TYRA - Tyra Biosciences: FDA ODD Designation Progresses TYRA-300

2023-08-29 18:30:23 ET

Summary

• Tyra's net loss continues to improve in Q2 2023.
• TYRA-300 has been granted Orphan Drug Designation status by the FDA recently, continuing its progression to market.
• Tyra's substantial cash reserves and ongoing trials support the development of its pipeline for at least the next 2 years to come.

Operating in precision oncology, Tyra Biosciences (TYRA) has placed immense bets on delivering targeted, patient-specific therapies. The keystone of their offerings lies in their TYRA-300 and TYRA-200 series, both of which harbor significant potential to overturn existing models of cancer treatment. The underpinning theory driving these investigational therapies involves the novel concept of interfering with cancerous signaling events, thereby preempting the proliferative spree characteristic of malignant cells. Given the company's current balance sheet and position of its pipeline, Tyra stands as a solid buy in the current market as per our analysis below.

Financials

Even though Tyra exhibits a net loss of $13.3 million for the second quarter of 2023 , this is an improvement from the loss recorded in the same period the previous year, which amounted to $15.1 million. As such, it appears that Tyra is threading a path of reducing its losses, albeit gradually. Considering the often high-risk, high-cost arena of oncology research, such progressive losses are not unusual and may hint towards nervous but undeterred forays into the unknown realms of molecular cancer therapies.

In relation to the operational expenditure, it's noteworthy that research and development costs rose to $12.2 million in 2Q 2023 from $12 million in 2Q 2022. Although this marks a slight uptick from the prior year, that extra investment could correspond to the progress and intensity of the ongoing research, especially if the firm is nearing pivotal milestones within their product pipeline. Furthermore, general and administrative costs also increased year on year, reflecting a heightened outlay in the management and facilitation of the firm's research efforts.

From an asset standpoint, Tyra Biosciences possesses a substantial cash reserve of $232.4 million as of June 2023, with a sanguine expectation of supporting their major clinical and operational milestones over the forthcoming two years. Should the company maintain its current burn rate, the cash reserves could indeed navigate Tyra Biosciences through remarkable milestones in the future. However, the burn rate will largely be dictated by the pace and scale of research efforts, along with any unexpected obstacles that transcend typical financial predictions.

Pipeline

Concentrating its efforts on the inhibition of Fibroblast Growth Factor Receptors (FGFRs), the company's varied portfolio seeks to outmaneuver the restrictions of existing treatments.

First in line is TYRA-300 , distinguished by its selectivity towards FGFR3. Encouragingly, preclinical models demonstrate the impressive potency and selectivity held by TYRA-300 against FGFR3 mutations and mechanisms of resistance. Currently, TYRA-300 is under the scrutiny of a Phase 1/2 study (SURF301) for patients with advanced solid tumors that contain FGFR3 alterations. Through this study, the company aims to define both optimal and maximum tolerable dosages, while also charting preliminary antitumor activity. Echoing its dual-purpose design, TYRA-300 has also showcased significant enhancements to growth and bone lengths within preclinical models of achondroplasia, offering hope for the most widely observed form of dwarfism, a consequence of specific FGFR3 mutations. While TYRA-300 has already received Orphan Drug Designation from the FDA for achondroplasia treatment, the company's eyeline is set on submitting an IND to further a Phase 2 study in pediatric achondroplasia by late 2024.

TYRA-200 is another contender within Tyra's product pipeline, and instead draws its focus to FGFRs 1, 2, and 3. This therapeutic candidate has shown its strength against FGFR2 gene alterations and mechanisms of resistance. TYRA-200 presents potential for those patients suffering from intrahepatic cholangiocarcinoma ((ICC)), a rare form of liver cancer with aggressive tendencies, who have either exhibited progression or intolerance to prior FGFR inhibitors. Superior activity against FGFR2 fusions and mutations has been proven by TYRA-200 when pitted against approved therapies within preclinical models. As expectations grow, Tyra Biosciences anticipates the delivery of their first dose for the Phase 1 study of TYRA-200 in ICC as we move closer towards the end of 2023.

At the heart of these efforts lies Tyra Biosciences’ proprietary SNÅP platform - the Selective Next-generation Anti-cancer Products initiative. The platform, underpinned by computational chemistry, is adept at rapidly crafting and refining novel small molecules that reflect desirable properties, such as potency, selectivity, favorable pharmacokinetics, and safety. With the concurrent application of molecular modeling, machine learning, artificial intelligence, and medicinal chemistry, the SNÅP platform generates superior clinical development candidates.

FDA Grants ODD to TYRA-300 for Achondroplasia

The FDA recently bestowed Orphan Drug Designation to the company's pioneering precision medicine program, TYRA-300, for treating achondroplasia. This decision accentuates the capacity of TYRA-300 as not only a unique solution for height challenges characteristic of achondroplasia but also as a pioneering therapeutic approach to a spectrum of long-term health complications associated with this condition that existing therapies are ill-equipped to manage.

This FDA endorsement crucially underscores the potential that TYRA-300 holds and, by extension, the caliber of Tyra Biosciences' innovative endeavors. The ODD catalyzes the developmental journey of drugs aimed at treating, diagnosing, or preventing rare diseases or conditions, and hence opens the door to several benefits such as tax credits for qualified clinical trials, specific user fee exemptions, and a potential seven-year exclusive marketing period in the U.S. upon regulatory approval. This market exclusivity, in particular, could provide a valuable timeframe to establish TYRA-300 as a leader within its niche, undisturbed by competing therapies.

However, the very rarity of this condition also raises questions around the potential market size and profitability that TYRA-300 could tap into. While TYRA-300 may indeed prove to be a groundbreaking therapy, the extent to which it will significantly shift Tyra's financial landscape remains to be seen. By taking definitive strides forward in multiple directions, Tyra has certainly carved an unfettered path for itself, one that could potentially intersect with success in the long run given the strength of its developmental candidates, skilled leadership, and its boosted status following the FDA grant.

Challenges and Risks

Beginning with TYRA-300, the company's most advanced drug candidate targeted at FGFR3, the primary challenge lies in achieving a delicate balance between efficacy and toxicity. FGFR3 is known to have a primary role in bone development, and off-target inhibition of this protein could lead to unforeseeable side effects, particularly in patients who already have FGFR-altered tumors. This could heighten the risk of treatment-induced bone diseases, such as osteoporosis or osteomalacia, rendering patient management more challenging.

Additionally, FGFRs are known for their multiple and overlapping functions in various signaling pathways across different tissues. Therefore, non-selective FGFR inhibition could potentially lead to widespread adverse effects. This is due to the inadvertent inhibition of FGFRs without any cancer-associated mutations, thus negatively affecting normal cellular functions and resulting in a higher frequency of adverse events. The extent of these off-target effects could pose a key risk to the clinical viability and commercial potential of Tyra's treatments.

The SNAP platform though technologically impressive, is not without its own set of challenges. One major setback could be the prediction-based design process utilized by the platform. Though this approach might streamline drug discovery efforts by quickly identifying potential candidates, it essentially gambles on the accuracy of computational modeling and machine learning algorithms. In realms as intricate and nuanced as cancer biology, even the most subtle unforeseen alterations could render the predicted therapeutic outcome ineffective or even unsafe.

Furthermore, while working on therapies for rare diseases like achondroplasia might gain the company regulatory favor and market exclusivity, it could also limit the financial returns due to a smaller patient population. Moreover, considering the relatively scarce competition and research in this particular therapeutic area, Tyra's journey with achondroplasia treatments like TYRA-300 navigates a largely uncharted territory, which inherently involves additional risks.

Coming to product development, the progression of TYRA-300 and TYRA-200 into the much-anticipated clinical stages generates its own set of challenges. Clinical trials, especially those involving oncology drugs, often witness high drop-out rates due to the severity of side effects or due to disease progression in advanced-stage patients. Additionally, the unpredictability of how the drug will interact with comorbid conditions, concomitant medications, and patient-specific factors increases the risk of unforeseen adverse events, study delays, or even complete trial failures. Moreover, given the early stage of development for Tyra's drug candidates, the limited data available for analysis might not fully capture their risk potential.

Competitor Overview

BridgeBio ( BBIO ), through its subsidiary QED Therapeutics, offers infigratinib as a formidable counterpart to Tyra's product portfolio. Infigratinib is marketed under the brand name Truseltiq and was recently approved by the US FDA for adults with previously treated, locally advanced, or metastatic cholangiocarcinoma exhibiting an FGFR2 fusion or other rearrangement. Truseltiq's approval was accelerated based on promising response rates, whereas continued approval might necessitate confirmed clinical benefit in upcoming trials. Notably, infigratinib also inhibits FGFR1 and FGFR3, broadening its potential scope of application. Moreover, it is currently undergoing Phase 2 trials for the treatment of achondroplasia, just as TYRA-300 does, suggesting a potential rivalry on that front as well.

However, while infigratinib may initially command an advantage through earlier market entry, it also bears the burden of being a first-generation FGFR inhibitor, thereby lacking the refined selectivity that the next generation of inhibitors, such as those developed by Tyra Biosciences, bring to the table. The non-selective inhibition could lead to off-target effects, ultimately compromising the drug's safety profile or diminishing its therapeutic window. On the other hand, the improved selectivity and potency that Tyra's candidates promise could give them an edge over Truseltiq.

TYRA-200's favorable activity against FGFR2 fusions and mutations in preclinical models could pose a competitive threat to Truseltiq if the superiority is validated in clinical trials. The potentially better-managed safety profile due to selective targeting could work in TYRA-200's favor as well.

Valuation Verdict

The company's current market cap of $600 million and a higher-than-sector-average price-to-book ratio of 2.54 could be seen as the market's forward-looking view on its strong growth prospects. These are underscored by a year-over-year reduction in net losses and a considerable cash reserve of $232.4 million, expected to fund pivotal milestones over the next two years. Though operating in a high-risk, high-reward landscape, the company has displayed methodical strides toward turning clinical progress into shareholder value.

But Tyra's journey is not without its set of obstacles, from both a scientific and a competitive standpoint. Regulatory hurdles and existing market players will test the company's endurance and adaptability. Yet, the TYRA-300’s recent progress and the company’s solid pipeline puts it in a good position for future growth. Thus, Tyra stands out as a promising frontier in oncology and skeletal dysplasia, backed by next-generation selective FGFR inhibition and precision-guided therapies.

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