IBB - Vera Therapeutics: Unremarkable New Interim PP Analysis Of Ph2 IgAN Trial Maintaining A Sell Rating

Summary

• Vera Therapeutics has released an updated interim PP analysis on the phase 2b ORIGIN trial.
• The updated data excluded 14 patients who had some degree of a trial protocol violation, further enriching the data.
• The PP data was better than ITT data, where 36 weeks of data of the 150mg arm showed 48% placebo-adjusted proteinuria benefit vs. 33% in ITT data.
• Even though the 36-week data was slightly better than the previous ITT analysis, atacicept's proteinuria seems underwhelming than the anti-APRIL monotherapy and is relatively slow acting.
• We maintain a sell rating until we see atacicept's full phase 2b publication.

Summary of Key update

On Jan 30, 2023, Vera Therapeutics ( VERA ) announced an update of the phase 2b ORIGIN trial. The data presented was a prespecified per-protocol ((PP)) analysis that excluded 14 patients who violated the study protocol. We remind readers that the previous phase 2b data published back on Jan 3, 2023, was an intent-to-treat ((ITT)) analysis of all randomized patients (n=116). Our previous analysis can be found in our initiation article written a couple of weeks ago. The company noted that they excluded 14 patients across treatment arms who had some degree of protocol violations after being vetted by a blinded third-party contract-research organization ((CRO)). Also, the detailed reason for protocol violation/exclusion was announced, as shown below.

We find ITT analysis more accurate as it captures all patient's data, not only the responders. The problem with the per-protocol data is that some patients who did not respond and hence had to adjust the background ACEi/ARB dosing were excluded, potentially giving an unfair advantage to the atacicept arm. Furthermore, we are surprised that 3 patients missed UPCR data at week 24, which can be problematic as missing data points can bias the mean proteinuria data of the IIT analysis and may signal a poor clinical trial execution.

In the PP analysis, at Week 24, the atacicept 150 mg dose group achieved a 41% mean reduction in proteinuria versus baseline and a 34% delta versus placebo (p=0.025). With interim data at Week 36, the atacicept 150 mg dose group achieved a 47% mean reduction in proteinuria from baseline and a 48% delta versus placebo - Source

Although the 41% mean reduction and placebo-adjusted delta of 34% at week 36 is slightly better than the ITT analysis (at week 36), -36% vs. -5% (placebo), we don't believe it moves the needle as other anti-APRILs have shown significantly superior data so far. Considering the superior proteinuria benefit shown to date by BION-1301,-54% at 6 months, and Telitacicept, 48% placebo adjusted at 6 months, we believe in order to move the needle, atacicept should deliver at least 40-50% placebo-adjusted improvement. Furthermore, the placebo arm's UPCR data in the positive territory is unusual; we note that previous trials' placebo arm has shown around 5-15% reduction, and using a midpoint of conservative 10% placebo rate reduction that was shown in other trials, we get around 38%, which is not that impressive.

Also, the big difference between week 24 and week 36 proteinuria data makes us think that atacicept may have a longer onset of action vs. mono-APRIL therapies (i.e., sibeprenlimab and BION-1301). This is interesting, considering that another anti-APRIL/BLyS inhibitor Telitacicept has shown a faster onset of action than atacicept (shown above). Therefore, we wonder if it is a mechanism of action-related trend.

Safety seems fairly clean, as expected, although long-term follow-up data would be needed for us to build conviction considering the novel mechanism of action of dual inhibitors.

Safety results indicated that atacicept was generally well-tolerated and were consistent with the previously observed safety profile of atacicept, including a 1% discontinuation rate due to adverse events (AEs) and comparable rates of infection compared to placebo. Serious treatment-emergent AEs were observed in 2% of patients in all atacicept arms and in 9% of patients in the placebo arm. These results build upon the prior integrated analysis of atacicept in randomized, double-blind, placebo-controlled clinical trials in over 1,500 patients to date – in which atacicept was well-tolerated. Source

The company plans to initiate phase 3 during the first half of 2023, and the company seems to be in an active discussion with the FDA. We expect the phase 3 data to come out around 2H of 2024, which means that there will be a point in time without a near-term clinical catalyst. Moving forward, we believe the key catalyst that can act as an inflection point for the stock would be the full phase 2b data publication that may include longer-term follow-up and additional subgroup analysis. Although, based on the interim data, we don't expect too much from it.

Vera is continuing to rapidly advance atacicept into pivotal Phase 3 development, which is anticipated in the first half of 2023, subject to and following discussions with the FDA. The full data sets from the ORIGIN clinical trial will be presented at upcoming medical congresses. Vera plans to prioritize and focus current resources on the advancement of atacicept in IgAN into a pivotal Phase 3 trial, extending cash runway to the fourth quarter of 2024. This updated cash runway guidance assumes a delay in enrollment in the pivotal Phase 3 trial for lupus nephritis, and a delay of commitment of resources to the MAU868 program until regulatory agreement is reached regarding the pivotal Phase 3 program for the treatment of BK viremia in kidney transplant recipients. Source

Risks

Clinical risk and commercial risk remain as Vera is still pre-commercial biotech without an approved drug candidate. Even with approval, self-commercialization comes with a great degree of commercial risk as first-time launchers historically underdeliver vs. big pharma companies with robust commercial infrastructures. Financing risk as Vera is still not cashflow positive; they will have to rely on external financing. We find risk-reward not attractive enough to enter even after the market sell-off that we have seen during the last few days.

Source: our initiation article.

Conclusion

We re-iterate a sell rating on Vera therapeutics. The per-protocol data wasn't that impressive as even the PP data analysis showed inferior efficacy data compared to Telitacicept, which makes the market positioning of atacicept complicated unless the full data or the phase 3 data show significantly superior efficacy over other anti-April/BLyS combo or anti-April monotherapy. Furthermore, we highlight that the market dynamic for the B-cell modulators is becoming more and more complicated with new entrants (KDNY, AUPH, ALPN, Otsuka, MOR, TAK) entering the space. We continue to remain on the side-line until we see further data points or subgroup analyses from the company where we see at least 40-50% placebo-adjusted proteinuria reduction. Also, we believe the slow onset of action seems like an atacicept-specific characteristic, although it may be too early to say. For a more detailed analysis of the ITT analysis released in early Jan 2023, we encourage readers to read our previous initiation article.

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