EPIX - ESSA Pharma: One Asset One Program Company With Little Data

Summary

• EPIX is targeting prostate cancer with its lead and only asset EPI-7386.
• While there's some rationale to the molecule's science, there's not a lot of convincing data yet.
• The company is also hurting for cash.

ESSA Pharma ( EPIX ) is a Canadian developer of therapies directed specifically at prostate cancer. This is interesting because it is quite rare to see a biotech that's this focused, and that makes it easy to analyse the company. There's no fallback option here to confuse the analysis. If they do well, they are gold; if they don't, there's nothing in between.

So their pipeline looks like this:

So this is basically a one-asset one-indication program, with multiple drugs in combo. 3 big pharmas are interested, which is good. However, these do not seem to be revenue generating deals, but merely supply and development agreements, as far as I could gather from their 10-K . So let's dig into the data, if any are available.

According to the company, lead and only candidate EPI-7386 is a first-in-class oral, small molecule androgen receptor Nterminal domain inhibitor ("Aniten"). This molecule is targeting later line mCRPC as a monotherapy, and also 1st line CRPC as a combo therapy with antiandrogens. Current standard of care for CRPC is antiandrogens, however resistant to these therapies - within a year of use - develops at the ligand-binding domain ((LBD)) of the androgen receptor ((AR)), and limits their usage. This is the domain a critical part of which EPI-7386 occupies, inhibiting the resistance mechanism. Research shows that early inhibition of androgen receptors has better therapeutic value for patients. Thus, EPI-7386 is targeting the 3rd line mCRPC indication as monotherapy, which is 33,000 in number, and it is targeting the nearly 500,000 patients with mCRPC who are using antiandrogens but need some improvement in their therapy. According to the company :

Initial clinical data show EPI-7386 is well-tolerated as a monotherapy and in combination with leading antiandrogens; early combination data with enzalutamide showed 4/6 patients achieving a PSA90 in 90 days

In a phase 1 monotherapy trial, EPI-7386 was well-tolerated with only one case of unrelated grade 3 anemia; grade 2 diarrhoeas only occurred in the dose group above 600 mg. Data was from 39 patients.

There are a number of positives in the early clinical or preclinical data for EPI-7386. It has a long half life greater than 24 hours, so it is ideally suited for once daily prescription. All doses used in the trial reached the predicted efficacy threshold of exposure seen in Enzalutamide-resistant preclinical models. However, there was no obvious dose response observed in the QD dosing regimen.

Another interesting takeaway from this trial was that in patients with no visceral disease, fewer DNA genomic aberrations in non-AR oncogenic pathways, and who had less than 3 lines of therapy, PSA decrease or PSA stabilization was observed consistently. In the phase 1 QD dosing regimen patients, there was observable decrease in ctDNA, which indicates tumor response. ctDNA are circulating tumor DNA which are DNA that lie at the center of the tumor cell and are released into the bloodstream when the tumor cells die. ctDNA is often used to test how well a treatment is able to kill tumor cells, so an increase in ctDNA after a certain therapy is indicative of its effectiveness in killing tumor cells.

In 17 patients such a decrease in ctDNA was observed, however the observation was confounded by a lack of dose response, as well as the strange fact that ctDNA was increasing in some patients even when their PSA was also increasing. PSA decrease is a marker for drug activity in prostate cancers, so PSA increase and ctDNA increase together send a conflicting signal.

In a combo trial of EPI-7386 and Xtandi, key data indicating drug activity was observed thus:

• Rapid, deep and durable prostate specific antigen reductions observed

• 5 of 6 patients achieved a PSA90 regardless of prior chemotherapy status (data cutoff in Oct 2022)

• 4 of 6 patients achieved a PSA90 in 90 days

However, these are non-randomized trials so it is difficult to pinpoint the source of this drug activity. The company has compared this dataset with historical data, however, this is not very convincing because the dataset is small and cross trial comparisons have only indicative value.

Another trial with EPI-7386 and Janssen's erleada or zytiga produced drug activity data in 3 patients, however Janssen was forced to terminate this trial after it failed to enroll patients.

Financials

ESSA has a market cap of $126mn and a cash balance of $168mn as of the September quarter. Thus, the company's enterprise value is negative, which is not indicative of market confidence. R&D expenditures for the year ended September 30, 2022 were $24.4 million, while G&A expenditures for the year ended September 30, 2022 were $12.5 million. At that rate, they have a cash runway of some 4 quarters - from the September quarter. That means, as of now, they may have funds for just 6 months more.

Bottomline

ESSA is a microcap biopharma with an interesting focus, but with not a lot happening to attract investor interest. Though their baseline clinical approach got them some collaborations with big pharma, not much data is stacking up to instil confidence.

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