This Week In Pharma: Can Radius’ Abaloparatide-SC Beat Current Osteoporosis Drugs? Will Arrowhead Pharma Make It In The HBV Space?

By Slingshot Contributor Phil Loria

This week I focus on two lead candidates that will be the main determinants in the success of their respective companies over the next couple of years.

Arrowhead Pharma (ARWR) is a company with several potential catalysts over the next two years that will determine if they make it as a company. After the first quarter they only have $77 million in cash, and they burned an average around $22 million a quarter in 2015. They are currently presenting positive Phase I data at The International Liver Congress, which sent their shares up 12% premarket last Wednesday. Although they will not give any exact timeline on further data releases for ARC-520, they have five ongoing Phase II studies, and management noted in the recent earnings call “we have a good chance of seeing evidence this year.” In 2016 they also expect to initiate clinical studies for another candidate they are developing for HBV, ARC-521. ARC-AAT, their candidate for liver disease associated with a rare genetic disorder causing alpha-1 antitrypsin deficiency (AATD), also provides some catalysts for the company this year. They have plans to release top-line results in 2016 from their Phase I trial and initiate a Phase IIA study.

Radius Pharma (RDUS) has no approved products, but they have five in development for serious endocrine-mediated diseases. Its lead candidate is Abaloparatide-SC for the treatment of postmenopausal osteoporosis, and they just filed their New Drug Application (NDA) with the FDA on March 30th. The transdermal patch version of the drug has completed a Phase II trial, but lags behind the subcutaneous injection in development. Their stock is currently trading around $36 a share, above their 52-week low of $24.75, but far from the 52-week high of $84.64. This emphasizes the potential for this stock to be a major mover over the next year, and biotech investors need to pay close attention to where Radius’ value is going. Eli Lilly (LLY) is the main player in the osteoporosis space right now with Forteo, and Amgen (AGN) recently released positive Phase III data for their product, Romosozumab. Radius’ market value relies heavily on the success of Abaloparatide, but investors are wondering if they can beat out Lilly and Amgen.

Option 1: Looking at the potential of Arrowhead Pharma’s ARC-520 a in treatment of Hepatitis-B before more data is released in 2016. How will their lead candidate progress through further trials, and what does current data suggest?

Hepatitis-B (HBV) is a viral infection transmitted through bodily fluids that affects an estimated 2 billion people globally, approximately 250 million of which are chronically infected. The virus replicates in the liver causing the immune destruction of liver cells and is responsible for approximately 1 million deaths per year. In adults who are acutely infected symptoms largely go unnoticed, but can include jaundice, nausea, vomiting, abdominal pain, extreme fatigue, and others.

There is no cure for HBV, but there are highly efficacious oral therapies (that must be taken for life) that suppress the viral load, a major predictor of disease progression. Gilead’s (GILD) Tenofovir and Bristol-Myers Squibb’s (BMY) Entecavir are among the bigger names. On the rare occasion, some patients are treated with alpha interferon injections for defined durations, but interferon has a notoriously difficult side effect profile and is less feasible in low income areas. ARC-520 is being tested as a possible functional cure, and could be the first RNAi-based therapy to hit the HBV market. Investors have responded well to data thus far, and Arrowhead just announced that ARC-520 and entecavir “inhibited HBV cccDNA-derived mRNA with observed viral protein reduction in HBV patients up to 2.0 log (99%) after a single dose.” If the product pans out in larger trials and receives approval, this would be viewed by the market as a major breakthrough, and Arrowhead would substantially increase in value. In fact, investors are already talking about Arrowhead as a potential acquisition target for big-name pharma companies.

While the numbers are promising, it is difficult to interpret the drug’s potential, as many details of the initial trail are unknown. Furthermore, RNAi therapies have mechanical hurdles (delivering the drug to target, etc.), and the fact that it is contending with an exceptionally complicated DNA virus. The goal of investigational therapies for HBV is to reduce cccDNA levels. Although at first glance these results appear exceptional, they should be viewed with an eye of caution. In order to gain a better understanding of the data behind ARC-520, Slingshot Insights would like to conduct an expert interview that gives investors a better understanding of the future for Arrowhead. Here are some questions I would ask.

Questions for a liver specialist with significant experience treating patients and a deep understanding of the data and mechanism of action behind ARC-520 and ARC-521. He or she will have knowledge of the other drugs in the space and the regulatory process for similar products.

  1. Can you discuss the recent Phase I that showed ARC-520 and BMY’s entecavir achieved up to 5.5 log (99.9997%) knockdown of HBV DNA in hepatitis B e-antigen (HBeAg)-positive treatment-naive patients, achieving reductions below the level of quantization? What percentage of HBV patients are in this patient population?
  2. What HBV genotypes were studies and in what races?
  3. ARC-520 inhibited HBV cccDNA — derived mRNA with observed viral protein reduction in HBV patients up to 2.0 log (99%) after a single dose. Can you discuss the clinical relevance of this result?
  4. Can you discuss any other data that has been released on ARC-520 and its implications for your view of the drug?
  5. Given the current information, how do you view ARC-520’s chances of successfully moving through the later stages of testing and eventually receiving approval, or is it too early to tell?
  6. The HCV market has obvious parallels to HBV, but can you compare and contrast them for investors? How different or similar would a functional cure in HBV look for a drug compared to what we’ve seen in HCV.
  7. Although it has yet to reach human trials, can you discuss the mechanism of action for ARC-521 and any data you are aware of at this point? Is there anything else we should know about ARC-521?
  8. In their most recent earnings call, the company states that “ARC-521 is designed to hit mRNA transcripts deriving from both HBV cccDNA, and integrated HBV DNA. This means ARC-520 may be optimal in patient populations with higher levels of cccDNA, such as e-antigen positive NUC naive patients. And ARC-521 may be optimal in patients with lower levels of cccDNA.” What are your thoughts on this statement?
  9. If ARC-520 were to continue to demonstrate safety and efficacy and receive approval, what percentage of existing patients do you think would switch to ARC-520? How many new patients do you think would choose ARC-520 as their first-line treatment?

In Conclusion

This interview will give investors a better understanding of the early data behind ARC-520, in order to gauge the drug’s market potential and chances of approval. The discussion will also give investors information on how the drug works, and how experts view its prospects for success in the crowded HBV market.

Join the project and add your questions now:

*Author note: If you join and agree to pay for the call before the contest winner is selected, and it ends up winning, you will still receive it for free. You will only pay your share if you do not win, but there is still enough people willing to pay for the call to happen.*

Option 2: Analyzing the potential and chances of approval for Radius’ Abaloparatide-SC in treatment of postmenopausal women with osteoporosis. Can it beat out Lilly’s Forteo and Amgen’s candidate Romosozumab?

Osteoporosis is four times more prevalent in women than men, and patients usually start showing symptoms 5–7 years after menopause. The disease lessens bone density, making bones weak and brittle, which can lead to sudden fractures. Loss of bone mass and strength usually occurs without symptoms, meaning the disease usually isn’t detected until a patient fractures a bone. There are as many as 10 million people with osteoporosis in the United States alone, and more than 18 million who are at risk of developing the disease.

Abaloparatide is a synthetic peptide that engages the parathyroid hormone receptor (PTH1), a naturally occurring bone building hormone that is critical in the formation of the skeleton. The drug has completed Phase III trials and shown promising results, and is currently waiting for decisions from the EMA and FDA regarding approval. They are hoping to launch commercialization in Europe this year, meaning abaloparatide would be the first new osteoporosis drug to launch in over six years.

The success (or failure) of abaloparatide has potential to drive (or drop) the value of Radius (RDUS), and there are a lot of questions to be answered surrounding the drug. Many are concerned it will be unable to beat out established drugs, especially Lilly’s Forteo, which is also a once daily injectable that will be going generic shortly after abaloparatide might come to market. There are also some candidates in development that could hinder the success of Abaloparatide, particularly Amgen’s Romosozumab. Romosozumab has the major advantage of being a once a month injection. I would like to conduct an expert interview on the topic to learn more about each drug, and particularly the potential for Abaloparatide-SC in the osteoporosis space. Here are some questions I would ask.

Questions for an endocrinologist or other doctor with specialized training in osteoporosis, who has knowledge of the trials for abaloparatide-SC and other drugs in the space. He or she will be someone who treats osteoporosis patients, and understands the regulatory processes and current competitive environment.

  1. Radius recently announced pre-specified subgroup analyses from its Phase 3 ACTIVE trial, and has made a number of other presentations on their Phase 3 data. Can you discuss the results of these trials, and their implications?
  2. Given the current information, what chance does Radius stand to receive approval for its two outstanding authorization applications for the EMA and the FDA?
  3. Assuming it gets approved, what percentage of existing patients do you expect to switch to Abaloparatide-SC? What percentage of new patients will you prescribe Abaloparatide-SC? Will the drug’s approval have an affect on any patients who may not currently be seeking treatment?
  4. Can you discuss the differences in terms of safety, efficacy, and pricing between Abaloparatide-SC, Lilly’s FORTEO, and Amgen’s Romosozumab? How much market share do you expect each to attain assuming abaloparatide-SC and romosozumab are approved?
  5. FORTEO and abaloparatide-SC are daily injections, whereas Romosozumab is injected once a month. How will this affect the popularity of each drug? Do these differences suggest Romosozumab fits a niche market within osteoporosis?
  6. When FORTEO goes generic early (patent expires December 2018) in the launch would abaloparatide still be able to compete?
  7. Would efficacy or price be more important to you and your patients in choosing a treatment option between these three?
  8. Can you discuss the most recent data from Amgen’s Phase 3 BRIDGE study on romosozumab in men with osteoporosis?
  9. If Radius received approval for abaloparatide-SC in treatment of postmenopausal women with osteoporosis, would they use this as a basis to try for an expanded indication covering men with osteoporosis? If so, do you think they would be successful, and how much of that market could they win?

In Conclusion

This interview will give investors a better understanding of the validity of Radius’ data behind Abaloparatide-SC. It will also give them valuable information to evaluate the chances of approval and market potential of the drug, and how it compares to Lilly’s Forteo and Amgen’s Romosozumab. After the interview, investors should have more accurate assumptions for their valuations of Radius, and a better understanding of the company’s future.

Join the project and add questions now:

*Author note: If you join and agree to pay for the call before the contest winner is selected, and it ends up winning, you will still receive it for free. You will only pay your share if you do not win, but there is still enough people willing to pay for the call to happen.*

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