Biotech portfolio updates – Esperion, Abeona , Sage and adding two more GTx names

It has been a hectic 5 months here at Pontifax (10 new investments, some yet to be announced) so unfortunately I didn’t have a lot of time to publish new posts. Going forward, I will try to make posts more concise so I’ll be able to publish stuff also during busy periods.Today, I will focus on what I consider to be the three winners in the portfolio in 2017 so far, not only from a stock performance but also from a strategic development perspective. All three will have important readouts in the coming 6 months.  

Esperion – Flawless execution, pivotal readouts in Q2/18

Despite its strong stock performance (+275% YTD), I still feel that Esperion (ESPR) and its management team don’t get the credit they deserve for their flawless execution in 2017. After starting 2017 with poor investor sentiment and great uncertainty about its clinical/regulatory strategy, Esperion is ideally positioned for pivotal readouts next year (Q2 2018). Although risk is still significant I am more excited than ever about Esperion for the following reasons:

Clinical profile continues to hold up– With a database of >700 patients, the effect of bempedoic acid (ETC-1002) on LDL and CRP is seen universally across patient populations (statin intolerant, diabetics, hypertension) and combinations (statins, ESPRezetimibe). Despite inhibiting the same pathway targeted by statins, the drug has a differentiated tolerability profile especially on muscle-related side effects. Long term safety is still a significant risk, as rare safety events require large studies and long follow up to emerge.


Experience with PCSK9 drugs validates Esperion’s market assumptions – CV outcomes data with PCSK9 inhibitors earlier this year continued to validate the LDL hypothesis, and were probably an important part of FDA’s decision to keep LDL reduction as an approvable endpoint. The lower than expected effect size with PCSK9 may grow with more follow up but also suggests that CRP is also an important part of the equation (PCSK9 drugs do not reduce CRP). The lackluster commercial performance of Repatha and Praluent also support Esperion’s long thesis, showing that subQ administration and high pricing are barrierS for patients and payors, respectively. This makes bempedoic acid (especially in combination regimens) an attractive option: oral, well tolerated and relatively cheap.

CRP hypothesis supported by Novartis’ canakinumab – The recent data with canakinumab provided the first prospective proof that inflammation is an important driver of cardiovascular disease. Canakinumab inhibits IL-1 beta, a master inflammatory switch without any major direct metabolic functions. This supports Esperion’s claim about the importance of CRP reduction on top of LDL reduction. Canakinumab had a dose-dependent CRP-lowering effect (see figure below). Bempedoic acid appears to be the only drug in clinical development that inhibits both LDL and CRP (as statins do).

canakinumab - CRP

Source: Ridker PM. N Engl J Med. 2017 Sep 21;377(12):1119-1131.

Competitive threat from CETP inhibitors is gone – Merck’s decision not to file for approval for its CETP program (anacetrapib) followed by Amgen’s decision to terminate its CETP program it had acquired in 2015 leave the stage to Esperion’s bempedoic acid as the only late-stage oral lipid-lowering agent in development.

FDA acknowledges statin intolerant patients as a legitimate sub-population – One major achievement Esperion had is the agreement with the FDA on using the definition “statin intolerant” in order to identify patients who cannot or will not take even a low dose of statins. This group is still tricky to define but the acknowledgement of its existence and need of treatment alternatives is very encouraging. It is still unclear if and how statin intolerance will be reflected in bempedoic acid’s future label.

Esperion expects to have P3 data from four parallel P3 studies in Q2/Q3 2018, which will include LDL and CRP readouts. A CVOT (cardiovascular outcome trial) is expected to readout only in 2022.

Abeona – Three gene therapies now in the clinic

Abeona(ABEO) (+215% YTD) also had a strong year, moving from obscurity to a leading gene therapy company. Like Avexis (AVXS), Abeona’s programs utilize AAV9 to replace a missing protein in the CNS. Although Abeona cannot boast a spectacular clinical data set like that of Avexis (see recent NEJM publication), it has preliminary signs of biological activity in the CNS using biomarkers (which Avexis lacks). To me, from an investor perspective, the two data sets complement each other in validating AAV9’s ability to express clinically meaningful amounts of a therapeutic protein in the brain.

Abeona’s lead program (ABO-102) for MPS IIIA (Sanfilippo A) has generated a promising efficacy signal, making it one of the most promising gene therapy programs in development. The company recently started a clinical trial for a related condition (MPS IIIB, Sanfilippo B) for another gene therapy program (ABO-101). A third gene therapy program (EB-101) is expected to enter P3 for a rare dermatology indication (RDEB), unrelated to the company’s CNS pipeline.

During 2017, Abeona provided several updates from the ABO-102 trial (I discussed initial data a year ago here). Overall, updated results continue to look promising and indicate ABO-102 has the potential to alter the natural course of the disease. Findings include:

1) HS reductions in the CSF – Reductions in HS (a toxic metabolite that gets accumulated in MPS IIIA patients) in CSF were significant and dose-dependent. This is the most important biomarker readout as the CSF is thought to mirror metabolite content in the brain.

ABO-102 HS

2) Urine HS reduction – significant but with fluctuations, effect in the low dose group diminished at 180 and 360 days (despite the strong effect in the CSF). The medium dose had limited improvement but the single patient at the high dose had a remarkable 94% reduction.

ABO-102 - HS in urine

3) Liver volume reductions – At the low and medium doses, there were significant reductions after 360 and 180 days, respectively. The patient at the high dose cohort (who had the largest baseline liver volume in the trial so far) had a dramatic reduction already after 30 days.

AB0-102 - Liver

4) Clinical measures – Most importantly, there are hints of clinical stabilization based on the Vineland Adaptive Behavior Scale/test for the low dose cohort. A historical control cohort demonstrated a 14-point decline vs. a 2-point decline for the three treated patients. This observation is also aligned with other brain imaging endpoints that all point at the same direction.

ABO-102 - Vineland

In summary, data are preliminary and limited but all point to the right direction. During 2018, Abeona should have 1-year data for the medium dose cohort and initial biomarker data for the high dose cohort.

Regulatory strategy – Based on recent cases with rare pediatric CNS indications (Avexis’ SMA1 program, Biomarin’s CLN2 program), Abeona may be able to file for approval based on the ongoing study. It is still unclear how many patients and what follow up will be required by the FDA but if data from higher doses corroborate initial findings, the company may have a sufficient data package by Q1 2019 (1 year follow up for 12 patients across three doses). A BTD is likely to come by mid-2018.

Market opportunity and valuation – MPSIII A and B are ultra-rare indications and estimations regarding the relevant number of patients vary from 1500 to 4000, combined. Assuming a targetable population of 2000 and an average cost of $800k per patient, the cumulative commercial opportunity is $1.6B.  The RDEB opportunity is probably similar in size (Higher prevalence but lower cost per treatment). At a market cap of $700M, Abeona’s upside potential is still significant but not huge. Further upside could come from the two Batten diseases programs (CLN1 & CLN3), which are expected to enter the clinic by early 2019.

Lack of AAV9 license from Regenxbio (RGNX) is a risk going forward – Regenxbio holds IP around AAV9 and while Abeona indicated the two companies are in discussions, no agreement was announced to date. While this should not stall Abeona’s clinical development, it represents a commercial risk.

Sage – P3 POC achieved but real value lies in follow-on program

Sage Therapeutics (SAGE) reached an all-time high last week after announcing positive P3 data for its lead program brexanolone (SAGE-547) in PPD (post-partum depression). Brexanolone’s data set were from two P3 trials in severe and moderate PPD, respectively. Although benefit was not as dramatic as observed in P2 (placebo arm performed much better in the P3 studies, as usual…), brexanolone’s benefit in severe patients looks clinically meaningful (~ 5 points on the HAM-D scale) and should support approval in early 2019. Efficacy in the moderate PPD trial was not as robust (2.2 points) and did not reach statistical significance after 30 days.

While last week’s data may open up a $300M opportunity for brexanolone, they should be viewed more as a mechanistic validation for SAGE’s approach of using neuroactive steroids and as a positive read-through to SAGE’s oral derivative of brexanolone, SAGE-217. SAGE-217 is a novel oral drug with potentially superior properties over brexanolone, which is a formulation of a naturally occurring substance administered over a 60-hour IV infusion.

SAGE-217 is viewed by investors as Sage’s real value driver based on its improved properties, potentially superior efficacy (based on prolonged exposure with oral administration) and strong patent protection. It is currently in P2 trials in PPD and major depressive disorder (MDD), two indications that represent blockbuster potential for a novel oral agent.


Sage is expected to report P2 data in MDD for SAGE-217 by year-end, which should have a significant impact on the stock. Positive data will open up a multi-billion opportunity in a market that has seen little innovation in decades. Negative data will probably push the stock towards the floor valuation provided by brexanolone in severe PPD (~$1.5B). A P2 study in PPD is also expected to read out shortly afterwards in Q1/18. This trial involves treatment for 14 days with SAGE-217 (in contrast to 2.5 days with brexanolone), which might lead to a more pronounced therapeutic effect.

Portfolio updates

Staying loyal to the gene therapy basket approach, I am adding Nightstar Therapeutics (NITE) and Krystal Biotech (KRYS). Nightstar is becoming a diversified gene therapy play in ophthalmology with a P3-ready program in choroideremia and a P1 program in XLRP (competes with AGTC/Biogen’s program).  Krystal has a preclinical program for DEB that in contrast to Abeona’s program, involves injecting a virus with the relevant gene (COL7A1) directly to the patients’ skin.

I am selling Trevena (TRVN) and ArQule (ARQL), which I won’t be able to discuss going forward.

Portfolio holdings – Nov 13, 2017

Biotech portfolio - 12-11-2017 - after changesbiotech etfs - 12-11-2017

118 thoughts on “Biotech portfolio updates – Esperion, Abeona , Sage and adding two more GTx names

  1. BOLD released some data today.

    1. what are your general thoughts on it? how about regarding the safety concerns? the “elevated troponin levels” have me concerned…
    2. by now, you are up a lot, congrats! when do you plan to do some profit taking?


  2. Hi Ohad Happy New Year. Regarding $VKTX for VK 2809 primary endpoint percent change from baseline LDL-C at the end of the treatment period (Week 12) secondary endpoint liver fat content and other liver and lipid markers, as well as effects on safety and tolerability, and pharmacokinetic (PK) measurements. Without showing decrease in fibrosis with an MRI is this an fda approved endpoint for NASH?


  3. Richard Baker (ADXS) – No concrete opinion. They definitely have an interesting twist on cancer vaccines but I am still not optimistic about the approach in general.

    DAn (RXDX/MRTX) – Two names that obviously come to mind are LOXO and BPMC but valuation is too high IMO. There is also DCPH which is less advanced. MRTX is more similar to RXDX in the sense that its molecules are broad spectrum, looks like they are trying to find new niches in NSCLC, combo data with PD1 is limited.

    ESPR – If they get positive LDL/CRP data next Q, they can definitely go to $120 but safety profile will have to be very clean.

    Not very familiar with VTGN.

    andre (SRRA) – I am still not convinced that Chk1 is a viable target unless they come up with a biomarker for patient selection.

    Alex (TOCA) – Don’t know them well but I prefer to focus on other therapeutic approaches.


    DAn on December 27, 2017 at 3:58 pm said: Edit
    Hey Alex

    Isn’t SRRA the old RNAI rebranded and with a new strategy? I think they are trying to replicate something similar to PARP (DNA damage). Maybe this time aroundthey will be more successful. Seems better changes. Also well funded.

    creminofumagalli – Thanks, Happy New Year.

    Peter Lawson (ADXS) – Thanks, hard to interpret single arm combo data.

    DAn (APTO) – It’s been ages… will take a look.

    druz (TRVN) – I am still not optimistic about their market position even if they get approval (which they should)

    Chris (ALNA) – I think they have a neat approach and valuation is not very high, definitely considering them.

    DAn (APTO) – Key issue here would be safety profile, we know both FLT3 and Btk inhibitors have safety issues. It may be challenging to establish a Tx window with such a broad spectrum agent imo.

    Kay Lee (BOLD) – I think data are exciting yet early (lesson from ONCE…). The fact they see such a clinical effect after a relatively short follow up implies the disease may be reversible. Agree about the troponin increase, need to see if it can be mitigated or whether or not it resolves. I plan to continue holding the stock.

    Bouschka (TOCA) – Not sure they qualify as gene therapy… Anyway, hard to get excited wit teh approach imo.

    Luigi –
    AGTC – Yes, still holding despite the setbacks. Cannot comment about ARQL.

    Bouschka (RGNX) – The AMD data was certainly not what people were expecting but the fact they see dose dependent increase in protein is encouraging. Not enough details, hope they communicate data differently next time.

    William Harrison (VKTX) – Not sure… I think that in order to get a NASH label they need to show reduction in fibrosis

    Dimitri (ATRA) – Sorry, no strong opinion there…



  4. Hey Ohad

    Re APTO, good point. But they seem to say (in vitro and in vivo mice studies so far) have not shown any toxicities a d that the molecule does not inhibit any of the kinases that generally cause toxs, and only inhibit FLT3/ CSF1R / BTK / AURK / ERK / AKT.



  5. Ohad
    any comment on the DTX301 data?

    About DCPH – you wrote they are less advanced compared to BPMC.
    But they just started Phase III registration trail in 4-th line. In 1 year they will have data and can be on the market in early 2020.
    It’s difficult to say when BPMC will be on the market since they are still in Ph 1.
    Their data are indeed spectacular, but DCPH can beat them to the market by at least a year.


  6. Ohad, I believe you spoke positively about ADVM gene therapy drug for A1AT deficiency before. Aren’t you concerned that it and also the HAE drug are using the same vector (AAV10) that was used in DMTX hemophilia trial that had some safety issues?


  7. Ohad,
    You indicated a desire to expand your portfolio with new approaches. Are there any public companies that are focused on degrader molecules, protein knockout…… targeting E3 ubiquitin ligase or otherwise.
    If not current public companies, are there any IPO’s that are coming up in this arena?


  8. hey Ohad

    I just listened to the ESPR CEO chat with JpMorgan analyst.
    We are getting real close to results.
    He says that they’ve looked at blinded data, taken a conservative stance, and assigned all AE to BA cohort and still safety profile is in line with ph2 studies. This sound positive. However, there are many more weeks to go before the end of the studies and safety monitoring is only quarterly.
    Management seems very confident. Maybe even cocky…. not sure I like that. Until now they have been very humble and leveled. Maybe I’m reading this wrong… they also seem comfortable waiting for those readouts before finalizing a partnership or BO.

    What is your take / strategy for ESPR into the ph3 readings? Are you going to hold on to all your shares?

    Would appreciate you input.




  9. Hey Ohad
    How much market share do you think $ESPR will get? we have zocor, lipitor, crestor, zetia, vytorin already in the generic market. Is it about LDL reduction, then existing agents are already there in the market. Any reason bempedoic acid will gain market share from the above agents?


  10. DAn (APTO) – The proof is in the pudding…

    ande (RARE) – I expected a better DTX301 data set, still can improve with higher doses.
    DCPH/BPMC – I was under the impression that BPMC could file earlier with single arm data. Ina ny case, they are more advanced in mastocytosis, which has become their most valuable program.

    mcbio316 (ADVM) – Their A1AT treatment is administered directly to the lung so we’re talking about a different route of admin and a different target tissue. Burden of proof is on them of course.

    Frank – Not aware of publicly traded companies with “degarders”. I won’t be surprising to see Arvinas going public this year although still not in the clinic yet but I don’t know of any specific plans there (or C4 or Kymera for that matter).

    DAn (ESPR) – Hard to speculate here, need to wait patiently for the data next Q… Yes, I am holding my shares.

    Richard Baker (XENE) – Yes, see yesterday’s post.

    Chris (NKTR) – Agree data are encouraging but too prelimary and hard to interpret without a control arm. Hard to justify valuation but hope the signal is real, we desperately need new IO drugs…

    Douglas williams (ESPR) – I don’t think anybody expect BA to compete with generic statins. It will be added to them in patients whose LDL levels are not adequately controlled or be used in combinatio nwith Zetia in intolreant patients.

    Bouschka (BerGenBio) – Intersting approach to tackle EGFR resistance not driven by T790M, Axl is a very intriguing target but still not validated. So far data are not very compelling, I would hope to see objective responses if Axl is truly a primary resistance switch. I like the trial design, though, wish more IO drugs (e.g. NKTR) would be evaluated that way…



  11. Do you believe the risk reward is positive for Incyte now that it is more than 40% from it’s highs before the study results are revealed? Thanks.


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