Analysts Question Intercept Pharma NASH Trial Phase III Length and Size

Published: May 21, 2015

Analysts Question Intercept Pharma NASH Trial Phase III Length and Size
May 20, 2015
By Mark Terry and Riley McDermid, Breaking News Staff

Investors apparently weren’t happy when Intercept Pharmaceuticals announced yesterday that it had a new design for its Phase III trial of obeticholic acid (OCA) for the treatment of non-cirrhotic nonalcoholic steatohepatitis (NASH) with liver fibrosis. The stock fell 16 percent, probably because the clinical trial schedule was longer than expected.

Following advisements from the U.S. Food and Drug Administration (FDA) and the European Medicines Agency, the REGENERATE Phase III trial was designed as a double-blind, placebo-controlled pivotal trial with enrollment of about 2,500 patients. It will include a pre-planned interim histology analysis at the end of 72 weeks of treatment in about 1,400 patients. It is expected to take place in about 250 locations in North America, Europe and other regions starting in the third quarter of this year.

In a live webcast this morning, Senthil Sundaram, senior director of corporate development, said, “We believe that our focus on demonstrating both fibrosis improvements and NASH resolution is a critical feature of the REGENERATE trial.”

In a research note, Michael Yee of RBC Capital Markets, observed that the clinical trial was both bigger and longer than expected. There are no currently approved treatments for NASH and there has been no history of large clinical trials involving treatment of NASH patients.

Earlier this week Australia-based Pharmaxis Ltd. announced that Boehringer Ingelheim had acquired global rights to its anti-inflammatory drug PXS4728A for the treatment of NASH. Unlike Intercept’s stock drop, Pharmaxis stock jumped by 45 percent for the news. Some of that may be due to the fact that the Australian company was valued at $50 million, but the deal with Boehringer Ingelheim led with an upfront payment of 27.5 million Euros with milestone payments that could hit $750 million (Australian).

Other companies working on NASH treatments include Gilead Sciences, Inc. , with Simtuzumab, with interim 48-week data expected in late 2015. Tobira Therapeutics Inc. is currently recruiting for a NASH study for cenicriviroc.

Analysts have been closely watching developments in the NASH space, particularly for Gilead, who has multiple potential candidates to treat the disease and is expecting NASH data this year.

“We came out bullish that Sovaldi/Harvoni's volume will increase in U.S. and Europe in 2015 driven by increased rebates to public segments. Gilead Sciences, Inc. (GILD)'s pipeline is also advancing and Simtuzumab should have interim 48 week data in late 2015 in NASH,” wrote biotech head analyst Yaron Werber in a note to investors.

Alexander Poulos, a columnist at Seeking Alpha, said Gilead's NASH assets are just one more reason the company should consider merging with Vertex Pharmaceuticals .

“Naturally, a new novel therapy for an unmet need such as a viable treatment for Hepatitis B (HBV) or Non-Alcoholic Steatohepatitis (NASH) would significantly add to GILD revenue generating ability,” he said. “My current price target for GILD is $117 as detailed in a previous article. Assuming VRTX newest combo is approved, it is quite reasonable to conclude the proposal makes sense.”

Sundaram attempted to map out the company’s strategy this morning. “We’ve been saying for a long time that CVOT [Cardiovascular Outcomes Trial] will not be required for approval, and that’s been borne out in our consultations with the regulatory authorities, they have reviewed all the data based on two previously published Phase II studies, and all the safety data in those studies,” said Sundaram in this morning’s webcast.

“As I mentioned, based on our discussions, there’s no CVOT study required here and there won’t be one in the Phase III program. With respect to the 2,500 patients, what we’ve always guided was this study would be over 1,000 patients primarily to satisfy ICH [International Conference on Harmonisation] guidelines on safety exposure. That is in fact the case and you need to focus on the 1,400 patients in the interim for initial approval. The 2500 patients, which is a population that is very robust for confirmation of clinical benefits of clinical outcomes. This is a very, very large patient population, there are a lot of NASH patients out there. We are confident we will be able to enroll this study on a timely basis.”

Bank of America downgraded the company’s stock from Buy to Neutral after this morning’s announcements. “OCA could be the first approved treatment for NASH,” said analyst Yin Huang in a statement, “however, there are a number of other NASH therapies under development and OCA may not present the best profile for a chronic treatment for a largely asymptomatic disease.”

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