Wednesday, October 8, 2014

Arrowhead’s HBV Candidate Requires Further Dose Escalation

Today, we learned about some hard HBsAg knockdown numbers from the phase IIa Hong Kong study of ARC520 in chronically infected HBV patients.  The data relate to the first 2 cohorts in this ongoing dose escalation trial.  Accordingly, the mean HBsAg knockdown at nadir for the starting dose of 1mg/kg was 39% within a range of 22-57% (n=6) while it was 51% within a range of 46-59% for the 2mg/kg cohort (n=6).

ARC520 was given as a single dose to patients already stably on polymerase inhibitor entecavir.

It should be noted while numerically the improvement in knockdown from 1mg/kg to 2mg/kg was only 12%, this is likely the result of the apparent high variability at the lower dose level with the increased tightness of the knockdown range at 2mg/kg indicating that the RNAi mechanism is starting to be solidly engaged with the expectation of a steepening dose response going forward.



While clearly missing the company’s own guidance of a 1 log reduction at 2mg/kg, the good safety profile-no SAEs at all in the study with all AEs rated to be unrelated to ARC520- in addition to the steepening dose-response curve following 2mg/kg means that ARC520 is far from being out of the HBV knockdown race.  Still, the stock market over-reacted, punishing ARWR stock with a percent decrease that matched the reported knockdowns.

Although even I ended up willing myself into believing that a 70-80% knockdown was possible following a single ARC520 dose of 2mg/kg, revisiting the chimp study which involved 2 doses of ARC520 (first one at 2mg/kg then one at 3mg/kg), it should be noted that at the time the 3mg/kg dose was administered, the HBsAg levels had only declined by 50%...about the same as achieved in the phase IIa study.  It is thus possible that Arrowhead gave the 2nd dose just as HBsAg levels were about to go up again, consistent with the already rebounding levels of HBV DNA and HBeAg in that study.

As a result, my expectations for the single 3mg/kg dose are now 70-75% based on the ~75-80% peak HBsAg knockdown in the chimp study following the 2mg/kg and 3mg/kg doses.  This also means that in order to reach that 1log knockdown goal the company had set for itself, 4mg/kg will most likely be needed.  Importantly, in the concurrent phase I dose-escalating study in healthy volunteers, this quite large amount of drug seemed to be well tolerated and the company is awaiting approval to adopt this dose in the Hong Kong study.

This projection is not much off the 90% knockdown achieved in the ARC-AAT program at 3mg/kg in non-human primates.  The improvement of this 2nd DPC-based candidate about to enter the clinic is possibly explained by progress in the potency of 2-molecule DPC delivery technology.  I add this as today many were confused about what the interim phase IIa results meant for the platform and the value of the company.

Overall, as long as 4mg/kg is an acceptable dose from a tox point-of-view, ARC520 is still in the game to be first-in-class in HBV knockdown.  It would have been much worse if say a 70% knockdown had been reported, but worrisome safety signals emerged.  On the other hand, the continued need for a dose escalation would seem to delay Arrowhead’s broad-based phase IIb study plans, meaning that the competition, in particular Tekmira's TKM-HBV is coming closer.

At a market cap of ~$400M, the market has almost fully discounted the potential of ARC520 given the $150M+ in cash as well as the IND-ready, first-in-class ARC-AAT for which we can expect solid knockdowns in the clinic.  Interestingly, data for this candidate were selected for an oral presentation at AASLD while the ARC520 data will be in less prestigious poster form. Finally, should the single-molecule DPC which got me excited about the Arrowhead RNAi platform in the first place finally reach the clinic, it would necessitate an upward revision of the value of the company.

Disclosure: Long ARWR.  I sold most of my holdings at $11 and change given the underwhelming results and increasingly negative market reaction, but got back in below $6 when I considered the sell-off to be a gross over-reaction and imminent 3mg/kg data having the potential to surprise the market to the upside from now much lowered expectations.  Add to this ARC-AAT, the platform...

17 comments:

Anonymous said...

even if a 90% knockdown would be achieved, this drop in hbsag would not alter the clinical course. To reduce the immune supression of hbsag, much lower values are needed. Replicor, of whom you must be aware, is able to reduce the hbsag 100000fold to undetectable, and has shown the value of such suppression. Still they are struggling to maintain the long term clinical benefit.

Dirk Haussecker said...

If you take REPLICor's data seriously (non-specific phosphorothioate oligo), you are gullible at best. REPLICor does not change the validity of the HBsAg knockdown hypothesis one way or the other.

I suggest Arrowhead or Tekmira to replicate REPLICor's experiments with regard to lowering viral markers if this was really an honest investor concern.

Anonymous said...

replicors data are dead serious and i am not gullible, but happen to be in a position to definitely kmow that.

i am in the research field, not the investment arena, but i think it would be very difficult for tekmira or arrowhead to perform human studies with replicors compounds.

what makes you think that lowering the hbsag by a factor of ten will change the disease course, considering that most patients are in the range between 5000 and 1000 and that even a low 10 iu hbsag cannot be overcome by an internal or external antibody? how should that lead to the so called functional cure?

Anonymous said...

it is true that the idea that non sequence specific phophorothioates can have such a dramatic effect on hbv surface particle release or production is hard to believe. But yes, absurdely, it outperforms arrowheads drug by a factor of thousands.
And yet the effects on robust svr are still a matter of struggle. You should be very interested in all that, because it forecasts the outcome of the iRNA TRIALS. Elegantly ignoring that is not wise at best.

BTW i wish nothing more than one of the iRNA approaches, be it arrowhead or someone else to be effective, for the sake of all the hbv patients out there.
i was hoping for a higher percentage of suppression, also that substantially higher doses are possible in terms of tox concerns and that repeat doses at good frequency might lead to knockdowns of sufficient magnitude and duration.

chem2mc1 said...

chem2mc1 • 4 hours ago



very good article , Dirk.
However, you did not point out the key reason behind this avalanche sell-off. The reason is that some cronies were broadcasting mislead conception for ARWR PhIIa data expectation for long time and misled investors believe that ARWR Management cheating ( of course it means data is very bad in that case) I share my reply to Adam with you Dirk. What you think. Why Adam compare one dose 2mg human data with two dose 2mg 15min later 3mg final KD that leading folks believe ARWR LIE

My original post as



chem2mc1 • 4 hours ago





Adam: I wrote my first post here but it seems to be purged. I only have one question to you: How can you compare 2mg/1kg single dose human data ( 50% KD , 0.3 log ) with 2mg/1kg and 3mg/1kg subsequently injected with 15days interval Chimp data ( 80% KD 0.8 log ) . Dr. Anzalone said that human data is similar with chimp data , of course it would be one dose compare to one dose. how can you twist fact to being one dose 2mg/1kg human to two dose chimp ... and you repeatedly broadcasting this data...IS you mislead retail investors but not Dr. A. You and your folks might couched today comedy


Adam: I wrote my first post here but it seems to be purged. I only have one question to you: How can you compare 2mg/1kg single dose human data ( 50% KD , 0.3 log ) with 2mg/1kg and 3mg/1kg subsequently injected with 15days interval Chimp data ( 80% KD 0.8 log ) . Dr. Anzalone said that human data is similar with chimp data , of course it would be one dose compare to one dose. how can you twist fact to being one dose 2mg/1kg human to two dose chimp ... and you repeatedly broadcasting this data... you mislead retail investors but not Dr. A. You and your folks might couched today comedy

Latebloomer said...

Do you think there could have been any additive effect for the 3 mg/kg when it was dosed at Day 15 (after 50% KD had occurred via 2 mg/kg) for the chimp?

(Are you perhaps accounting for some additive effect in the chimp when you make an educated guess of 70-75% clinical KD at 3 mg/kg vs. the 75-80% KD seen in the chimp?)

I'm just trying to get a better sense of what we might look for with 3 mg/kg as a SINGLE dose, not having that comparison with the chimpanzee, unlike what we had with the initial dose of 2 mg/kg.

Linda

Anonymous said...

Following on from Linda's comment on additive effect, why did management not pick up on that as a likely effect, or at least not try to get ahead of the game and instigate a multi-dose ph1b trial to test for safety in humans?

Another small cohort dosed monthly for 3 months could have been setup in the time that has elapsed since management knew the results of the first 2 ph2a cohorts.

We could now be in a position to know safety was ok on multi-dose side and ready to do a multi-dose ph2a trial to see the KD after 3 monthly doses, a mini ph2b if you like.

Anonymous said...

I'm in agreement with Dirk here in that there is little risk (other than cost and time - and the 3mg/kg dose cohort is already enrolled) of this product failing a phase 2 trial. The therapeutic index for the product doesn't appear to be a risk.

The cost of the end product might be high though. Any idea how much 195mg of this would cost?? Also a factor would be convenience of injection. Even if it were at 10mg/mL it'd be 20 mL of injected volume which is not nice for anyone.

What's the potential market (insured patients) for an FDA approved HBV treatment?

Dirk Haussecker said...

Yes, Linda, I am assuming that there was some additive effect in the chimp study.

REPLICor data (assuming they are real like you) arguing against RNAi for HBV? You could make the case that seeing >80% cure rates is success, or not? 10% with interferon alone, then add an HBsAg-lowering agent --> 80%. My base case is combination therapy with an immune stimulant anyway.

Anonymous said...

Dirk,

Is it absolutely necessary to get 1 log or close to it with a single dose?

Since 2mg/kg has proven to KD 50% in every patient reliably, four successive 2mg/kg a few days apart could theoritically achieve more than a log knockdown. (100% -> 50% -> 25% -> 12.5%) Is that not enough?

Another question I have is about this theory that a deep and sustained HBsAg KD leads to functional cure? How positive are you about this theory? Is there any literature or studies supporting it?

Thanks.

Anonymous said...

Dear Dirk,

Thank you for your excellent blog! I know that you're an ARWR bull and own more of ARWR than TKMR, but decided to ask you anyway:)

As it stands now, it would seem that ARWR will need at least 3 mg/kg or 4 mg/kg for a meaningful Tx. Based on the 2nd gen results published by ALNY it would, hower seem that TKMR would only need ~0.23 mg/kg, possibly significantly less if 3rd gen delivery is more potent and IF the trigger used is equal or better than ARWRs trigger.

My question is what are the implications for ARWRs COGS? I remember you stating earlier (re: a different subject) that the cost of the oligo component is the most significant factor affecting the total cost of a Tx.

So all things equal is the success of ARWR contingent on much better efficacy than TKMR, ANLYs and ISIS Tx's, whereas TKMR could out-compete ARWR simply with an equally efficacious Tx (non inferior) by virtue substantially lower COGS based on less oligo needed for therapeutic effect?

This is of course purely hypothetical, and extremely premature! Would nonetheless appreciate your take on the COGS aspect considering ARWR will probably have to use 3 or 4 mg/kg or even more.

Anonymous said...

Dirk, I am sure you are aware of the Medhelp blog and the HBV site therein. The poster Studyforhope is obviously a very well versed hbv researcher and I believe he is the person who posted replies 1,3,4 above. I am invested significantly in ARWR and TKMR but he makes a great point about multi log KD not significantly increasing SVR even in combo therapy due to cccDNA. Can you reply to his concerns in post 3 and 4 in greater detail.

Dirk Haussecker said...

Yes- Arrowhead faces competition. Tekmira's candidate is very likely to be more potent than ARC520. We will have to wait, however, how differences in HBsAg potency will translate into treatment effect differences and what the relative safety profile will be for the 2 treatments.

Anonymous said...

Thanks for the response. You are of course right in that there are many variables concerning potency -> efficacy. If the approach works both companies (and ALNY and ISIS) will probably be extremely successful - then it will be down to which one of the inevitable Big Pharma partners has the most potent marketing squad!

Looking forward to your thoughts on TKMRs pre-clin. data package!

Anonymous said...

Dirk, after listening to ALNY's and ISIS's conference calls, it appears to me that they are on a collision course with their patent claims. Would you sort out these claims and, if possible, indicate which has the best case?

Anonymous said...

Does anyone have an opinion on ARWR today? Up 20% as I write and counting.

Seeking Alpha postulates interest from GILD is the root cause.

I wonder if data is due. Linda was the calendar counter so she should know.

I do know Paul Allen, Bill Gates' mate is in Sydney, Aust. for NYE. It has been touted that the whale behind ARWR is either one or both of them. It has also been claimed that some of the IP being developed by ARWR is originates from Aust.

Am wondering if GILD execs will be at his party on the night seeing in the new year if they have something to announce before the end of today.

Anonymous said...

The only data due any day is from BLT/BTEBY for their three man inhouse HCV trial.

It's quite likely their IP is involved at the RISC/DICER phase of treatment for ARWR's HBV program. But they have not explicity said so to my knowledge.

If what Seeking Alpha says about GILD is true, then we have had a papal smoke signal that a new leader in this race has been declared.

That will explain the legal eagle appointment.

TKMR looking like a me too wannabe bereft of data.

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