2023-12-23 12:00:00 ET
Summary
- Alignment with FDA reached to have phase 3 ARROW study use Best Corrected Visual Acuity ? 15-Letter Loss as the primary endpoint; Significance of this could mean competitive advantage.
- A sham-controlled trial, known as ARCHER II expected to begin in mid-2024, could provide a quicker pathway towards European regulatory approval.
- The prior phase 2 ARCHER study showed that patients given ANX-007 achieved the endpoint of protection of vision loss measured by BCVA compared to baseline.
- Pricing of $125 million worth of common stock should help it advance several of its drugs forward in the pipeline and to fund its operations.
Annexon, Inc. ( ANNX ) has made great progress in being able to advance its pipeline, that's because it has been able to obtain alignment with the FDA to advance its complement inhibitor ANX007 forward for the treatment of patients with Geographic Atrophy [GA]. It was able to garner the ability for the agency to allow for another endpoint for the treatment of this patient population for the design of its soon-to-be initiated ARCHER study. This is good news for the biotech, because it will not need to explore another endpoint of lesion growth that is typically used for these GA patients to garner regulatory approval.
Such a phase 3 study is expected to start in late 2024. The most recent clinical update of ANX007 achieved an even better outcome for the European territory. Why is that? That's because the European Medicines Agency [EMA] is going to allow for a global sham-controlled trial, known as Archer II. The significance of this study is that Annexon might be able to have a quicker pathway towards regulatory approval of ANX007 for the treatment of GA patients in the European territory. Such a phase 3 sham-controlled study is expected to start in mid-2024.
ANX007 For The Treatment Of Patients With Geographic Atrophy
As I stated above, Annexon has been able to obtain a positive clinical development update with respect to its program advancing the use of ANX007 for the treatment of patients with Geographic Atrophy [GA]. That's because it came in alignment with two agencies in order to possibly eventually move this program forward towards regulatory approval. The first advancement specifically dealt with talks that this biotech had with the FDA. Such talks went very well, because it was able to agree with the FDA that a phase 3 head-to-head study, will be enough to file for regulatory approval of ANX007 for the treatment of patients with GA. This is going to be through a late-stage study, known as ARROW, which is going to compare ANX007 to another approved drug for these patients, known as SYFOVRE. In my opinion, I consider this is a huge win for this company. Why do I believe that? That's because such late-stage approval studies for GA normally want to see slowing of lesion growth. The win for the company is that it will be able to instead use another primary endpoint for this study known as prevention of ?15-letter loss of BCVA assessed through 12 months.
A second reason why this is a good outcome is because a prior phase 2 study, known as ARCHER, achieved a statistically significant preservation of BCVA compared to baseline when these patients received monthly ANX007 injections. Such a difference compared to baseline was achieved with a statistically significant p-value of p = 0.006. Another way of looking at it is that the drug was able to achieve a 72% reduction in the risk of 15-letter loss compared to baseline . Thus, if the phase 3 ARROW study achieves this primary endpoint, then Annexon will be in good shape to file for FDA approval of this drug for the treatment of patients with GA.
A second positive clinical update was achieved with respect to a quicker approval pathway of ANX0067 for the European territory. The reason why is because it might be possible for Annexon to submit a regulatory application on the basis of another type of phase 3 study, known as ARCHER II. This late-stage trial is going to enroll about 400 Geographic Atrophy [GA] patients who are to be randomized 1:1 to receive either a monthly dose of ANX007 or sham procedure. This study is going to use a similar endpoint as the other study, which is the prevention of a ?15-letter loss of best corrected visual acuity [BCVA]. Discussions continue with the European Medicines Agency [EMA] to initiate a pivotal phase 3 study for this program in the 1st half of 2024. Not only that, but ANX007 was given PRIME designation by this regulatory body. This was the first drug for GA to receive this type of designation as well.
Financials
According to the 10-Q SEC Filing , Annexon had cash and cash equivalents and short-term investments of $192.9 million as of June 30th 2023. It believed that it would have enough cash to fund its operations into 2025. However, despite this cash runway, it enacted the pricing of a $125 million underwritten public offering of common stock. This is whereby it would sell 25,035,000 shares of its common stock and pre-funded warrants to purchase 18,379,861 shares of its common stock. The share of common stock themselves were sold at a price of $2.88 per share, and the pre-funded warrants are being sold at a price of $2.879 per share. It should be well capitalized for quite some time now, especially after this most recent cash raise.
However, just in case it isn't, it does have an ATM program it can tap into if necessary. This would be with respect to a 2021 ATM program that was established back in August of 2021 with Cowen and Company LLC, or Cowen. Such an ATM agreement was made whereby there could be an aggregate maximum offering price of $100 million worth of stock to be sold as needed. As of September 30th of 2023, it is said that roughly $82 million remains under this ATM Sales Agreement with Cowen. Thus, it is my belief that this remains another viable option in the future, should Annexon need to raise additional cash.
Risks To Business
There are several risks that investors should be aware of before investing in Annexon. The first risk to consider would be with respect to the advancement of ANX-007 for the treatment of patients with Geographic Atrophy [GA] in the ongoing phase 3 ARCHER II study. That's because not only is there no guarantee that the primary endpoint will be met with statistical significance, but this again is going to be important for possibly allowing this biotech to have a quicker pathway towards European approval. The second risk to consider would be with respect to the other phase 3 ARROW study, which is going to compare ANX-007 to SYFOVRE for the treatment of patients with GA. I believe that there are two points to consider here with respect to this risk. The first of course is whether or not the primary endpoint is ultimately achieved with statistical significance.
The second point would deal with a possible competitive advantage. That's because SYFOVRE was the first FDA-approved drug for the treatment of patients with GA. The thing is that this complement inhibitor drug was approved based on two late-stage studies that showed SYROVRE was able to reduce the rate of GA lesion growth compared to sham in a statistically significant manner. What Annexon is hoping to prove in its phase 3 ARROW study, is that its drug ANX-007 performs better in terms of preserving visual function based on BCVA measurement.
It hopes to show that long-term treatment with its drug does better in preserving GA patient's vision, compared to SYFOVRE. A third risk to consider would be with respect to ANX-005, which is being developed for the treatment of patients with Guillain-Barre Syndrome [GBS]. A pivotal phase 3 study using this drug to treat this patient population is expected to have a data readout in the 1st half of 2024. There is no guarantee that the primary endpoint will be met for this late-stage trial, nor that the company will ultimately be able to file for regulatory approval of ANX-005 for these GBS patients.
Conclusion
Annexon has been able to make significant progress in advancing its clinical pipeline. That's because it has been able to receive positive feedback from both regulatory agencies about the trial designs necessary to ultimately receive approval of ANX-007 for the treatment of patients with Geographic Atrophy [GA]. This would be with the advancement of two phase 3 studies, known as ARCHER II and ARROW. It is quite possible that the ARCHER II study could provide for a quicker pathway towards regulatory approval in the European territory, though. The ability for Annexon to achieve the primary endpoint of best corrected visual acuity ? 15-Letter Loss, would not only just mean the ability to be able to file regulatory approvals for its C1q inhibitor ANX-007.
It could also eventually mean a competitive advantage of this drug being able to achieve superior preservation of vision loss over SYFOVRE. In the meantime, 2024 won't be without any other catalysts, though. It is expected that in the coming year that the biotech will release results from the phase 3 study using ANX-005 for the treatment of patients with Guillain-Barre Syndrome. With phase 3 program advancement of ANX-007 for the treatment of patients with GA, plus a data readout from another program expected in the coming year, I believe that investors might be able to capitalize on any potential gains made.
For further details see:
Annexon: ANX007 Advances Forward With Stellar Endpoint