BCYC - Bicycle Therapeutics: Not Much Differentiation Between Bicycles And mAbs Yet

2023-05-14 07:16:59 ET

Summary

• BCYC's distinction is that it is founded by a Nobel laureate.
• However, unless it can differentiate its product's efficacy from that of mAbs, that may be its only distinction.
• So far, it has not been strikingly successful.

I covered Bicycle Therapeutics ( BCYC ) in July last year, and the stock is up 30% from that time. The company is co-founded by Dr Greg Winter, 2018 Nobel prize winner in medicine for his work on the therapeutics use of monoclonal antibodies. These “bicycles” are molecules that combine properties of large molecule biologics with small molecule efficiency. These have larger surface areas so they are able to target normally undruggable proteins; however, they are excreted through the kidney rather than the liver, making them easy to get rid of from the body. Like I noted last time, all this is good in theory, but we need to see human data for the company to derisk itself.

When I covered it last, preclinical data from these bicycle toxin conjugates and partial clinical data from BT8009 was available. Preclinical data showed higher potency and specificity with fewer side effects than ADCs or antibody drug conjugates. As for the partial clinical data, let me quote from my previous coverage as background material:

This partial data shows that clinical activity was seen at 5mg/m2 QW in urothelial carcinoma (UC), and the dose was well-tolerated, with signs of differentiation compared to antibodies and potential for industry-leading product profile.

• 50% ORR and 75% disease control, including 1 (13%) complete response

• Durable responses, with tumor reductions maintained over time

We also noted that some of this data was better than those from Enfortumab vedotin, which is approved in UC. We discussed some of the possible reasons the stock may have gone down on positive data, and we concluded that it doesn’t appear that safety of the 5mg QW dose was called into question. I personally thought, then, that the fall was not a retail reaction at all. The stock is very heavily smart money owned.

So, this was where we left off in July last year. In February this year, additional data from this phase 1 trial saw a complete response among 49 patients dosed, all of whom have had three prior lines of therapy. Out of these 49, ??24 were UC patients, eight of whom received BT8009 5 mg/m2 weekly, one of the two recommended Phase II doses (RP2Ds), and the dose we saw earlier to be the most optimum. Besides that one CR (13%), there were 3 PRs or Partial Responses (38%). The overall response rate (ORR) and the clinical benefit rate for this intent-to-treat (ITT') population stood at 50% and 75%, including stable disease in two additional patients, respectively. The drug was generally well-tolerated, with no drug-related treatment discontinuations. The company now plans a phase 2 study in combination with keytruda.

If we compare this data with phase 3 trial data from Enfortumab vedotin, we see the following:

The confirmed overall response was higher in the enfortumab vedotin group than in the chemotherapy group (40.6% [95% CI, 34.9 to 46.5] vs. 17.9% [95% CI, 13.7 to 22.8]; P<0.001) (Table S3). The results of subgroup analyses were consistent with those of the primary analysis (Fig. S2). A complete response was observed in 4.9% of the patients (14 of 288) in the enfortumab vedotin group and in 2.7% of the patients (8 of 296) in the chemotherapy group. Disease control was observed in 71.9% (95% CI, 66.3 to 77.0) and 53.4% (95% CI, 47.5 to 59.2), respectively (P<0.001). In patients who had a complete or partial response, the median duration of response was 7.39 months in the enfortumab vedotin group and 8.11 months in the chemotherapy group (Fig. S3).

If we just focus on one key data here - the CR rate - we see that BT8009 had a 13% CR against enfortumab’s 4.9%, and in the other metrics that can be compared, 8009 maintained its non-inferiority. Especially in duration of response, 8009 saw a 14 months DOR while enfortumab’s was 7.6 months.

If we look at the safety profile for enfortumab:

Skin reactions and peripheral neuropathy were the most frequent treatment-related adverse events of special interest with enfortumab vedotin (Table S7). Treatment-related rash occurred in 43.9% of patients who received enfortumab vedotin (grade 1, 13.9%; grade 2, 15.5%; grade 3, 14.2%; grade 4, 0.3%) and in 9.6% of patients who received chemotherapy (grade 1, 7.2%; grade 2, 2.1%; grade 3, 0.3%).

Bicycle’s safety profile was much more benign, as we have seen earlier as well. This safety profile is what will determine which drug is better in this late stage application.

Bicycle has a number of collaborations. One with Genentech/Roche, started in 2020, yielded $10mn in July last year after Roche decided to opt for a second program partnership. None of the target programs include any of Bicycle’s wholly-owned pipeline assets.

In March this year, Bicycle signed a deal with Novartis ( NVS ) to discover novel bicycle radioconjugates or BRCs, which will then be developed and commercialized by Novartis. The deal was worth $50M upfront and Bicycle is eligible for development and commercial milestone payments totaling up to $1.7B plus royalties.

In May this year, Bicycle inked a deal with Bayer for $45M upfront and potential development and commercial milestone payments of up to $1.7B, plus royalties on sales. Under the partnership, Bicycle will discover bicyclic peptides, which Bayer will take over and develop.

Financials

BCYC has a market cap of $691mn and a cash balance of $294mn. Research and development expenses were $32.2 million for the three months ended March 31, 2023, while general and administrative expenses were $14.5 million. At that rate, they have cash for another 4-5 quarters.

The stock is heavily and almost exclusively smart money owned. Key holders are Deep Track Capital, Ridgeback Capital and so on. GSK has a considerable stake. Insiders never buy stock; they are mostly selling in the last two years.

Bottomline

BCYC premises itself on the comparative benefit of using its bicycle antibodies versus monoclonal antibodies. However, so far, it has really not been able to differentiate itself very strongly. It has data only in UC, and although the phase 1 trial involved other cancers, we are not being given much data on them, leading to the conclusion that perhaps UC is BCYC’s best bet yet. If that is so, its best bet is yet to distinguish itself. Bicycle has a very high benchmark to meet - its own Nobel prize winning founder’s pioneering work in mAbs being that benchmark. I am going to stick to the sidelines and wait for more data. Yes the stock is down 30% from last year, but let's not invest without reason.

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