EWTX - Edgewise: DMD Data In The First Half Of 2024 Could Lead To Additional Testing

2023-12-28 15:00:21 ET

Summary

• Edgewise Therapeutics, Inc. interim results from the phase 2 LYNX study, using EDG-5506 for the treatment of children ages 4 to 9 with DMD, are expected first half of 2024.
• Expansion opportunity exists to use EDG-5506 for the treatment of children and adolescent DMD patients ages 6 to 14 who have previously already been treated with gene therapy.
• It is expected that the global Duchenne Muscular Dystrophy treatment market size is expected to reach $3.89 billion by 2028.
• EDG-5506 has the potential to be used for the treatment of patients with Becker Muscular Dystrophy being explored in the ongoing pivotal phase 2 GRAND CANYON study; if positive data is achieved, then it is possible for a regulatory application to be filed.

Edgewise Therapeutics, Inc. ( EWTX ) is advancing the phase 2 LYNX study, which is using its drug EDG-5506 in children ages 4 to 9 years with Duchenne Muscular Dystrophy [DMD]. It has also decided to add a new cohort that is going to include such patients who have not yet received any corticosteroids treatment. The goal of this study is to measure several endpoint measurements over a 12-week period. The significance of this mid-stage study is that it could provide some evidence of whether or not EDG-5506 has the ability to help these children with DMD.

Why I believe it might offer some value to investors to keep an eye on would be because of a major catalyst that is approaching in the coming year. It is expected that it will report interim results from this phase 2 LYNX study in the 1st half of 2024. Not only that, but it will also accomplish the goal of establishing the recommended phase 3 dose [RP2D] it will need to move on towards the next stage of clinical testing. There is even an expansion opportunity to target another portion of the DMD patient population. This would be with respect to the targeting of children and adolescents who fail to respond to gene therapy treatment for their disease in a phase 2 study. This mid-stage study is expected to start dosing patients in the early part of 2024.

The LYNX Study Could Provide Insight Into A Large Market Opportunity

As I noted above, Edgewise Therapeutics is advancing the use of EDG-5506 for the treatment of patients with Duchenne Muscular Dystrophy [DMD]. This is a good indication for it to go after, especially since it is a large opportunity for it. It is expected that the global Duchenne Muscular Dystrophy treatment market size is expected to reach $3.89 billion by 2028 .

It is doing so through the use of an ongoing phase 2 study known as LYNX. This study is recruiting a total of 45 children ages 4 to 9 years with DMD. Patients are to be randomized 2:1 to one of four dose cohorts, whereby each cohort will be evaluated compared to placebo for several outcome measures. The goal of it is to evaluate safety, pharmacokinetics, and biomarkers of muscle damage over 12-weeks.

While these are important measures for sure, there is an even better endpoint being assessed for this phase 2 study . One, which I believe is far more important to consider, which would be the North Star Ambulatory Assessment [NSAA] score. Why is that? It is because this NSAA score is an endpoint that is typically used for phase 3 pivotal testing. Investors won't have to wait long to see clinical data from the ongoing phase 2 LYNX study, either. That's because interim results from this trial, using EDG-5506 for the treatment of patients with DMD, are expected to be released in the 1st half of 2024.

The ability for Edgewise to go after this patient population could be expanded upon. How so? While gene therapy has been able to help treat some patients, much of how it will help still remains to be seen. That's because the FDA approved the first gene therapy for children ages 4 to 5 with DMD back on June 22nd of 2023. Even then, it's possible that some patients may either not respond to such treatment or could use another treatment option. Especially, since gene therapy treatment for DMD is set to cost roughly about $3.2 million .

Having said that, the biotech initiated another phase 2 placebo-controlled study known as FOX . It is expected to be advanced in order to test safety, PK and biomarkers of damage in children and adolescents with DMD who have already previously been treated with gene therapy. I believe this is another population it could target, because if gene therapy doesn't work out, then this might end up helping out a lot of them instead. A downside is that this study is not expected to begin dosing patients until early 2024.

Financials

According to the 10-Q SEC Filing , Edgewise Therapeutics had cash, cash equivalents, and marketable securities of $290 million as of September 30th of 2023. The reason for the cash on hand was because of cash raising activity, which was enacted back in September of 2022. That was when it was able to complete an upsized underwritten public offering of 13.3 million shares of its common stock at a price of $10.32 per share, which also included the underwriters option to purchase additional shares as well. Total gross proceeds generated from this offering before expenses, was $138 million.

Despite the cash on hand, Edgewise Therapeutics, Inc.is likely going to need to raise additional funds in the coming months. Why do I state that? That's because in its 10-Q SEC Filing, it states that it believes it has enough cash on hand to fund its operations for at least the next 12 months. Being that biotechs don't wait until the last minute to enact a raise, I believe that it is going to be looking at finding a way to generate additional cash in the coming months.

Risks To Business

There are several risks that investors should be aware of before investing in Edgewise Therapeutics. The first risk to consider would be with respect to the release of interim results from the phase 2 LYNX study, which is using EDG-5506 for the treatment of children with DMD. There is no assurance that the results to be released from this stud will turn out to be successful, nor that the company will be able to move towards the next stage of clinical testing.

A second risk to consider would be with respect to the possible expansion opportunity with respect to the use of EDG-5506 for the treatment of patients with DMD. The goal of the company is to attempt to target children and adolescent DMD patients who have been previously been treated with a gene therapy. This is being tested out in the phase 2 FOX trial and there is no way of knowing whether or not Edgewise will eventually be able to expand the use of EDG-5506 for this patient population.

A third risk to consider would be with respect to the advancement of EDG-5506 being developed for the treatment of patients with Becker Muscular Dystrophy [BMD]. The use of this drug is being tested for adults and adolescents with this disorder in the ongoing phase 2 pivotal GRAND CANYON study. The primary endpoint for this late-stage trial is North Star Ambulatory Assessment [NSAA] and there is no guarantee that the primary endpoint will be met. If this primary endpoint is not met, not only would it be bad because the stock price could decline by a significant margin, but this biotech would not be able to file a regulatory application of EDG-5506 for possible approval for the treatment of patients with BMD.

The fourth and final risk to consider would be with respect to the financial position, which was noted above. It believes that it only has enough cash on hand to fund its operations for at least the next 12 months. The risk here is that shareholders could be diluted, because it will likely need to find a way to raise cash in the coming months.

Conclusion

Edgewise Therapeutics has done well to advance the use of its drug EDG-5506 towards a few indications. First, it is looking at developing this drug in the phase 2 LYNX study, treating children ages 4 to 9 years with Duchenne Muscular Dystrophy [DMD]. Interim results from this mid-stage study are expected to be released in the 1st half of 2024.

If this doesn't work out, I would say that at least there is going to be another shot on goal for Edgewise Therapeutics, Inc. in targeting another patient population. That is, it is also testing out the use of this drug in children and adolescents with DMD who have already been previously treated with a gene therapy. If such a drug like EDG-5506 can work well as a 2nd-line treatment for this patient population, then this would also be highly welcomed. Regardless, the Duchenne Muscular Dystrophy indication is going to be a multibillion-dollar market opportunity.

Lastly, it is also in the process of testing out this drug for the treatment of patients with Becker Muscular Dystrophy [BMD]. I believe that this could be a more important program to keep an eye on. Why is that? It is because should the primary endpoint be met in the pivotal phase 2 GRAND CANYON study, then this company will be able to file for U.S. market approval of EDG-5506 for this patient population.

For further details see: