La Jolla shocks the market with a positive study
La Jolla Pharmaceutical is heading to the FDA with a successful pivotal study of its treatment for dangerously low blood pressure, and investors have jumped on board for the journey. Shares in the company surged 77% on the news, adding an impressive $278m to its market value.
This is not a trip without risks, however. The California drug developer revealed very little information beyond the topline results, and the full data remain crucial for assessing the clinical relevance of LJPC-501. Of course this did not deter the sellside from slapping ever higher valuations on the stock yesterday, ahead of a fund-raising that now looks inevitable.
La Jolla shares closed Monday at $35, although this was lower than the new price targets applied by analysts: $40 from Jefferies, $55 from Cowen, $57 from Suntrust and a huge $75 from Chardan. With $66m in the bank at the end of 2016 and a stated aim to launch LJPC-501 itself, La Jolla will need to top up the coffers.
Bankers and investors are also no doubt hoping for corporate activity. However, this surely depends on the full data from the Athos-3 trial, which must now prove to be as unequivocally positive as the share price reaction suggests.
|Athos-3 topline results|
|% experiencing at least one AE||87%||92%|
|% discontinuations due to an AE||14%||22%|
|*Percentage of patients achieving prespecified target blood pressure response; **Change in cardiovascular and total SOFA score at hour 48|
Athos-3 was conducted in patients with catecholamine-resistant hypotension. These patients are experiencing distributive shock – which is frequently caused by sepsis – and their blood pressure has not been restored despite treatment with norepinephrine or vasopressin.
LJPC-501 is thus being pitched as a third-line therapy in patients with few options – 30-day mortality is more than 50%, according to La Jolla. The study enrolled 344 patients and was very highly powered to show success on the primary endpoint; its size was determined by the need to also establish safety.
The win on the primary endpoint on the surface does appear impressive, although as a potent vasoconstrictor LJPC-501 was arguably set a low bar to beat. The project is a synthetic version of human angiotensin II, a naturally occurring regulator of blood pressure.
Other than saying he was “very thrilled”, on a conference call chief executive George Tidmarsh would reveal little more than the data above, citing the need to hold back for publishing in a medical journal later this year.
An extra nugget La Jolla did choose to unveil was a numerical survival benefit, with a 22% reduction in the risk of death observed (p=0.12). However, Mr Tidmarsh refused to be drawn on any findings on the secondary endpoint. This is important because SOFA – or the sequential organ failure assessment score – is associated with mortality.
On the call he was very keen to stress that the trial design, including the primary endpoint, was agreed under a US SPA, with no emphasis placed on a mortality finding.
Devil in the details
These patients are very sick and complicated to treat, with a very poor prognosis. As such, while any signal of a survival benefit would be a huge boost for the project’s potential, this has to be considered unlikely.
Other secondary measures, and the baseline state of patients entering the trial, are keenly awaited details to help assess how this drug might be used. Catecholamine carries its own toxicities, so its use as sparing agent could well earn LJPC-501 a niche.
La Jolla clearly wants more than a niche, however, and its chances of grabbing a decent chunk of the market would be greatly aided by a clear hit on the secondary endpoint of this trial. Should this fail to emerge, doubts about the project's potential earlier in the treatment cascade will surely grow.