BioCryst Pharmaceuticals (BCRX) is expected to release results from its prophylactic treatment for patients with Hereditary Angioedema (HAE). Specifically, in Q2 of 2019, it expects to release results from its phase 3 APeX-2 study. These results will be very important, because it involves a late-stage study that could potentially be used for approval of BCX7353.
BCX7353 As A Prophylaxis
BioCryst is currently in a phase 3 study. This involves using an oral prophylactic drug BCX7353 as a preventative measure for patients with HAE. The ongoing phase 3 study is known as APeX-2, and it recruited a total of 96 patients with HAE. Patients in the study were split into three different dosing groups. They are:
- 32 patients given 150 mg QD of BCX7353
- 32 patients given 110 mg QD of BCX7353
- 32 patients placebo QD
One thing to note is that "QD" in essence is a term indicating once-daily dosing. In other words, patients would take one pill per day. This trial will evaluate those taking drug compared to placebo in preventing HAE attacks. The primary endpoint will be looking to see how many HAE attacks have taken place on all the given treatments. Obviously, if BCX7353 reduces the amount of HAE attacks by a statistically significant manner compared to placebo according to the primary endpoint, then the study will be a success. Hopefully, the trial will be successful, because this will end up leading the program forward. The good news is that results are not that far away. The biotech believes that results from the phase 3 APeX-2 study could be released by Q2 of 2019. That would put data coming out between April of 2019 through June of 2019. This is a good catalyst, but there is some clinical evidence that shows that the phase 3 study has a good chance at meeting the primary endpoint.
There is no 100% way to know if the phase 3 will be successful, but it is always wise to look at prior clinical data to determine what are the chances of success. This is evidenced based on the phase 2 APeX-1 study. This study was a double-blind, randomized, placebo-controlled study that recruited patients with HAE. The intent was to see if there was a reduction in HAE attacks of those on BCX7353 compared to those on placebo. Sound familiar? That's because the phase 3 study is also looking at the same endpoint of a reduction of HAE attacks. One important thing to note is that this phase 2 study was a dose-range finding study.
In essence, such studies are implemented to test out multiple doses to determine the best one/ones to take to a phase 3 study. The doses in the phase 2 APeX-1 study were: 62.5 mg, 125 mg, 250 mg, and 350 mg of BCX7353. Here is the good news, those patients that took any dose at 125 mg or higher resulted in a significantly lower rate of HAE attacks compared to placebo. Matter of fact, the 125 mg dose alone resulted in a reduction of HAE attacks by 73.8%. These results were highly substantial, and BioCryst was able to get them published in The New England Journal of Medicine. If the results released in Q2 of 2019 from the phase 3 APeX-2 study are successful, then BioCryst is expected to file an NDA for approval of BCX7353 as a prophylactic in preventing HAE by Q4 of 2019. That would put potential FDA approval of the drug and marketing of the drug by the 2nd half of 2020. Even better, the biotech is not just aiming for the U.S. market only. It is expecting that it could also file an MAA for approval to the European Union by the 1st half of 2020. That will, in essence, get the ball rolling for approval in the European territory as well.
HAE Market Opportunity
HAE is a rare genetic disorder that is characterized by random episodes of swelling in the skin or internal organs. There are about 1 in 50,000 people globally affected by the disease. Before diving any further into the study, I want to point out that, even though this is a rare disease, BioCryst still stands to make billions of dollars on it. It is prudent that biotechs that treat rare diseases can charge more per patient per treatment. This biotech has shown evidence that through Q3 of 2018, there were companies that estimated annualized HAE sales of over $2.1 billion. This is just a conservative estimate by BioCryst itself, according to certain data it acquired. However, the global estimated market opportunity for HAE is expected to be $3.81 billion by 2025. But you may be wondering, how will BioCryst differentiate itself? To that, I will say because this biotech is developing an all-oral option, the other already-approved therapies don't offer an easier route of administration. Current therapies for HAE involve injectable drugs. But surveys that have been done show that these patients would love to switch over to an oral drug option if it becomes available. BioCryst has the opportunity to do this for these patients if it can make it through FDA approval of BCX7353.
According to the 10-Q SEC filing, BioCryst Pharmaceuticals had cash, cash equivalents and investments of $151 million as of September 30, 2018. An influx of cash came in the form of two different items. The first was on July 20, 2018, when BioCryst entered into a $30 million secured loan facility with MidCap Financial Trust. Then, on top of that, there was a complete exercise from the underwriters. They had the option to and purchased an additional 10,454,546 shares of common stock at a price of $5.50 per share. This raised about $53.4 million in cash for the company after expenses. The company projected a burn rate of about an average of $100 million in 2018. Obviously, the biotech needed additional funds to keep its pipeline going. Therefore, it decided to amend its agreement with MidCap Financial noted above. Instead, it replaced that old agreement with an improved one. So, what does BioCryst get out of this new agreement? First, it gets an upfront non-dilutive payment of $20 million to help it push along its pipeline. Then, if the phase 3 results from the APeX-2 study are successful (in Q2 of 2019), it gains an additional $30 million as a milestone payment. Then, it could possibly receive another $20 million upon NDA approval of BCX7353 as a prophylaxis for HAE. I believe this is a good way of doing a financing structure, because the money only comes in if the biotech is successful in its phase 3 study. In addition, the company doesn't have to perform another public offering to dilute the company to raise more cash. The risk is, though, that if the results from the phase 3 are not successful, then the company may be forced to either amend the agreement or seek additional financing options.
BioCryst is in good shape, because it expects to release results in Q2 2019 for its phase 3 study using BCX7353 as a prophylaxis for HAE. Prior results from the phase 2 APeX-1 study showed a significant reduction in HAE attacks. The problem is that there is still a risk involved. That's because there is no guarantee that the same type of results produced in the phase 2 study will be produced again in the phase 3 study. In other words, there is still a chance for failure of the phase 3 study. However, the phase 2 study meeting the endpoint instills confidence for the upcoming late-stage data. This is a good indication for the biotech to go after. Not only because of the monetary value, with sales expected to be multi-billion dollars, it is because patients may finally have a more suitable oral option for HAE, as opposed to injections. If the results turn out to be positive for the phase 3 study, then BioCryst can file for approval of BCX7353 in Q4 of 2019.
This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of. My service offers deep dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.
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