IPSEF - CymaBay: Positive Phase 3 Data And Competitive Advantage Established

2023-09-10 06:05:05 ET

Summary

• Positive results achieved in phase 3 RESPONSE study, which used seladelpar for the treatment of patients with primary biliary cholangitis.
• Positive results of the phase 3 RESPONSE study leads to additional data at an upcoming medical meeting and possibly several regulatory submissions of seladelpar for primary biliary cholangitis.
• The global primary biliary cholangitis market is expected to reach $1.4 billion by 2032.
• The Phase 2a proof-of-pharmacology study data using MBX-2982 to prevent hypoglycemia in Type 1 Diabetes patients, expected before the end of 2023.

CymaBay Therapeutics ( CBAY ) had made great progress in advancing the use of its drug seladelpar, because it was able to achieve a successful outcome for its phase 3 study known as RESPONSE, which treated patients with primary biliary cholangitis [PBC]. Not only was it able to meet on the primary endpoint, but the secondary endpoint as well. The secondary endpoint is important as well, because this endpoint being met provides the ability for these patients to have reduced itching associated with their disease. This biotech now has the ability to meet with regulators to see if it can seek approval of seladelpar for PBC.

However, this is not the only data expected to be shown from this study. The company intends to release additional results from this phase 3 RESPONSE study at an upcoming medical meeting as well. Lastly, the company is advancing a candidate known as MBX-2982, which is being developed to prevent hypoglycemia in patients with Type 1 Diabetes [T1D]. Topline results from the ongoing Phase 2a proof-of-pharmacology study, using this drug to treat this patient population, are expected before the end of 2023. This provides another catalyst for investors to look forward to.

Reduced Itching Of PBC Patients With Seladelpar Could Mean A Huge Competitive Advantage

As I noted above, the positive results released from CymaBay were from the phase 3 RESPONSE study. This double-blind placebo controlled-study randomized a total of 193 patients to receive either 10 mg of seladelpar or placebo, once-daily. It was noted that both the primary and key secondary endpoints of the study were met. The PBC indication is a pretty large market for it to go after, because it is said that the global primary biliary cholangitis market is expected to reach $1.4 billion by 2032 . This positive data now gives the company the ability to be able to speak with several regulators about being able to file for approval of seladelpar for this indication. This creates several catalysts to look forward to in the coming year. Besides these trade opportunities, there is another one on deck. CymaBay states that it intends to provide additional results from this phase 3 RESPONSE study at an upcoming medical conference.

Why CymaBay is ideal to look into is because it may be able to have an edge over other competitors who have a drug for the treatment of patients with primary biliary cholangitis [PBC]. That's because these patients who received seladelpar were able to achieve reduced itching, in a statistically significant manner. Whereas some other competitors weren't able to achieve a reduction in pruritus [itching] in such a statistically significant manner. For instance, Genfit ( GNFT ) and its partner Ipsen ( IPSEY )( IPSEF ) had announced positive results for their phase 3 ELATIVE trial , which used elafibranor for the treatment of patients with primary biliary cholangitis [PBC]. Even though the primary endpoint and the first secondary endpoint were met, the other secondary endpoint with respect to pruritus [itching] was not met. There was a trend observed in favor of elafibranor against this endpoint, but statistical significance was not achieved.

Another competitor, whereby CymaBay could have an advantage over, would be Intercept Pharmaceuticals ( ICPT ). That's because it has a drug known as Ocaliva, which was granted Accelerated approval by the FDA in 2016 in combination with ursodeoxycholic acid [UDCA] in adults with an inadequate response to UDCA, or given as a single treatment option for those who can't tolerate UDCA. A common side effect for Ocaliva is pruritus [itching]. Thus, CymaBay Therapeutics, with being able to achieve reduced itching in its phase 3 study, could have a huge competitive advantage over this company and Genfit. On the flip side, Intercept completed enrollment of two phase 2 studies which are exploring an OCA-bezafibrate combination for PBC patients. It remains to be seen if targeting both pathways results in superior efficacy data, however, the pruritus associated with OCA may still be a major problem for it.

Financials

According to the 10-Q SEC Filing , CymaBay Therapeutics had $213.8 million in cash, cash equivalents and investments as of June 30, 2023. The reason for the cash on hand was because of the public offering of common stock and pre-funded warrants that were sold. These include 11,821,428 shares of common stock sold along with 1,821,428 shares sold as part of the full exercise of the underwriters' option to purchase additional shares, at a public offering price of $7 per share. In addition, it also sold pre-funded warrants to purchase 2,142,857 shares of common stock in the offering, at a public price of $6.9999 per underlying share. Total gross proceeds from this offering were $97.7 million. With the cash on hand, it believes that it has enough to fund its operations through Q3 of 2024. However, with this being less than one years' worth of cash, it could choose to raise cash soon. Especially, since the stock price climbed a bit higher on the back of the release of a successful outcome for the phase 3 RESPONSE STUDY.

Risks To Business

There are several risks that investors should be aware before investing in CymaBay. The first risk to consider is with respect to the recently announced positive results from the phase 3 RESPONSE study, which used seladelpar to treat patients with PBC. Even though the primary and all key secondary endpoints were met, the ability to obtain regulatory approval for this drug is not yet complete. First, once regulatory submissions of seladelpar are made to authorities, there is no assurance that the applications will be accepted. Secondly, even if the regulatory applications are accepted, there is no guarantee that marketing approval will be achieved.

A second risk to consider would be the cash on hand, especially given that the company is going to have to start preparing to file multiple regulatory applications and prepare for commercialization of seladelpar for PBC. Thus, it may have to start looking at several ways to raise cash in the coming months in order to sustain its operations. The third and final risk to consider would be with respect to the upcoming readout of topline results from the phase 2a proof-of-pharmacology study, which is using MBX-2982 for the prevention of hypoglycemia in patients with T1Ds. Results from this trial are expected before the end of 2023 and there is no assurance that there will be a successful outcome, nor that the market itself will view them in a positive manner.

Conclusion

CymaBay has made great progress in being able to advance its drug seladelpar for the treatment of patients with PBC. The next goal is to meet with authorities, so that it can see if it will be able to submit regulatory applications of this drug for marketing approval. However, it was stated by the biotech that it intends to release additional results from the phase 3 RESPONSE study at an upcoming medical meeting in 2023, which is another catalyst. The global primary biliary cholangitis market is expected to reach $1.4 billion by 2032 and CymaBay could have a huge competitive advantage in terms of reduced itching, which was achieved with statistical significance in the phase 3 RESPONSE study.

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