2023-05-04 02:08:35 ET
Summary
- Reneo is small and relatively undercovered.
- It has positive data from lead and only asset mavodelpar in early trials.
- Reneo could get interesting quickly.
Reneo Pharmaceuticals ( RPHM ) develops treatments for mitochondrial diseases. Lead program mavodelpar or REN001 is running a pivotal trial in patients with PMM (primary mitochondrial myopathies) and myopathy with mitochondrial DNA (mtDNA) mutations. Here’s the pipeline:
Reneo pipeline (Reneo website)
Mavodelpar is a potent and selective agonist of the peroxisome proliferator-activated receptor delta (PPAR?). In preclinical and clinical trials, mavodelpar has been “ shown to increase transcription of genes involved in mitochondrial function and increase fatty acid oxidation, and promote formation of new mitochondria.” It is targeting two indications, primary mitochondrial myopathies (PMM') and long-chain fatty acid oxidation disorders (LC-FAOD). The company has completed phase 1b safety and tolerability studies in each indication. Thus far, the molecule has been run through four clinical trials with preliminary evidence of efficacy and safety. They are currently running a pivotal clinical trial in primary mitochondrial myopathy (PMM') with topline results in 4Q23.
The company completed a randomized, placebo-controlled leg immobilization study of mavodelpar in healthy volunteers. 24 healthy volunteers had their legs immobilized for 14 days, after which they were randomized to Mavodelpar 100 mg BID or placebo. The following chart gives details about measurements in muscle strength:
Mavodelpar data (Reneo website)
As we do see, mavodelpar significantly improved muscle strength in these subjects after 1 hour post leg brace, as well as after 1 week. There were no SAEs, and TEAEs were similar between groups. Subjects treated with mavodelpar also showed increases in expression of relevant PPAR?-regulated genes.
The company also completed an open label phase 1b study in PMM patients with mtDNA defects and myopathies. 23 enrolled patients were given Mavodelpar 100 mg QD for 12 weeks, and then for 36 more weeks in an optional extension study. The study showed a mean change of 104 meters in 12MWT from baseline. Response rate was more than 80%, with 13 out of 17 evaluable patients showing a 50+ meter improvement. On various other parameters like walking velocity, mean oxygen consumption and changes in various other symptoms, too, mavodelpar showed improvements over baseline.
The company also conducted an open-label trial in adult LC-FAOD subjects with mutations in LCHAD, CPTs, VLCAD, and TFP genes. Patients were given Mavodelpar 50 mg QD (n=3) or 100 mg QD (n-21). The drug was well tolerated. Of the various types of LC-FAOD tested, 12-minute walk distance increased in patients with long chain 3-hydroxy acyl-CoA dehydrogenase (LCHAD) deficiency and carnitine palmitoyltransferase 2 (CPT2) deficiency following treatment. In LCHAD, following this trial, the molecule received a Fast Track designation.
There are 66,000 US patients for PMM and 82000 EU patients. There are 5000 US patients for LC-FAOD, and 6000 in Europe. Between Japan, China and Brazil, there are another 350,000 PMM patients and 25,000 LC-FAOD patients. The PMM pivotal trial will produce topline data in 2H2023, and the company plans to file an NDA by 1H 2024.
Financials
RPHM has a market cap of $255mn and a cash balance of $101mn. Research and development (R&D) expenses were $10.4 million during the fourth quarter of 2022, while general and administrative (G&A) expenses were $4.2 million. That gives them a cash runway of 6-7 quarters, which is enough time to see them through the pivotal trial, increased trial expenses notwithstanding.
The company licensed the molecule from vTv Therapeutics for $3mn upfront, equity shares, and upto $65mn milestone payments, in 2017. Composition of matter patents are expiring in 2026, while methods of use patents in 2034 - thus the patent runway is not very reassuring. The molecule has orphan drug designations, which will give them 7-years of exclusivity, and possible NCE status, which will give them a concurrent 5-year exclusivity.
A quarter of the stock is held by retail investors. Insiders are generally purchasing stock, with one sale in the last 2 years.
Risks
This is a single asset company, and that single asset does not have solid patent protection. This is a major problem. Another problem is low cash. Although they have low expenses, $100mn just isn't enough for longer term plans. And it doesn't speak well of their cash raising capabilities. As I write this, however, Reneo was in the news yesterday for trying to raise an undisclosed sum of money through a public offering, and a $5mn private placement with Abingworth Bioventures 8 LP conditional on the successful closing of the offering. The company has been in existence for nearly a decade, and they have a pivotal trial running. Despite that, if they have only $101mn in cash, it does raise some critical questions. If they are successful with that offering, though, I guess that will answer those critics.
Bottomline
RPHM seems like a decent company with positive trials in rare indications, and a pivotal trial soon to topline. Its problem is working with an old molecule, which reduces patent protection. The market it targets is large, and untapped. If it can maintain this momentum, I think this could become an attractive investment in a couple of years.
For further details see:
Reneo Pharmaceuticals: Interesting, Undercovered Company Developing Mitochondrial Disease Therapies