Biotech Values

[DewDiligence]

EGRX—A deeper dive on Ryanodex heatstroke data:

[Please refer to EGRX’s PR at: http://finance.yahoo.com/news/eagle-pharmaceuticals-reports-successful-outcomes-115000770.html and to the trial’s listing at: https://www.clinicaltrials.gov/ct2/show/NCT02513095 .]

Patients in this phase-2 trial had a mean Glasgow Coma Scale* (GCS) score at baseline of about 6 (higher is healthier, lower is sicker), which is squarely within the GCS range of 3-8 considered severe.

The primary endpoint of the trial was the proportion of Ryanodex patients relative to placebo patients who improved to a GCS score of >=13, the lower bound of the GCS range considered mild. On this measure, the Ryanodex arm achieved a rate of 29.4% vs 11.8% for the placebo arm.

We may presume from the mean baseline GCS scores of the two trial arms (6.1 for Ryanodex; 5.9 for placebo) that almost all of the patients in the trial had severe status at baseline, and hence the 29.4% and 11.8% numbers (above) for the two trial arms are good proxies for the proportion of patients in each trial arm who improved from severe GCS to mild.

That’s impressive, but one might argue that what matters even more to subjects with life-threatening heatstroke is an improvement from severe GCS to moderate, which greatly lowers the risk of an early death. (Moderate is defined as a GCS score of 9-12.)

EGRX’s PR does not furnish the proportion of patients in each trial arm with a severe-to-moderate GCS improvement; however, the severe-to-moderate numbers are tautologically at least as high as—and likely much higher than—the severe-to-mild numbers. My educated guess is that the proportion of patients in the Ryanodex arm who had a severe-to-moderate improvement at 90 minutes was at least 50%, and that the proportion in the placebo arm was no better than 25%.

If the above guesses are accurate (we’ll know when EGRX presents the full dataset at a medical conference or publishes it in a peer-reviewed journal), then I would submit that the severe-to-moderate data contribute meaningfully to demonstrating a real-world clinical benefit for Ryanodex in the treatment of severe heatstroke.

In any case, the limited top-line data that EGRX furnished in the PR certainly exceeded my expectations for what could be shown in a 34-patient trial conducted during the Hajj, and the data suggest that a Ryanodex label expansion for heatstroke could add annual sales of a few hundred million dollars—over and above the roughly $75M annual market for Ryanodex in its existing indication of malignant hyperthermia.

As an aside, I would not take too literally the claim in EGRX’s PR that the phase-2 results reported today will be sufficient for an FDA label expansion all by themselves (#msg-119231131). I expect the FDA to want a small US confirmation trial, preferably one that is blinded rather than open-label.

Disclosure: I am long EGRX and think the stock has a lot of headroom based on the prospects for Bendeka (#msg-119003236, #msg-119004422), Ryanodex in heatstroke, liquid Angiomax (#msg-118876127, #msg-118484166), and other programs (one of which has a PDUFA date of 12/27/15).

*The formula for calculating the GCS score is shown in EGRX’s PR under the heading, “About the Glasgow Coma Scale.”