PFE - uniQure: An FDA Approval An Advancing Pipeline And A Critical Data Readout

Summary

• Hemgenix was approved by FDA.
• uniQure appears undervalued based on the value of milestones and royalties due to the company.
• During Q2, uniQure will release data on AMT-130, which is a binary event with an asymmetric risk reward.

Summary

Partner CSL obtained an FDA approval on Hemgenix and uniQure (QURE) will now be eligible for milestones and double digit royalties reaching the low 20s. This revenue will fund uniQure's pipeline, which is expanding and supports a valuation in excess of the current share price. This article is an update on the pipeline, an assessment of the commercial landscape for Hemgenix and a perspective on the upcoming binary readout on AMT-130. The critical catalyst for uniQure remains a data readout for AMT-130 in Huntington's disease, which is due in 2023.

AMT-260 - The pipeline expands

At an R&D event, the company presented data on gene therapy asset, AMT-260, for the treatment of refractory temporal lobe epilepsy (rTLE). Patients with rTLE, which is the most common form of localized epilepsy, experience seizures. Patients experience poor in quality of life and increased mortality and morbidity. Current standard of care treatments include medications and in some cases epilepsy surgery and implantable devices, which both have safety issues. These procedures have the potential for a loss of cognitive function and there is variability in outcomes. There are 800K patients in the US with rTLE and thus there is a significant market opportunity.

An IND is expected in 2023 for AMT-260. It is an AAV9 gene therapy with two miRNAs designed to reduce the expression of the GRIK2 gene, with the goal of reducing neuronal excitability. The first data in humans is expected in 2024.

Mice treated in preclinical models showed a reduction in seizure frequency, and no toxicity or safety issues were noted. Brain tissue resected from humans (post surgery) were transduced in the laboratory with AMT-260 and these pre-clinical experiments evaluated epileptic activity and biomarkers. Results suggest AMT-260 is active and there is target engagement.

uniQure has set the goal of a 50% reduction in seizures when tested in human subjects. They anticipate that the study will enroll adults with a diagnosis of rTLE with severe disease. The study will likely be designed as an open-label, controlled study where AMT-260 is compared to patients taking standard anti-seizure medication. The trial will test two doses, and AMT-260 will be administered by a neurosurgeon directly into the hippocampus. Endpoints for the study which may be reported include safety, seizure frequency and biomarkers.

In addition, uniQure recently licensed an asset for ALS caused by the SODI mutation and is working on an additional pre-clinical asset, AMT-191 for Fabry's disease.

Hemgenix was approved by FDA

Hemgenix, a gene therapy developed by uniQure was approved by FDA for the treatment of hemophilia B. Pivotal studies met the primary non-inferiority endpoint and demonstrated superiority on a secondary endpoint. The approval included patients who currently use FIX prophylaxis therapy, have current or past life-threatening hemorrhage, or have repeated severe spontaneous bleeding episodes. Because Hemgenix uses an AAV5 (rather than other AAVs where neutralizing antibodies may impact treatment) most hemophilia B patients will be eligible for treatment.

The list price of $3.5m was announced. ICER suggested the upper limits for the price of Hemgenix to be $2.9m, which reflects a price that delivers benefit to the medical system. Treating hemophilia B can cost $20 m over a patient's lifetime and thus assuming the gene therapy is durable, significant savings can accrue for insurers as they reduce or eliminate the need for expensive FIX and hospitalizations. It is notable that some patients dosed early in clinical development have showed sustained efficacy out to 10 years . Pricing, while incredibly expensive, is consistent with BioMarin's Roctavian for hemophilia A which was priced at $2.5 m.

uniQure is not responsible for any of the costs of commercialization, and partner CSL will incur these costs. However, Pfizer will likely be bringing to market a competing gene therapy for hemophilia B patients.

Pfizer's BENEGENE-2 study met its primary endpoint of non-inferiority and superiority in the annualized bleeding rate ('ABR'). Patients experience a mean ABR for all bleeds of 1.3 for the 12 months from week 12 to month 15 compared to an ABR of 4.43 during the pre-treatment period, resulting in a 71% reduction in ABR (p<0.0001). Data recently released suggests that for Hemgenix, the ABR for all bleeds was reduced by 64% during months 7-24 of the study (mean ABR 1.51 vs. 4.18 during the lead-in period; p=0.0002).

Pfizer's product met the bar of superiority over SoC, while Hemgenix was non-inferior on the primary endpoint. However, in patients treated with Pfizer's gene therapy, there were fourteen serious adverse events with two deemed related to treatment. In contrast, there were no serious adverse events in patients treated with Hemgenix in the pivotal study. In addition, patients with existing antibodies to the AAV were excluded from treatment with Pfizer's gene therapy. Given this, Hemgenix appears to offer comparable efficacy with a better safety profile and no need to screen and exclude patients with neutralizing antibodies.

H.C. Wainwright analyst Patrick Trucchio wrote that the data for both gene therapies demonstrated comparable ABR reduction but that Pfizer's pointed to "a more complicated safety profile. " He suggested that Hemgenix "should become the leading HB gene therapy on the market," and placed a Buy rating and $90 price target on uniQure shares. Wells Fargo's analyst described the recently accounted Pfizer data as "competitive" and cited Pfizer's commercial prowess as an advantage. However, CSL currently markets multiple hemophilia products and thus has existing relationships with the small cohort of prescribers for treated Hem B and thus should be well positioned commercially.

AMT-130 - Huntington's Disease is a high risk program and competitors have not been successful in the clinic

For a detailed description of Huntington's disease and AMT -130, please read my prior SA article . The previous two years have been filled with disappointment for the HD community. Roche's phase 3 tominersen study yielded disappointing results. Roche has revised their protocol to include younger, earlier stage patients and is running a new phase 2 trial. Wave Life Sciences had two early stage assets that failed. Novartis's branaplam produced side effects including peripheral nerve damage, and the trial was halted. PTC Therapeutics halted their study while they review safety protocols. Triplet Therapeutics, a private company, had early disappointing data and closed after their drug showed signs of toxicity and the company could not raise additional capital.

While these failures highlight that the unknown biology in HD makes it difficult to design therapeutics, it is notable that uniQure's AMT-130 is highly differentiated. The AMT-130 trial only enrolled patients early in the clinical course of the disease. AMT-130 was distributed directly and exclusively to the tissues affected in the striatum via a neurosurgical procedure and critically, AMT-130 targets exon 1 HTT, a toxic protein implicated in the disease which none of the other medicines target.

By mid 2023, uniQure will release further data on the first cohort treated with AMT-130. There will be data provided for sixteen patients who received the high dose. This cohort includes ten patients who were treated and six control patients with one year of follow up. There will also be data on ten patients who received the low-dose and four control patients with two years of follow-up.

This data readout will include functional and cognitive testing which can be compared to placebo patients and natural history data. This will be the first data on whether there is an efficacy signal. Importantly, volumetric MRIs will be conducted to assess brain atrophy. Imaging studies conducted in pre symptomatic and early stage HD patients have shown that quantitative measures of the striatum are accurate biomarkers measuring disease progression.

Finances

uniQure has $440 million in cash, which they believe will be sufficient through 2025. Milestone payments may add an additional $175m further extending the company's runway. Royalties will also be due to uniQure. uniQure may never need to raise funds in the capital markets again, given the revenue stream from the CSL licensing deal.

Conclusion

AMT-130 remains a very high risk program, but they now have a steady revenue stream which cushions the blow if it fails to show efficacy. At the time the CSL deal was announced, shares tumbled as uniQure no longer appeared to be an M & A target. However, now, they are positioned to reap the rewards of this deal. Given the very significant cash position and revenue stream, the company is likely to be self sustaining and be in the enviable position of not requiring funding from the capital markets during this difficult time.

Critically, Goldman Sachs analysts have valued the hemophilia B royalty stream/milestone payments and suggest it alone supports a $42/share valuation. Given this, at the current share price of approximately $20, there appears to be limited downside should AMT-130 fail to show efficacy.

For investors, if AMT-130 is a breakthrough for Huntington's patients, Raymond James analyst Danielle Brill estimates there is a $7B market for HD medicines. Given this and the unfortunate track record of competitors, investors would likely be extremely well rewarded if the data in mid 2023 for AMT-130 shows proof of concept. While I would assign a low probability of success given the unknown biology, the downside protection provided by the CSL revenue makes the risk reward appear favorable.

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