RedHill And Talicia In Helicobacter Pylori Eradication And The Market Assessment
Mar. 18, 2019 6:56 PM ET|
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About: RedHill Biopharma Ltd. (RDHL)
First Genesis Consulting
First Genesis Consulting
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Summary
Talicia is a triple combination investigative drug candidate that demonstrated superior clinically meaningful benefits in eradicating H. pylori infection relative to the current branded standard of care.
Talicia provides clinical differentiation through its development as an advanced first-line therapy for eradication of H. pylori irrespective of ulcer status.
On approval, Talicia will be the first FDA approved drug for H. pylori eradication in a decade.
NDA application will be filed in H1/2019.
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Market Assessment
Talicia by RedHill (RDHL) is a novel proprietary fixed-dose triple therapy combination of two antibiotics (amoxicillin/rifabutin) and a proton pump inhibitor (PPI; omeprazole) in an all-in-one oral capsule. In Q4/2018, Redhill reported a confirmatory Phase 3 trial data readout of Talicia demonstrating significant clinical differentiation by its enhanced eradication efficacy of H. pylori infection (84%) relative to current branded standard of care ((SoC; Prevpac; 61%; Pylera; 80%) therapies. Furthermore, its clinical development as an advanced first-line therapy for eradication of H. pylori irrespective of ulcer status could broaden its therapeutic application. No safety or tolerability signal was reported for Talicia.
Most current branded SoC therapeutics, Prevpac and Pylera, provide clinical benefit(s) by incorporating antibiotics, clarithromycin and metronidazole, as part of their active ingredient. For this reason, a 30-40% failure eradication rate due to H. pylori resistance to clarithromycin and metronidazole (Graham, DY, Clin. Gastroenterol Hepatol. 2009) have been documented with SoC. Besides, unwanted side effects including a warning for potential carcinogenicity due to metronidazole has made Pylera undesirable.
The crux of Talicia superiority lies in the inclusion of antibiotics, rifabutin, as an active ingredient since the efficacy of rifabutin in eradicating multi-resistant H. pylori is well documented (Lim et. al. Helicobacter, 2014; Zullo et. al. J. Gastrointestin Liver Dis. 2010). The presence of rifabutin in Talicia cocktail enhanced its eradication effects more than 25% as revealed in the top-line data (i.e. 84% for Talicia vs. 58% for active comparator; amoxicillin/omeprazole). Equally important, H. pylori resistance to amoxicillin and rifabutin is negligible at less than <1.04% (Hirschi, et. al. J. Gastroenterol. 1996; Mégraud F, Gut, 2004). Rifabutin is a member of the rifamycin family belonging to the WHO lists of essential medicine.
Talicia has Qualifying Infectious Disease Product (QIDP) designation under the GAIN Act for serious or life-threatening infections, including Fast-Track development, priority review, and extended market exclusivity for a total of 8 years. Furthermore, in 2017, the WHO designated H. pylori as one of high priority antibiotics-resistant pathogen in need of new effective antibiotics.
Institutional Investors, Insiders Purchase, And Analyst Ratings
RedHill: The latest 13F filings revealed Institutional ownership at 29% with 48 Institutional holders accounting for a total share of 8,231,716. Top 3 holders are 683 Capital Management, Disciplined Growth Investors, and IBEX Investors. Analysts from 5 firms recommend a buy with a 12-month consensus price target of $19.02.
Financially, at the end of Q4/2018, cash and cash equivalents balance were approximately $53.2M. RedHill also strengthened Talicia intellectual property protection through 2034 in the US. On approval by the FDA, commercial launch for Talicia in the U.S. is expected to begin in H2/2019.
Giving CEO Dror Ben-Asher the last word:
2019 is an exciting and transformative year for RedHill, as our team continues to focus intensively on diligent preparations for the NDA submission of TALICIA, as well as the potential FDA approval and commercial launch of the TALICIA in the United States, potentially as early as the fourth quarter of this year. We are confident and well-positioned for the future.
Market Outlook
With 30% of US population infected with H. pylori, there is a need for advanced first-line therapies with broad clinical indication to slow, eradicate the progressive and fatal pathophysiological consequences of H. pylori in the gastrointestinal tract. Talicia fits that profile.
Nevertheless, Talicia's novel H. pylori infection eradication benefits will advance the clinical quest initiated by Drs. Marshall, Warren, and Borody to dramatically eradicate the H. pylori infection that leads to gastrointestinal inflammation, pathological and possibly oncological injury. This makes Talicia clinically de-risked and a good investment opportunity.
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Disclosure: I am/we are long RDHL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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