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. Christian
    VKTX’s compound is less selective than MDGL’s. From what I remember MDGL is X24 more affinity to B agonist, whereas VKTX x16 the affinity is important for side effects, however so far VKTX has had a clean profile.

    VKTX is taking 5 and 10 mg to ph2, which in their ph1 was comparable to $MDGL’s (80mgs I believe) in terms of results.
    VKTX is also testing 12 weeks for ph2.



  2. The other difference between the two drugs is that VKTX2809 is a prodrug. I think it was tested at 5 to 40 mgs in the ph1B and “mild liver enzyme increases” were only seen at the “high doses.” The ph2 has 3 arms:
    10mg every other day

    so perhaps we they will show now liver enzyme increases, though duration goes from 14 days to 12 weeks.


  3. andre (ERYP) – Sorry, don’t know them well.

    DAn (MDGL/ESPR) – Not a NASH expert but the MDGL data look really nice imo, and they (as well as VKTX) clearly demosntrate an effect on LDL so potentially it’s a competing mechanism. Agree about Paul Friedman, some people simply know how to build companies…

    andre (DNLI) – Yep, one of these cases of great but too expensive company…
    ZYME – I think they continue to look good the response in gastric cancer was a nice surprise, can’t wait to see combination data given teh very good safety profile.

    DAn (VKTX) – Agree, I completely missed out on MRNS but VKTX could be an interesting bet. Their molecule is derisked (relatively speaking) based on their P1 data demonstrating lipid effect but safety is a long term risk we should be aware of.

    Christian (VKTX) – Agree about the favorable risk/reward profile although this is still a small cap biotech with very limited data. Safety bar is very high, especilly for liver tox, which may explain why investors are less excited about VK2809 based on the liver enzyme signal they saw (they might still have a viable dose going forward).

    Andre (BMRN) – No, from what I understand it’s a natural AAV5 capsid.



  4. Dan/Ohad – My point that Christian referenced is not so much whether or not VKTX will show a safety signal with their drug in future trials related to elevation of liver enzymes but the fact that the MDGL drug is going the other direction in showing a stat sig REDUCTION in liver enzymes. Seems like their drug is acting differently (perhaps due to being more selective as Dan referred to?).


  5. mcbio: I’m not clear as to what you are referring to by liver enzymes… it seems awkward that these would be tracked for statistical significance- we are talking about toxicities and SE? at least I was. I am confused.


  6. Dan: On MDGL, check their recent PR regarding P2 data in NASH. It notes: “Statistically significant improvements in liver enzymes in drug-treatment group.” And more specifically: “Statistically significant reductions in ALT and AST were observed in MGL-3196 treated patients; greater reductions in ALT and AST, statistically significant relative to placebo, were observed in the prespecified group of 44/78 patients with relatively higher MGL-3196 drug levels.”


  7. Ohad,

    seem Argenx (ARGX) has real drugs!

    see updates for AML (ARGX-110) and for Myasthenia Gravis (ARGX-113), both out today.

    Their IPO in US recently went very well… maybe for good reasons.

    What is your opinion on the (no longer very cheap) company?



  8. mcbio316 (MDGL/VKTX) – With small molecules there is always a high degree of uncertainty about cilnical profile and the underlying cause for a clinical observation. The VKTX looks selective in the relevant assays (MDGL looks more selective but not dramatically…) . The LDL reduction implies it is working in the right direction,, to me, the liver enzyme signal is a safety issue, not a mechanistic one. Hard to interpret the subset analysis MDGL mentioned, the VKTX is not in NASH/NAFLD patients so these are apples and oranges imo.

    Georges Robitaille – They usually mean liver damage (if the effect is consistent and durable)

    Christian (ARGX) – Indeed , nice one! Didn’t know CD70 is relevant in AML and the MG data look promising, will look into the data.

    paul/Martin-2 (ONCE) – Clearly a disappointment, don’t think it’s the end for their HepA program but my early excitement was premature.



  9. Leerinks’ note on ONCE is pretty damning
    – behind QURE for HemA
    – Behind NITE (and with worse data) for CHM
    – Behind Biomarin (and no differentiation) for HemB
    Price target lowered to $49 (from $97.)
    Seems to be saying that NITE, QURE, and BMRN are better investments.


  10. Hello Ohad,
    in my opinion an overlooked IPO: Zealand Pharma from Denmark. The IPO price was $17.87, now around $13.25. They are focused on metabolic and gastrointestinal diseases. They have a collaboration with Boehringer Ingelheim. BVF Inc. bought a stake. Can you take a look? Thanks.



  11. I am currently looking at NITE, I have also interests in GTs companies. Contrary to you, I am concerned and very sensitive about valuations that seem high also in GT companies, and waiting for the right price works for me. NITE did today a new 52wl. and traded at $12. How far is the company from next catalyst?


  12. Hey Ohad
    have you had a chance to look at $GLMD, since we were talking about NASH cos.? They are from Israel. An interesting paper (pre-clinical studies NASH model) was released earlier this year, showing that their drug has a dual mechanism of action, decreasing fibrosis and inflammation of the liver by ~70% each. Their two ph2 studies read out in Q1 18. Former Tobira director, Carol Brosgart, joined the company earlier this year.


  13. Hey mcbio316

    I just read the $MDGL press release, i think the reductions in liver enzymes they were referring to are ALT and AST, which VKTX also reduces (in ph1 comparisons, similar or slightly grater reduction for VKTX, compared to MDGL).


  14. Dan: What VKTX PR are you referring to? The one from 11/15/16 says: “Consistent with liver-targeted thyroid receptor activation, mild, asymptomatic elevations in liver enzymes and decreased thyroid hormone levels were observed at higher doses.” What other liver enzymes would they be referring to here beyond ALT/AST?

    I think it’s odd they call it a class-effect of raising liver enzymes at higher doses yet the MDGL drug at higher doses results in the stat sig decrease. On Ohad’s point, I don’t see it as apples-to-oranges comparison of MDGL vs. VKTX drug as different disease indication because VKTX makes that general comment that this class of drug results in raising liver enzymes at the higher dose (seems to imply not disease specific).


  15. Ohad
    do you follow AKTX?
    Soon (18Q1) they will have 1 Ph3 and 3 Ph2 programs – quite impresive for 60M company. The trails look derisked since they have the same MOA as Soliris.


  16. Ohad
    Any opinion on SPRO
    trading below its ipo price.
    I think you mentioned in past not much exciting novel antibiotic research going on in publicly traded companies.
    Their SPR741 IV abx potentiater program although early seems first in class. also oral carbapenem drug seems like a easy single as it is already approved in children in Japan.


  17. avi (ONCE) – Clearly disappointing data, could still be saved with higher doses but then differentiation from BMRN is unclear.

    DAn (ONCE/QURE/NITE/BMRN) – Agree they are behind QURE in HemB but they actually have data with the padua variant as opposed to QURE. I don’t think CHM is a major driver for them, data is probably underwhelming, which is puzzling given NITE’s data. Despite this I still feel comfortable owning them as a core GTx play.

    druz (NITE) – Don’t think it’s related.

    Toby (ZELA) – Sorry don’t know teh field well. The only metabolic company on my watchlist is ZFGN.

    David (ONCE/NITE) – I don’t plan on adding at these levels. Would like to diversify the portfolio beyond GTx.

    Ruhu (IMUC) – Sorry, not following them. Not a big fan of vaccines …

    lgonber (NITE) – I guess that some of weakness can be attributed to the lack of major catalysts next year, they should have initial data in XLRP, where they have a lead.

    Richard Baker (ITEK/Rocket) – Definitely one to follow, curious to learn what their secret indication is with the AAV program.Their lenti pipeline is differentiated from BLUE which is a good thing.

    DAn (GLMD) – Sorry, not following them.

    Toby Spider (SNDX) – I think data at SITC were underwhelming, not a big fan of their target.

    andre (AKTX) – Still trying to understand whether their mechanistic differentiation is clinically meaningful as their drug has a short half life and ALXN is already working on a subQ version of their next-gen product. Agree that it’s very cheap and that regulatory route is clear.

    roland (SPRO) – Planning to learn more about them, personally I am more interested in more innovative approaches (new MOAs or drug types etc.)

    Alex (NVUS)- Sorry, I can’t comment.



  18. Ohad
    You wrote: “diversify the portfolio beyond GTx” – like in CRSP/EDIT/NTLA :):)

    AKTX – they will start Ph3 about 9 months earlier than subQ ALXN1210.
    Plus they are going after Soliris-resistant pts. Approvable drug in well defined market looks like a low risk investment at 65M cap, I guess / hope.
    Probably I am missing something since they have very low institutional investment.


  19. Ohad
    I would like to thank you for the valuable discussion on different technologies.
    Last spring you were talking about the value of the targeted therapies. After your positive comments about LOXO and RXDX (April 2016) I bought share in both companies. After the today acquisition of RXDX mine return is 350% (RXDX) and 250% (LOXO).
    I am investing in biotech since 10-12 years, but after following your blog in the last 2 yeas I became more focused and started to pay more attention to the underlining technology. Your blog is very valuable in that respect.
    Happy Holidays and New Year

    Any comment on the FATE programs? With Immuno-oncology/regulation they seem to be in the right trend.


  20. andre (CRSP/EDIT/NTLA) – Still not the time to jump into gene editing imo but these companies are making great progress. Fingers crossed!

    Lorenzo (EXEL) – Yes very good news that opens the door for 1B+ sales in RCC. HCC data will be a key readout, anything below HR = 0.75 is significant IMO.

    Alex (ARRY) – It wasn’t a licensing deal, just a clinical collaboration from what I understand.

    DAn – Will post something after the holidays.

    andre (RXDX/LOXO) – Thanks glad to hear and congrats on these gains, too bad I didn’t hold LOXO and RXDX …;)
    Happy New Year!

    FATE – I am more interested in their engineered products where they are trying to do off the shelf CARs but these programs are still early.



  21. Hey Ohad!

    Happy holiday and good wishes to you and everybody else on this board for ’18!

    I wonder if considering the recent RXDX acquisition there might be other targeted oncology companies that might warrant a closer look (besides our very own KURA)? Some investors have mentioned Mirati?

    I also wanted to ask you about valuation for ESPR, if everything goes well… Right now market cap is $1.6B. Do you see this climbing up to $120/share again? (Considering the dilution since two years ago).

    Have you still not looked at VTGN? I watched last year’s presentation by Carlos Zarate (NIMH), which is quite compelling (you can find it on youtube) and seems to point to effects of AV-101 on AMPA receptors, and seems to work through a pathway that does not produce the side effects (including addiction) of ketamine.
    Phase 2 for MDD should read out within 3-4 months.



  22. Hi Ohad
    Did you look into SRRA? They claim much higher selectivity compared to other Chk1 inhibitors, especially no activity against Chk2, They say that the MOA is validated by Prexasertib but with superior efficacy and much better safety profile.


  23. 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 around they will be more successful. Seems better changes. Also well funded.


  24. DAn
    I guess the old name was DNAI. Many companies have unpleasant past and failures (SNSS or ARQL come to mind as examples).
    If they prove that the new inhibitor works, the past will be forgotten. Data from two trails are coming in Feb 2018, so no need to wait too long for answers.
    What is very attractive (to me) was almost lack of any AEs – even no grade 2 in the dose escalation from 20 to 600 mg/day. Also the MOA is indirectly validated, so I am challenging my luck with a few 1000’s shares.


  25. Andre
    Yes, you are right.
    I will keeping an eye on them. Seems they had a run already but they are well-funded.
    Results are due soon… what are the other companies with pursuing same target?


  26. DAn
    Ohad may know more. As far as I know:
    Genentech GDC-0575 is in Ph 1 for lymphoma or solid tumors. It was developed originally by ARRY..
    Eli Lilly: Prexasertib – Ph 2 in ovarian cancer and Ph1 in other cancers.
    They got some nice data – 75% DCR in small sell carcinoma, incl 1 CR

    SRRA claims 100 times higher selectivity (Chk1 / Chk2 ratio) which should improve the safety profile, or they can increase the dose and improve the response rate.
    There would be some ups and downs before the data in February, but I plan to hold through the data release


  27. Hi Ohad,

    In terms of Advaxis (ADXS), just to help, you may want to see these links:

    Phase I/II study:

    And initial results in JCO:

    Very early to tell but the abstract confirms the safety side and so far the on the limited numbers PFS looks good. Two statements in the abstract seemed promising, “Eight of 9 patients (89%) are disease-free at a median follow-up of 34 months.”, and “Conclusions: ADXS11-001 can be safely administered with CRT for anal cancer. Promising PFS was observed in patients with locally advanced disease.”

    This data was published in the second half of 2017 with follow-ups to come.

    Best regards,



  28. Hey Ohad

    APTO has interesting molecule about to enter clinic:

    pan-FLT3/pan-BTK inhibitor (non-covalent too, so will compete with ARQL and SNSS)
    in addition it is also pan-FLT3 which opens the molecule to larger markets. The CEO says because it is pan-FLT3 he expects it to had a broader market than most FLT3 inhibitors. Also claims that it is has thousand fold greater potency than ibrutinib

    Seems interesting, but still early.



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