Idera Pharmaceuticals (IDRA) announced on June 5th that it had initiated enrollment in a Phase 2 trial of IMO-8400, one of its lead drug candidates, for patients with mild to severe plaque psoriasis. The announcement was a bit more significant than many investors were aware of apparently, as there was little share price or volume response with only 127,250 shares changing hands that day. Buried in the announcement was the phrase announcing "Data from the Phase 1 study will be presented at a scientific meeting in June 2013." The data was indeed presented in June and subsequently announced on July 1st via a corporate press release. The data were promising in the single escalating-dose trial with multiple doses administered weekly for four weeks in healthy subjects. IMO-8400 was well tolerated at all doses with inhibition of TLR 7-, 8-, and 9-mediated cytokines, including tumor necrosis factor-alpha (TNF-a), interleukin-1 beta (IL-1ß), interleukin-6 (IL-6), interferon-alpha (IFN-a), and other pro-inflammatory cytokines. Robert D. Arbeit, M.D., Vice President of Clinical Development noted in the press release that Phase 2 data will be available by the end of the year. The data release should be construed as significant and a large share price mover as Q4 winds down. Subsequently, it was noted in the company's Q2, 2013 10Q that the data will most likely be released in Q1, 2014. However, I believe share price movement will likely begin earlier as investors open long positions in anticipation of share price run up or in anticipation of possible positive data. Although the plaque psoriasis indication can be a significant market on its own, success in this indication could help to validate the program for other indications including lupus and other autoimmune diseases. Moving forward, I believe liquidity and investor interest should increase rapidly into November and December.
Idera is focused primarily on the treatment of autoimmune diseases via two candidates, IMO-3100 and IMO-8400. Although the company is in preclinicals developing candidates as vaccine adjuvants via collaboration with Merck, that part of the pipeline is still in its early stages and beyond the scope of this article. Idera's pipeline is attempting to address autoimmune disease by modulating immune response through Toll-like Receptors (TLRs). TLRs are part of the immune system that utilize pattern recognition (usually protein patterns) to recognize pathogens and damaged tissue. These TLRs then trigger an immune response against the perceived pathogens or damaged tissue via innate and adaptive responses. A large part of this immune response is via production of cytokines. Although effective, these cytokines can often be over-produced, produced unnecessarily, or can even target actual tissue, exacerbating already critical conditions. Idera is using knowledge that TLRs 3, 7, 8 and 9 are implicated in multiple autoimmune diseases such as lupus, psoriasis and arthritis to develop its two product candidates. It is employing IMO-8400 and IMO-3100 to inhibit or deactivate these TLRs in an attempt to stifle the autoimmune response. Success or perceived success in either of these two candidates could provide for much hope in these highly unmet or undermet indications (and markets).
Each of Idera's two clinical candidates is being evaluated initially to treat mild to severe plaque psoriasis. This autoimmune disease manifests itself via raised, red patches covered with a silvery white buildup of dead skin cells. The condition is a solid initial target indication as it is the single most prevalent autoimmune disease in the U.S. with about 7.5 million Americans affected according to the National Psoriasis Foundation. According to a recent article, sales of drugs addressing psoriasis in 2010 alone totaled $3.9 billion with expected growth to $7.4 billion by 2020, just 7 years from now. On December 19th, 2012 Idera announced topline data from its Phase 2 trial evaluating IMO-3100 to treat moderate-to-severe plaque psoriasis. Per the trial's design, 44 patients were randomized to receive IMO-3100 at 0.16 or 0.32 mg/kg or a placebo by subcutaneous injection once weekly for four weeks with four weeks of follow-up evaluation. The safety profile from the patient set was impressive with both doses being well tolerated with no treatment-related discontinuations. In terms of efficacy, results were promising with 48% of patients treated with either dose of IMO-3100 (12 of 25 patients) demonstrating improvements of 35% to 90% from baseline Psoriasis Area Severity Index (PASI) scores. None of the 12 placebo group recipients were able to experience such, with the treatment groups yielding a statistically significant (p<0.005) correlation. In the only negative bit of data from the trial, the trial achieved reduction in PASI scores at the end of treatment in the 0.16 mg/kg dose cohort with statistical significance (p<0.02) compared to the placebo cohort, but not in the 0.32 mg/kg dose cohort, indicating higher dosages of the drug did not increase the drug's effectiveness in the short term. However, at the end of the four-week follow-up period, 25% (3 of 12) of patients treated with 0.16 mg/kg dose and 31% (4 of 13) with 0.32 mg/kg dose achieved PASI 50 or greater, compared to none of the placebo patients. With solid safety profile on both dosages, both options will be available moving forward as the product is developed further.
With solid apparent success in IMO-3100 for the Phase 2 trial, IMO-8400 could generate even better data coming from its ongoing Phase 2 trial. IMO-3100 is an antagonist of TLRs 7 and 9, meaning that any autoimmune response that these two TLRs initiate could possibly be treated effectively. Meanwhile, IMO-8400 deactivates TLRs 3, 7, 8 and 9. If IMO-8400 deactivates TLRs 7 and 9 as well as IMO-3100, any additional deactivation of TLRs 3 and 8 should only add to the drug's efficacy relative to IMO-3100.
While looking forward to the early Q1 Phase 2 data release for IMO-8400, Phase 1 data as mentioned earlier indicated possible efficacy with a good safety profile already. Phase 1 data for IMO-3100, released on April 4th, 2011 gave investors an idea of the possible efficacy for the Phase 2 IMO-3100 data as noted above. Phase 1 IMO-3100 data was presented as "IMO-3100 was well tolerated in both treatment regimens. There were no serious adverse events and no treatment discontinuations. Mild injection site reactions were the most common adverse events." In terms of efficacy, the company noted "Suppression of multiple cytokines including IFN- a, IL-6, MIP-1B, and IL-1Ra, mediated through TLR7 and TLR9 was observed in both IMO-3100 groups." I believe investors could anticipate a comparable press release for the Phase 2 data on IMO-8400 and note that both drugs utilized dosages of 0.32 and 0.64 mg/kg twice per week.
Idera's common shares closed yesterday's trading day at $1.64, giving it a market capitalization of $74.3 million. According to the company's Q2, 2013 financials, it has capital sufficient to fund it through year-end 2014. However, the company announced after markets closed yesterday that it was performing a stock offering to fund its operations. With no dollar amount yet assigned to the offering and no share price indicated, I believe the offering could provide interested investors with a solid entry-level price for an exciting company that could be well-funded through 2014. Whether the company announces the terms of the offering very soon or later at elevated levels assuming positive Phase 2 data, I believe the company presents much upside potential for investors if data are promising. With Phase 2 data release for IMO-8400 an almost imminent event and additional Phase 2 trials for IMO-8400 in "other autoimmune disease indications, including lupus" set to begin enrollment also in Q4, I believe investor interest will be increasing rapidly and soon for this under-the-radar autoimmune company. Please note that this is a development-stage company with no real revenue generation at this point. Most of the value ascribed to the company's $74.3 million market capitalization is based on its early-stage pipeline success and its drugs' potential markets if approved for such. The investment is not for the risk averse and should be considered only after much additional due diligence.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in IDRA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)
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