A biotech analyst could play it safe, and stick with mid-, late- and commercial-stage companies that offer higher odds and decent returns on good news.
The Life Sciences Report: Chris, small molecules will always be an important part of medicine. But now we are seeing therapeutic interventions move to new paradigms, with larger molecules such as antibodies and fusion proteins, and soon we'll see wider use of regenerative and immunologically enhanced cells, as well as oligonucleotides--small segments of DNA and RNA. It's hard to discern how clinicians will embrace these newer therapies. How do investors get their arms around these concepts? How do we know that some of these ideas won't be the eight-track tapes of tomorrow?
That being said, I do believe that pharmas and investors are increasingly interested in larger molecules, in RNA-based therapies, and in regenerative approaches such as stem cells, which have the ability to actually modify disease, versus a small molecule that must be used chronically, for long term. The newer modalities offer the right combination of technology and intellectual property (IP), and are attracting the investment capital to advance. These potentially very powerful medicines can help patients with diseases that represent truly unmet needs. They also offer a potentially faster path to approval--especially for orphan disease indications.
TLSR: A physician can write a prescription for any approved small molecule. Any patient can carry these pills on his/her person. Plain and simple, they are modular. Newer therapies may break that model, resulting in slower uptake. I'll give you an example: Rheumatologists have been slow to embrace B-cell blockade with antibodies for autoimmune disease--psoriatic arthritis, rheumatoid arthritis, etc.--because they think of these infusions as chemotherapeutic agents. Infusions of large molecules don't traditionally fit into the rheumatologist's practice model. Do we just assume that newer modalities, such as stem cells and oligonucleotides, are going to encounter slow uptake?
CJ: Let's take a step back. You mentioned oligonucleotide therapies; these include antisense, RNA interference (RNAi) and approaches to target microRNAs. These therapies offer a unique opportunity to target a range of diseases that cannot be addressed with traditional, small-molecule pills. I believe that once the data are mature, the potential for targeting diseases with oligonucleotides will be recognized as unique and huge.
You can target microRNAs to control gene expression and entire pathways of diseases. It's a very powerful technology.
TLSR: You initiated coverage on Regulus in mid-May of this year. The company was formed as a joint venture of
CJ: Yes. We believe Regulus is on the forefront of the movement away from monogenetic disorders and toward targeting entire pathways. The microRNAs that Regulus targets are extraordinarily powerful, and can regulate networks that play a major role in biological processes such as immune modulation, metabolic disease and neurological disease. The company's technology is differentiated because microRNAs work farther upstream than either antisense or RNAi, which both target only single genes.
Regulus has large pharma alliances, which lower the risk and validate its microRNA technology platform. The company recently renewed a strategic alliance with
TLSR: The company's market cap is almost
CJ: Regulus actually does have a molecule in the clinic. It is RG-101 (targeting microRNA-122 [miR-122]) in a 100-patient Phase 1 study that includes both healthy and HCV-infected patients in
TLSR: Chris, allow me to go back to RG-101 for HCV for a moment. Is that a
CJ: It's not a U.S. study, and if the study is not being conducted in the U.S., it does not have to be in the clinicaltrials.gov database. We don't believe that will affect the drug moving forward. The study is being done in
RG-101 is targeting miR-122, which is one of the most highly conserved (by evolution) regions encompassing all HCV genotypes. RG-101 is pan-genotypic in its scope, which would include HCV genotype 3.
TLSR: To your point about partnering, both Alnylam and Isis have created business models where they achieve proof of concept in targeting genes, and then partner their products with companies that have expertise in marketing to that disease indication. Does this appear to be what Regulus is doing?
CJ: Yes, absolutely. I'll remind you that in January, Alnylam entered into a large strategic alliance with
TLSR: You have a new company under coverage. Could you tell me about it?
TLSR: Give me your investment theory on
CJ: This company is rapidly advancing a neural stem cell therapy for multiple indications, particularly for the central nervous system. It is going after chronic spinal cord injury (SCI) and geographic atrophy age-related macular degeneration (GA-AMD). Both indications, we think, will generate significant data over the next 24 months.
TLSR: These two indications are the catalysts for
CJ: The main catalyst right now is GA-AMD. Investors like this story because of their familiarity with
Recently, we saw initial interim data from the Phase 1/2 study with the company's HuCNS-SC cells (purified adult human neural cells of fetal origin) in GA-AMD. These data were extraordinarily encouraging. In fact, when you compare them to Phase 2 data from
We will see additional data from this
TLSR: Going back to spinal cord injury, loss of motor function is a difficult indication, and that really gets people's attention. I'm wondering why
CJ: That's a great point, which I can address from a clinically practical standpoint. There is a large commercial opportunity with spinal cord injury, but a real, practical problem with treating acute injury patients.
As you mentioned, the microenvironment changes over time. There is glial scarring, and the disease process changes. Treating the acute form of spinal cord injury does offer patients the best possible outcomes. The problem is that you are treating a patient who was fine up until a motorcycle or car accident. Suddenly he can't feel a certain part of his body--or, God forbid, he may have a high cervical injury, with paralysis from neck down. It's hard to convince this patient that he is not going to walk again for the rest of his life. Can you imagine the conversation at the bedside? Can you say to this patient: "You are not going to walk again, and we need you to accept that. We also need you to accept an experimental therapy."?
Treating the acute-injury patient is a very delicate situation. Patient acceptance of the true situation may be six months in the future. But a therapy would be more efficacious earlier than later. This opportunity will come eventually, after good data and proof of concept have been generated.
TLSR: What kind of improvements have we seen in spinal cord injury with
CJ: We have seen improvements in sensation at the thoracic level. Thoracic injuries are much worse than cervical injuries. You need greater trauma to affect the thoracic cord versus the cervical cord, where very small amounts of trauma can cause problems. Cervical cord is much more delicate and controls more motor function. To show improvement in a difficult area like thoracic cord bodes well for the next phase, which will start later this year and focus on cervical injury. You need less improvement in the cervical cord to regain movement--actual motor function. We think the thoracic data will translate to increased efficacy at the cervical level and the presence of small motor improvements, such as allowing movement in the hands--maybe to control an electric wheelchair, maybe to type--that would really affect quality of life. These commercial opportunities will propel the company's valuation higher.
TLSR: Chris, could you mention another name?
CJ: We are very excited about
We're particularly excited about Rexahn's RNA-based therapeutic, an oligonucleotide. This class of drug is coming of age. The Archexin Phase 2a proof-of-concept trial in metastatic renal cell carcinoma is enrolling patients. It also has orphan drug designation.
TLSR: Do all of those programs have data forthcoming that could move this stock over the next year?
CJ: We should have some safety data from the Archexin study in Q4/14. The company recently provided an update on its Phase 1 supinoxin trial in cancer patients. Enrollment with the fourth dose is complete, and the estimated bioavailability is approximately 50%. Complete enrollment is on track for Q4/14. With RX-3117, we also expect a Phase 1 study to be completed in Q4/14.
TLSR: Thank you, Chris.
CJ: Thanks so much.
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