ATXS - Astria: Biotech To Watch With Proof Of Concept Established For HAE

2023-04-24 08:10:36 ET

Summary

• Proof of concept in using STAR-0215 as a preventative Hereditary Angioedema therapy had been established.
• Results from the phase 1b/2 ALPHA-STAR study using STAR-0215 as a preventative therapy for HAE are going to be released in mid-2024.
• It is expected that the global HAE market could reach $6.5 billion by the end of 2025.
• Astria Therapeutics had $226.4 million in cash as of December 31, 2022. Enough to fund its operations into the 1st half of 2025.

Astria Therapeutics ( ATXS ) is a good speculative biotech play to look into. That's because it has been able to establish proof of concept in using STAR-0215 as a preventative Hereditary Angioedema [HAE] therapy. Such data was established from the phase 1a clinical trial of STAR-0215 in healthy patients and initial unblinded results from the first three cohorts in December 2022. With proof of concept on hand, it chose to initiate the phase 1b/2 ALPHA-STAR study using STAR-0215 for the prevention of HAE. This means that traders/investors have a major catalyst to look forward to. It is expected that results from this phase 1b/2 ALPHA-STAR study are going to be released in mid-2024.

STAR-0215 As A Preventative Option For Patients With Hereditary Angioedema

The main and only program in the pipeline involves the use of STAR-0215 as a preventative option for patients with Hereditary Angioedema. Hereditary angioedema is a type of disease where there is an ongoing (recurrent) type of serious swelling that occurs in the patient's body. There are many areas that can be affected by HAE, but some areas are:

• Face
• Limbs
• Airway
• Intestinal Tract

Sometimes there is a trigger that brings about an attack for an HAE patient. However, a big issue is that most of the time there is no known cause for this type of an attack to occur. These attacks they experience are painful and on average they occur about on average 3 times per month. This is a pretty large global market, which the company can go after. It is expected that the global HAE market could reach $6.5 billion by the end of 2025 . Where Astria could make a difference with respect to HAE is being able to change the way patients are treated. What do I mean by this? Well, as I will go over below, current treatment options to prevent HAE must be taken once every day, once every 3-4 days or once every few weeks. Where STAR-0215 can make a difference in this HAE space, is its potential as a long-acting monoclonal antibody, to allow treatment to be given once every 3 months or longer. I must stress the importance of this potential, because of the convenience of a patient only needing to take this drug once every 3 months or more. This, instead of the other dosing schedules I noted above, where treatment must be done often. In other words, it would give patients a much easier time in preventing HAE attacks. Less often dosing would not only provide patients with convenience, but it could also lower the number of side effects as well. Thus, where this biotech can potentially overcome competitors is in the realm of both less frequent dosing, efficacy and even safety.

STAR-0215, like most other HAE preventative drugs, target Plasma Kallikrein. There is a whole premise or chain of events that occur to cause HAE attacks. Having said that, there are drugs developed to target other portions of this chain of events in HAE. A main problem for these patients is that they have a protein known as C1 esterase inhibitor, which does not function properly. When this doesn't function the way it should, it causes protein Plasma Kallikrein to release a third protein known as bradykinin. Having an overabundance of bradykinin causes the patient's blood vessels to release fluid, which in turn creates the swelling observed in attacks with HAE patients. STAR-0215 is being developed as a Plasma Kallikrein inhibitor. As you can see, inhibiting/stopping Plasma Kallikrein stops the chain of events of it developing the third protein bradykinin and thus in turn should prevent an HAE attack. A phase 1a study was initiated by Astria back on August 4, 2022 . Again, the goal was to see safety first and foremost, but what also needed to be shown is the inhibition of Plasma Kallikrein activity. This was exactly what was shown later on with results from the phase 1a clinical study using this drug for the prevention of HAE.

Positive results, from the phase 1a clinical study using STAR-0215 in healthy patients were announced in December of 2022. Thereafter, initial unblinded results were released from the first three cohorts of this study at the American Academy of Allergy Asthma and Immunology Annual Meeting [AAAAI] in February of 2023. An important finding presented here showed that estimated half-life of the drug was up to 117 days and sustained target engagement with plasma kallikrein inhibition for at least 3 months. With such early proof of concept data established, it chose to advance a phase 1b/2 study known as ALPHA-STAR. This study intends to use STAR-0215 for the prevention of HAE in 18 patients. This is where a major catalyst comes into play, in that results from the phase 1b/2 ALPHA-STAR study is going to be released in mid-2024. While this is a bit far off, there is another catalyst which is much closer to watch and that will be additional results from the phase 1a trial for this program expected in Q4 of 2023. However, the next set of results to come from this early-stage study is the testing of STAR-0215 being given every 6 months in other cohorts. The goal is to see if this drug is capable of achieving efficacy, while being given less often. With this finding in Q4 of 2023, plus final results from the phase 1b/2 ALPHA-STAR study, these pieces of information will be enough to advance STAR-0215 in a pivotal study for this indication.

Financials

According to the 10-K SEC Filing , Astria Therapeutics had cash, cash equivalents, and short-term investments of $226.4 million as of December 31, 2022. The reason why it had so much cash on hand is because back in December of 2022 it has closed a huge underwritten offering of common stock, where it raised a total of $115 million. It believes that this will be enough cash on hand to fund its operations at least through the first half of 2025. I believe that it may likely need to raise cash again before the release of results from the phase 1b/2 ALPHA-STAR study in mid-2024. It could raise additional cash if it releases positive results from the other phase 1a cohorts, where STAR-0215 is being given for HAE prevention once every 6 months.

Risks To Business

There are several risks that traders/investors should be aware of before investing in this biotech. The first risk is with the use of STAR-0215 being given once every 6 months in the phase 1a study. Even though proof of concept data was established in using this treatment once every 3 months, there is no guarantee that it will work for 6 months. A second risk to consider would be with the data expected to be released from the phase 1b/2 ALPHA-STAR study, there is no guarantee that the endpoint will be met. The final risk would be with respect to its financials. While it does state that it has enough cash to fund its operations into the 1st half of 2025, it will likely need to raise cash again. My prediction is that by at least early 2024 it will need to start raising additional funds.

Conclusion

The final conclusion is that Astria Therapeutics is a good speculative biotech play to look into. That's because it has been able to establish proof of concept in using STAR-0215 as a preventive treatment for HAE. As I noted above, once every 6 months treatment cohorts are going to be the next set of results released for this program. This data is expected to be released by Q4 of 2023. A phase 1b/2 study known as ALPHA-STAR has been initiated so that it can prove to prevent HAE in about 18 patients. Results from this mid-stage are going to be released mid-2024. However, there is an earlier catalyst in which traders/investors can look forward to. This would be the release of cohort data showing the use of STAR-0215 once every 6 months as an HAE preventative treatment, which is going to be released Q4 of 2023. With proof of concept established in using STAR-0215 as an HAE preventative therapy, plus a catalyst approaching in Q4 of 2023, these are the reasons why I believe that Astria Therapeutics is a good speculative biotech play to look into.

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