After last week’s pessimistic post, this week I am focusing on potential catalysts in 2016 that could improve sentiment towards biotech as a sector.
As if to remind us late stage trials don’t always fail, last week saw positive news from three different programs, all of which are antibodies in non-oncology indications. Regeneron (REGN) and its partner Sanofi (SNY) announced excellent data in atopic dermatitis, Alder (ALDR) reported positive results in a P2b in migraine and Pfizer (PFE) had positive P3 data for its PCSK9 program.
Below are four additional clinical data readouts that (if positive) may serve as important catalysts.
PCSK9 cardiovascular outcomes trials (CVOT)
Amgen (AMGN) and Regeneron will announce results from CVOT for their respective PCSK9 antibodies. So far, Repatha and Praluent have had weak launches as physicians are reluctant to put patients on injectable drugs without a proven long term benefit (reduction in CV events or death).
I think there is a high (~70%) probability of success for both programs based on dramatic reductions in LDL-C and preliminary pooled analysis from earlier studies. Positive outcomes data may allow PCSK9 to dramatically improve market penetration in high risk patients who are not adequately controlled by statins with a potential label expansion to other patients with high cholesterol.
Positive outcomes data should be viewed as a positive breakthrough for The Medicines Company (MDCO) and Alnylam (ALNY) which are developing an siRNA targeting PCSK9 with a potentially less frequent treatment regimen. Results will also be important for Esperion (ESPR) because they will further validate the LDL hypothesis. Compared to PCSK9 antibodies, Esperion’s bempedoic acid has a weaker effect on LDL but as an oral agent that does not cause muscle pain, it may become an important treatment line after statins.
Three high risk readouts – Aduro, Biogen and Lilly
Aduro (ADRO) will report P2b data for its off-the-shelf cancer vaccine in pancreatic cancer by mid-2016. Off- the-shelf cancer vaccines have a terrible track record with many attempts over decades and not a single success (Celldex (CLDX) is the most recent example). The only approved cancer vaccine (Provenge) is an autologous vaccine in which a patient’s cells are taken and modified before re-administration.
An earlier phase 2 trial generated a positive survival benefit of 2.2 months in the overall population and a subset analysis demonstrated a more pronounced survival benefit (5.1 months). The current P2b is designed to corroborate this finding with data expected in the May -June timeframe. Although I don’t think the trial will be successful, positive results will have widespread implications as they will validate the concept of cancer vaccines and set the stage for many other vaccines using Aduro’s platform.
In Q3 of 2016, Biogen (BIIB) will report data from a P2b data evaluating its anti-LINGO antibody in MS. Targeting LINGO represents a new approach in MS, as the drug is designed to induce re-myelination in contrast to available treatments that slow down disease progression by suppressing the immune system. Given the lack of clinical validation for the target and the approach, this program should also be regarded as a high risk bet. In addition, more studies will be required to understand whether anti-LINGO is truly disease modifying and how it fits in the crowded MS market.
Lilly (LLY) is expected to report topline results for its Alzheimer program solanezumab in December 2016 (data may be pushed to early 2017). Solanezumab is an antibody targeting amyloid-beta (Abeta), which like all other Abeta programs, failed to demonstrate clinical benefit in P3 trials. A subset analysis of the failed P3 studies generated a mild signal of activity in early stage patients which was enough to justify initiating another P3. Although market opportunity and unmet need are huge, likelihood of success is low in my opinion given past experience with other Abeta agents. Biogen recently started P3 with its Abeta antibody (adacanumab) in Alzheimer’s disease.
Gene therapy as a potential long term growth driver
So what could be the industry’s next growth engine? To support long term growth, the biotech sector has to expand to new treatment modalities and indications. This makes gene therapy an ideal growth engine given its broad applicability in diseases which are not well addressed with current therapeutic approaches (therapeutic proteins, small molecules, siRNA etc.).
After 20 years of setbacks, gene therapy had a comeback in 2013-2014 based on preliminary results from Bluebird Bio (BLUE), Spark (ONCE)and Avalanche (AAVL), among others. Since then excitement waned following a mixed performance: Sprak reported the first ever positive randomized P3 for its ophthalmic RPE-65 program while Avalanche’s gene therapy for wet- AMD had disappointing results. Bluebird’s Lentiglobin fell somewhere in between, generating a clear proof of concept but only in some patients.
Acknowledging gene therapy’s checkered history, I believe the field is ready for primetime for the following reasons:
Technology – Technologies are mature enough with specialized vectors and delivery technologies that have generated clinical proof of concept across a myriad of indications (Hematology, ophthalmology, CNS and metabolic disorders)
Pharmaceutical standards – Historically, most gene therapy programs were initiated by research centers. Today, more and more programs are being run by companies according to industry standards and are developed as a pharmaceutical product. This not only removes a lot of regulatory risk but also improves translatability from preliminary clinical anecdotes to late stage clinical trials.
Funding – For the first time, gene therapy programs have sufficient financial backing to reach the market. Between the gene therapy-dedicated companies and their partners, the budget available for gene therapy programs is probably several billions of dollars.
Gene therapy catalysts in 2016
While it is hard to see a single binary event in 2016 for gene therapy, the next 2-3 years will have readouts from dozens of programs across a wide spectrum of indications. (This doesn’t include CARs and TCRs, which are also a form of gene therapy but are regarded as an independent group):
Bluebird Bio remains the most prominent gene therapy company with a focus on hematology. Following a traumatic ASH last year, the company decided to provide another update for its beta-thalassemia and sickle cell disease trials only towards the end of 2016. Based on results to date and plans shared by the company, I am cautiously optimistic about the company’s chances of improving clinical activity.
After announcing positive P3 results for its lead program SPK‐RPE65 in RPE65-related blindness, Spark will file for approval and report initial data for a second ophthalmic program (SPK‐CHM for choroideremia) in the second half of 2016.
AGTC (AGTC) will report initial data for two other rare genetic ophthalmic indications (X-Linked Retinoschisis and Achromatopsia CNGB3) in 2016.
UniQure (QURE) – After presenting preliminary positive data in hemophilia B and Sanfilippo B (a rare neurological disease), UniQure is expected to update on both programs in 2016.
Voyager (VYGR), which focuses on CNS indications, expects to have clinical data for its Parkinson’s program in 2H:16. The program already generated early signs of clinical efficacy in patients.
Dimension Therapeutics (DMTX), which has a liver targeting vector will have hemophilia B data in 2H:16.
AveXis (AVXS), which completed its IPO earlier this year, will have an update for AVXS-101 in SMA Type 1. The company reported preliminary encouraging results from a phase I study.
REGENXBIO (RGNX) is the most diversified gene therapy company thanks to its licensing agreements with multiple gene therapy companies ( Voyager, Dimension, Baxter and Lysogene). The company expects to advance two programs for HoFH and MPS1 to clinical trials in 2016.
Portfolio holdings – April 3, 2016