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NGM Biopharmaceuticals (NGM) shares plunged 72% on Monday, from $11.53 to $3.41, after the company acknowledged that its eye disorder candidate NGM621 failed the Phase II CATALINA trial (NCT04465955) by showing reductions in the rate of change in geographic atrophy (GA) lesion area (slope) compared to sham injection control that did not reach statistical significance.

Over 52 weeks of treatment, the 108 patients who were dosed with NGM621 every four weeks (Q4W) showed a reduction of 6.3%—a rate that only inched up to 6.5% in the 104 patients dosed with the drug every eight weeks (Q8W), NGM Bio reported.

NGM Bio has cited the potential for extended dosing of up to two months as one of three potential areas of differentiation for NGM621, along with efficacy and safety.

“We’re disappointed that the CATALINA study did not meet its primary endpoint, particularly given the significant unmet medical need of patients impacted by GA,” NGM Bio CEO David J. Woodhouse, PhD, stated.

However, NGM Bio held out the possibility that signals from secondary and exploratory analyses may offer a path to further clinical development of NGM621, a humanized immunoglobulin G1 (IgG1) monoclonal antibody designed to inhibit the activity of complement component 3 (C3).

CATALINA assessed NGM621 in GA secondary to age-related macular degeneration (AMD). GA is a progressive retinal degenerative disease that is one of two advanced stages of AMD.

During a conference call with analysts and in an investor presentation, NGM Bio disclosed additional results from CATALINA. NGM621 “showed a treatment effect” in Q4W patients, the company reported, based on a 19.8% reduction from baseline in GA lesion area (MMRM) at 24 weeks that diminished at 52 weeks, to 7.4%. Q8W patients showed a 15.6% reduction at 24 weeks but only 6.6% at 52 weeks.

NGM Bio also cited findings of post-hoc analysis that excluded patients with the largest lesions (>9.64 mm2) at baseline, which it said, “showed potentially encouraging findings warranting further evaluation.” Specifically, 88 Q4W patients showed a 17.8% reduction in MMRM at 24 weeks, dipping to 13.9% at 52 weeks. For Q8W patients, the reductions were 15.3% at 24 weeks, and 12.2% at 52 weeks.

“A disappointment”

Those findings didn’t impress Jefferies analyst Dennis Ding.

“While baseline GA lesion variability may have contributed to the topline miss, post-hoc analyses demonstrated only modest signals of efficacy compared to industry competitors,” Ding wrote in a research note. “NGM has left the door open to continuing development in GA in some ways, but today’s data was a disappointment, and there’s limited visibility on the path forward.”

Ding downgraded Jefferies’ rating on NGM Bio shares from Buy to Hold and lowered its price target on shares 65%, from $25 to $4.

“NGM’s data may benefit industry GA players on the margin, and, though we appreciate NGM was 3–4 years behind competitors, there were some investor questions on whether NGM could show much better durability data with Q8W and what this may mean for others,” Ding added.

Joining Jefferies in downgrades and/or price target cuts:

  • Goldman Sachs went from Buy to Neutral and from $29 to $4.
  • Raymond James, from “Strong Buy” to “Outperform” and from $42 to $4.
  • Piper Sandler, from Overweight to Neutral.
  • B. Riley, from $29 to $8.
  • Cowen, from $32 to $9.

Colleen M. Kusy, senior research analyst with Baird, identified two competitors she predicted would likely benefit from NGM’s failed trial, saying that CATALINA’s outcome “most likely takes out next closest would-be competitor in GA for both Apellis and Iveric.”

“We do not see negative read-through on the failure for either Apellis or Iveric at this stage and continue to expect approval for both Apellis’ pegcetacoplan and Iveric’s Zimura,” Kusy wrote.

Iveric Bio (ISEE) shares rocketed 66% on September 6 after it announced positive topline results from its second Phase III trial of Zimura® (avacincaptad pegol), its complement C5 inhibitor, as a GA treatment. Iveric’s GATHER2 trial (NCT04435366) met its prespecified primary endpoint with a 14.3% reduction in the mean rate of growth (slope) in GA area over 12 months via square root transformation, and a 17.7% reduction via observed GA area.

Results from GATHER2, the Phase II/III GATHER1 trial (NCT02686658), and a Special Protocol Assessment with the FDA will underpin a New Drug Application that Iveric said it planned to submit to the agency during the first quarter of 2023.

Apellis Pharmaceuticals (APLS) is awaiting FDA review of a targeted C3 therapy for GA, pegcetacoplan, with the agency having set a Prescription Drug User Fee Act (PDUFA) target decision date of November 26. Pagcetacoplan aced one Phase III trial (OAKS; NCT03525613) but narrowly missed its primary endpoint in the other (DERBY, NCT03525600). Yet in both studies and the Phase II FILLY trial (NCT02503332), according to Apellis, treatment with both monthly and every-other-month pegcetacoplan resulted in clinically meaningful reductions of GA lesion growth over 12 and 18 months across a broad, heterogeneous population of more than 1,500 patients.

Last year, Apellis won FDA approval for pegcetacoplan under the name Empaveli® as the first and only targeted C3 therapy indicated to treat adults with paroxysmal nocturnal hemoglobinuria (PNH), a rare blood disease characterized by the destruction of red blood cells, blood clots, and impaired bone marrow function.

Forgiving investors

NGM Bio investors, however, appeared more forgiving than the analysts, rallying Tuesday to send shares rebounding 9% to $3.72 before dipping 2% Wednesday to $3.64.

One possible reason why: Woodhouse and NGM Bio quickly added that NGM621 showed a favorable safety profile, no evidence of increased choroidal neovascularization (CNV) conversions, and numerically fewer cases of CNV in NGM621-treated patients compared to sham. There were no drug-related serious adverse events.

“We continue to evaluate various pre-specified secondary endpoints and post-hoc analyses. We expect these additional findings, as well as the absence of treatment-related CNV conversion and the overall clean safety profile NGM621 showed in CATALINA, to provide important information regarding the treatment of patients with GA,” Woodhouse added.

Among watchers of the trial is Merck & Co. (MRK), which has approximately three months to decide whether to exercise the option it holds for a worldwide, exclusive license to NGM621 and related compounds. Merck can exercise that option for NGM621 alone or combined with two additional undisclosed preclinical ophthalmology compounds and their related compounds.

Should Merck opt against licensing NGM621, its rights would revert to NGM Bio—which would be obligated to pay Merck a low, single-digit royalty should it, and/or a partner commercialize that program.

“It’s clear to us that MRK will not opt-in on the GA program, and NGM will now need to reprioritize capital to fund oncology,” Ding wrote.

NGM Bio’s four oncology programs include NGM120, which is expected to release Phase II data in pancreatic cancer in 2023; and NGM707, for which Phase I monotherapy data is expected by year’s end and combination PD1 therapy data, in 2023.

NGM120 is an antagonist antibody that binds glial cell-derived neurotrophic factor receptor alpha-like (GFRAL) and inhibits growth differentiation factor 15 (GDF15) signaling. NGM707 is a dual antagonist antibody inhibiting ILT2 and ILT4,

“Investors have generally been skeptical on oncology given its early stage and may not give credit; thus, we expect NGM to continue to trade near zero EV [enterprise value],” Ding cautioned.

Kusy predicted that Merck will not exercise its option, and instead may acquire one of NGM621’s competing programs, Apellis’ pegcetacoplan or Iveric’s zimura.

“Since Merck has clearly demonstrated interest in a late-stage candidate for GA, walking away from the NGM option could bring Merck to the negotiating table for other late-stage GA programs, namely Apellis or Iveric,” Kusy observed.

NGM and a CATALINA investigator insist that they have not given up on NGM621.

“While the CATALINA trial did not meet its primary endpoint, the notable CNV finding combined with signals from secondary and exploratory analyses suggest the possibility that NGM621 may have a role in treating GA,” added Charles C. Wykoff, MD, PhD, an investigator for the CATALINA study and the director of research at Retina Consultants Texas.

Wyckoff added that he planned to evaluate further details from the CATALINA trial and present additional findings at the upcoming Retina Society Annual Meeting in November.

Unhappy October surprises for Minerva, key investor

Minerva Neurosciences (NERV) plummeted nearly 70% on Monday, from $13.43 to $4.09, then fell another 7%, to $3.80 on Tuesday and dropped an additional 14% on Wednesday, closing at $3.28. The plunge followed Minerva’s announcement that the FDA had issued a “Refuse to File” letter halting action on the company’s New Drug Application (NDA) for its lead pipeline candidate roluperidone (also called MIN-101) for the treatment of negative symptoms in patients with schizophrenia.

If the FDA offered the company reasons for its refusal, Minerva hasn’t shared them publicly: “The company intends to request a Type A meeting and looks forward to continued discussions with the FDA,” stated Remy Luthringer, Minerva’s executive chairman and CEO.

The Refuse to File letter came two months after Minerva gained a significant new investor—Point72, the global asset management firm founded and led by New York Mets owner Steven A. Cohen. Point72 took an 8.8% stake in the central nervous system disease drug developer by acquiring 470,000 shares back in August, according to a regulatory filing.

And Cohen’s Mets, like Minerva, have had to endure an October setback. His baseball team lost a wild-card playoff series it was forced to play after losing the lead it held in the National League East for 175 days, nearly all of the season.

Salarius tumbles on sarcoma patient death

Salarius Pharmaceuticals (SLRX) shares tumbled 45% on Tuesday, from $5.00 to $2.74, after the company disclosed that a patient had died in its Phase I/II trial (NCT03600649) assessing seclidemstat as a treatment for Ewing sarcoma and FET-rearranged sarcomas. Shares sank another 16% on Wednesday, closing at $2.31—for a 54% loss on the week’s first three trading days.

Following the trial’s protocol design, Salarius said, it voluntarily paused enrollment of new patients. Salarius said the death of the patient—who had metastatic FET-rearranged sarcoma—has been classified as a suspected unexpected serious adverse reaction (SUSAR).

However, patients currently receiving seclidemstat treatment may continue treatment after consulting with their physician, Salarius said, based on a review of the SUSAR and available information by the company’s independent Safety Review Committee for the trial.

Salarius added that it continues planning to release interim sarcoma clinical trial results later this year.

“We plan to restart enrollment as soon as possible,” Salarius CEO David Arthur said in a statement. “Patient safety is our primary concern, and this is reflected in the design of our clinical trial protocol, which automatically paused enrollment based upon this SUSAR.

“Unfortunately, pauses to enrollment occur in early-stage drug development, but these pauses allow time to understand new data and adjust clinical protocols and development plans as needed. We plan to restart enrollment as soon as possible,” Arthur added.

The trial is in its dose-expansion stage, consisting of three patient arms:

  • The first patient arm is enrolling up to 30 patients with Ewing sarcoma, and will assess seclidemstat in combination with topotecan and cyclophosphamide.
  • The second patient arm is investigating seclidemstat as a single agent in up to 15 patients with myxoid liposarcoma.
  • The third patient arm is investigating seclidemstat as a single agent in up to 15 patients with select sarcomas that share a similar biology to Ewing sarcoma, also referred to as FET-rearranged or Ewing-related sarcomas.

Salarius cited data released at ASCO 2021, in which a subset of patients with advanced FET-rearranged sarcomas that were treated with single-agent seclidemstat showed stable disease and prolonged time to progression—outcomes that according to the company suggest disease control.

The company also cited ASCO 2021 data showing synergy in a Ewing sarcoma cell line when seclidemstat was used in combination with the chemotherapy agents.

“Salarius also believes this treatment combination and its use as a second- and third-line therapy could greatly expand the addressable patient population for seclidemstat and improve outcomes by allowing physicians to introduce seclidemstat earlier in the Ewing sarcoma continuum of care,” the company also stated.

Patent-ly obvious reason for AVEO purchase?

AVEO Oncology (AVEO) shares leaped 42% to $14.92 on Tuesday after the company announced that it agreed to be acquired by Seoul-based LG Chem for $566 million. The deal would expand the buyer’s footprint into the United States, where AVEO would be transformed into the U.S. commercial foundation for LG Chem Life Sciences’ Oncology segment.

LG Chem reasons that AVEO will diversify its pipeline with a broader range of oncology therapies and accelerate its efforts to keep growing by developing and commercializing cancer therapies.

At $15 a share cash, the purchase price represents a ~43% premium on AVEO‘s Monday closing price of $10.48, and a ~71% premium to the 30-day volume weighted average price, Andrew Berens, MD, senior managing director, targeted oncology and a senior research analyst with SVB Securities, wrote in a research note.

Berens posited that LG Chem’s purchase may have been sparked by AVEO’s success in extending the patent life for its lead product, Fotivda® (tivozanib) by 11 years, from 2028 to 2039. Fotivda received FDA approval last year as a treatment for adults with relapsed or refractory advanced renal cell carcinoma (RCC) following two or more prior systemic therapies.

“We believe that this potentially extended IP may have sealed the deal, as it could be worth an incremental $12/share,” Berens wrote.

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