ALNY ISIS – Updates from the JMP Healthcare Conference

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  • Hear management’s most current guidance for the timing of upcoming catalysts [differentiating our Chimera catalyst database from other sources that rely solely on press release and SEC filing disclosures]
  • Get additional color, commentary, and question & answer session discussion about clinical programs, business development, etc that never appear in press releases or annual reports
  • See what programs management spends the most time talking about and capture changes in sentiment/”body” language over time – if you practice this enough and study your notes in hindsight, you can start to spot key information (said or unsaid) that telegraphs upcoming positive or negative news flow.
  • Offer brief commentary to point out when management makes dubious statements, changes their position without admitting it, or to provide added context to the reader

The bellwether RNA therapeutics companies Alnylam $ALNY and Isis Pharma $ISIS have displayed great strength along with many other biotechs in 2012 despite uneven corporate progress. A run-down of their updates at the recent JMP Healthcare conference follows. Chimera subscribers can look forward to dozens of such reports each year.

Editor’s note: these presentations and comments occurred before ALNY released phase 1 data in healthy volunteers for ALN-TTR02, their second generation RNAi drug for transthyretin-mediated amyloidosis. We’ll have more to say about this in the near future after digesting the conference call presentation, but the ~50% spike in ALNY shares seems wildly unwarranted in reaction to this news. It isn’t clear to us why anyone would have expected less than favorable data given that 1) ALNY already initiated a phase 2 trial of this drug candidate in TTR patients; 2) similar degree of knockdown with this delivery technology was achieved in the PCSK9 program; and 3) an identical siRNA payload targeting TTR was previously validated in the clinic with ALN-TTR01. We see little reason to buy or hold ALNY shares at these levels (~$19) over the coming months as risk/reward of upcoming catalysts tilts negative in terms of financing risk, litigation risk vs Tekmira $TKMR, long timelines to meaningful clinical data, and our belief that meaningful partnerships (especially for ALN-PCS) are a remote possibility in 2012.

 

Alnylam ALNY [background info] presentation by COO/President Barry Greene (JMP rates market outperform with $17 target)

  • The key technical challenge is to get siRNA into the cytoplasm of the correct cells. We have largely achieved this for liver with MC3 LNP and sub-cutaneous gal-nac conjugate (a more simple chemical modification that takes advantage of sugar receptors) – we announced data yesterday using this technology for hemophilia
  • >575 pts enrolled across these programs. including >100 systemic administration. Nadir of gene knockdown is between 7-10 days, lasts 1-2 months (particularly w/ LNP’s)
  • Reiterated guidance for year-end 2012 cash > $250 million and update on RSV program path forward in 4q-2012
  • PCSK9 program is more potent competitively compared to TTR or hemophilia, leading to decision to partner after phase 1. The potential advantages vs monoclonal antibodies (such as from Sanofi $SNY / Regeneron $REGN and Amgen $AMGN) need to be demonstrated in clinical trials.
ALN-VSP
  • “As we said we would” we partnered the liver cancer program. This was exactly in line with our strategy. This Chinese data may allow partnering for the rest of world and/or advance alone [right, I’m sure their plan all along was to part for just China and get no upfront money]
  • Q&A session: yes, we have patent protection in China
  • Q&A: current product is first generation delivery technology, does this deal plan to explore the 3rd generation gal-nac system? Partner Ascletis taking product in hand with rich preclinical and clinical data set. We know dosing twice monthly at 1 mg/kg is viable. They need to translate the regulatory package and meeting with SFDA – what we hear is that this process starts slow and then move more rapidly than US.
Hemophilia program
  • Seamlessly said “ALN-AT3″ instead of “ALN-APC” with regard to target for hemophilia program, as though the company hadn’t just announced they abandoned their lead candidate and pushed back the development timeline for one of the two programs that survived the chopping block and was deemed worthy of internal effort in early 2012.
  • AT3 drives key natural anti-coagulant pathways, inhibits factor Xa and thrombin. This inhibition resets the clotting cascade. Goal is IND in 2013.
  • The targeted patients currently have ~ $300k yearly health system cost and  poor quality of life
  • There is also an opportunity for this drug in non-inhibitor hemophilia patients that do not currently receive prophylactic treatment
  • $6 billion total market opportunity for hemophilia A and B
Transthyretin (TTR) program
  • Initiated phase 2 trial for TTR-02 in June (once monthly dosing for 2  months, data in 2013), data from phase 1 to come in 3q-2012 [this was released this week, see the note above].
  • Subcutaneous version offers producet differentiation – we see this as a once weekly product. Aim to be in the clinic in late 2012 or early 2013
  • Research field continues to find more TTR mutations and new pathophysiologies which is expanding the disease population (still orphan though)
  • Patients still dropped out of the tafamidis clinical trial or quit other therapy to take a liver transplant when their name came up.
  • Tafamidis doesn’t stop or reverse disease (and recently received a CRL from the US FDA despite approval in Europe)
  • Monthly IV dosing matches the schedule of these patients visiting their concentrated physician base
  • Phase 2 trial wil be dose ranging, similar doses as phase 1 study but looking at multidose – question is if you get 70-80% knockdown the first cycle, do you get higher knockdown the seocnd month because TTR levels wouldn’t return to baseline. We want to get the dose right for phase 3. We will measure knockdown of both wild-type and mutant protein. Plus we will do the preclinical studies needed for phase 3

 

Isis Pharma ISIS [background info] presentation by Dr Richard Geary, SVP of Development (no coverage by JMP)

  • Our partnership strategy is to minimize risk and maximize longterm value. Going forward, the type of deal we are involved in may evolve: including preferred partner options [like recent GSK and Biogen deals], semi-captive marketing/selling organizations, distributorship collaborations at registration, geographical registration deals. Overall, more deals at later stages of development. We would consider a few more preferred partners going forward – they put in money upfront and have right to license drug, but Isis controls development.
  • Latest Biogen deal for myotonic dystrophy DM1- $12m upfront, $59m prelicense milestones, undisclosed “substantial” license payment, double-digit royalties. We will seek to discover a drug targeting DMPK (with the goal of desroying this toxic RNA in the cell)
  • APOC-III drug: the 880 mg/dl level of triglycerides corresponds to a concentration of 10 mM, which is a key definition in EU treatment recommendations – these patients are at severe risk of acute pancreatitis and will be targeted first by Isis.
  • TTR- we are focused on moving into phase 3 trial with GSK in late 2012 – efficient route to commercialization [They have refused to provide any info on trial design. Note that Isis has yet to put the TTR antisense product into any ATTR patients, and unlike Alnylam, isn’t as concerned about taking the time to “get the dose right” for phase 3]
  • CRP – mentioned atrial fibrillation, rheumatoid arthritis, and ACS efficacy data in 2013 [this doesn’t seem probable in our opinion, as only the RA study is ongoing as far as we know]

KYNAMRO (mipomersen)

  • Sanofi/Genzyme estimates that there are 40,000 patients across the US/EU initial filing populations [others question these figures; note that >90% of these patients represent EU due to broader filing indication]
  • Injection-site reactions occur at rate of 10% of injections, leading to 5% discontinuation rate across the four phase 3 trials. 2% rate of flu-like symptoms (representing once per year for the average patient; led to 2.7% discontinuations), 8% rate of  persistent ALT elevation (3x above upper limit of normal)
  • There are four potential FDA Advisory Committee dates on the books in October and November 2012, one of these will be selected. Agreed with questioner that the liver safety will get a lot of attention. The liver findings are very much an “on-target” effect and correlate with the rate and extent of LDL reduction.

Response to this project

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  1. ALNY continues to come up with ways to work around the multi-dose issue. The Phase II study for TTR02 is only two doses per cohort, which is kind of silly in a patient population that will require lifelong therapy. The issue with this liposome formulation may be hepatic toxicity over the long term. (SNALP-C certainly had tox issues). The way this trial is designed, it almost seems they are trying to avoid real multi-dose studies. (probably hoping to grab a partner that doesn't know better like they did with Cubist). It is almost embarassing that these single dose Ph1 "clinical trials" are getting so much attention from analysts who should know better. The data is great from a POC standpoint with excellent knockdown, but this hardly validates MC3 or their TTR02 program.
    Jul 22, 2012 |