TVTX - Chinook: Travere's Sparsentan Approval Is Net Positive
Summary
- Travere's FILSPARI (sparsentan) received accelerated approval for IgAN's disease on Feb 17, 2023.
- Chinook has a similar phase 3 ERA atrasentan that drove a UPCR benefit of 54.7%, and approval of sparsentan based on UPCR only should be net positive for atrasentan.
- We reiterate a BUY rating.
Update: Travere's Sparsentan receives the FDA's stamp of approval
US Food and Drug Administration (FDA) has granted accelerated approval to FILSPARI (sparsentan) in IgAN on Feb 17, 2023. However, the FDA label that the drug has received was disappointing based on a) higher than expected proteinuria, UPCR >=1.5g/g, and b) cumbersome REMS monitoring requirements (increasing the administrative burden for prescribers). As we explored in detail in our initiation article , atrasentan is a stand-alone ERA, also going through a phase 3 trial. One of the key overhang for Chinook (KDNY) resided in the fact that the FDA may not accept the approval of an agent based on proteinuria alone if a clear eGFR improvement is available to confirm the proteinuria benefit at 9-month cut-off. However, we believe sparsentan's approval has derisked that concern, and we see the approval of sparsentan as a net positive for atrasentan as investors can now expect potential accelerated approval of atrasentan based on the proteinuria benefit at 9 months point without clear eGFR curve separation (although the full approval should take place after the drug showing long-term eGFR benefit).
One may argue that since sparsentan is approved, atrasentan's market positioning is now uncertain; however, we fundamentally disagree with this view due to three reasons, a) atrasentan is a standalone ERA which prescribers can mix and match with RASi; therefore, atrasentan has a leg up on convenience and safety (i.e., physicians can lower the dosing of ACEi if the patient has hypotension, which won't be possible for ACEi+ARB combo like sparsentan), b) atrasentan has shown stronger proteinuria benefit during phase 2 trial (~54.7% at week 24), which means there is a decent probability that atrasentan may show superior proteinuria and eGFR benefit over sparsentan during phase 3 readout, and c) since atrasentan does not contain a sulfonamide group, there is a probability that the FDA may not slap a renal toxicity related monitoring or REMS program.
Atrasentan has been shown to be generally well-tolerated with a favorable safety profile in clinical studies, while sparsentan has been associated with some gastrointestinal side effects, such as diarrhea. In terms of potency, atrasentan has a lower potency compared to sparsentan for the ETA component, but it still has shown promising results in clinical studies for reducing proteinuria and preserving kidney function. Atrasentan's lower potency may also translate into a more predictable and manageable safety profile.
Furthermore, we speculate that atrasentan may be indicated for patients with lower UPCR than UPCR's FDA label (>=1.5 g/g), as the phase 3 inclusion criteria for atrasentan was UPCR >1g/g, which means atrasentan may be able to be used in an earlier line than sparsentan. In terms of commercialization, we see a potential pricing advantage where atrasentan may be priced lower, considering that it is a standalone ERA vs. sparsentan, which can work favorably for atrasentan, especially around Medicare/Medicaid reimbursement.
| Factor | Atrasentan Phase 3 Trial | Sparsentan Phase 3 Trial |
|---|---|---|
| Trial Size | ||
| Approximately 800 participants | ||
| Approximately 300 participants | ||
| Inclusion Criteria | ||
| Biopsy-proven IgA nephropathy | ||
| Biopsy-proven IgA nephropathy | ||
| Exclusion Criteria | ||
| History of cancer, severe hypertension, severe cardiovascular disease, etc. | ||
| Similar to the Atrasentan trial, with additional exclusion criteria for prior treatment with RAAS inhibitors or immunosuppressants | ||
| Duration of Trial | ||
| 3 years | ||
| 2 years | ||
| Endpoints | ||
| Primary: Time to the first occurrence of a renal event (40% reduction in eGFR, ESRD, or renal death) Secondary: Change in eGFR, proteinuria, quality of life | ||
| Primary: Change in proteinuria from baseline at 36 weeks Secondary: Time to renal disease progression, change in eGFR, quality of life | ||
| Expected Completion Date | ||
| September 2023 | ||
| December 2022 | ||
| Efficacy Data | ||
| Atrasentan has shown a significant reduction in proteinuria and preservation of eGFR in phase 2 trials. | ||
| Sparsentan has shown a significant reduction in proteinuria and preservation of eGFR in phase 2 trials. | ||
| Safety Data | ||
| Atrasentan has been generally well-tolerated, with the most common adverse events being peripheral edema and nasopharyngitis. | ||
| Sparsentan has been generally well-tolerated, with the most common adverse events being diarrhea and peripheral edema. | ||
| Mechanism of Action Difference | ||
| Atrasentan is a selective endothelin A receptor antagonist. | ||
| Sparsentan is a dual endothelin receptor antagonist (blocks both A and B receptors). |
Risks
Considering that Chinook's pipeline candidate has not received FDA's approval, we expect regulatory, clinical, commercial risk moving forward. Furthermore, as Chinook is not cashflow positive, we believe cash runway risk remains.
Conclusion
Net-net, we believe Sparsentan's accelerated approval based on a 9-month standalone proteinuria data and worse-than-expected FDA label of sparsentan should be a net positive for Chinook moving forward. Therefore, we maintain a BUY rating due to a good risk-reward set-up and modest valuation for a company considering Chinook's best-in-class ERA and anti-APRIL pipeline. We are a big fan of standalone ERA and anti-APRIL as a mechanism of action to target IgAN based on a) superior convenience (dosage management perspective), and b) safety advantage.
For further details see:
Chinook: Travere's Sparsentan Approval Is Net Positive