07 2014 to 08 2016
Aug 16, 2016 19:57:21 GMT -5
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Post by digdeeper1976 on Aug 16, 2016 19:57:21 GMT -5
The following is a recap of what has happened since 2014. Some of this is speculation on my part. I will address things that I think are valid concerns.
When we backtrack from Analyst Day September 24 2015. we can see that the first doses of ARC-520 were given to the chimps around July of 2014. This seems to be confirmed by the excitement that was present in the August 12th 2014 conference call. What they were seeing in the first doses of the chimp study and the sudden drop in HBsAg from a patient (that turned out to be a lab error in a placebo patient) was the focus of this excitement. I think when the cohorts were un-blinded Arrowhead was surprised the results were not better. Now we know that they were seeing late responders in every cohort and the placebo patients HBsAg drop happens around day 57. This was just before the August presentation. Of course they would have thought this patient was a ARC-520 patient. No one could blame them for that but, they should not have been talking about what they thought they were seeing in a blinded cohort. They were giving in to market pressure to provide some results. This is a mistake I don’t think they will ever repeat and in fact have not mentioned a goal KD for the AAT or 521.
When AASLD abstract came out in October of 2014 and ARC-520 did not perform anywhere near the .7-.8 log reduction the Analyst had mentioned during the August presentation, the stock dropped. The stock has yet to recover from this sell off.
Regardless of the stock performance, Arrowhead was confident the 4mg would be much better in people then the 2mg. They had seen the results of the chimp getting multiple doses and they were getting KD of nearly 3log with multiple doses. Imagine the surprise of the Arrowhead team when the 4mg results were not any better than the 2mg dose.
The question is: should they have released the results as soon as they were available? Keeping these results from the public keep a tight lid on the stock for many months. I believe this was the primary reason every event was shorted and the short interest remained so high. On the other hand this was the first time they had used DPC in humans. Showing poor performance in the first drug would not be good news for the whole Delivery system. It is my opinion given the choices they had available they did the best the could have.
I hate to even bring the Partial clinical hold up at all but, it is a reality of the time line. They filed for multiple doses 2mg and 4mg parallel design with the FDA. Arrowhead filed an aggressive design to keep the program moving along at the highest possible rate. The 4mg dose was already through phase 1. They had the chimp study that they obviously referenced when talking with the FDA. They also had the pharmacokinetics studies to show that the part of the drug that drives toxicity is gone in 24hrs. Arrowhead was dosing once a month so the margin for error was pretty good. Requiring Arrowhead to start at 1mg is probably overkill on the safety side. This is what the FDA decided. Unfortunately the FDA had to put a label on it and they don’t have one that says we want you to start at a lower dose then you requested. Hence the PCH that the market did not understand.
When keeping with the July start for the chimps study the first doses of the IDNA triggers were given in February 2015. I think this is about the time frame they started to talk about multiple dose therapy and combination therapy. Here is another debatable subject should they have known that a significant amount of HBsAg was produced in the IDNA? We can find papers that declared this to be true as far back as 2000. Everything is easy in hindsight. Arrowhead is not a HBV company. They are learning / proving much of this as they go along.
My theory is between May-September Arrowhead was considering just moving forward with ARC-520 in Monarch and leaving the mono therapy testing to ARC-521. I base this on Arrowhead delayed start to studies during this time frame.
We know that they had approval to begin the US study on Apr 13, 2015. The next month they started the study.
Another example of an announced approval and the study Start Date is 521. Arrowhead received approval for the study on April 29 2016 and by June 16 2016 they were recruiting people for the study.
On Jun 17, 2015 Arrowhead Receives Regulatory Clearance to Begin Heparc-2002-3
The study Start Date is not the next month but, was delayed until October 2015
Once they got the KD they expected with ARC-520 and saw the immune response in the 7 chimps they decided a mono therapy with ARC-520 was back on the table. They moved quickly to start these studies and decided to do an open label extension study of Heparc-2001. The talk of combination therapy and multiple dose therapy seemed to quiet down. Once they saw the duration of the KD in cohort 7 they decided to move up to a 6mg dose.
Here is another point of contention: the cohort 7 people were given Entecavir so the results are not reliable. If you compare the results of cohort 5 with that of cohort 7 you do see that HBcrAg and HBeAg are higher in cohort 7 then in cohort 5. If neither of these proteins are produced in the IDNA why would it be higher? It could be a lot of reasons for this but, it could be that early on the NUCs do have an effect on these proteins. If you were to take this into account and say the differences would be similar then KD in cohort 7 would be 1log to 1.3 log. Still pretty darn good.
That wraps up 2014 and 2015. 2016 has been plagued by not a great market for biotech stocks and Arrowhead’s need for cash. The Balance Sheet running on the verge of empty slammed the lid back down on the stock that Analyst Day removed. So far in 2016 we have had 3 conference calls and several presentations to guide the story.
in the February conference call
The theme of that call seems to be we could see 520 data at any time. They also announced that they were slowing down programs other than HBV and AAT. They revealed that they had gone up to 5mg in the AAT study. I think we have the answer as to why they dosed higher in AAT at the August CC. BG said “It will also probably answer a question that's out there in the community of just how much AAT is made inside the liver relative to what's made outside the liver”
At EASL we learned that cohort 7 had significant KD at day 85. With 1 person still at 1 log KD at day 85. EASL also revealed the signs of immune reactivation.
“There was a significant association between the development of an HBsAg Clearance Profile and ARC-520 therapy in HBV patients”
“Complexed HBsAg antibodies (anti-HBs) were developed and detected in HBV patients treated with ARC-520, which may represent a recovery of the immune system response”
The May CC was the first CC as Arrowhead pharmaceuticals.
Again it was largely about 520 and possible data release at any time. They did spend more time on the rest of the pipeline then they had in previous Conference Calls. On this call they revealed that ARC-F12 has a sub-Q formulation. They also announced they had dosed the 5mg dose in the infusion rate study and they intended to dose up to 6mg in the 2001 study. If the time line from dosing the phase 1 to being able to do the same dose in HBV patients is the same as 521, then they have already dosed at 6mg in the 2001 stud. If the plan is to move these people into a multiple dose extension, we should see the protocol show up in the clinical trials website before year end. We also learned that they had not moved all of cohort 7 into the multiple dose extension. I have said repeatedly that the only thing that makes sense is they are waiting for the KD to return to baseline.
This brings us up to the most recent August CC.
This conference call focused on DPC delivery and Arrowhead as a platform company. CA went out of his way to point out that the extra-hepatic version of DPC is single molecule. They revealed that 521 will be dosing the 2mg dose in HBV patients this month and 4mg next month. CA said that “we are in active discussions around preclinical discovery stage collaborations”. I would not be surprised to here something on this by year end. They still maintain that waiting for the data to mature before entering into a partnership agreement will be in the best interest of shareholder. They also announced that they had approval to move forward with multiple dose therapy of AAT.
Arrowhead said they have access to non dilutive capital and they continue to say that. I don’t think they ever thought they could replenish the BS with money from deals on drugs not currently in the pipeline. Long term this is a viable solution as the drugs get into the clinic and milestone payments are made. I do believe they thought that something would happen in the clinic that would raise the share price to a level that they would be more willing to raise cash through the market. I have no idea what they thought would happen or when. Either things were delayed longer than they thought or investors were getting anxious and telling the company to do something soon.
To summarize the last 2 years
1 Most of the “mistakes” were made by being an aggressive management or bending to the will of the market. Personally I like them moving as fast as possible. With Arrowhead at least you know they are not just buying time to keep them employed.
2)I think 520 will prove to be efficacious. We have seen a lot of evidence that it will be over the last 2 years.
3) 521 will ultimately be successful as well. They may not need to KD sAg for the immune system to clear the virus but, it can’t hurt.
4) AAT data this year should provide a catalyst for the stock.
5) Collaboration with other drugs in Monarch should be a catalyst as well
6) Working with BP on preclinical projects should help the share price as well.
7) A cure for HBV will be huge for a company of any size. It will be magnified for Arrowhead because of limited number of shares.
8) The DPC delivery platform has the potential to dwarf HBV.
When we backtrack from Analyst Day September 24 2015. we can see that the first doses of ARC-520 were given to the chimps around July of 2014. This seems to be confirmed by the excitement that was present in the August 12th 2014 conference call. What they were seeing in the first doses of the chimp study and the sudden drop in HBsAg from a patient (that turned out to be a lab error in a placebo patient) was the focus of this excitement. I think when the cohorts were un-blinded Arrowhead was surprised the results were not better. Now we know that they were seeing late responders in every cohort and the placebo patients HBsAg drop happens around day 57. This was just before the August presentation. Of course they would have thought this patient was a ARC-520 patient. No one could blame them for that but, they should not have been talking about what they thought they were seeing in a blinded cohort. They were giving in to market pressure to provide some results. This is a mistake I don’t think they will ever repeat and in fact have not mentioned a goal KD for the AAT or 521.
When AASLD abstract came out in October of 2014 and ARC-520 did not perform anywhere near the .7-.8 log reduction the Analyst had mentioned during the August presentation, the stock dropped. The stock has yet to recover from this sell off.
Regardless of the stock performance, Arrowhead was confident the 4mg would be much better in people then the 2mg. They had seen the results of the chimp getting multiple doses and they were getting KD of nearly 3log with multiple doses. Imagine the surprise of the Arrowhead team when the 4mg results were not any better than the 2mg dose.
The question is: should they have released the results as soon as they were available? Keeping these results from the public keep a tight lid on the stock for many months. I believe this was the primary reason every event was shorted and the short interest remained so high. On the other hand this was the first time they had used DPC in humans. Showing poor performance in the first drug would not be good news for the whole Delivery system. It is my opinion given the choices they had available they did the best the could have.
I hate to even bring the Partial clinical hold up at all but, it is a reality of the time line. They filed for multiple doses 2mg and 4mg parallel design with the FDA. Arrowhead filed an aggressive design to keep the program moving along at the highest possible rate. The 4mg dose was already through phase 1. They had the chimp study that they obviously referenced when talking with the FDA. They also had the pharmacokinetics studies to show that the part of the drug that drives toxicity is gone in 24hrs. Arrowhead was dosing once a month so the margin for error was pretty good. Requiring Arrowhead to start at 1mg is probably overkill on the safety side. This is what the FDA decided. Unfortunately the FDA had to put a label on it and they don’t have one that says we want you to start at a lower dose then you requested. Hence the PCH that the market did not understand.
When keeping with the July start for the chimps study the first doses of the IDNA triggers were given in February 2015. I think this is about the time frame they started to talk about multiple dose therapy and combination therapy. Here is another debatable subject should they have known that a significant amount of HBsAg was produced in the IDNA? We can find papers that declared this to be true as far back as 2000. Everything is easy in hindsight. Arrowhead is not a HBV company. They are learning / proving much of this as they go along.
My theory is between May-September Arrowhead was considering just moving forward with ARC-520 in Monarch and leaving the mono therapy testing to ARC-521. I base this on Arrowhead delayed start to studies during this time frame.
We know that they had approval to begin the US study on Apr 13, 2015. The next month they started the study.
Another example of an announced approval and the study Start Date is 521. Arrowhead received approval for the study on April 29 2016 and by June 16 2016 they were recruiting people for the study.
On Jun 17, 2015 Arrowhead Receives Regulatory Clearance to Begin Heparc-2002-3
The study Start Date is not the next month but, was delayed until October 2015
Once they got the KD they expected with ARC-520 and saw the immune response in the 7 chimps they decided a mono therapy with ARC-520 was back on the table. They moved quickly to start these studies and decided to do an open label extension study of Heparc-2001. The talk of combination therapy and multiple dose therapy seemed to quiet down. Once they saw the duration of the KD in cohort 7 they decided to move up to a 6mg dose.
Here is another point of contention: the cohort 7 people were given Entecavir so the results are not reliable. If you compare the results of cohort 5 with that of cohort 7 you do see that HBcrAg and HBeAg are higher in cohort 7 then in cohort 5. If neither of these proteins are produced in the IDNA why would it be higher? It could be a lot of reasons for this but, it could be that early on the NUCs do have an effect on these proteins. If you were to take this into account and say the differences would be similar then KD in cohort 7 would be 1log to 1.3 log. Still pretty darn good.
That wraps up 2014 and 2015. 2016 has been plagued by not a great market for biotech stocks and Arrowhead’s need for cash. The Balance Sheet running on the verge of empty slammed the lid back down on the stock that Analyst Day removed. So far in 2016 we have had 3 conference calls and several presentations to guide the story.
in the February conference call
The theme of that call seems to be we could see 520 data at any time. They also announced that they were slowing down programs other than HBV and AAT. They revealed that they had gone up to 5mg in the AAT study. I think we have the answer as to why they dosed higher in AAT at the August CC. BG said “It will also probably answer a question that's out there in the community of just how much AAT is made inside the liver relative to what's made outside the liver”
At EASL we learned that cohort 7 had significant KD at day 85. With 1 person still at 1 log KD at day 85. EASL also revealed the signs of immune reactivation.
“There was a significant association between the development of an HBsAg Clearance Profile and ARC-520 therapy in HBV patients”
“Complexed HBsAg antibodies (anti-HBs) were developed and detected in HBV patients treated with ARC-520, which may represent a recovery of the immune system response”
The May CC was the first CC as Arrowhead pharmaceuticals.
Again it was largely about 520 and possible data release at any time. They did spend more time on the rest of the pipeline then they had in previous Conference Calls. On this call they revealed that ARC-F12 has a sub-Q formulation. They also announced they had dosed the 5mg dose in the infusion rate study and they intended to dose up to 6mg in the 2001 study. If the time line from dosing the phase 1 to being able to do the same dose in HBV patients is the same as 521, then they have already dosed at 6mg in the 2001 stud. If the plan is to move these people into a multiple dose extension, we should see the protocol show up in the clinical trials website before year end. We also learned that they had not moved all of cohort 7 into the multiple dose extension. I have said repeatedly that the only thing that makes sense is they are waiting for the KD to return to baseline.
This brings us up to the most recent August CC.
This conference call focused on DPC delivery and Arrowhead as a platform company. CA went out of his way to point out that the extra-hepatic version of DPC is single molecule. They revealed that 521 will be dosing the 2mg dose in HBV patients this month and 4mg next month. CA said that “we are in active discussions around preclinical discovery stage collaborations”. I would not be surprised to here something on this by year end. They still maintain that waiting for the data to mature before entering into a partnership agreement will be in the best interest of shareholder. They also announced that they had approval to move forward with multiple dose therapy of AAT.
Arrowhead said they have access to non dilutive capital and they continue to say that. I don’t think they ever thought they could replenish the BS with money from deals on drugs not currently in the pipeline. Long term this is a viable solution as the drugs get into the clinic and milestone payments are made. I do believe they thought that something would happen in the clinic that would raise the share price to a level that they would be more willing to raise cash through the market. I have no idea what they thought would happen or when. Either things were delayed longer than they thought or investors were getting anxious and telling the company to do something soon.
To summarize the last 2 years
1 Most of the “mistakes” were made by being an aggressive management or bending to the will of the market. Personally I like them moving as fast as possible. With Arrowhead at least you know they are not just buying time to keep them employed.
2)I think 520 will prove to be efficacious. We have seen a lot of evidence that it will be over the last 2 years.
3) 521 will ultimately be successful as well. They may not need to KD sAg for the immune system to clear the virus but, it can’t hurt.
4) AAT data this year should provide a catalyst for the stock.
5) Collaboration with other drugs in Monarch should be a catalyst as well
6) Working with BP on preclinical projects should help the share price as well.
7) A cure for HBV will be huge for a company of any size. It will be magnified for Arrowhead because of limited number of shares.
8) The DPC delivery platform has the potential to dwarf HBV.