Stay at the forefront of the week’s champions and runners-up among publicly traded biotech companies and the reasons behind the ups or downs of their stock price fluctuations.
Vertex Pharmaceuticals (VRTX) had some big news to announce Tuesday at the dedication of its new Jeffrey Leiden Center for Cell and Genetic Therapies in Boston’s Seaport District: The biotech giant disclosed plans for a further expansion within the Seaport that will entail constructing a second 344,000 square foot building designed to support continued growth in multiple disease areas and modalities.
The new Leiden Center accommodates more than 400 employees and is designed as a research and clinical manufacturing site, with 70% of the space dedicated to lab and research space. Vertex plans to base about another 500 additional at the facility to be constructed, 20–22 Drydock Ave., being developed by the company with developer Related Beal, Boston Real Estate Inclusion Fund, and Kavanagh Advisory group. When completed in 2025, 20-22 Drydock will combine labs with offices and manufacturing capabilities. At that point, Vertex will occupy 1.9 million square feet of space in the Seaport across five sites—which according to the company will make it the largest biotech in Boston.
The Boston expansion news helped Vertex rise 2%, to $261.84 from $254.17 on Monday, after reaching its high for the year of $262.09 at 3:15 p.m. By Wednesday, however, the stock slid 4%, to $252.35.
That doesn’t make the company sound like much of a Wall Street leader, until you consider that Vertex stock as of Thursday had climbed 16% since the start of 2022 (shares opened at $218.38 at the start of trading on January 3)—bucking the biopharma bear market trend reflected in the declines seen in biotech electronic transfer funds (ETFs) this year.
That’s no mean feat considering how far south the market has trended for biotech so far this year. The largest ETF—the iShares Nasdaq Biotechnology ETF (IBB)—has fallen 25% this year through Wednesday, to $113.56 from $152.37, and tumbled 34% from its record high of $172.60 reached on February 8, 2021.
The decline was worse on the SPDR S&P Biotech ETF (XBI), which plummeted 41% year-to-date, to $67.87 from $115.44 at the start of 2022, and lost more than half its value (61%) from its record high of $173.99 on February 8, 2021.
Progress with Moderna
Another factor in Vertex’s stock rising this week relates to its collaborations with Moderna, including partnerships to discover and develop mRNA therapies for cystic fibrosis (CF), as well as to discover and develop inhalable lipid nanoparticles (LNPs) to deliver those therapies.
The COVID-19 mRNA vaccine giant is partnering with Vertex on two parallel approaches for addressing the unmet need to deliver CF treatments to the approximately 5,000 CF patients who do not produce any CF transmembrane conductance regulator (CFTR) protein. One approach uses CFTR-encoded mRNA, the other Cas9-encoded mRNA.
At its Science & Technology Day on Tuesday, Moderna disclosed that IND-enabling studies have been completed for the CFTR-encoded mRNA program, with Vertex now on track to file an IND with the FDA in the second half of this year, then begin clinical development.
“If VRTX data looks promising in 2023, the new pulmonary LNP delivery may be more de-risked and open up platform value to go after other pulmonary diseases for mRNA listed out in the slides,” Jefferies analyst Michael J. Yee and colleagues commented Tuesday in a research note.
In addition to CF, those diseases include alpha-1 antitrypsin (AAT), chronic obstructive pulmonary disease (COPD), COVID-19, idiopathic pulmonary fibrosis (IPF), lymphangioleiomyomatosis (LAM), primary ciliary dyskinesia (PCD), and tuberculosis.
Until now, Vertex’s primary focus on CF has generated success for the company: The company’s four marketed drugs (two of which are also marketed under different names in Europe) carry indications in CF that have extended treatment to 90% of patients with the disease—about 83,000 patients across the U.S., Europe, Australia, and Canada.
Vertex saw a 22% jump in net product revenues during the first quarter, to $2.097 billion, with 84% of that generated by Trikafta®/Kaftrio®, ($1.762 billion, up 48% year-over-year).
“We continue to see Vertex’s CF products as among the most attractive franchises in biotech but see that as accounted for in the stock here,” Baird Senior Research Analyst Brian P. Skorney, CFA, commented in a May 6 research note.
Caution from Analysts
Skorney downgraded Vertex stock to “Neutral” (meaning it is expected to perform in line with the broader U.S. equity market over the next 12 months): “It’s been a good ride, but we aren’t compelled to believe there’s another leg of upside here,” he wrote. “It remains an attractive safety stock, unlikely to see material declines despite current market chaos, but we see the opportunities as fairly valued.”
For all of last year, Vertex net product revenues also jumped 22% from pandemic-skewed 2020, to $7.573 billion.
“New reimbursement agreements in ex-U.S. markets and label expansions to younger age groups in the United States are driving Trikafta/Kaftrio sales higher,” Zacks Equity Research explained Wednesday.
Zacks cautioned, however: “Vertex’s dependence on just the CF franchise for commercial revenues is a concern. Vertex’s non-CF programs carry significant risk, which is a concern. Overall, a consistent rise in CF sales, the rapid progress of the non-CF pipeline candidates, minimal competition in its core CF franchise, and regular business development should keep the stock afloat going forward.”
Zacks juxtaposed Vertex’s success with recent mixed results for AbbVie in CF. AbbVie has discontinued a triple combination therapy consisting of a potentiator, ABBV-3067 (navocaftor) and two corrector molecules targeting the cystic fibrosis transmembrane regulator, one targeting C1 (ABBV-2222, galicaftor) and the other, C2 (ABBV-119). However, the company is continuing to develop a dual combination consisting of ABBV-2222 and ABBV-3067 alone.
The company cited an interim analysis of its Phase II proof-of-concept study for the triple combination, showing that it did not meet the company’s prespecified criteria for advancement. “The results showed that the addition of 119 did not provide a meaningful improvement in FEV1 [forced expiratory volume in the first second] or reduction in sweat chloride concentration over our dual combination therapy,” Tom Hudson, AbbVie Senior Vice President, Research and Development and Chief Scientific Officer, told analysts April 29 on the company’s Q1 earnings call.
Hudson added that AbbVie also plans to advance a new triple combination therapy that would combine ABBV-2222 and ABBV-3067 with a new C2 corrector already in Phase I studies, ABBV-576.
“576 is structurally distinct from our previous C2 corrector 119 and has a better PK profile and provides higher drug exposure, which has the potential to deliver better efficacy,” Hudson said. “Our plan is to begin a Phase II study for this new triple combo by early next year.”
Chimerix shares plunged 61% on Monday, to $1.71, before climbing back up 5% on Tuesday and up another 3% on Wednesday, to $1.81. The initial plunge occurred after the company reported numerous updates that included the termination of its Phase III program to develop Dociparstat sodium (DSTAT) as a treatment for blood cancers, including newly diagnosed acute myeloid leukemia (AML) in combination with standard chemotherapy.
Chimerix only said it made its decision “following an internal review of our pipeline”—and didn’t disclose any clinical results for DSTAT, which had been under study in the Phase III DASH AML trial (NCT04571645).
“This narrower focus of development resources will ensure we optimize our execution in bringing ONC201 to patients as quickly as possible,” Chimerix CEO Mike Sherman said in a statement.
ONC201 is an oral small molecule dopamine receptor D2 (DRD2) antagonist and caseinolytic protease (ClpP) agonist being developed for the treatment of recurrent gliomas that harbor the H3 K27M mutation. Chimerix inherited ONC201 when it acquired its original developer Oncoceutics last year for $78 million, half in cash and half in Chimerix stock.
Chimerix has signaled it will pivot its development focus to ONC201, with plans to launch later this year a Phase III trial in patients with H3 K27M whose results are intended to be the basis for a confirmatory approval or first approval.
However, Chimerix reasons that the path to accelerated approval for ONC201 will be tougher than previously thought. While the FDA initially asked Chimerix to conduct a retrospective Natural Disease History (NDH) study of recurrent H3 K27M-mutant glioma, Chimerix said it was later told by the agency that it no longer expected to use the outcome of a NDH study as the basis for a regulatory decision given the limitations inherent in NDH studies.
Funding Further Development
To fund further development of ONC201 plus develop its imipridone platform for developing selective cancer therapies, Chimerix said, it has sold exclusive worldwide rights to its sole marketed product Tembexa® (brincidofovir), the first FDA-approved antiviral for smallpox indicated for all age groups.
The buyer was Emergent BioSolutions, which agreed to pay Chimerix up to $337.5 million. That will consist of $225 million upfront; up to $100 million in milestone payments tied to executing additional procurement awards from the U.S. Biomedical Advanced Research and Development Authority (BARDA), and up to $12.5 million in regulatory milestones associated with Chimerix’ 2-1/2-year-old development collaboration with SymBio Pharmaceuticals for brincidofovir, to be assumed by Emergent.
Chimerix may also earn a 20% royalty on future gross profit of Tembexa in the U.S should sales volume exceed 1.7 million treatment courses of therapy during the exclusivity period. Outside the U.S., Chimerix could earn a 15% royalty on all gross profit associated with Tembexa sales during its exclusivity period, on a market-to-market basis.
Chimerix finished the first quarter with a net loss of $24.767 million, improved from a net loss of $97.458 million in Q1 2021—though total revenues shriveled to just $15,000 from $1.435 million, reflecting the expiration of a BARDA contract to develop Tembexa.
“Given the strength of the data already presented and the extent of the unmet patient need, we still believe an accelerated approval is possible and plan to complete the work already underway to support a potential NDA submission,” Sherman added.
In November, Chimerix reported data from a 50-patient registration cohort of a Phase II trial (NCT03295396) at the Society for Neuro-Oncology (SNO) Annual Meeting. ONC201 generated an overall response rate (ORR) of 20.0% as determined by Response Assessment in Neuro-Oncology Criteria for High Grade Gliomas (RANO-HGG). The median duration of response was 11.2 months, in addition to the median time to response of 8.3 months. The proportion of patients achieving either a RANO-HGG and/or RANO-LGG response was 30%.
Idera shares rose a combined 26% on Tuesday and Wednesday after the company announced that investigators conducting the Phase II INTRIM 1 trial (NCT04126876) assessing the company’s cancer-fighting candidate tilsotolimod stopped the trial early due to positive topline interim results. According to the company, patients injected with tilsotolimod showed a 70% lower SLN+ rate compared with “mid-40%s” for patients injected with placebo.
“These results, together with data supporting tilsotolimod’s mechanism of action and encouraging safety profile from across the array of earlier pre-clinical and clinical work, reinforce the potential of tilsotolimod to offer benefit to patients with certain cancers,” Idera CEO Vincent Milano stated. “As a result, we plan to actively pursue a strategic partnership for tilsotolimod so that its full potential for patients may continue to be explored.”
INTRIM 1 is an investigator-sponsored trial conducted by UMC Amsterdam among patients with pT3-4 cN0M0 melanoma. The randomized, double-blind, placebo-controlled trial compares a single, intradermal injection of 8 mg tilsotolimod with placebo given at the primary tumor excision site 7-10 days prior to SLN biopsy. According to Idera, INTRIM 1 is intended to examine the ability of tilsotolimod to induce loco-regional and systemic immune stimulation, and therefore, improve survival.
While enrollment for the primary endpoint—the rate of tumor positive SLN at the time of biopsy—has been halted early because it has already been met, the study will continue to its secondary endpoints, the company added.
Tilsotolimod (IMO-2125) is a synthetic Toll-like receptor 9 agonist shown to promote both innate (Type-I IFN, antigen presentation) and adaptive (T cells) immune activation. Idera reasons that given those results, tilsotolimod may contribute to tumor suppression and regression.
Keros Therapeutics (KROS)
Shares of Keros dropped 17% on Wednesday after the company announced preliminary topline results from Part one of its Phase I trial assessing evaluating single and multiple ascending doses of KER-012 in healthy postmenopausal volunteers.
Among results highlighted by the company: A single 5 mg/kg dose of KER-012 led to maximal target engagement, with a mean standard deviation (SD) reduction of 39.6 (12.7%) in follicle-stimulating hormone levels seen on Day 22. Also, bone specific alkaline phosphatase increased, starting at the lowest dose of 0.75 mg/kg, with mean SD maximum increases from baseline of 36.4 (4%) at the highest dose of 5 mg/kg.
“We believe these results support the potential of KER-012 as a treatment for diseases that are associated with reduced BMP signaling, such as pulmonary arterial hypertension (PAH), without a potentially dose-limiting red blood cell effect,” Keros President and CEO Jasbir S. Seehra, PhD, said in a statement.
Investors, however, appeared to disagree. From May 12 through Tuesday, Keros shares rose 11%, from $41.49 to $46.14, on apparent investor interest in what the trial results might show. By contrast on Wednesday, Keros shares opened down 4% at $44.26, and fell from there.
KER-012, Keros’ third product candidate, is a protein therapeutic designed to inhibit the signaling of TGF-β ligands, including activin A and activin B, thus increase the signaling of BMP pathways. KER-012 is in development for PAH as well as disorders associated with bone loss, such as osteoporosis and osteogenesis imperfecta, since inhibiting activin A and activin B could potentially increase bone mass, according to Keros.
Keros said it plans to complete the Phase I trial, which began in September 2021, then expects to start a Phase II clinical trial of KER-012 in patients with pulmonary arterial hypertension, and expects to share the trial design for the Phase II clinical trial in early 2023.