Orphan drugs have been all the rage recently, Sarepta Therapeutics (SRPT) rocketed from $3.30 to $45 in just three months after presenting results for Eteplirsen, its novel orphan drug for Duchennes Muscular Dystrophy. Aegerion Pharmaceuticals (AEGR) has nearly tripled since January after the FDA approved its orphan drug, JUXTAPID, for Homoozygous Familial Hypercholesterolemia (HoFH), a rare, fatal disease. Enter Mast Therapeutics (MSTX), (formerly Adventrx Pharmaceuticals) which now has the most advanced new molecule, MST-188, in a phase three clinical trial, for the treatment of the highly unmet orphan indication, sickle cell disease (SCD) vaso-occlusive crisis. Mast Therapeutics also has plans to develop MST-188 for complications of arterial disease (ALI).
Sickle Cell Disease
Sickle cell disease,
SCD is a group of inherited red blood cell disorders. Healthy red blood
cells are round, and they move through small blood vessels to carry
oxygen to all parts of the body. In someone who has SCD, the red blood
cells become hard and sticky and look like a C-shaped farm tool called a
“sickle”. The sickle cells die early, which causes a constant shortage
of red blood cells. Also, when they travel through small blood vessels,
they get stuck and clog the blood flow. This can cause pain and other
serious problems such infection, acute chest syndrome and stroke. Sickle cell disease (SCD) affects millions of people throughout the
world and is particularly common among those whose ancestors came from
sub-Saharan Africa; Spanish-speaking regions in the Western Hemisphere
(South America, the Caribbean, and Central America); Saudi Arabia;
India; and Mediterranean countries such as Turkey, Greece, and Italy.
It is estimated that:
- SCD affects 90,000 to 100,000 Americans.
- SCD occurs among about 1 out of every 500 Black or African-American births.
- SCD occurs among about 1 out of every 36,000 Hispanic-American births.
- SCT occurs among about 1 in 12 Blacks or African Americans.
People with SCD have less access to comprehensive team care than people
with genetic disorders such as hemophilia and cystic fibrosis. More than $1.0 billion is spent annually in the U.S. to treat patients with SCD It is estimated that, in the U.S., sickle cell disease results in over
95,000 hospitalizations and, in addition, approximately 69,000 emergency
department treat-and-release encounters each year. When a patient with
sickle cell disease makes an institutional visit, vaso-occlusive crisis
is the primary diagnosis in approximately 77% of hospital admissions and
64% of emergency room treat-and-release encounters.
Big Pharma Interest in SCD
In October 2011, Pfizer signed a $340m development
deal with GlycoMimetics obtaining exclusive worldwide rights to its investigational compound GMI-1070. The compound is a pan-selectin antagonist currently in phase 2
development for the treatment of vaso-occlusive crisis associated with
sickle cell disease. More recently in November 2012, Novartis signed an option
deal with Selexy for its phase 2 novel drug for SCD, SelG1, which is an anti-P selecting antibody. The deal is valued at up to $665m in upfront, acquisition and milestone payments.
FDA Orphan Drug Status
The Orphan Drug Act
(ODA) provides for granting special status to a
product to treat a rare disease or condition upon request of a sponsor.
The combination of the product to treat the rare disease or condition
must meet certain criteria. This status is referred to as orphan
designation. Orphan designation qualifies the sponsor of the product for tax credits and seven years of market exclusivity. A marketing
application for a prescription drug product that has been designated as a
drug for a rare disease or condition is not subject to a prescription
drug user fee unless the application includes an indication for other
than a rare disease or condition. MST-118 has received orphan drug designation for SCD in the U.S. and the EU
MST-118-SCD
MST-188 (formerly ANX-188) is a purified form of a nonionic, triblock copolymer (poloxamer
188). It is an investigational agent that binds to hydrophobic surfaces
on damaged cells and improves membrane hydration and lowers adhesion and
viscosity, particularly under low shear conditions. MST-188 has the
potential to reduce ischemic tissue injury and end-organ damage by
restoring microvascular function, which is compromised in a wide range
of serious and life-threatening diseases and conditions. Mast is developing MST-188 as a treatment for complications arising from SCD.
After completing the acquisition of
Synthrx,
Inc. in April 2011, Mast Therapeutics (formerly Adventrx
Pharaceuticals) acquired the worldwide rights to ANX-188, (formerly
PP-188) a potential treatment for patients in sickle cell crisis, which
is a severe and painful condition often with life-threatening
complications. An earlier patient phase 3 study, which was completed by Glaxo SmithKline, (the prior sponsor) was published in
JAMA, (n=249).
This trial narrowly missed its primary endpoint, duration of crisis, (p=.07) in patients of
all ages but in the pediatric (<16 yrs old) sub-population, (n=73)
the drug was associated with reducing the duration of painful episodes
by 22 hours (p=.01). Using a Kaplan-Meier post-hoc analysis of the proportion of patients <16 years old remaining in crisis, yielded a highly statistically significant p=.007 and showed a clear separation in the time curves. MST-188 appears to have a favorable safety profile with no differences between the 2 treatment groups in the overall incidence of adverse events and no evidence of increased risk of bleeding during the treatment period.
Based upon the much higher response rates observed in pediatric patients in the prior trial, on
January 30, 2013, Mast Therapeutics initiated a forty center, randomized, double-blind, two-arm, placebo controlled, pivotal
phase 3 clinical study, focusing
only on pediatric patients ages 8-17 (n=388). The primary endpoint of the trial is the reduction of the duration of vaso-occlusive crisis in SCD patients. Using a two-sided alpha of .05, the study is 90% powered to detect a 16 hour difference between treatment arms. The secondary endpoints will compare re-hospitalization rate (for vaso-occlusive crisis)
within 14 days of initial discharge from the hospital and the occurrence
of acute chest syndrome within 120 hours of randomization. This phase 3 trial will take approximately 24 months to complete and assuming a successful outcome, a potential product launch in 2015.
As part of its discussions with the FDA, Mast Therapeutics committed to conduct a parallel
QTC/QTc study of MST-188 to obtain additional safety data. This single center, double blind,randomized study initiated dosing on February 11, 2013. Sixty patients were to be enrolled and the study will assess whether MST-188 has an effect on QT prolongation. The study was scheduled to complete dosing in the first quarter of 2013 with results expected to be announced in the middle of the year.
MST-Acute Limb Ischemia (ALI)
On
February, 28, 2013 Mast Therapeutics announced its plans to develop MST-188 in the complications of arterial disease, initially as an
adjunct to thrombolytics in acute limb ischemia (ALI), a complication
of peripheral arterial disease. ALI is a progressive circulatory problem in which obstructed arteries reduce the blood flow to tissues peripheral arterial disease affects an
estimated 8 to 12 million people in
the United States and there is significant morbidity and mortality.
R. Martin Emanuele,
Senior Vice President, Development, said: "Data from experimental models
demonstrate the potential for MST-188-188, when used alone or in
combination with thrombolytics, to improve outcomes for patients with
thrombotic arterial disease, whether manifesting as acute limb ischemia,
stroke or some other variant. Studies in animals and humans suggest
that ANX-188 can shorten time-to-thrombolysis, improve blood flow, delay
re-occlusion and reduce reperfusion injury, each of which may improve
the effectiveness of existing thrombolytic agents." Santosh Vetticaden, Chief Medical Officer, said: "We plan to evaluate
the potential of MST-188 in arterial disease initially by evaluating it
in acute limb ischemia. Near-term goals include seeking orphan drug
designation for ANX-188 in ALI, meeting with FDA to discuss our development plan in ALI and, assuming FDA
agrees with the plan, initiating a phase 2, clinical proof-of-concept
study in late 2013 or early 2014. Currently, we estimate that
third-party costs to conduct this study will be approximately
$2 million
and that it will take approximately 15 to 18 months to enroll.
Ultimately, we plan to leverage the data in ALI to find a partner to
develop MST-188 in larger indications within arterial disease, such as
stroke."
On
March 25, 2013, following a positive opinion adopted by the Committee for Orphan Medicinal Products (COMP), the European Commission designated MST-188 as an orphan medicinal product.
Brian M. Culley,
Chief Executive Officer, said: "Now that we actively are recruiting
patients in EPIC, our pivotal phase 3 study of MST-188 in sickle cell
disease, we intend to pursue strategic alliances more aggressively. We
believe orphan designation and the expectation of 10 years of marketing
exclusivity in the EU will enhance partnering interest in Europe. In
addition to enabling development in multiple countries and enhancing the
overall commercial opportunity for MST-188, partnerships will help fund
its development within the U.S." Mr. Culley continued: "Our recently announced plans to investigate
MST-188 in acute limb ischemia, a complication of peripheral arterial
disease, also may bolster our partnering efforts. Indeed, we already
have been approached by at least one pharmaceutical company that wished
to discuss our near- and long-term plans in arterial disease, which we
announced just three weeks ago."
Catalysts:
- Announcing results from the thorough QT/QTc study of MST-188, expected mid-year;
- Soliciting FDA input on our planned phase 2 study in acute limb ischemia, expected in the third quarter;
- Announcing results of
nonclinical studies evaluating the physiologic significance of TEG
results observed in prior nonclinical studies funded by the Defense Advanced Research Projects Agency (DARPA) Surviving Blood Loss (SBL) program, expected in the second half of the year;
- Initiating a microvascular blood flow sub-study in EPIC, expected in the fourth quarter;
- Initiating a phase 2 clinical proof-of-concept study of MST-188 in acute limb ischemia, expected in late 2013/early 2014;
- Obtaining orphan drug designation for MST-188 for acute limb ischemia;
- Submitting application(s) to request funding from the U.S.
government to conduct a phase 2 clinical proof-of-concept study with
MST-188 for resuscitation of shock following major trauma; and
- Filling patent applications claiming key aspects of our proprietary manufacturing process.
On March 28, 2013, Mast Therapeutics
engaged ESC Advisors to identify partnering opportunities for MST-188. Brian M. Culley, Chief Executive Officer, said: "Given the high unmet need and limited treatment options,
sickle cell disease is experiencing significant levels of interest from
strategic partners. MST-188 is now the only new molecular entity in phase 3
development in sickle cell disease. Based on its stage of development, the absence of competitive, novel
and late-stage products, its designation as an orphan drug in the
U.S.
and Europe and its potential utility in additional indications, we
believe there will be substantial interest in MST-188 from potential
partners, both in the U.S. and globally, and we intend to pursue
strategic alliances aggressively. ESC's experience in transactions
involving orphan product candidates will complement our internal
capabilities and expand the scope of our current and future partnering
discussions."
Other Considerations:
After the recent
offering, Mast Therapeutics has a fully diluted market cap of approximately $60m. As of 3/31/13, the
10Q shows cash and cash equivalents of $32m. With the addition of the $22.9m from
the 6/14 offering, cash now totals approximately $55m with zero debt. The Company is trading near its cash level, yet it has a very attractive phase 3 asset in MST-118, in the orphan
indication of SCD, which due to trial redesign, has a
VERY high
probability of success. Mast Therapeutics is also developing the therapy in what could ultimately be a very large cardio indication.
Mast Therapeutics reminds me alot of Acadia Pharmaceuticals (ACAD), which had a similar situation and setup. After learning from mistakes made in the design of their failed first phase 3 trial for their parkinsons drug, pimavanserin, Acadia analyzed the data, redesigned a new phase 3 trial and subsequently set up a a new phase 3 trial for success. After reporting positive
phase 3 results on November 27, 2012, the stock exploded from $2.30 to over $6.50, and now trades around $18.
As outlined above, Mast Therapeutics has two shorter term catalysts that could move the
stock; announcement of the results from the thorough QT/QTc study of MST-188, expected mid-year and obtainment of orphan drug
designation for MST-188 for acute limb ischemia. Longer term, once the stock gets on "catalyst traders" radars, it should experience the typical strong "biotech runup" into the SCD phase 3 clinical trial results.
Technically, on a short term basis, the stock is severely oversold and is digesting
the recent stock offering in the 45c area. There is a gap to be filled
at 61c, with major resistance at 75c -81c. On a longer term basis, a move
above that major resistance level opens the way to the $1.50-$2.75 area.
Conclusion:
Over the last few years, Mast Therapeutics has completely transformed itself, appointing a new management team, board of directors and even changed its
corporate name. The Company is dramatically different now with a laser focus on the development of its lead candidate MST-118.
Reduction of a sickle cell patient's duration of painful episodes is a
highly unmet medical need, with with only one
approved treatment option, hydroxyurea. If MST-188 is successful in the current
phase 3 clinical trial, I believe it could become the new standard of
care in the treatment for this very painful disorder. Annual U.S. incidence of SCD crisis produces 100,000
hospitalizations, if just 35,000 of those patients undergo MST-188 therapy, annual peak sales could conservatively approach $300m. Assuming a 2015 launch and conducting a conservative NPV analysis yields a current price target in the $2.00-$2.50 range.
Disclosure:
I am long MSTX. I wrote this article myself, this is NOT investment advice, it expresses
my own opinions. I am not receiving compensation for it. I have no
business relationship with Mast Therapeutics.
