Reata Gains On Kidney Disease Drug Study

Reata Pharmaceuticals (RETA) skyrocketed to a record high Monday after its experimental drug crushed expectations in two groups of chronic kidney disease patients.

On the stock market today, Reata stock rocketed 65%, to 76.55, in heavy volume. That made it the best performer among biotech companies. Collectively, shares of biotech companies rose a fraction.

Early Monday, Reata said its drug known as bardoxolone methyl benefited patients with what’s known as Alport syndrome and autosomal dominant orphan kidney disease. Both are forms of chronic kidney disease.

The results in Alport syndrome patients were “better than we expected,” Leerink analyst Joseph Schwartz said in a note to clients. “We believe this de-risks Phase 3 results expected in the second half of 2019.”

Chronic Kidney Disease

To measure kidney function, researchers look at a metric that looks at how much blood an area of the kidneys can filter in a minute, or the glomerular filtration rate . When the filtration rate decreases, waste products begin to accumulate in the blood.

Historical data show the kidneys of Alport syndrome patients decline rapidly. On average, their ability to filter declines each year by 4.2 milliliters per minute, Reata said in a news release.

Reata treated Alport syndrome patients for 48 weeks and then re-examined patients four weeks after stopping treatment. At that point, patients showed an improvement in their average estimated glomerular filtration rate by 4.1 milliliters per minute. This sustained some of the benefits they experienced while on the drug.

“These results provide evidence that bardoxolone may delay or prevent kidney failure,” Reata said.

Leerink’s Schwartz noted this significantly tops the threshold of 2.2 milliliters per minute that the Food and Drug Administration will require for accelerated approval of the drug. An upcoming Phase 3 study is looking for the same benefit.

“Since estimated glomerular filtration rate is expected to decline by around 4.2 milliliter per minute per year for patients in the placebo arm, we believe these results are highly de-risking since the implied placebo-corrected difference of 8.3 is almost four times the threshold for success,” he said.

Reata Stock Gets Boost

Reata also improved kidney function in patients with autosomal dominant orphan kidney disease at 12 weeks of treatment. The observed improvement “represents a recovery of approximately two years of average” filtration rate loss, Reata said.

Neither patient group experienced serious treatment-related side effects. Of 28 patients in the latter group, only one discontinued treatment due to fatigue.

Leerink’s Schwartz boosted his price target on Reata stock to 64 from 43, and kept his outperform rating.

He sees Reata as having a 90% likelihood of success in Alport syndrome. He also models a 20% probability of success in autosomal dominant orphan kidney disease.

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