LBPH - Longboard Pharma: Excellent Data In Epileptic Seizures But We Are A Little Late Now

2024-01-08 03:32:22 ET

Summary

• Longboard Pharma's stock surged nearly 500% overnight on positive data for their lead candidate LP352, a therapy for neurological diseases.
• LP352 showed promising results in reducing seizures in patients with Developmental and Epileptic Encephalopathy in a phase 1b/2a study.
• The drug has a clean safety profile compared to approved treatments and has the potential to tap into a large market of over 110,000 US patients with DEEs.

Longboard Pharma ( LBPH ) is a small-cap that recently went up nearly 500% overnight on positive data. While this ship may or may not have sailed already (we will soon explore that), this has piqued my interest for sure.

LBPH is a developer of therapies for neurological diseases. Lead candidate LP352 (bexicaserin) is a 5-HT2C Superagonist targeting DEEs (Developmental and Epileptic Encephalopathy) and other refractory epilepsies. The other asset is preclinical.

DEE is a group of severe epilepsy syndromes that typically emerge in infancy or early childhood and are associated with developmental impairment. These conditions are often characterized by frequent seizures, developmental delays, and cognitive dysfunction. Examples of DEEs include Dravet syndrome, Lennox-Gastaut syndrome, and West syndrome.

Refractory epilepsy, on the other hand, refers to a type of epilepsy that does not respond well to standard anti-seizure medications. Individuals with refractory epilepsy continue to experience seizures despite treatment with multiple medications. Managing refractory epilepsy can be challenging, and healthcare providers may explore alternative treatment options such as dietary therapies, neurostimulation, or even surgery.

There are four DEEs which have approved therapies. These are Dravet Syndrome, where Stiripentol in combination with clobazam and valproate is approved for the treatment of seizures associated with Dravet syndrome. Cannabidiol (CBD') oral solution (Epidiolex) is also approved for the treatment of seizures associated with Dravet syndrome in patients aged 2 years and older. A third approved product is Fintepla (fenfluramine), an antiepileptic medication that is approved for the treatment of seizures associated with Dravet syndrome in patients 2 years of age and older. There are 21000 US patients (prevalence). The second DEE is Lennox-Gastaut Syndrome, where Epidiolex is also approved. It has 48,000 US patients. The third one is Tuberous Sclerosis Complex (TSC)-Related Epilepsy, where Everolimus, an mTOR inhibitor, has been used to treat seizures associated with TSC. It has 50000 US patients. The fourth one is CDD, or childhood development disorder, which has some 1800 US patients.

There are 20+ DEEs with no approved treatments, all of which together may have a market at least as large as these four combined, that is, over 110k US patients. Fintepla has annual revenue of $800mn. Epidiolex has an annual revenue of $1bn. The entire seizure market is estimated to be over $6bn.

LP352, the company’s lead molecule, is designed to be more specific and selective than other similar molecules. It is designed to bind only to the 5-HT2C receptor, avoiding similar receptors which may cause adverse reactions, like it does not bind to 5-HT2B, which could have caused valvular heart disease and PAH, or to 5-HT2A, which could have led to psychiatric adverse effects like insomnia, hallucinations, and euphoria.

In preclinical trials, LP352 was shown to reduce seizure and epileptiform events in various animal models. In SAD/MAD studies, the molecule was generally safe and well-tolerated.

On January 2, the company announced positive data from the phase 1b/2a PACIFIC study of LP352 in DEE. Hitting its primary endpoint, the molecule saw a median seizure reduction of 53.3% in countable motor seizures, compared with 20.8% for the placebo group. The molecule also achieved a median seizure reduction of 72.1% in Dravet Syndrome (DS), 48.1% in Lennox-Gastaut Syndrome (LGS) and 61.2% in DEE Other.

In this study, 52 patients aged 12-65 were enrolled across the USA and Australia. Oral bexicaserin of three dosages,6 mg, 9 mg and 12 mg, was given three times daily (TID) versus placebo. 43 participants were randomized to bexicaserin (DS=4, LGS=24, DEE Other=15) and 9 to placebo (DS=0, LGS=5, DEE Other=4). Here’s the efficacy data :

The median change in countable motor seizure frequency (primary efficacy endpoint) from baseline for the evaluable participants treated with bexicaserin (n=35) was a decrease of 53.3%, compared to a 20.8% decrease for those receiving placebo (n=9). Overall, this represents a placebo-adjusted reduction in seizure frequency of 32.5%. The median change in countable motor seizure frequency from baseline in the DS, LGS and DEE Other cohorts was a decrease of 72.1%, 48.1% and 61.2%, respectively. This represents a placebo-adjusted reduction in seizure frequency of 27.3% and 28.6% in LGS and DEE Other, respectively.

Overall, the drug was safe and well tolerated. Discontinuation details:

Overall, 9 participants in the bexicaserin group discontinued due to an AE. Of note, 2 of these participants discontinued during the maintenance period (7 participants discontinued during the titration period). No participants in the placebo group discontinued or experienced an SAE. 100% of the participants who completed the PACIFIC Study elected to enroll in the ongoing 52-week open-label extension study.

As the company has shown, this data compares very well to approved products like fintepla and epidiolex in DS and LGS. Not only is LP352 seizure reduction equal or better to these approved drugs, it is also better when adjusted for placebo.

Also noteworthy, while Fintepla has strong efficacy in some DEEs, its cardiovascular risks (patients need their heart checked every 6 months) is a major problem. The drug comes with a REMS for valvular and pulmonary arterial hypertension because the active ingredient engages the 5HT2B receptor, which is known to cause these problems. Echocardiograms are required during and after trial, unlike with LP352 where these were not necessary. This clean safety profile is a major selling point for LP352.

Financials

LBPH has a market cap of $913mn and a cash balance of just $56mn. The company has launched a $210mn public offering, which has had no negative effect on the stock. Research and development expenses were $10.5 million for the three months ended September 30, 2023, while general and administrative expenses were $3.1 million. Assuming a successful closing of the offering, they have a cash runway of 18-20 quarters. Of course, as they begin the global phase 3 trial, their expenses will substantially increase.

20% of the stock is held by retail, 49% by institutions. The molecule has a composition of matter patent to 2041, which makes it strongly IP protected.

Bottomline

The stock has gone up hugely, which makes me uncomfortable. The stock is pricey now, doubtless, but that’s the price you pay for a very derisked stock. I am interested, but maybe I will just wait for a better price.

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