uniQure: A High-Risk, High-Reward Investment Opportunity
Summary
- uniQure has submitted data to the FDA that suggest that etranacogene dezaparvovec (AMT-061) is highly unlikely to be the cause of liver cancer in a patient in the pivotal trial.
- FTC review of the transaction with CSL Behring is ongoing and is projected to close during the second quarter of 2021.
- Wave Life Sciences and Roche/Ionis reported disappointing results in Huntington’s disease clinical trials.
- uniQure has made significant progress in their Huntington’s program and data readouts in late 2021 will give investors a glimpse into AMT-130’s efficacy and safety profile.
uniQure (NASDAQ:QURE) is on track to read out data from its pivotal trial of AMT-061 for patients with hemophilia B. Given the gene therapy appears safe, the company can complete the pivotal trial and eventually file for a regulatory approval. The closing of the deal with CSL Behring may provide significant cash flow to fund the pipeline. uniQure remains a high-risk, high-reward investment due to the Huntington's disease program.
AMT-061 appears to have a favorable safety profile
uniQure released findings regarding their investigation into the cause of hepatocellular cancer that was diagnosed in a patient in the HOPE-B gene therapy trial for patients with hemophilia B. The company concluded that its gene therapy for hemophilia B is not likely to be related to the patient developing hepatocellular cancer. The patient who developed the cancer had multiple risk factors including hepatitis B and C infections which are associated with 80 percent of all hepatocellular cancers.
According to a statement released by uniQure, "The external lab analyzed more than 220,000 cells from the tissue sample and identified 60 cells with random integration events that have no known association with the development of HCC. Moreover, whole genome sequencing of the tumor showed that this patient had large abnormalities on chromosomes 1 and 8 that are commonly associated with HCC, as well as mutation of TP53 and several other potentially oncogenic genes." Discussions with the FDA about these findings should occur in Q2 and based on this data, uniQure seeks to have the clinical hold lifted.
The clinical hold placed on the HOPE-B trial due to the hepatocellular cancer case resulted in QURE's stock falling significantly in December. QURE shares had been trading in the high $40 range and fell as low as $28 as investors waited for a resolution to the issue. bluebird bio (BLUE) voluntarily stopped a trial of their lentivirus gene therapy after two patients developed cancer likely making investors even more concerned about the safety profile of gene therapies. uniQure is using AAV vectors so the read-through is limited. Nonetheless, investors are concerned and watching these developments closely.
Analysts seem to agree that the data uniQure provided supports the favorable safety profile of etranacogene dezaparvovec. The favorable safety data should clear the path for uniQure to submit a BLA after the pivotal trial is completed. Barron's noted that Raymond James analyst Danielle Brill was optimistic. "We think the results exonerate Etrana Dez as a contributing factor,"... "and represent the 'best case scenario' for [uniQure]." Mizuho analyst Difei Yang upgraded uniQure shares after the data was provided and described "a favorable risk/reward in the shares given the "positive" safety update on the lead hemophilia B program."
Moreover, the data thus far showed that bleeding events were significantly decreased in treated patients suggesting a favorable efficacy profile. It appears uniQure is in a good position after the recent data which has already resulted in shares moving slightly higher. Additional catalysts may also help QURE shares to recover. The company is on track to report top line data for the HOPE-B clinical study during the second quarter of 2021 and according to the company the timeline for a BLA submission has not been impacted by the clinical hold.
The deal with CSL Behring that was previously negotiated will entitle uniQure to a $450 million cash payment. After uniQure receives this payment, they will have close to $700 million on hand which will fund their pipeline and makes dilution highly unlikely. Additional revenue of up to $1.6 billion is possible in the future based on meeting regulatory and commercial milestones and from royalties on product sales of etranacogene dezaparvovec. uniQure will likely have significant cash inflows from the hemophilia B program which should begin to be realized during 2021.
Huntington's Disease Update
The profile of AMT-130 for Huntington's Disease remains a focus of investor attention and a key determinant of uniQure's future. Q1 of 2021 has been devastating for the Huntington's community with two major setbacks. First, Roche (OTCQX:RHHBY), partnered with Ionis (IONS), halted a Phase 3 trial of tominersen, an antisense oligonucleotide drug designed to "silence" the huntingtin gene by attaching to mRNA with the goal of curtailing production of mHTT. (Further details on the program can be found in my article published on SA.)
The drug was administered via an intrathecal catheter and appeared to be effective at lowering mutant huntingtin protein in the cerebrospinal fluid. However, Roche reported that the trial was stopped for reasons other than a safety issue. An article titled "Roche halts Huntington's Phase 3 of Ionis-partnered antisense drug as blockbuster hopes fade" suggested that the trial was likely halted due to the drug's failure to show an efficacy signal.
The Phase 2 study proved that a drug can lower mutant huntingtin protein in the cerebrospinal fluid but it may be that this is inadequate to have a treatment effect. A full data set has not been released which makes drawing conclusions difficult. Advances in science often come with setbacks and occur in small increments. In this case, their Phase 2 trial proved that drugs can lower mHTT protein in HD patients for the first time ever but it remains unclear how this very significant accomplishment can translate into a clinical benefit for patients.
Wave Life Sciences also announced a setback. WVE-120102 and WVE-120101, both antisense oligonucleotide drugs from an older platform, failed to reduce mHTT in any meaningful way in a Phase 1b/2a study. According to an article by Ben Adams of Fierce Biotech, these programs will be stopped and Wave Life Sciences will focus on WVE-003 which is designed to "selectively lower mHTT by targeting a specific single nucleotide polymorphism (SNP3)."
Wave Life Sciences has seen many clinical programs fail in the past few years and an analyst quoted in the Fierce Biotech article saw "little room for optimism." Triplet Therapeutics, a private company may also be developing treatments for Huntington's disease but few details have been released to evaluate their approach. Clearly, Huntington's Disease is proving to be an extremely difficult disease to target.
AMT-130 Update
AMT-130 is an AAV5 gene therapy that seeks to treat Huntington's disease by "silencing" the huntingtin gene and inhibiting the production of mutant protein (mHHT). It also targets the Exon 1 fragment which is considered to be highly toxic. AMT-130 is delivered directly into the striatum and putamen (in the brain) via a neurosurgical procedure using MRI to guide placement.
Currently, uniQure is conducting a randomized double blind study where ten patients have been enrolled. Six patients were treated with AMT-130 and four placebo patients have undergone a sham procedure. uniQure reported that the Independent Data Safety Monitoring Board has reviewed six-month safety data for the first two enrolled patients and three-month safety data for the next two patients and has allowed the trial to continue. In addition, uniQure reported they will be initiating an open label trial in Europe in Q3 2021 which will enroll fifteen additional patients in two dose cohorts in hopes of ascertaining the optimal dose while assessing efficacy signals.
By year-end 2021, investors should get a first look at biomarker data in the first two patients who will be evaluated after the twelve-month blinding period ends. Matt Kapusta, the CEO of uniQure, commented on how uniQure's approach differs and why these differences will hopefully translate into a better outcome. First, he stressed that it is critically important to get treatments to the target tissues in the deep brain structures.
uniQure is administered directly into the brain via a neurosurgical procedure using real-time MRI to visualize and confirm hitting the target tissue. Roche/Ionis administered Tominersen via an intrathecal catheter into the spinal column rather than directly into the brain. Whether tominersen reached therapeutic levels in the brain will likely be a question investigators want to further explore.
Mr. Kapusta also notes that AMT-130-enrolled patients must have a minimal level of striatum volume to enroll in the trial which should ensure patients have cells to transduce and viable cells that can be preserved. Treating neurodegenerative diseases as early as possible is a logical approach and a concept most neurodegenerative drug developers believe is important.
Treatments are likely to be ineffective after substantial neuronal death so selecting patients early enough in the disease course is preferred. Due to the protocol requirements, patients in the uniQure trial may be earlier stage than patients treated in the Roche/Ionis trial. Lastly, the highly toxic Exon1 mHTT fragment is being targeted by AMT-130 which distinguishes uniQure's approach from competitors.
The data readout in late 2021 will include data from two patients with one year of followup. With such limited data, it will only give investors a glimpse into the efficacy profile of AMT-130. The company reported that it will measure mHTT in the CSF but they do not believe it is a particularly meaningful marker. mHTT CSF levels may not correlate with brain levels. Neurofilament light chain levels are an accepted biomarker and measure neuro-axonal damage and will be measured in the AMT-130 trial.
uniQure suspects neurofilament light chain levels may initially rise as a result of the neurosurgical procedure but they will be reporting levels in the first two treated patients. Neurofilament light chain levels are known to be a reliable biomarker in Huntington's patients and are elevated with the progression of the disease. Volumetric MRIs which can quantify atrophy of the brain structures will also be performed.
Huntington's disease is a slowly progressing disease and thus seeing clearly delineated differences between treated patients versus the expected natural progression of the disease (placebo patients) in a one-year study with only two patients is likely to be difficult. During 2022, the data set will be significantly larger and over a longer time frame and will provide a much more accurate view of the efficacy and safety profile of AMT-130.
Risk vs. Reward
An article published in 2017 titled, "Fifteen Years of Clinical Trials in Huntington's Disease: A Very Low Clinical Drug Development Success Rate," looked at 99 trials and assigned an overall success rate of just 3.5 percent. The two recent failures followed this trend. This should highlight for investors how difficult a challenge uniQure has taken on. Huntington's disease is thought to be caused by a single defective gene which in theory should offer a clear target to develop treatments.
However, it has not been definitively proven in humans that lowering mHTT will yield clinical improvements in patients which adds a layer of uncertainty to clinical trials. It is also not clear how early patients must be treated to garner a clinical benefit. Access to the affected tissues in the brain provides an additional challenge. In general, neurodegenerative diseases such as Huntington's disease, Alzheimer's disease and Parkinson's disease have been particularly challenging for drug development.
Unknown biology has played a role. Given the abundance of failures, investors would be wise to assign a low likelihood of success to the AMT-130 trial despite uniQure's novel, well-reasoned approach. It should also be noted that long-term safety and efficacy data is likely to be required by the FDA and it will take years to produce this making drug development costly.
Although Huntington's is a rare disease, there are 40,000 patients in the US who are believed to have manifest Huntington's Disease and there is a high unmet need for disease-modifying treatments. In the US and Europe, uniQure estimates that there are 70,000 patients in need of a transformative treatment for this devastating disease. Analyst Danielle Brill estimates there is a $7 billion market for Huntington's treatments which highlights the enormous upside for a company that can provide a disease-modifying treatment. The Mizuho analyst has a $52 price target on QURE shares, Chardan placed a $100 price target and Raymond James has a $75 price target on QURE shares.
Conclusion
uniQure remains a very high-risk, very high-reward investment due to its Huntington's program. It is only appropriate for investors looking for this profile. Despite the well-reasoned approach, the likelihood of success with AMT-130 must be considered to be low due to the many failures in the space. Failure of the Huntington's program would leave a hole in a relatively small and early stage pipeline.
If successful, uniQure is well-positioned relative to competitors. Overall, the risk for investors is somewhat mitigated by the positive news and cash from the hemophilia B program. Investors and patients should mark their calendars for a late 2021 data release which will be an important milestone for uniQure.
This article was written by
Analyst’s Disclosure: I am/we are long QURE. 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.
This article is not a recommendation to buy or sell any security.
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