INZY - Inozyme: Early Rare Disease Data Decent Cash No Major Near-Term Catalysts

2023-05-09 01:45:09 ET

Summary

• Inozyme targets rare diseases characterised by pyrophosphate deficiency.
• It has produced some early positive data.
• Lead asset INZ-701 may start a pivotal trial this year.

Inozyme ( INZY ) is a clinical stage developer of rare disease therapies. It has two midstage studies of the same molecule running in two rare diseases. The pipeline looks like this:

Lead asset INZ-701, a novel enzyme replacement therapy or ERT, is in a phase 2 trial targeting ENPP1 Deficiency. It has a Rare Pediatric Disease Designation in the US, a fast track designation, and an orphan disease designation in both the US and EU.

INZ-701 is also in a phase 2 trial targeting ABCC6 Deficiency, where it has an orphan designation in both the US and EU. Both ENPP1 and ABCC6 deficiencies are diseases with high mortality and morbidity. There are some 700 ENPP1 patients. There are no approved therapies for either of them. ENPP1 is characterized by arterial calcification in infancy, and can often lead to death, in up to 50% of patients, by 6 months of age. ABCC6 deficiency causes another calcification disease called Pseudoxanthoma elasticum ((PXE)). It causes low pyrophosphate levels leading to soft tissue calcifications in the skin, retina and arteries, but can also cause kidney stones.

INZ-701 has demonstrated its ability to improve plasma levels of inorganic pyrophosphate (PPI') in patients while remaining safe and tolerable. It will begin a pivotal trial this year in the third quarter, according to the company.

In February, the company presented topline data from the phase 1/2 trial in infants with ENPP1 deficiency. Key highlights :

• Rapid, significant, and sustained increase in plasma pyrophosphate (PPI') observed and encouraging patient reported outcome data in all dose cohorts in ENPP1 Deficiency trial

• Rapid and significant increase in PPi observed in all dose cohorts with sustained increase observed in highest dose cohort in ABCC6 Deficiency (PXE') trial

• INZ-701 was generally well-tolerated and exhibited a favorable safety profile in both trials

INZ-701 was observed to be able to rapidly increase PPi within 6 hours of dosing, and to sustain normalized PPi levels throughout the course of the treatment. Half life was ~126 hours, meaning it can potentially be dosed once-weekly. In terms of efficacy, INZ-701 demonstrated improvements in both the clinician’s and the patient’s global impression of change ((GIC)), indicating clinical benefit. A more properly efficacy oriented trial design will be required to demonstrate this properly, but early indications exist, mainly through the PPi improvements.

The drug was safe and well-tolerated, with low anti-drug antibodies detected in titers. The highest level was 160, which compares well with other ERTs listed by the company:

• STRENSIQ®: ADA titers: 2,0481 ; patients with ADA: 89%
• ALDURAZYME®: ADA titers: 31,9722 ; patients with ADA: 97%
• LUMIZYME®: ADA titers: >51,2003 ; patients with ADA: 89%

There were two serious adverse events in the middle dose, however these were found to be unrelated to the drug.

The other trial, a phase 1/2 trial for ABCC6 deficiency, is fully enrolled and will read out in the fourth quarter.

Financials

INZY has a market cap of $257mn and a cash balance of $148mn. R&D expenses were $47.8 million for the year ended December 31, 2022, while G&A expenses were $20.8 million. At that rate, they have a cash runway for about two years. The cash balance includes $20mn they recently borrowed from their existing loan facility.

There was a CEO transition. Founding CEO Axel Bolte is retiring, to be replaced by Douglas A. Treco, Ph.D. Bio listing M&As :

Dr. Treco was co-founder, president, and chief executive officer of Ra Pharmaceuticals, Inc. (acquired in 2020 by UCB S.A. for $2.5 billion) where he oversaw the discovery and development of zilucoplan in myasthenia gravis, which is currently under review for marketing approval in the United States and European Union. Previously, he co-founded Transkaryotic Therapies, Inc. (TKT; acquired in 2005 by Shire plc), where he directed research and development efforts which led to the approval of Replagal®, Elaprase®, Dynepo™, and Vpriv®. Dr. Treco is a member of the Board of Directors of CRISPR Therapeutics AG.

Insiders make regular purchases. There was a major purchase recently - see here . The float has a mix of public and institutional presence. Key holders are Longitude, VenRock and Adage Capital.

Patent protection for its assets end in 2034-2036. The company acquired some IP from Yale University.

Risks

The company is quite early stage, and they have no proper efficacy data from the clinic yet. This is their principal risk. Their cash balance is decent, but they will probably need to dilute sometime before mid-2024 to pay for regulatory and commercialization expenses.

Bottomline

INZY has targeted a rare disease market worth a few hundred million dollars, and it has no real clinical efficacy data yet. However, it does have significant data from clinical trials indicative of clinical benefit. It also has some cash, not a lot, but enough to get through proof of concept. The stock looks interesting, and I will add it to my watchlist and wait for a bit of derisking.

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