Biotech News Recap: Acer Therapeutics' Long-Term Data Supports Approval

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About: Acer Therapeutics Inc. (ACER), Includes: AQST, BDSI, MESO
by: Jonathan Faison
Summary

Aquestive Therapeutics announced FDA acceptance of NDA for riluzole oral film in ALS.

Acer Therapeutics' announced publication of long-term data from a cohort of COL3A1-positive vEDS patients is in the Journal of the American College of Cardiology.

Mesoblast announced that the FDA has agreed to rolling BLA submission for remestemcel-L in children with steroid-refractory acute Graft Versus Host Disease.

BioDelivery Sciences' recent in-licensing of Symproic (naldemedine) US rights should boost long-term growth prospects and diversify its commercial portfolio.

Ophthotech continues its transition to being a gene therapy concern with a name change to IVERIC bio.

Acer Therapeutics (ACER) - The company announced publication of long-term data from a cohort of COL3A1-positive Vascular Ehlers-Danlos Syndrome (vEDS) patients in the Journal of the American College of Cardiology. The trial describes outcomes for 144 COL3A1-positive vEDS patients clinically monitored and treated at the French National Referral Center for Rare Vascular Diseases between the years 2000 and 2017. Patients were followed for a median of 5.3 years and up to 20 years. At the initial work up, 50% of patients were not treated regularly and only a third were taking celiprolol. By the end of the study period, the majority of patients were treated with celiprolol alone or in combination with other medications. Once the maximum tolerated dose of celiprolol was reached, 90 patients remained at this dose throughout their follow-up (only five required dose reduction due to fatigue and there were no serious drug-related adverse events). Survival was 80.7% for patients treated with celiprolol versus 48.5% in those not treated after 11.1 years of follow-up. Dose effect was observed with survival significantly higher for 400 mg/day vs. 217mg/day. Importantly, decrease in hospital rates for acute arterial events was observed in the majority of celiprolol-treated patients.

This one is just starting its run up to June PDUFA date. I've commented before that approval would be a significant event for the company, as $400 million plus of peak sales potential (conservative estimate of 2,000 patients and $200,000 price tag) in the US alone compares favorably to market capitalization of just $250 million.

Aquestive Therapeutics (AQST) announced FDA acceptance of its New Drug Application for riluzole oral film, to be marketed under the brand name Exservan. ROF is a novel formulation of riluzole (used as an adjunctive therapy in the treatment of amyotrophic lateral sclerosis or ALS) which could increase compliance as it can be given twice daily without water. PDUFA goal date is Nov. 30.

While not one of its key pipeline assets (much of the potential bull thesis focuses on progress of Libervant Buccal Film), approval would be a win for the company, providing more validation for its PharmFilm technology considering they've had a few regulatory setbacks in the past. This is one to keep an eye on as a potential turnaround play.

Mesoblast (MESO) - The company announced that the FDA agreed to rolling submission of Biologics License Application for its allogeneic cellular medicine remestemcel-L in children with steroid-refractory acute Graft Versus Host Disease (SR-aGVHD). A benefit of this route is allowing for frequent communication with the regulatory agency to address issues raised along the way. The company is eligible for priority review once BLA filings are completed and the first module should be submitted shortly.

This is a significant event for the company, considering that there are no approved products for SR-aGVHD in children (outside of Japan where licensee JCR Pharmaceuticals already markets TEMCELL1 HS Inj. for children and adults with aGVHD). The company estimates a $700 million market opportunity in the US and Europe for this indication (even half that number would be significant as compared to current $560 million valuation). While anything could happen, Remestemcel-L seems like a shoe-in for approval considering that in the phase 3 trial 69% of these children met the primary endpoint of improved Day 28 Overall Response versus 45% historical control rate with high statistical significance (P=0.0003). Day 100 overall survival was 75% with 87% survival in Day 28 responders, while Day 180 overall survival was 69% with 79% survival in Day 28 responders.

BioDelivery Sciences (BDSI) - A few days ago the company announced licensing of US rights to commercialize Symproic (naldemedine), which is indicated for the treatment of opioid-induced constipation in adults with chronic non-cancer pain, including patients with chronic pain related to prior cancer or its treatment who do not require frequent (e.g., weekly) opioid dosage escalation. In return for these rights the company is paying $20 million upfront plus $10 million in six months along with tiered royalties on net sales.

Considering that management is guiding for long-term net sales (BELBUCA + Symproic) of $325 to $400 million and reaffirmed expectations of achieving positive operating cash flow by the end of 2019, this could be a good time to buy the dip. They also are guiding for 2019 net sales of $92 to $100 million (Symproic net sales of $7 to $9 million), which makes the current valuation seem reasonable to slightly on the cheap side. Another reason for the current dip is the $50 million secondary offering, which seems like it was necessary given recent cash balance of $43.8 million. Lastly, I'd point out that management should be given the benefit of the doubt considering strong execution with BELBUCA (in Q4 prescriptions rose 126% year-over-year and 27% over the prior quarter, while sales grew by 28.3% over the prior quarter).

Ophthotech (OPHT) - The company announced that it's changing its name to IVERIC as part of its transition to focusing on gene therapy candidates (treating orphan inherited retinal diseases with unmet medical need). The new ticker will be "ISEE." Management seems optimistic on the ability to generate value for shareholders and leverage expertise to move multiple programs forward in the clinic.

With all due respect, this looks like yet another failed company (Axovant also comes to mind) pivoting to the promising field of gene therapy to try to turn its prospects around. That said, investors would best be served to look forward to where it's going with clinical data for programs (LCA10 and STGD1) expected by the end of 2019 and 2020 (followed by potential partnerships if data is promising). Just a few days ago the company exclusively licensed rights to develop AAV product candidates for treatment of Best vitelliform macular dystrophy from the University of Pennsylvania. This followed last year's option agreement, so the company must be liking preclinical data. Even though there's a large market to be targeted (10,000 individuals in the US), a phase 1/2 study is still pretty far off (to be initiated in 1H 2021). With early-stage stories like these it can often be better to wait on the sidelines until we get initial proof-of-concept data in humans (to manage risk although some upside is sacrificed).

Author's Note: I appreciate you taking the time out of your day to read the above and hope you found it to be helpful in some form or fashion. These were just a few pieces of news I found interesting and/or potentially actionable. Feel free to comment on other biotech news tidbits you think merit being highlighted and look forward to our discussion below.

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