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Thursday, February 28, 2019

Mirati bulls will need patience

Hopes that Mirati could become the first company to succeed in targeting the “undruggable” KRAS oncology target have played a significant part in sending this company’s stock to an all-time high. But, judging by yesterday’s abstract drop for the upcoming AACR conference, the bulls will have to be patient. Both Mirati’s KRAS C12C inhibitor, MRTX1257, and Amgen’s rival AMG 510, will feature at the meeting, but there are no clinical data to report. Amgen’s three abstracts detail AMG 510’s discovery and in vivo characterisation, while Mirati has one preclinical abstract whose text has not yet been made available. Hopes were stoked by Amgen’s head of R&D, David Reese, who on an analyst call last month stated that the group was “seeing interesting early hints of clinical activity” and expected by mid-year to present “initial results … in terms of best-in-class”. These first results seem unlikely to come before Asco. MRTX1257 was Mirati’s early lead, but the current focus is on MRTX849, which has just entered phase I. Despite this early stage of development Leerink estimates that KRAS accounts for 70% of Mirati’s valuation, which today stands at a staggering $2.6bn.
SELECTED PROJECTS AGAINST CANCERS HARBOURING KRAS MUTATIONS
ProjectCompanyMechanismStatusTrial ID
AMG 510AmgenKRAS G12C inhibitor1st in human data possible at AscoNCT03600883
TNO155NovartisSHP2 inhibitorStudy in KRAS, NRAS, HRAS, BRAF or PTPN11 (SHP2) mut tumoursNCT03114319
MRTX849Mirati (ex Array)KRAS G12C inhibitorTrial in KRAS G12C mut cancers started Jan 2019NCT03785249
KRAS TCRGilead (ex Kite/NCI)Anti-KRAS G12D engineered T-cell receptorNCI trial starting Mar 2019NCT03745326
UnnamedMiratiKRAS G12D inhibitorPreclinicalNone
MRTX1257MiratiKRAS G12C inhibitorEarly pipeline leadNone

Robotic pill seen safe in early human study, paving way for oral biologics

Transforming injectables into pills is hardly a novel idea, but a string of pharmaceutical/chemical efforts to evade the enzymes that break down the oral drug before it can be absorbed have largely hit a wall. Earlier this month, an animal study captured the spotlight for the potential of its blueberry sized robotic pill designed to deliver an insulin shot inside the stomach — but California-based Rani Therapeutics on Thursday said it has successfully tested its robotic pill for safety and tolerability in humans, paving the way for efficacy studies that could open the door to a colossal market to enhance treatment compliance, diminish the need for physician-led therapeutic administration and placate needle-phobic patients.

The company’s product — called the RaniPill — has undergone over 100 preclinical studies, including large animal trials. The capsule has an enteric coating that protects it from the acidic ambience of the stomach, and once it moves into the intestine and pH levels rise, the coating dissolves and a chemical reaction takes place which inflates a balloon. Pressure in the balloon pushes a dissolvable microneedle filled with the drug into the intestinal wall.
Intestines don’t have pain receptors, and the intestinal substrate — which is designed to absorb nutrients — is highly vascularized, making it the ideal location for the drug-engorged injection to deploy, Rani chief Mir Imran told Endpoints News, adding that in the handful of drugs the company tested as part of the RaniPill in animal studies, the absorption of the drug was generally equal or higher than that of a subcutaneous injection.
Following successful animal studies, Rani initiated a study in healthy humans last year to evaluate the feasibility of the product. Two groups of 10 subjects each (with one arm having fed, and the other arm having fasted) were given a drug-free version of the RaniPill. Results revealed neither group felt the impact of the capsule inflating or deploying, and each patient successfully expunged the remnants. The capsule was well tolerated and the presence (or absence) of food in the stomach had no impact on the performance of the capsule, the company said.
“This is the first time a robotic pill was swallowed by humans — this really paves the way for the next study which will have a drug, and we will be able to measure drug levels,” Imran said.
The company has chosen to use a pill loaded with octreotide, an off-patent biologic that treats the hormonal disorder acromegaly, for the upcoming study, which the company expects will commence in the coming months.
“If we’re successful in our next study, it really means that we can deliver any drug…including insulin and Humira and treatments for a whole host of other diseases such as multiple sclerosis, hemophilia and other chronic conditions,” he added.
But there’s a long road ahead. Each drug loaded into the capsule will require a separate study before Rani can petition the FDA for approval.
Meanwhile, rat and pig data on the other robotic pill — created by a team of researchers at MIT (including the prolific drug delivery maestro Robert Langer) and Novo Nordisk $NVO — announced earlier in February, has an alternative mechanism of action.
The device, called Soma, encapsulates a needle inside a pill made of compressed freeze-dried insulin that is designed to orient itself when it comes in contact with the stomach lining — inspired by a leopard tortoise, which brandishes a shell that allows the African reptile to right itself if it rolls onto its back. Upon contact with the wet inner lining of the stomach (which is also devoid of pain receptors), a sugar disk holding the needle in place is dissolved, making way for the needle to release its contents. The product is then engineered to disintegrate and travel harmlessly through the digestive system and eventually be eliminated, the researchers wrote in their report in Science.
“One big difference is that we predate the MIT effort by at least 5 years and our IP really covers everything they’re doing…their (Soma’s) spring loaded delivery is something we have very strong patents on, so I think they are going to step on our IP. The design of the needle we have very strong patents on, and their needle looks exactly like our needle,” Imran said, emphasizing the size of Rani’s patent portfolio, which he claimed includes 70 issued patents.
“The MIT group as far as we can tell has two patent applications and neither has been issued. Certainly for us we see that (competition) as a positive because it validates our approach in a very fundamental way — not that we need that validation thanks to our animal studies — but it’s really nice to have Bob Langer on my heels.”
In response to Imran’s commentary, Langer suggested it was unclear whether the MIT approach is infringing on Rani’s patents.

“I think it’s unclear at this time — recognizing that we, Rani, and I’m sure others have a number of patent applications in this area — whether, for some applications we are stepping on their patents, they are stepping on ours, and/or there are patents by others which will be important,” he said in an emailed statement.
“Our goal in publishing our work in a top peer reviewed scientific journal (Science) was to get the scientific principles we developed out to the scientific community in the hopes that it can get to patients. If that happens through us, our collaborators at Novo Nordisk, Rani, or someone else, we will have achieved our goal.”
Founded in 2012, Rani Therapeutics has raised $142 million in funding from a slate of investors including GV (the investment arm of Alphabet), and counts Novartis and Shire as its partners.

Another Phase 3 RSV fail hits Novavax, but execs claim there’s a way forward

Back in November 2016, when Novavax was picking up the scraps from a Phase III crash of its RSV vaccine in older adults, the company pointed to the Gates Foundation-backed program to test the vaccine in infants as a “significant commercial opportunity.” It went on to become the lead program as Novavax mounted an arduous comeback campaign for RSV-F vaccine.
But today, execs conceded that the infant trial has suffered the same late-stage fate.

Investors showed little patience for a company that’s been quick with explanations but slow to deliver. The stock $NVAX tanked more than 65% in pre-market trading to $2.13.
As it turned out, immunizing mothers with ResVax while they are pregnant did not prevent medically significant lower respiratory tract infections caused by RSV in infants for the first three months of their lives — the primary endpoint.
To be sure, Novavax is operating in a tough field littered with setbacks, including a flop from Regeneron (which has since dropped its RSV antibody). In a rare win, AstraZeneca recently secured expedited reviews in the US and EU for a different approach — a single dose long-acting drug for a broad swath of newborns.
What the treatment did achieve — and this is the silver lining that execs are holding onto as they try to beat down a path to approval — was protecting infants from “some of the most serious consequences of RSV, including RSV LRTI hospitalizations and RSV LRTI with severe hypoxemia,” CEO Stanley Erck said in a statement.
In other words, execs elaborated on a conference call, while the vaccine was not deemed effective for common — but less severe — manifestations of the respiratory syncytial virus, it appears to protect the small group of infants who get the worst attacks.
They also suggested that vaccinating mothers at an earlier stage of gestation (from 28 to 33 weeks) might increase efficacy — potentially a key point in their pitch to regulators.
Novavax offered a peek on the data, which it plans to unveil at a medical meeting. Respectively, the efficacy rates of ResVax in per-protocol infants were as follows:
39% against medically significant RSV LRTI (97.5%CI, -1% to 64%)
44% against RSV LRTI hospitalizations (95%CI, 20% to 62%)
48% against RSV LRTI with severe hypoxemia (95%CI, -8% to 75%)

Analysts Mixed After Fitbit’s Q4 Earnings

Fitness tracker and smartwatch maker Fitbit Inc FIT 13.96% swung back to a profit in the fourth quarter, but guidance for 2019 disappointed some investors.
The report was compelling enough for one research firm to turn bullish, but another continues to recommend investors stick to the sidelines for the time being.

The Analysts

D.A. Davidson’s Tom Forte upgraded Fitbit from Neutral to Buy with a 12- to 18-month price target lifted from $5.50 to $7.
Wedbush’s Michael Pachter maintains at Neutral, unchanged $6.50 price target.

D.A. Davidson: Healthier Company

Fitbit’s earnings report demonstrated the company is “much healthier” today than it has been in the past, Forte said in a research report. Some of the encouraging takeaways from the report include a return to unit and sales growth, sales coming in $11 million ahead of management’s own guidance and active user growth of 9 percent to 27 million.
Despite multiple encouraging takeaways, management did guide first-quarter sales, EPS and adjusted EBITDA short of the Street’s expectations. The company also guided its gross margins to be “much lower” than expected at 34.5 percent, but this is due to multiple temporary factors, including lower warranty benefit, a mix shift towards smartwatches and the migration to the cloud.
Forte said Fitbit’s focus on the health care market is still in the early stages but showing encouraging progress. Coupled with the multiple encouraging metrics seen in the fourth quarter and the $2.78 per share in net cash, the stock offers a favorable risk to reward profile at current levels.

Wedbush: Discouraging Guidance

Fitbit’s report exceeded expectations and shows the company controls a large portion of the fitness tracking and smartwatch markets, Pachter said in a research report. Guidance for 2019 is “somewhat discouraging” as it implies only modest revenue growth, gross margin contraction and earnings losses.
Nevertheless, Pachter said Fitbit is adopting a strategy of pushing hardware sales and then leverage its user-base and technologies to gain traction in health care products and services. The company’s Fitbit Health Solutions (FHS) business has significant long-term potential, but management’s hasn’t fully explained the true opportunity.
Before potentially turning more constructive on the stock, investors may want to wait for signs of a quicker growth trajectory and more transparency, especially within the FHS business

Analysts Laud Sarepta’s ‘Increasingly Active’ Gene Therapy Development

Sarepta Therapeutics Inc SRPT 4.94% reported fourth-quarter results Wednesday alongside positive results for its muscular dystrophy gene therapy candidate.

The Analysts

Janney analyst Yun Zhong reiterated a Buy rating on Sarepta with a $200 fair value estimate.
Cantor Fitzgerald analyst Alethia Young reiterated an Overweight rating and increased the price target from $217 to $231.

Janney: Strong Balance Sheet Needed For Active Clinical Program

Sarepta continues to move ahead with its gene therapy and exon-skipping pipelines, Zhong said in a Thursday note.
The company will initiate a multicenter registrational study of microdystrophin gene therapy using commercial-scale material by the end of 2019, the analyst said.
Sarepta is seeking to discuss a regulatory pathway for all five limb-girdle muscular dystrophy, or LGMD, gene therapy programs with the FDA, Zhong said.
Janney projects that Sarepta will more than double the exon-skipping market in 2020, given the scheduling of the golodirsen PDUFA date for August and the potential for a midyear NDA submission for casimersen.
Reviewing the results, Janney attributed Sarepta’s fourth-quarter loss to upfront and milestone payments due to gene therapy partners Lysogene and Myonexus.
Even as the company forecast an increase in operating expenses due to gene therapy manufacturing, Zhong said a strengthened balance sheet should support its “increasingly active” clinical development.

Cantor Sees Compelling LGMD Opportunity

The limb girdle data released Wednesday exceeded expectations, Young said in a Thursday note. The analyst views the collective LGMD opportunity as a compelling one, with a target population similar to DMD, with over 10,000 patients in the U.S.
The analyst said she hopes to get further updates on LGMD development strategy later this year following regulatory interactions. The Paragon commercial manufacturing facility is expected to be ready by the first quarter of 2020, Young said.
“We have raised our probability of success for MYO-101, ‘103 and ‘201 to 50 percent from 25 percent and left MYO-102 and ‘301 programs unchanged.”
Cantor sees meaningful read-through across these programs because they use a similar approach.

FDA: Regulatory Process For CBD Edibles Kicks Off With April Hearings

Food and Drug Administration Commissioner Scott Gottlieb said his agency has plans to regulate CBD edibles and will start holding public hearings on the matter as early as April.

What Happened

The FDA has taken notice of the legalization of hemp and CBD in December, Gottlieb said during a Wednesday House Appropriations Committee committee.
The agency is assembling a team of senior officials to develop new rules and will start the process with a public hearing in April.
Gottlieb also warned the committee that the regulations concerning CBD-infused food products will not be straightforward. As a potential pathway, Gottlieb said the FDA might regulate products with high CBD content as drugs and subject them to more stringent rules, but products with lower concentrations could be categorized as food products.

Why It’s Important

Since the legalization of hemp and hemp-derived CBD in the Farm Bill, the CBD industry has eyed the FDA’s position toward the substance, as it represents an obstacle to mass-market CBD edibles from a federal standpoint.
A clear set of rules would make it easier for companies like New Age Beverages Corp NBEV 4.65% to distribute their products and would eliminate the uncertainties that might prevent large retailers such as Walmart, Inc. WMT 0.87%, from offering CBD products.

Adial CEO: Medical Solution For Alcoholism Could Be Just Around Corner

More than 15 million Americans suffer from alcohol use disorder, according to the CDC, but a new medication may offer a solution. Adial Pharmaceuticals Inc ADIL 1.39% is developing AD04, a drug in Phase IIb clinical trials for treatment of alcohol addiction.

Precision Medicine

This week, Adial CEO Bill Stilley discussed the prospects for AD04 in an interview with CBS San Francisco affiliate KPIX-TV. AD04 is genetically targeted to help a specific subset of people suffering from alcohol addiction due to genetic factors, he said.
“We believe that this drug can help those patients,” the CEO said. “But in the future, as we start to understand more about the brain, more about addiction, we’ll be able to develop other drugs and other people will develop other drugs to help a different segment of the population.”
Adial’s approach to complex psychological conditions such as addiction and depression is known as precision medicine, and it was facilitated by the unlocking of the human genome at the beginning of the 21st century, Stilley said.
“I think it’s the wave of the future. It’s how all drugs will be targeted.”

Universal Treatments

Like depression and other conditions, the causes and types of alcohol addiction vary from person to person, and one universal treatment is unlikely to help every patient, Stilley said, adding that AD04 showed promising results in its Phase IIb trials.
“Patients has a significant reduction in how often they drank, and then, importantly, when they drank, a 60-percent reduction in the amount they drank.”
AD04 works by modifying the dopamine system in the brain that is involved in cravings.

Major Problem

Alcohol-impaired driving is a factor in more than 30 percent of fatal traffic accidents each year, according to the CDC. Each year, more than 88,000 Americans die as a result of alcohol abuse.
“It is one of the single worst diseases in the world and in the United States,” Stilley said.