Analysts at Truist Securities admitted that the result for itepekimab, which the companies were hoping to follow their blockbuster Dupixent in the I&I space, was “contrary to our expectations—we were wrong.”
Sanofi and Regeneron’s Dupixent follow-up drug has failed to reach the sky-high expectations set by analysts for a pair of Phase III trials, sending the shares of both large pharmas down in early morning trading.
Truist Securities analysts, which had predicted that the drug, called itepekimab, could have provided a wider patient population in COPD than Dupixent, said the new result was “contrary to our expectations—we were wrong.” The firm had predicted sales of $3.5 billion for the drug prior to the failed readout, but now it’s unlikely that itepekimab will receive approval without additional testing. BMO Capital Markets, meanwhile, said on Friday that the mixed result “muddies the water” for the candidate.
Sanofi’s shares declined over 6% to $85.86 on Friday, while Regeneron tumbled a more dramatic 18% to $496.42, compared to $605.39 at Thursday’s close.
The companies reported that itepekimab only met the primary goal in one out of two late-stage trials testing the interleukin-33 (IL-33) inhibitor in chronic obstructive pulmonary disease (COPD). The AERIFY-1 trial tested itepekimab in former smokers with inadequately controlled disease. This trial met the primary endpoint of significantly reducing moderate to severe exacerbations by 27% as compared to placebo at 52 weeks. The companies said this was a “clinically meaningful benefit.”
AERIFY-2, however, did not meet the same goal, despite a benefit being observed earlier in the study. At week 52, patients who took itepekimab every two weeks had just a 2% reduction in exacerbations. This number jumped to 12% for patients dosed every four weeks but still did not meet the threshold of the primary endpoint.
Truist said that in both studies, the total number of exacerbations was lower than expected, which “decreased the power” of both. BMO noted that the companies conducted the trial during the COVID-19 pandemic but had adjusted the study protocols to accommodate it.
Big Shoes To Fill
Both Sanofi and Regeneron had been hoping to raise itepekimab as a follow up to their blockbuster Dupixent, which brought in $14.15 billion worldwide last year—a 22% increase over the year prior. The drug has expanded into multiple indications in inflammatory diseases, most recently garnering an FDA nod for chronic spontaneous urticaria, or hives. While the companies still have about six years until Dupixent loses patent exclusivity, they have been hoping to find a replacement that could extend their winning streak.
Itepekimab also provided a potential opportunity to expand the patient population addressed by Dupixent, which is currently only approved for type 2 COPD. Truist said in a note prior to Friday’s readout that itepekimab, which addresses airway inflammation “upstream” of Dupixent, could have addressed non-type 2 patients which make up about 60–70% of the 1.6 million patients with severe COPD. But the new drug would have needed to achieve a 20% reduction in exacerbations to set itself up for such an approval, according to Truist.
Sanofi and Regeneron did not provide a plan for itepekimab’s future. The companies said they would review the data and discuss with regulatory authorities before announcing what’s next. BMO said that two positive Phase III trials are typically the standard for approval in COPD.
In a Wednesday note prior to the readout, BMO said that Regeneron “has not been able to catch a break lately.” The company has been facing pressure from biosimilar competition to its approved medicines, regulatory rejections and “general malaise.” BMO had placed the likelihood of a “positive or a strong positive result” from the AERIFY trials at 80%. The firm considered a strong positive to be a reduction in exacerbations of 30% over background therapy, a result that could have driven broad use in former smokers with COPD. A negative result meanwhile “likely removes the opportunity for the asset in COPD.”
“Today’s miss on significance adds to what has been a more difficult story for Regeneron in recent months,” BMO said Friday. “A statistically significant benefit in only one of the two Phase III trials leaves potential approval less likely for itepekimab.”
BMO said Regeneron shareholders’ focus now turns to an upcoming readout for the PD-1/LAG3 melanoma combo of fianlimab and Libtayo, which is due in the second half. The company will also reveal some data on its obesity program in that timeframe.
