEO Shah mentioned investors may have misinterpreted the bilirubin data. We reported that total bilirubin levels were stable throughout the study during seladelpar treatment. If you look at the graph, you notice that in both dose groups total bilirubin levels remained within normal range (Fig. 5). There were some outlier which could mean that some patients were sicker and probably had a higher baseline bilirubin levels prior to seladelpar therapy. There were no bilirubin safety signals since total bilirubin levels remained within normal range throughout the study.
Obeticholic acid is known to cause or worsen pruritus (intense itch) in patients with PBC. The 26-week data showed that seladelpar had good effects on pruritus during PBC. Specifically, decreased median changes in pruritus as measured by the visual analog scale was -50% and -55% in the 5 mg/10 mg and 10 mg seladelpar groups, respectively. The data was very encouraging since seladelpar did not cause or worsen pruritus.
But, CEO Shah pointed out that the anti-pruritogenic signal associated with seladelpar treatment needs to be confirmed in a placebo-controlled study in the ongoing Phase 3 trial. He also noted that the improved overall tolerability potential of seladelpar in PBC was further confirmed with the first 55 PBC patients from the 52-week Phase 2b study that were eligible elected to continue the extension study.
Financial Analysis And Risks
CymaBay has multiple shots on goal and is currently focused on the development of seladelpar as its lead candidate. All clinical trials are associated with risks including trials delay and negative clinical outcome. Based on its successful Phase 2b data in PBC, seladelpar is clinically de-risked. As its lead candidate, a negative clinical outcome for seladelpar in NASH or PBC would lead to sell-off. This could be financially challenging for CymaBay.
CymaBay's long-term valuation will be determined by the clinical outcome of seladelpar in Phase 3 PBC trial and Phase 2b NASH. It will be adversely impacted by a negative clinical outcome in PBC and/or NASH. This is because seladelpar is considered a viable anti-PBC drug candidate and the front-runner. However, a positive clinical efficacy in the NASH Phase 2b trial would be key to increasing and sustaining future long-term valuation.
At the end of Q3/2018, cash, cash equivalents and marketable securities totaled $198.1M enough to fund operations into 2021. At the end of Q3/2018, CymaBay had a cash burn of $13M versus Q2/2018. CymaBay also reported a debt-free balance sheet at the end of Q3/2018. The market has a favorable assessment of seladelpar with 8 analysts rating CymaBay as a strong buy with a 12-month consensus price target of $20. My perception is that a clinically promising interim NASH Phase 2b data readout in H1/2019 would drive the stock price to $50.
The approval of ocaliva was a significant advance in PBC therapeutics for patients diagnosed with this dreadful disease. However, its clinical adverse events have paved the way for improved and innovative therapeutics for PBC. Seladelpar is now considered clinically de-risked based on the 52-week data and most likely, the next PBC therapeutic to be approved by the FDA pending a successful Phase 3 trial.
Despite its adverse events, ocaliva has shown clinical promise in regressing or stabilizing biliary fibrosis in PBC. So, there is still room for ocaliva on the prescription pad. In summary, it is best to describe ocaliva as laying the foundation to the house and seladelpar as building the house.
As always, my articles are meant to facilitate your understanding. Readers are expected to form their own trading plan, do their own research and take responsibility for their own actions. Investing in common stock can result in partial or total loss of capital. Please implement due diligence and invest wisely.
This idea was discussed in more depth with members of my private investing community, Liver Therapy Forum.
Disclosure: I am/we are long CBAY. 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.