HZNP - Murky Forecast For Selecta Biosciences' SEL-212 In Treating Chronic Refractory Gout
2023-03-14 06:08:03 ET
Summary
- Selecta Biosciences is a biotech firm working on therapies for rare illnesses. SEL-212, its lead product, helps control uric acid levels in chronic refractory gout patients.
- SEL-212 controls serum uric acid levels to treat chronic refractory gout by using pegadricase, a proprietary pegylated uricase, and ImmTOR to prevent the formation of anti-drug antibodies.
- After failing to demonstrate superiority over standard-of-care, Krystexxa, Selecta is conducting two phase 3 studies against placebo (DISSOLVE).
- Despite the high likelihood of success for DISSOLVE, its real-world significance is minimal because Krystexxa combined with methotrexate was already approved by the FDA in 2022 to address ADA concerns.
- SEL-212 will likely become obscure soon, with Selecta focusing instead on their preclinical ImmTOR platform, particularly its use in autoimmune and gene therapies. It's unclear whether ImmTOR will perform well, but the disappointing outcomes of SEL-212 don't bode well. While Selecta's stock isn't overvalued, the poor outlook suggests it's a "Sell."
Introduction
Selecta Biosciences ( SELB ) is a clinical-stage biotechnology firm specializing in the development of immune-modulating therapies that address rare and severe illnesses. Its leading product candidate, SEL-212 , is a combination therapy intended to maintain control of serum uric acid levels in patients diagnosed with chronic refractory gout. This article aims to provide a comprehensive overview of Selecta Biosciences, including its financial performance, existing treatments and limitations for chronic refractory gout, and the SEL-212 product candidate. We will discuss the phase 2 clinical trial data and phase 3 trial design of SEL-212 and offer insights into its potential future.
Financials
Let's first look at Selecta's most recent financial report . As of December 31, 2022, Selecta Biosciences had a cash position of $136.2 million, up from $129.4 million as of December 31, 2021. Collaboration and license revenue for the full year 2022 was $110.8 million, driven primarily by the license agreement with Sobi resulting from the shipment of clinical supply and the reimbursement of costs incurred for the Phase 3 DISSOLVE clinical program. Research and development expenses for the full year 2022 were $72.4 million, while general and administrative expenses for the same period were $23.9 million. For the full year 2022, Selecta reported net income of $35.4 million, or basic net income per share of $0.24.
Sobi Signs License Agreement with Selecta for SEL-212 Development and Commercialization
In June 2020, Swedish Orphan Biovitrum AB [Sobi] had signed a license agreement with Selecta Biosciences Inc. to take over the responsibility for the development, regulatory, and commercial activities for SEL-212, except for the Chinese market. In return, Sobi had made an initial payment of $100 million to Selecta, including an upfront license fee of $75 million and a private placement of shares of Selecta common stock for $25 million. Selecta was also eligible to receive up to $630 million in potential milestone payments from Sobi, based on meeting specific regulatory and development targets and sales thresholds, as well as tiered double-digit royalties on net sales.
Chronic Refractory Gout and Current Treatments/Limitations
According to Selecta:
Gout is a painful and potentially disabling form of arthritis associated with elevation of SU levels caused by an overproduction of serum urate and/or an inability of the kidneys to excrete adequate amounts of serum urate from the body. High concentrations of SU lead to formation of serum urate crystals in joints and tissues, causing pain, inflammation and joint damage, and increase the risk for other conditions, including cardiovascular, cardiometabolic, joint and kidney disease. Patients who are unable to reduce their SU levels below 6.0 mg/dL with oral drugs are defined as having refractory gout. Chronic refractory gout constitutes a subset of gout patients exhibiting chronic high SU levels and painful and damaging serum urate deposits. We estimate that there are approximately 160,000 chronic refractory gout patients in the U.S.
The current treatment options for chronic refractory gout have limitations. The FDA-approved drug, Krystexxa (pegloticase), is an intravenous enzyme replacement therapy that breaks down uric acid and is administered every two weeks. However, Krystexxa, when administered alone, has a high rate of adverse events, including infusion reactions and the development of anti-drug antibodies that can limit its effectiveness.
SEL-212: A Novel Product for Chronic Refractory Gout with ImmTOR to Address Anti-Drug Antibodies
SEL-212 is a novel product designed to tackle chronic refractory gout in patients by controlling serum uric acid [SUA] levels. It comprises two components: pegadricase, a proprietary pegylated uricase, and ImmTOR, which is intended to mitigate the formation of anti-drug antibodies [ADAs]. ADAs can be a significant concern when treating chronic refractory gout as they can reduce the efficacy of the treatment over time. By incorporating ImmTOR, SEL-212 aims to prevent the formation of ADAs, thus prolonging the efficacy of the treatment. This is particularly important as chronic refractory gout is a long-term condition that requires sustained control of SUA levels to prevent debilitating flares and joint damage.
SEL-212 Fails to Demonstrate Superiority to Standard of Care
Selecta initiated the COMPARE Phase 2 clinical trial in March 2019 to assess the efficacy of SEL-212 compared to Horizon's ( HZNP ) Krystexxa (pegloticase), the current FDA-approved therapy for chronic refractory gout. In September 2020, Selecta disclosed that SEL-212 failed to meet the primary endpoint of statistical superiority over pegloticase with regard to maintaining SUA levels under 6 mg/dL for at least 80% of the time during six months. The results showed a 53% response rate for SEL-212 versus 46% for pegloticase (ITT, p=0.181). However, Selecta highlighted that SEL-212 did exhibit a significantly higher response rate in the third month of treatment and a significantly greater reduction in mean SUA levels during months three and six combined compared to pegloticase. These findings, however, were not pre-specified, so their statistical significance is considered nominal.
There is currently limited information available regarding the safety data. Per Selecta:
SEL-212 showed a favorable safety profile and was well-tolerated. There were no deaths during the study. There were no notable differences in serious TEAEs, treatment-related serious TEAEs, or infusion reactions between the two groups. A full analysis of safety signals, including gout flare incidence and severity, requires evaluation of the full data set and will be reported together with the full efficacy analysis in a manuscript in a medical journal.
Based on Selecta's statement about SEL-212, it seems that its safety outcomes are no better than those of Krystexxa. Although SEL-212 is theoretically expected to reduce safety events and be more effective by lowering ADAs, neither of these expectations were met.
Registration-Enabling DISSOLVE I & II
The phase 3 clinical program, called DISSOLVE, for the drug candidate SEL-212 involves two studies. These are double-blind, placebo-controlled studies that will evaluate the safety and efficacy of SEL-212 at two doses of ImmTOR (0.1 mg/kg and 0.15 mg/kg) and one dose of pegadricase (0.2 mg/kg) in up to 120 patients in each study. The primary endpoint for both studies is to assess the control of serum uric acid [SUA] levels at the six-month time point. The secondary endpoints include other measures such as joint counts, tophus burden, patient-reported outcomes, and gout flare incidence. The first study, DISSOLVE I , will evaluate safety and efficacy at six months and has a six-month extension to evaluate safety. DISSOLVE II will only evaluate safety and efficacy at the six-month time point with no extension. Each trial was originally expected to enroll 105 patients, according to Selecta's 2021 annual report .
Selecta reported in December 2021 that the enrollment for DISSOLVE I was finished. Nevertheless, according to clinicaltrials.gov , the study's enrollment was increased from 105 patients to 120 patients in March 2022. Selecta stated the change was due to "potential treatment discontinuations due to the ongoing COVID-19 pandemic as a result of the emergence of COVID-19 variants which were not accounted for in the sample size calculations." Similarly, Selecta elected to increase enrollment in DISSOLVE II to 153 patients due to "potential loss of subjects enrolled in Russia and Ukraine due to operational or other issues arising from instability in the region."
Selecta anticipates top line data for DISSOLVE I in March.
My Analysis & Recommendation
Selecta Biosciences relies completely on its ImmTOR platform, which it asserts "can overcome the hurdles of autoimmunity and immunogenicity." The high prevalence of anti-drug antibodies [ADAs] among gout patients treated with pegloticase leads to decreased efficacy and increased safety events, making gout an ideal and straightforward means for Selecta to showcase the effectiveness and significance of ImmTOR. Although combining Selecta's pegylated uricase with ImmTOR was expected to lower the incidence of safety events and significantly enhance effectiveness, the COMPARE study indicated otherwise.
The issue with DISSOLVE does not concern the effectiveness of SEL-212 in comparison to a placebo, as this is taken for granted. Rather, the concern lies with the real-world relevance of the trial's results. It could be argued that Horizon has already made a substantial reduction in the impact of the ADA problem by incorporating an immunosuppressant, methotrexate, with Krystexxa. This was achieved through obtaining FDA approval for the co-administration of methotrexate with Krystexxa in July 2022.
In a 52-week, randomized, double-blind trial which evaluated KRYSTEXXA co-administered with methotrexate compared to KRYSTEXXA alone, approximately 26% of patients had pre-existing antibodies to pegloticase. Patients with an increase in titer from baseline or who were negative at baseline and developed an anti-pegloticase response at one or more post dose time points was 30% and 51%, for the KRYSTEXXA co-administered with methotrexate and KRYSTEXXA alone treatment groups, respectively. Patients with higher antibody titers were more likely to have faster clearance and lower efficacy.
Combining Krystexxa with methotrexate has become a widespread practice , as it has been shown to enhance the effectiveness of the treatment and significantly decrease the incidence of infusion reactions.
In my opinion, although SEL-212 may demonstrate success in DISSOLVE and receive regulatory approval, its market significance seems to be insignificant. Nevertheless, it is important to acknowledge Selecta's efforts in out-licensing SEL-212 and continuing its clinical development since Sobi is covering the associated costs. Thanks to the license agreement, Selecta was able to transition away from SEL-212 and focus on its other ImmTOR early-stage prospects without the need for significant share dilution (although they did raise ~$40 million last April).
In the near future, SEL-212 is anticipated to fade into relative obscurity, eliciting only sporadic mentions upon regulatory and market milestones. Selecta's strategic priorities will be redirected towards the advancement of their preclinical ImmTOR platform, with a specific emphasis on its application in autoimmune and gene therapies. It remains to be seen whether the performance of the ImmTOR platform will be successful; however, the outcomes thus far of SEL-212 do not bode well for the platform. Furthermore, as Selecta notes , several other larger companies are, too, developing technologies to mitigate ADA-related issues. Although Selecta's stock does not seem overvalued to me, its poor prospects suggest that it is a "Sell".
Risks to Thesis
The success of Selecta Biosciences' ongoing Phase 3 DISSOLVE clinical program for SEL-212 and its preclinical assets, including the gene therapy platform and the immunotherapy program, could potentially improve the company's financial outlook and market potential. Positive results from the DISSOLVE program could lead to increased market interest in SEL-212 and validate Selecta's technology platform, while success in the preclinical assets could diversify the company's product portfolio and potentially generate additional revenue streams. However, the outcome of these programs remains uncertain and there are no guarantees that they will result in marketable products or financial success for the company.
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Murky Forecast For Selecta Biosciences' SEL-212 In Treating Chronic Refractory Gout