标题: Arrowhead v Assembly: 股市观点 [打印本页] 作者: StephenW 时间: 2019-11-22 15:12 标题: Arrowhead v Assembly: 股市观点
Investors eagerly awaiting updates from the American Association for the Study of Liver Diseases (AASLD) Annual Meeting, simply referred to as the Liver Meeting, weren't disappointed when presentations began publishing online in mid-November. Some of the most intriguing drug candidates in the pharmaceutical industry's pipeline, treating conditions ranging from fatty liver disease to chronic hepatitis B (CHB), were on display.
Arrowhead Pharmaceuticals (NASDAQ:ARWR) and Assembly Biosciences (NASDAQ:ASMB) were two companies that stoked investor interest heading into the meeting. Each is developing a treatment for CHB. Both had promising potential based on results published before the meeting. But investors appear to have coalesced around one of the drug candidates now that the meeting has ended.
Investors can easily find themselves lost in the clinical jargon of hepatitis B drug development, so it helps to explain several terms.
It starts by considering the structure of the infectious particle. The hepatitis B virus (HBV) is encapsulated within two shells: The outermost layer is the viral envelope, while the innermost layer is the nucleocapsid core. Researchers diagnose the viral infection and determine its activity level by detecting the presence of certain viral proteins produced on or within one of these layers. Therefore, the effectiveness of a drug candidate is determined by measuring the reduction of HBV proteins from baseline levels, which suggests HBV particles are being cleared from the body faster than they can be replenished.
Viral Antigen
Location
Significance
Hepatitis B surface antigen (HBsAg)
Found on the outermost layer (the viral envelope) of an HBV particle, secreted into the blood.
Used to diagnose an individual with CHB, even if they have no symptoms.
Hepatitis B envelope antigen (HBeAg)
Found between the inner and outer layer of an HBV particle, secreted into the blood.
A sign that HBV is replicating, suggesting an individual can pass it to another person.
Hepatitis B core-related antigen (HBcrAg)
Found within the innermost layer of an HBV particle, not easily detected in blood.
A sign that HBV is replicating, suggesting an individual can pass it to another person.
Data source: Liang 2009.
Researchers also look for HBV DNA and HBV RNA fragments to determine if the virus is replicating and whether a patient is responding to treatment. However, an individual is considered "functionally cured" if HBsAg can no longer be detected in blood tests, which makes the measurement of the surface antigen the gold standard in determining if a drug candidate is effective.
While nucleos(t)ide analogs (NA) are the current standard of care for CHB, it's estimated that no more than 3% of individuals receiving treatment for five years achieve a functional cure. Most individuals taking an NA never achieve a clinically meaningful reduction in HBsAg antigen, but the drug candidates from Arrowhead Pharmaceuticals and Assembly Biosciences both reported promising reductions.
What makes this hepatitis B drug candidate the winner?
One look at the divergent charts of the two pharma stocks says it all. Shares of Assembly Biosciences have fallen 21% since the beginning of November, while shares of Arrowhead Pharmaceuticals gained 18% in that span. Stretch back to the beginning of October and shares of Assembly Biosciences gained as much as 75% just before the meeting. What happened?
The updates for both hepatitis B drug candidates were promising, but the update from Arrowhead Pharmaceuticals and its collaborator Johnson & Johnson (NYSE:JNJ) was better when it comes to reductions in HBsAg.
The pair are developing a combination therapy comprising an NA and JNJ-3989, a drug candidate based on RNA interference (RNAi). The goal is to develop the foundation for a functional cure defined by reductions in HBsAg. By contrast, Assembly Biosciences is developing a combination therapy comprising an NA and ABI-H0731, which is a core inhibitor thought to work by disrupting viral replication and the innermost layer of an HBV particle. That's why the company has prioritized reductions in HBV RNA levels rather than HBsAg.
While stacking up the results side by side provides an imperfect comparison, it helps demonstrate why investors are beginning to favor JNJ-3989:
Drug Candidate
HBsAg Reduction
HBeAg and HBcrAg Reductions
Data Cutoff
JNJ-3989 + NA
31 of 32 patients achieved at least 90% reduction
Generally less robust than HBsAg reductions
16 weeks
ABI-H0731 + NA
11 of 21 patients achieved at least 80% reduction
Generally more robust than HBsAg reductions
48 weeks
Data source: Poster presentation from AASLD and press release.
As the table above makes clear, investors have good reason to favor JNJ-3989 in the race for developing a functional cure for CHB. Any arguments about the superior efficacy of ABI-H0731 as measured by reductions in envelope and core antigens is quickly snuffed out by data presented for a triple-combination therapy being developed by Arrowhead Pharmaceuticals and Johnson & Johnson.
The triple-combination therapy comprises an NA, JNJ-3989, and JNJ-6379. The third asset is a capsid assembly modulator, which means it disrupts the formation of the innermost protective layer of an HBV particle. The hypothesis is that such a combination will lead to robust reductions in HBsAg (from JNJ-3989), as well as HBeAg and HBcrAg (from JNJ-6379). Early results suggest that the hypothesis may prove correct.
In an ongoing phase 1 study of the triple-combination therapy, all 12 patients available for evaluation achieved reductions of at least 90% for both HBsAg and HBeAg after 16 weeks of treatment. By contrast, the double-combo involving ABI-H0731 achieved HBeAg reductions of at least 80% in only 11 of the 21 patients after 48 weeks of treatment.
The cure for hepatitis C, developed in the last decade, sparked renewed hope that the milestone can be duplicated in hepatitis B. While it's too soon to declare that the triple-combination therapy from Johnson & Johnson and Arrowhead Pharmaceuticals will provide that long-awaited victory and potentially save more than 1 million lives per year, it does appear to be the most promising CHB drug in the industry's pipeline based on limited data collected to date.
That explains why shares of Arrowhead Pharmaceuticals have soared since the beginning of November despite the early-stage nature of the results. It stands to earn up to $1.6 billion in milestone payments from Johnson & Johnson, plus royalties on future sales, for JNJ-3989 (formerly ARO-HBV). It could receive up to $1.9 billion in additional royalties for other drug candidates involved in the broad collaboration.
That also explains why investors are less impressed with the otherwise solid results from Assembly Biosciences. However, that doesn't mean Johnson & Johnson and Arrowhead are free from competition. A new partnership between Dicerna Pharmaceuticals and Roche promises to combine a potentially superior RNAi drug candidate with a novel capsid assembly modulator. While the new challengers won't have data until 2020, their presence should keep investors grounded.
