2023-03-09 08:15:00 ET
Summary
- With back-to-back clinical data readouts of Protagonist Therapeutics' lead product candidates this month, the first one led to a 50% run.
- This agent being picked for Phase 3 development on the strength of these statistically significant but mysterious results is another catalyst.
- Indirect evidence suggests that the second Phase 2 trial is likely to be positive as well.
Protagonist Therapeutics (PTGX), a small (nearly $750 million market cap) biopharmaceutical company, skyrocketed 52% on March 7 (Figure 1) after positive topline results from the FRONTIER 1 Phase 2b trial utilizing JNJ-2113. The oral Interleukin-23 receptor antagonist (IL-23RA) is the company's second-most advanced drug candidate (Figure 2). Investors should be aware of all the moving parts as the market is pricing in the likelihood of attaining $165 million in milestone payments for JNJ-2113's advancement into, and meeting the primary endpoint of, a Phase 3 study as part of Protagonist's collaboration with Johnson & Johnson's (JNJ) Janssen Biotech. In particular, a second readout looms this month.
Figure 1. One-year PTGX Price Chart
Figure 2. Protagonist Therapeutics Peptide Pipeline
March 7, 2023 Corporate Presentation
JNJ-2113
Regarding FRONTIER 1, Protagonist had this to say:
"Data from the 255-patient study showed that JNJ-2113 achieved the study's primary efficacy endpoint, with a statistically significant greater proportion of patients who received JNJ-2113 achieving PASI-75 (a 75% improvement in skin lesions as measured by the Psoriasis Area and Severity Index) responses compared to placebo at Week 16 in all five treatment groups. A clear dose response was observed across an eight-fold dose range. Treatment was well tolerated, with no meaningful difference in frequency of adverse events across treatment groups versus placebo. Data will be presented from various pre-clinical and clinical studies on JNJ-2113 at medical conferences beginning in the second quarter of 2023."
Psoriasis is currently recognized as a primarily IL-23/IL-17-mediated autoimmune skin disorder. Relevant FDA-approved agents to treat psoriasis include Janssen's blockbuster STELARA ( $9.72 billion sales in 2022 ), a monoclonal antibody against the p40 subunit of IL-12 and IL-23. Another 3 monotherapies are monoclonal antibodies against the p19 subunit of IL-23: Janssen's TREMFYA ($2.67 billion), Sun Pharmaceutical's ILUMYA, and AbbVie's ( ABBV ) SKYRIZI. All are subcutaneous injectables, while JNJ-2113 is the only-in-class oral IL-23RA in Phase 2 or beyond for moderate-to-severe plaque psoriasis.
According to the latest 2022 Cochrane Review, the self-described highest standard in evidence-based health care, SKYRIZI was the most effective of that quartet for reaching PASI 90 when compared to TREMFYA ( risk ratio (RR) 1.19 , 95% confidence interval ("CI") 1.08 to 1.32) and STELARA (RR 1.52, CI 1.38-1.67). In Janssen's sponsored network meta-analysis that ranked by dose regimen and the first to compare AbbVie's Janus kinase (JAK) inhibitor RINVOQ, TREMFYA at the approved 100 mg every 8 weeks and SKYRIZI ranked at the top . The marks investors should reference once the FRONTIER 1 data are shared come from Tremfya's performance in the pivotal Phase 3 studies Voyage 1 ( 91% achieving PASI-75 ) and Voyage 2 (83%). JNJ-2113 really should at least match those levels for Janssen to seriously consider advancing it; otherwise, share PTGX prices could see a humbling crash.
Rusfertide
Moving on to the next catalyst, rusfertide has a topline data summary scheduled this month for the randomized portion (Part 2) of the 80-patient REVIVE study (Figure 2). Part 1 was a 28-week open-label dose-escalation in which the rusfertide dose is titrated until patients are stabilized with hematocrit levels below 45%. Part 3 is an open-label extension which could last up to 3 years. The ongoing Phase 3 VERIFY study is expected to complete enrollment as early as late Q3 but has been delayed before.
Figure 3. Rusfertide: Phase 2 REVIVE Trial Design
March 7, 2023 Corporate Presentation
Rusfertide, the most advanced investigational synthetic analog of the natural hormone hepcidin, is Protagonist's wholly-owned lead drug candidate. As a class, hepcidin mimetics augment low levels of hepcidin to reduce intracellular iron export into the blood by blocking the ferroportin transporter (Figure 4), which in turn trims excessive erythropoiesis (red blood cell [RBC] production). The goal is to eliminate the therapeutic phlebotomy ("TP") requirement as standard of care in polycythemia vera ("PV") patients. TP is associated with anemia, thrombosis, erratic hematocrit levels, and "brain fog". Patients for whom TP alone cannot control the overproduction of RBCs may resort to cytoreductive therapy ("CRT") to reduce blood count, such as hydroxyurea (first-line) or Jakafi (second-line), a JAK inhibitor from Incyte Corporation ( INCY ). PV is a rare blood cancer ( 22 cases per 100,000 people ) and rusfertide was granted an orphan drug designation by the European Medicines Agency.
Figure 4. Rusfertide Mechanism of Action
Rusfertide Safety Signals
Rusfertide trials had been subjected to an FDA clinical hold in September 2021 after benign and malignant subcutaneous skin tumors findings in a 26-week rasH2 transgenic mouse model study. The hold was quickly lifted less than a month later with no additional cancer cases or unexpected safety signals found. In response to a subsequent FDA request, Protagonist voluntarily withdrew rusfertide's Breakthrough Therapy Designation in June 2022. This is more of a psychological blow for investors because it has minor utility relative to Fast Track (which is still active) for agents already in Phase 3.
During an interview (1:42) at the International Congress on Myeloproliferative Neoplasms (MPN Congress) in November, REVIVE investigator Dr. Yelena Ginzburg, whose eponymous lab in the Icahn School of Medicine at Mount Sinai, NY, focuses on studying iron transport for erythropoiesis, said they hadn't seen any unexpected outcomes other than the usual injection site reactions and low-grade adverse effects. The next month at the Annual Meeting and Exposition of the American Society of Hematology in December, Protagonist presented a subgroup analysis of adverse events in 70 REVIVE subjects. They identified secondary malignancies in 6 patients , 5 of whom had nonmelanoma skin cancer (NMSC). All patients had pre-existing or prior history of cancer; and 5 of 6 had been or were on CRT with carcinogen hydroxyurea or Jakafi, which also carries a risk of NMSC.
Rusfertide Efficacy
The clinical hold did have an unintended consequence of demonstrating rusfertide's effectiveness in the Phase 2 REVIVE and PACIFIC studies. During the first 28 weeks of treatment in REVIVE, 74% (18/70) of subjects did not require a phlebotomy, 16 (23%) required one and 2 (3%) required two phlebotomies (Figure 5). Most patients who stopped their doses required phlebotomy again. Before the hold, the effects on TP frequency were significant in both the TP only and TP + CRT groups ( p<0.001 ).
Figure 5. REVIVE: Rusfertide Reduced Phlebotomy Frequency
March 7, 2023 Corporate Presentation
Importantly, hematocrit ("HCT") levels increased close to dangerous levels in both studies (Figure 6). After the hold was lifted, patients once again no longer required phlebotomy and levels were normalized. REVIVE's primary endpoint is the proportion of responders (who maintain hematocrit control) during the 12-week period of Part 2. Since the left-middle chart of Figure 6 shows an uptick of the mean (red error bars) at the end of Week 40 (E0), this hints of a separation between the placebo and active groups.
Figure 6. REVIVE and PACIFIC: Rusfertide Controlled HCT and Ferritin
EHA 2022 Poster Presentation
Takeaways
With 10 patients left to be analyzed, REVIVE appears to be looking positive. FRONTIER 1 could be spun if Protagonist was going at it alone, but a partner wouldn't be as forgiving; it's unlikely Janssen would put off news if the results were mediocre, so expect PASI-75 to be in the 90% range. If so, then Phase 3 is a given. The 2023 American Society of Clinical Oncology ("ASCO") Annual Meeting in June is a big enough stage to be graced by the full data reveal. Perhaps the data point of a 68 year-old male (#16 in the TP only group) which was still in as of the 2022 ASCO Meeting June 7 presentation but disappeared two days later from the European Hematology Association 2022 Congress poster would resurface? But he was one of those who needed TP during the treatment period, so chances are probably slim.
As for finances, Protagonist's $267.4 million cash and investments as of September 30, 2022 are reasonably expected to fund operations well into 2024 because net quarterly losses last year averaged in the low $30-million range. The Q3 2022 report also mentioned that plans to initiate studies of rusfertide in additional disease indications were listed as casualties of the Inflation Reduction Act . However, Ph.D., President and Chief Executive Officer Dinesh V. Patel just said that, "We are excited about JNJ-2113's potential prospects across the spectrum of additional IL-23 mediated diseases." Because they're aware they'll immediately face lawsuits for misleading investors by fudging JNJ-2113's prospects, it should be safe to take management's claim at face value. Therefore, the company should soon be achieving $10.0 million for dosing of the third patient in the first Phase 2 clinical trial for a second indication as part of the up to $855 million in various milestone payments and tiered royalties based on worldwide net drug sales that Protagonist remains eligible for.
In conclusion, expect volatility due to all the secrecy (which is keeping the stock from a Strong Buy), but several more bits of anticipated positive news over the next few months should overall keep the PTGX price trending upward.
For further details see:
Protagonist Therapeutics: More Good News Likely To Come