Friday, May 31, 2013

Can RXi Pharmaceuticals Spot the Difference?

The imminent announcement of phase I results for RXI109 will be a clinical highlight of RNAi Therapeutics in 2013.  RXI109 is the self-delivering RNAi trigger against dermal scarring and is developed by RXi Pharmaceuticals.  Needless to say, as the company is committing 90% of its resources to this trial and indication, the results should cause major volatility in the stock.

While the dermal anti-scarring landscape is complex, RXI109 for the present indication can safely be categorized as a cosmeceutical.  According to RXi Pharmaceuticals, already $100M are spent each year in the US on non-FDA approved ointments against dermal scarring.  The interest in RXI109 is thus for its commercial potential and the clinical results are a milestone in the development of so-called ‘self-delivering RNAi triggers’.

Self-delivering RNAi triggers are a concept coined first by Dharmacon (although one could argue that was largely a branding achievement as it essentially involved known cholesterol conjugation), but is getting more widely adopted these days.  Beyond its local indications for which they self-delivering RNAi triggers were initially developed, I expect the concept to also be applied to certain systemic delivery strategies.  I could imagine that in an effort to render GalNAc-siRNAs more potent, self-delivering chemistries will be useful.

Phase I studies

RXi has conducted two phase I studies.  In both studies, volunteers got multiple surgical incisions symmetrically on both sides of the abdomen.  For each pair of incisions, one side either received RXI109 or placebo by intradermal injection.  In the first study, RXI109 was given just once before incision, from 1mg to 10mg per 2cm incision (similar range as in the Excaliard antisense trials).  In the second study, RXI109 was given three times within two weeks from 2.5mg to 7.5mg per 2 cm incision.

In addition to safety and tolerability, the important endpoints will be a visual assessment of scarring and then, based on a biopsy obtained from a tummy tuck at Day 84, important biomarker data in the form of CTGF levels (the target gene) and a histological evaluation of the scar tissue.

Although this is a blinded study, the company has discussed blinded results in extenso.  On the safety front, there seems to be little cause for concern, and adverse events are consistent with what you would expect from an incision.  Management appears to be very bullish on the therapeutic outcomes since in many cases left and right sides look different.  So if they are different, the side that looks better should have been given RXI109, right? 

Unfortunately, you have to look very hard to spot the differences.  In one example shown, the ‘average differences’ in scar tissue area were 31%.  Since they will put their best foot forward with this example, the largest effect size that we can expect is 31%.  And this assumes that in each case, it is the drug-treated side that outperforms the placebo-treated side. 

It is thus difficult for me to be optimistic that this trial allows for a therapeutic effect to be demonstrated.  For this, the natural wound healing variability would have to be really small (I admittedly don't know what this is).  On the other hand, it is with this symmetrical, intra-patient control design that such small differences might be teased out.  Regardless, I expect enough data to be collected from the studies that it will make for a nice headline and narrative about how RXI109 had improved wound healing and the correlation with CTGF (I bet there will be a correlation, whether due to knockdown or not).

So while I think that RXI109 is a decent RNAi Therapeutics (not the best possible one given the short dsRNA length), it will be important to conduct future studies in patient populations more prone to scarring to increase signal to noise.  This could be for example in the scar-revision setting or in Asian populations.

Trading the event

As I expect major volatility and have some confidence in the science behind RXI109, I have taken a long position ahead of the event.  It is not clear whether the results from the two studies will be presented separately or together.  I suspect the latter given that the CEO of RXi in February/March guided the results from the first study to be forthcoming in April.  Since it is almost June already, it is likely that the company expects the biggest bang from presenting the results together.  This should happen before July.  Once again, given that there is so much potential for data-mining, I expect positive headlines- justified or not.

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By Dirk Haussecker. All rights reserved.

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