Astellas Gene Therapies signaled plans to further expand in its namesake focus area this week, when it joined Taysha Gene Therapies (TSHA) on Tuesday to announce a $50 million investment in the Dallas drug developer that could expand the pipeline of the Japanese pharma giant.

Astellas Pharma (4503)’s investment gives it a 15% stake in Taysha, as well as an exclusive option to obtain an exclusive license for two of Taysha’s three clinical-phase adeno-associated virus (AAV)-based gene therapy candidates, both targeting rare monogenic central nervous system diseases.

One candidate is TSHA-102, a self-complementary intrathecally delivered AAV serotype 9 (AAV9) gene replacement therapy, and the first-and-only gene therapy for Rett syndrome to have reached the clinic. TSHA-102 applies Taysha’s novel miRNA-Responsive Auto-Regulatory Element (miRARE) platform, designed to regulate transgene expression genotypically on a cell-by-cell basis. miRARE technology is intended to prevent toxicity associated with transgene overexpression and can be potentially utilized across other indications.

The other gene therapy candidate, TSHA-120, is an intrathecally dosed AAV9 gene replacement therapy delivering the gene gigaxonin for the treatment of giant axonal neuropathy (GAN). TSHA-120 is currently being evaluated in an ongoing Phase I/II clinical trial (NCT02362438).

Both candidates have received the FDA’s Orphan Drug and Rare Pediatric Disease designations, as well as the European Commission’s Orphan Drug designation.

“We are encouraged by Astellas’ investment as it provides Taysha with additional capital in the near term and could rapidly evolve to become a very strong longterm partnership with a committed player in the gene therapy space (should Astellas exercise its options),” Jack K. Allen, CFA, a Senior Research Analyst with Baird, wrote Wednesday in an investor note.

However, despite saying the firm was positive on the Astellas-Taysha deal, Allen lowered Baird’s price target for Taysha shares from $26 to $21 “given the challenging macroeconomic outlook.”

Jefferies analyst Eun Yang, PhD, highlighted in a research note that Astellas’ option for TSHA-120 is available for an unspecified period after Taysha receives formal minutes of its Type B end-of-Phase II meeting with the FDA, expected to occur in mid-January 2023.

According to Yang, Taysha previously told analysts that it expected FDA feedback on a potential approval path for TSHA-120 to be similar to feedback expected from the U.K.’s Medicines and Healthcare products Regulatory agency (MHRA), with the company expected the agencies to require potency assays & dosing of at least ~three to five patients for about six months with a commercial grade material for clinical comparability. Based on that scenario, Taysha had anticipated potential FDA approval by year-end 2023 or early 2024.

Under another significant portion of the investment agreement, disclosed in a regulatory filing, Taysha effectively gave Astellas a right of first refusal to acquire the company. Taysha agreed to “not solicit or encourage any inquiries, offers or proposals for, or that could reasonably be expected to lead to, a Change of Control” (such as a merger or acquisition) without first notifying Astellas, then offering Astellas “the opportunity to submit an offer or proposal to the Company for a transaction that would result in a Change of Control.”

“If Astellas delivers an offer to the Company for a transaction that would result in a Change of Control, the Company and Astellas will attempt to negotiate in good faith the potential terms and conditions for such potential transaction that would result in a Change of Control,” Taysha and Astellas agreed.

Should Astellas decline to submit such an offer in a specified period of time, only then would Taysha be able to solicit third party bids for a change of control transaction.

Astellas’ $50 million investment consists of $20 million to be paid to Taysha in return for the rights granted under the option agreement, plus $30 million Astellas agreed to spend in return for 7,266,342 shares  of Taysha stock. The stock purchase prices Taysha shares at $4.13 a share—nearly three times their closing price the day before the Astellas investment was announced.

In connection with its equity investment, Astellas will receive one observer seat on Taysha’s Board of Directors.

Taysha said Astellas’ investment will keep its cash runway stretching into the fourth quarter of 2023, as the company guided to investors on August 11 when it released second-quarter results. Taysha finished Q2 with $66.2 million in cash and cash equivalents, as well as a net loss of $33.9 million, versus a net loss of $40.9 million in the second quarter of 2021.

Astellas’ investment proved to be a great short-term boost for Taysha’s shares, which nearly doubled, rising 97% from $1.51 to $2.98 on Tuesday. However, Taysha gave back about half of that gain Wednesday as shares plummeted 27.5% to $2.16.

Astellas investors appeared unfazed by the deal, as its share price rose just 2% on the Tokyo Stock Exchange to ¥2,016 ($13.83), followed by a 1% gain Wednesday, to ¥2,042.50 ($14.02) before shares dipped nearly 1% Wednesday to ¥2,028 ($13.91).

The Taysha deal is Astellas’ latest move to bolster its gene therapy presence. In June, Astellas opened a $100 million manufacturing facility in Sanford, NC. The late-stage clinical and commercial manufacturing facility is the company’s third facility devoted to producing gene therapies, joining sites in Tsukuba, Japan, 45 miles northeast of the pharma giant’s headquarters in Tokyo, and South San Francisco, CA.

And in December 2021, Astellas announced plans to develop next-generation AAV vectors for gene therapies targeting skeletal and cardiac muscle using Dyno Therapeutics’ CapsidMap™ platform, through a collaboration with Dyno  that could generate more than $1.6 billion for the George Church, PhD-co-founded company.

Of Astellas’ 14 gene therapy candidates in its pipeline, only two have reached clinical phases. One is resamirigene bilparvovec (previously known as AT132), a gene replacement therapy for X-linked Myotubular Myopathy (XLMTM) consisting of an AAV8 vector containing a functional copy of the MTM1 gene, to transfect and express myotubularin in skeletal muscle cells. Last year, Astellas acknowledged the death of a fourth boy in the troubled Phase I/II ASPIRO trial of AT132 (NCT03199469); the other three boys all died in 2020.

Astellas’ other clinical gene therapy candidate is AT845, a gene replacement therapy for Pompe disease caused by mutations in the gene encoding the lysosomal enzyme alpha-glucosidase (GAA). In June, the FDA placed Astellas’ Phase I/II FORTIS trial of AT845 on clinical hold, after one trial participant developed peripheral sensory neuropathy, a serious adverse event (SAE). The SAE was classified by a site investigator as Grade 1 (mild in severity) but deemed serious due to medical significance.

Phase III CKD Failure Shreds Tricida Shares

Tricida (TCDA) shares cratered 94.5% on Monday, from $10.88 to just 60 cents a share, after announcing disappointing topline Phase III results for its chronic kidney disease (CKD) candidate veverimer. Tricida shares continued their slide over the following two trading days, falling another 8% to 55 cents on Tuesday, then plunging another 15% to $0.467 on Wednesday.

Veverimer failed the Phase III VALOR-CKD trial (NCT03710291) by missing its primary endpoint, namely time to the first occurrence of any event in the composite endpoint of renal death, end-stage renal disease (ESRD), or a confirmed greater than or equal to 40% reduction in estimated glomerular filtration rate (eGFR), also called DD40.

Over the 26.7-month median duration of treatment, the number of patients experiencing a DD40 primary endpoint event stood at 149 of the 739 treated with veverimer (9.9% event rate) and 148 of the 737 treated with placebo (9.8%), for a hazard ratio of 0.99.

Worse for Tricida, VALOR-CKD showed higher than expected serum bicarbonate values in placebo patients compared with veverimer-treated patients. As a result, Tricida stated, the difference in serum bicarbonate levels between the two groups was insufficient to evaluate the effect of veverimer on slowing CKD progression in patients with metabolic acidosis and CKD.

Given our past clinical experience with veverimer, and the VALOR-CKD trial design, we were surprised that there was not a greater separation in serum bicarbonate levels between the two groups,” Gerrit Klaerner, PhD, Tricida’s CEO and President, said in a statement. “In light of the disappointing results from the trial, and our cash runway, we are evaluating next steps.”

Tricida finished the first half of this year with cash and cash equivalents of $22.152 million—up 5% from $21.113 million as of December 31, 2021, but 84% below the $137.857 million it enjoyed as of December 31, 2020.

“Tricida currently has the financial resources to fund its planned operations into early in the second quarter of 2023,” the company stated in announcing its Q2 results on August 8.

Tricida proceeded with VALOR-CKD after the FDA responded to the company’s New Drug Application (NDA) seeking accelerated approval for veverimer in August 2020 with a Complete Response Letter. In the CRL, the FDA sought additional data beyond two earlier Phase III trials, the 12-week TRCA-301 (NCT03317444) and TRCA-301E 40-week safety extension trial (NCT03390842)—both of which assessed the magnitude and durability of the treatment effect of veverimer on the surrogate marker of serum bicarbonate and the applicability of that treatment effect to the U.S. population.

Veverimer is an oral polymer designed to slow progression in patients with CKD and metabolic acidosis, a condition commonly caused by CKD that is believed to accelerate kidney deterioration, and estimated to affect approximately 4.3 million CKD patients in the U.S. No currently approved therapies are designed to slow progression of kidney disease through the treatment of chronic metabolic acidosis in patients with CKD.

Taking Aim at Pfizer Pays Off for Vaxcyte

Vaxcyte (PCVX) shares nearly doubled this week, zooming 98% to $40.80 on Wednesday. Behind the stock surge was positive topline data from a Phase I/II proof-of-concept trial (NCT05266456) assessing VAX-24, the company’s 24-valent pneumococcal conjugate vaccine (PCV).

Vaxcyte said VAX-24 met the study’s primary safety and tolerability objectives by demonstrating a safety profile similar to Pfizer’s Prevnar 20TM (PCV20) for all doses studied. VAX-24 also met or exceeded established immunogenicity standards for all 24 serotypes at the conventional 2.2mcg dose, which Vaxcyte said it will advance into a Phase III program expected to begin next year, with topline data projected for 2025.

The 2.2mcg dose of VAX-24 met standard opsonophagocytic activity (OPA) response non-inferiority criteria for all 20 serotypes common with Prevnar 20. Of those 20 serotypes, higher immune responses were achieved by 16 (3, 4, 6B, 7F, 8, 9V, 10A, 11A, 12F, 14, 15B, 18C, 19A, 19F, 23F and 33F) while the other four serotypes (9V, 18C, 19F and 33F) reached statistical significance.

At all three doses in the Phase I/II trial, VAX-24 met standard superiority criteria over the current standard-of-care in adults for all four serotypes unique to the vaccine (2, 9N, 17F and 20B), which cover 10%-15% of strains causing invasive pneumococcal disease.

“The study results demonstrate that VAX-24 has the potential to provide broader coverage and better immune responses relative to the standard-of-care. We believe this presents an opportunity to set a new bar for immunogenicity standards for pneumococcal vaccines,” Grant Pickering, Vaxcyte’s CEO and Co-Founder, said in a statement. “The findings indicate a potential best-in-class profile for VAX-24 and validate our carrier-sparing approach to enable the development of broader-spectrum PCVs.”

Two analysts agreed with Pickering’s upbeat assessment.

“This readout not only suggests VAX-24 to have the best-in-class pneumococcal vaccine potential (vs. comps [competitors] that are currently approved AND in the development) but also validates the precision conjugation platform (licensed from STRO [Sutro Biopharma]) to overcome key technical/biological challenges (e.g., carrier protein suppression),” Roger Song, MD, CFA, wrote Monday in a research note.

Specifically, Song explained, the results at 2.2mcg further validated the platform’s ability to overcome carrier protein suppression—and supported developmental progression of another PCV in Vaxcyte’s pipeline, the 31-serotype VAX-XP.

“As a result,” Song added,” we expect the stock to trade into the upside (~50-100%+).”

Song’s forecast proved correct, as Vaxcyte shares leaped 60% on Monday, from $20.58 to $33.00, and kept climbing early this week, rising 6% to $34.86 on Tuesday and another 17% on Wednesday, when shares closed at $40.80.

Joseph Stringer, PhD, a Senior Analyst with Needham, used a baseball metaphor, hailing Vaxcyte’s positive news in a research note as a “home-run” or best-case scenario that validated the company and its platform, significantly de-risking both, as reported by Fintel.

Prevnar 20, marketed in Europe as Apexxnar, won FDA approval in June 2021 and European approval in February. Pfizer reports only combined revenues for Prevnar 20 and the older Prevnar 13, which fell 10% last year from $5.850 billion to $5.272 billion. That decline was paced by a 27% revenue drop in the U.S. that the company blamed in part on disruptions related to COVID-19, including priority given by authorities to primary and booster vaccination campaigns, as well as a lower remaining unvaccinated eligible adult population.

However, the launch of Prevnar 20 sparked a rebound in Prevnar family revenues, which during the first half of this year climbed 19% from $2.524 billion to $2.994 billion. U.S. revenues jumped 41% during Q2, Pfizer added.

Triple Play: ESSA Aces Prostate Cancer Trial

ESSA Pharma (EPIX) shares nearly tripled, rocketing 180% from $1.72 to $4.82 on Wednesday, after the company announced updated positive clinical data from the first two cohorts of a Phase I/II trial evaluating lead candidate EPI-7386 plus Pfizer’s Xtandi® (enzalutamide) in patients with metastatic castration-resistant prostate cancer (CRPC).

ESSA’s data from the open-label, dose escalation study showed that four of six evaluable patients completing the study achieved a PSA90—the earliest attainment of a ≥90% decline in prostate-specific antigen (PSA) relative to baseline PSA—by 12 weeks of dosing. Five of six have achieved a PSA90 to date.

Seven mCRPC patients naïve to second generation antiandrogens were enrolled in the trial’s first two cohorts. The seventh patient dropped out after one cycle of dosing due to taking a strong CYP3A inducer concomitant medication which lowered exposures to both EPI-7386 and enzalutamide, and thus was not evaluable for efficacy.

“We are encouraged by the rapid and deep PSA responses observed in the dose escalation study of EPI-7386 in combination with enzalutamide,” stated David Parkinson, MD, ESSA’s President and CEO.

Parkinson added that a third dose escalation cohort is now being enrolled while ESSA optimizes the dose of EPI-7386, in preparation for the study’s Phase II portion.

South San Francisco, CA-based ESSA also said that pharmacokinetic results from its first two cohorts showed enzalutamide exposure to be minimally impacted by EPI-7386 while exposures of EPI-7386 were reduced by coadministration with enzalutamide, but remained clinically relevant based on preclinical xenograft studies. The company said its combination therapy also showed a favorable safety profile consistent with second-generation antiandrogens, with no dose limiting toxicities seen.

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