StemCell Therapy

On the good news front in today's series, Stealth BioTherapeutics (MITO) and Alexion Pharmaceuticals (ALXN) have agreed to co-develop and commercialize elamipretide for mitochondrial diseases. Elamipretide, an inner mitochondrial membrane-targeting therapeutic, is Stealth BioTherapeutics' lead product candidate, which is being investigated in late stage clinical studies in three primary mitochondrial diseases - primary mitochondrial myopathy (PMM - an inherited disorder), Barth syndrome (enlarged & weakened heart) and Lebers hereditary optic neuropathy (LHON - an inherited vision loss), and in an earlier stage clinical study in dry age-related macular degeneration (dry-AMD).

It is good to see that small biopharma is still able to make quick bucks in short spans of time, isolated from the big economy. While there is undoubtedly a lot of pressure, and many portfolio and individual stocks have lost money, there are some that are doing well on science and fundamentals.

Today, I was reading an article about how isolationist tendencies are gripping countries the world over. The US is going its own unfathomable way; Britain is becoming an island again; the EU is like a robotic voice that continues running without power; and China is a sepulchre, boxed in, isolated, trying to buy its way out. I mention these things in an investment article because unlike 2008, the nature of the depression that is being predicted in some quarters is political. It is as macro as macro can get.

We discussed Stealth BioTherapeutics and PMM in July 2019 - and were not very enthusiastic about its prospects. However that may be, elamipretide is currently in phase 3 trial for PMM. Alexion's option will be exercised based on results from this study, which are expected by the end of 4Q-2019. These results are also important as phase 2 trials did not produce statistically significant data. If the drug is approved, Alexion and Stealth will co-promote the product in the U.S. on equal basis, while outside the U.S., Alexion will have exclusive rights for development and commercialization. Stealth will receive $30M upfront, which includes an option fee, equity investment and development funding. Alexion will make additional payments, including an option exercise fee, an additional equity investment, development funding and milestones if it exercises its option.

Stealth BioTherapeutics has the below pipeline in the lead indications for elamipretide.

(Image source: company website)

There are no therapies approved by the U.S. FDA or the European Medicines Agency (EMA) for the treatment of PMM. Stealth Bio has received Fast Track designation and Orphan Drug designation from the FDA for the development of elamipretide in this indication. Prevalence of PMM in the U.S. is estimated at 40,000. There are no therapies approved by the FDA or the EMA for treating Barth syndrome, which is estimated to affect between one in 300,000 to 400,000 births. The company has received Fast Track and Orphan Drug designation from the FDA for the development of elamipretide in this indication too. LHON has been diagnosed in approximately 10,000 individuals in the U.S. There are no therapies approved by the FDA for the treatment of LHON either, and Stealth BioTherapeutics has received Fast Track and Orphan Drug designation from the FDA for this indication as well. Dry-AMD is estimated to affect over 10 million individuals in the U.S., and it also does not have any therapies approved by the FDA or EMA.

Stealth BioTherapeutics is developing a Mitochondrial Carrier Technology (MCT) platform, which will utilize their proprietary compounds to deliver biologically active cargo to mitochondria. Preliminary data demonstrates the ability of the carrier compounds to direct the distribution of biologically active cargo to mitochondria. This approach shows possibilities for mitochondrial localization of small molecules, and may also have the potential to deliver peptides, proteins and oligonucleotides.

OncoSec Medical Inc. (ONCS) has entered into a strategic transaction with Grand Decade Developments Limited, a direct, wholly-owned subsidiary of China Grand Pharmaceutical (CGP) and Healthcare Holdings, and its affiliate, Sirtex Medical US Holdings. CGP and Sirtex are investing $30 million in OncoSec at $2.50/share, a 25% premium over the company's average share price over last 20 days. This would take the shareholding of CGP and Sirtex to 53% of OncoSec common shares. CGP can offer to buy the remaining shares within 12 months at the greater of $4.50 per share or 110% of the closing share price as on the prior date of such offer.

The present arrangement grants CGP "an exclusive license to develop, manufacture, commercialize, or exploit OncoSec's current and future products, including TAVO and OncoSec's new Visceral Lesion Applicator (VLA), in Greater China and 35 other Asian countries (the "territory")." CGP will pay up to 20% royalties on the net sales of such products in the territory, while "Sirtex will support and assist OncoSec with pre-marketing activities for TAVO and VLA in exchange for low single-digit royalties on TAVO and VLA net sales" outside the territory. With this transaction, OncoSec will have the funds needed to complete its ongoing pivotal clinical trial (KEYNOTE-695) of TAVO in combination with Merck's keytruda, in checkpoint-refractory metastatic melanoma, and the ongoing clinical trial (KEYNOTE-890) in chemo-refractory metastatic triple negative breast cancer. OncoSec anticipates filing for accelerated approval in the U.S. in 2020 after the completion of the KEYNOTE-695 trial. We discussed OncoSec's options back in December 2018, when the company was on the OTC market.

Amicus Therapeutics' (FOLD) shares were up in the premarket yesterday on preliminary Q3 results. Q3 sales of Galafold are expected to be around $48 million, above consensus of $45 million and 133% increase over previous year. Full-year revenue from Galafold is expected to be between $170 million and 180 million. Amicus expects to end the year with over $420 million cash, which should carry the company's operations well into 1H-2022.

Last week, the company presented additional positive data from the phase 1/2 study of AT-GAA in Pompe disease (GAA deficiency). The U.S. FDA previously granted Breakthrough Therapy Designation to AT-GAA for the treatment of late onset Pompe disease based on clinical efficacy results from this Phase 1/2 clinical study, including improvements in six-minute walk distance in late onset Pompe patients and comparison to natural history of treated patients. John F. Crowley, Chairman and CEO of Amicus, stated, Collectively these data continue to represent meaningful and durable improvements in functional outcomes, in addition to persistent reductions in key biomarkers of muscle damage and disease substrate." Further, he said that these results show that "AT-GAA has the potential to become the new standard of care for people living with Pompe." We analysed the company back in February 2019, and looks like the company is on track as we predicted.

Puma Biotechnology, Inc. (PBYI) is down further 6%, almost to near its 52-week low. Not much volume, though. Puma Biotechnology had recently raised the price of its breast cancer drug Nerlynx (neratinib) by 20%, which is being criticized by various influencers including Senator Bernie Sanders. Early this week, PBYI fell over 20% on the news of the exit of the company's chief commercial officer, Steven Lo, effective October 18. Steven Lo is taking over as CEO at Zosano Pharma. The stock was also downgraded at Goldman Sachs to "Sell" with a price target of $8.

Taro Pharmaceutical (TARO) has been hit with a patent infringement lawsuit by Aclaris Therapeutics (ACRS) together with Allergan plc (AGN). Taro had filed an ANDA with the U.S. FDA, seeking approval to manufacture and market a generic version of rhofade (oxymetazoline hydrochloride) cream 1%, before the expiry of the patents listed in the Orange Book, which are set to expire in 2035. Rhofade is an alpha1A adrenoceptor agonist, specifically indicated for the topical treatment of persistent facial erythema (redness) associated with rosacea in adults. Allergan developed and commercialized rhofade, which was approved by the U.S. FDA in January 2017. Allergan had acquired the drug as part of its 2011 acquisition of Vicept Therapeutics, Inc., which was established by some members of the current senior management at Aclaris. Aclaris acquired worldwide rights to rhofade from Allergan in November 2018, and its revenue will accrue to Aclaris from 4Q-2019.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

Original post:

Stealth BioTherapeutics Does The Deal With Alexion, And Other Headlines: The Good, Bad And Ugly Of Biopharma - Seeking Alpha

This entry was posted on October 13, 2019 at 9:41 pm and is filed under Neuropathy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed. |