ChemoCentryx is about to enter the most important period of its short life as a public company. The second half of 2013 should see data readouts on its two most advanced candidates, and these events will spell out more clearly the promise of the group’s inflammation-oriented technology platform.
The first lot of data is from a phase III trial of the GlaxoSmithKline-partnered Traficet-EN in Crohn’s disease. This project has the potential to offer an oral alternative to the biologics like Remicade that now dominate the market. Meanwhile, interim phase II data from the unpartnered diabetic nephropathy treatment CCX140 should come in the third quarter, and if the trial is successful it will pique big pharma's interest.
|Product||Traficet-EN (vercirnon sodium)|
|% of market cap||150%|
|Event type||Phase III data|
ChemoCentryx’s focus is on the signalling pathways of chemokines, which play a role in inflammatory response. Its drug discovery platform has been innovative enough to stimulate a multi-compound deal with GSK, which has signed up two of the California group’s candidates in Crohn’s disease and a third in rheumatoid arthritis (Therapeutic focus – Glaxo and ChemoCentryx enter pivotal stage for novel anti-inflammatory class, January 14, 2011).
Traficet-EN is an antagonist of the chemokine receptor CCR9, a protein found primarily on T-cells that migrate to the digestive tract when signalled by the intestine-specific chemokine CCL25. That protein binds to the CCR9 ligand, the overexpression of which might have a role in the autoimmune response that triggers the persistent inflammation characteristic of Crohn’s disease and ulcerative colitis.
The phase III Shield-1 trial is testing a 500mg pill once or twice daily against placebo over 12 weeks in 600 patients. It hopes to detect a 100-point decrease from baseline measurements in the Crohn’s disease activity index – a score of 220 to 450 out of 600 is considered moderate to severe active disease, which is the patient population enrolled in the trial.
Established biologics achieved a response in anywhere from 35% to 58% of patients, although drug-to-drug comparisons are difficult to draw because of shorter treatment periods or a lower 70 point reduction used as a primary endpoint. UCB’s Cimzia had the lowest response rate of the four, achieving 35% clinical response rate at six weeks, although it was using the same 100-point reduction as Traficet; presumably that represents a goal to which ChemoCentryx and GSK can aspire.
In phase II trials, 61% of patients achieved a decrease of 70 points or more at the 12-week point, compared with 47% for placebo, a statistically significant result.
In addition to requiring subcutaneous injection or intravenous infusion, the biologics carry with them a risk of severe infection, including the progressive multifocal encephalopathy that has specifically dogged Biogen Idec’s Tysabri. The specificity of Traficet’s mechanism of action has the potential to offer reduced side effects in a more attractive oral dosage.
EvaluatePharma’s consensus forecast puts sales at $42m in 2018, a figure that would likely rise on successful results as analysts get a clearer idea of its potential. Launch would unlock a double-digit royalty stream for ChemoCentryx under a 2006 multi-compound deal that saw the UK partner agree to pay $63.5m up front and participate in the group’s series D venture round. The option fee on Traficet was worth another $35m in 2010.
JP Morgan analyst Geoff Meacham has given the compound a 70% chance of success and optimistically estimates potential peak sales of $2bn, which would result in a $350m revenue stream for the discovery partner. By comparison, Abbvie’s Humira is forecast to sell $2.38bn this year in Crohn’s disease.
The second compound, CCX140, is a higher-risk phase II play in diabetic nephropathy. It binds with the CCR2 chemokine receptor, shutting down a signalling pathway that stimulates migration of monocytes and macrophages to the kidneys.
That is a market being served by ACE inhibitors and angiotensin II antagonists to prevent disease progression, but these do not address underlying causes of the disease.
Interim 12-week data are expected in the third quarter, with investigators looking for signs that the agent is reducing proteinuria. A positive review would see the phase II expanded from 135 to 270 patients, not to mention see analysts perhaps begin to pencil in forecasts or begin to value it for its outlicensing potential.
After an initial public offering at $10 in early 2012, ChemoCentryx’s shares have see-sawed between $10 and $17, but recently took a downturn following announcement of a $64m secondary offering (IPO prices sheared as companies continue to take haircuts, August 14, 2012). Trading Monday saw the group surge 9% to $13.26 after release of first-quarter results, with shares up another 6% to $14 in early trading today, so optimism has returned.
Clearly, failure of Traficet would be a major setback, but even a poor outcome from CCX140 interim readout would probably result in a big selloff despite its rather early stage of development. Should both fail, the company would become an drug discovery business with a less-promising technology only validated by two remaining early-stage GSK collaborations on CCX168 and CCX354.
Failure in 2013 would probably not be game over for ChemoCentryx. However, for investors to remain interested it needs good news from Traficet EN; CCX140 would be good to have, too.