PRQR - ProQR: Too Many Failures For Its RNA Technology

2023-07-09 06:53:51 ET

Summary

• PRQR, last year, failed a pivotal trial.
• This is the third time it has failed trials after showing early signs of efficacy.
• While they are making an effort, I see little future here.

In June 2021, I covered ProQR ( PRQR ) when it was about to publish pivotal data from lead candidate Sepofarsen (QR-110), an RNA therapy targeting Leber congenital amaurosis 10 (LCA10) due to the most common p.Cys998X mutation in the CEP290 gene. That trial did not meet its primary endpoint, as was revealed in February next year. This decimated the stock, and although there was some slight recovery, the stock is back to where it was trading after February 2022.

PRQR is a Dutch company that uses antisense RNA technology to target inherited retinal diseases. Their core products are antisense oligonucleotides [ASOs] which can modify protein expression through altering RNA. While this is similar to gene therapies, the difference is that since ASOs target RNAs and not DNA, their effect is reversible and not inherited. On the con side, they have a poor toxicity profile because oligonucleotides are inherently unstable and prone to enzymatic degradation, and efforts to stabilize them result in toxicities. However, a lot of progress has been made in the last decade, and a number of ASOs are now approved.

In 2021, Sepofarsen was conducting a phase 2/3 trial called ILLUMINATE in 36 adults and children where an intravitreal injection was given either with sepofarsen or with a sham procedure. An earlier phase 1/2 trial showed that the drug was safe, and also showed early signs of efficacy with clinically meaningful improvements in BCVA, so it was converted into a pivotal trial.

In Feb 2022, this trial toplined, and failed to meet the primary endpoint of Best Corrected Visual Acuity (BCVA). Key data :

According to the topline analysis at 12 months, the mean BCVA change in the 160/80 ?g dose group and 80/40 ?g group dose groups stood at -0.11 logMAR (p=0.96) and -0.13 logMAR (p=0.97), respectively, compared to -0.12 logMAR in the sham group. Therefore, no benefit was found in either treatment arm vs. sham.

There was also no difference between the treated and sham groups in terms of secondary endpoints of full-field stimulus test and mobility.

These results led to a shutting down of its entire pipeline after the stock crashed more than 75% overnight. Their second program, QR-421a for Usher Syndrome, was also shut down. However, QR-421a has had bad history, after it missed the FDA-approved BCVA count of a three-line gain, and also when its mean improvement of five retinal locations in the treated eyes by at least 7dB came out only as equivalent to sham. Thus, its shutting down was no surprise.

This leaves PRQR with a completely preclinical or discovery stage pipeline now, one that is not worth considering. Lead programs in the lab are AX-0810 for Cholestatic Diseases targeting: NTCP, and AX-1412 for Cardiovascular Disease targeting: B4GALT1. So the company has moved away from eye diseases and gone into liver and other diseases.

Such shifts are not new for this company. Before eye, PRQR used to do cystic fibrosis. The company produced early positive results for that program in 2017, but then fizzled out, quite like it did with eye diseases. So far, then, we have three programs they have run using their ASO technology, and each has failed after producing initial positive data. This record is not good, and speaks to something fundamentally wrong with their science, or at least their trial execution.

Interestingly, they have a large legacy partnership with Eli Lilly for their antisense technology. The partnership began in 2021, and even more surprisingly, Eli Lilly expanded the partnership with a fresh $75mn infusion in December last year, even though PRQR halted its eye programs and basically went back to the drawing board. So what exactly did Lilly see in PRQR’s Axiomer technology? According to Andrew C. Adams, Ph.D., Lilly senior vice president of genetic medicine and co-director of the Institute for Genetic Medicine:

We have been impressed with the progress to date with our partners at ProQR and have conviction that RNA editing can be an important alternative to other more permanent therapies.

The two companies will collaborate in undisclosed targets in the central nervous system and peripheral nervous system. Lilly has been actively wooing companies in the RNA space, and it also tentatively agreed “to provide ProQR with access to the company’s proprietary delivery technology for its wholly owned pipeline.” Their due diligence must have found something useful in PRQR’s core technology even if the latter has consistently failed to prove it in trials.

Financials

PRQR now has a market cap of $136mn and a cash balance of €139 M, in cash and cash equivalents. Last year, they cut their workforce by 30% and also stopped all their programs. Right now they only have early programs, so expenses will be low. Research and development (R&D) costs were €6.1 million for the quarter ended March 31, 2023 while general and administrative costs were €4.0 million. At that rate, they do indeed have enough cash until 2026, as they claim.

Risks

PRQR is an almost destroyed company making a gallant effort to recover from its various debacles. While Eli Lilly still sees residual value (worth $75mn in cash and equity) in the Axiomer technology, it has repeatedly failed to prove itself. As such, investing in such an unproven technology is inherently risky.

PRQR has a low cash balance, which, with their reduced expenses, will help them survive, however it will not be enough to help them do much of anything else. If they try to buy assets or venture into later stage clinical trials, this small amount of cash will fizzle out.

Bottom line

There is nothing interesting here save the Eli Lilly deal. However, that deal itself - with its undisclosed targets and undisclosed trial progress - has little to offer. I will avoid.

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