Biotech Values

[mcbio]

RIGL @ Piper (12/1/10)

[I think it's important to note that two of the three Phase 3 efficacy trials are in a patient population wherein FosD showed clear success in Phase 2 (DMARD failures, including methotrexate). Also, RIGL now at least has what appears to be a decent explanation for why the Taski3 trial in TNF-failure patients failed on ACR scores and may be able to design a Phase 3 trial in these patients that is more likely to succeed. Finally, on the safety front, RIGL has to date seen no increase in cardiovascular outcomes (strokes, MIs) as a result of FosD treatment.]

1. RIGL believes it has a better handle now on why its Phase 2b Taski3 trial of FosD in TNF-failure RA patients showed no benefit on ACR scores. RIGL indicated that patients in this trial had, on average, failed four prior biologics and most patients had sub-normal levels of CRP which is usually a sign that there is no longer a circulating inflammatory disease. RIGL/AZN have designed one of the three Phase 3 pivotal efficacy trials for FosD (the other two efficacy trials are in DMARD failure patients, including methotrexate, wherein FosD showed clear success in the Phase 2b Taski2 trial and there are also two additional safety trials) to include TNF-failure RA patients that have only failed one biologic so that there is a greater likelihood that there may still be a circulating inflammatory disease that FosD could address. The Phase 3 FosD program is as follows: http://www.clinicaltrials.gov/ct2/results?term=oskira . (RIGL's CEO actually said that the Phase 3 TNF-failure trial would include patients that failed "no more than a few" biologics, but the actual trial looks like it is specific to just one failed biologic.)

2. Regarding the hypertensive side-effect of FosD, RIGL's CEO indicated that, if the blood pressure signal does occur (2-3mm mercury bp change in some patients who are already on anti-hypertensive drugs), it usually just occurs in the first month and there typically only needs to be a one-time adjustment in anti-hypertensive medication to resolve the increase. With an increase in blood pressure, there's a question of what effect there will be longer term on cardiovascular outcomes if the blood pressure increase is not managed. RIGL has seen no effect so far on cardiovascular outcomes with FosD treatment. Through 1500 patient years, the cardiac event rate (strokes, MIs) is .61 events per 100 patient years (I'm assuming this number is based on patients that have controlled the blood pressure increase as I assume all blood pressure increases were treated so I guess there's still the question of what the rate would be if blood pressure is not managed). This compares favorably to two big databases managed by Stanford and Harvard that have 85,000 patients out to twenty years that show a cardiac event rate of .5 to .75. Also, there was apparently a prior study done on RA patients in Finland that showed a baseline stroke/MI rate of .72.

3. In its guidance for monitoring Phase 3 cardiovascular events, the only modification made by the FDA to RIGL/AZN's Phase 3 design was to increase the frequency that blood pressure is monitored in the open-label portion of the trials (beyond the initial two years) from eight weeks to six weeks.

4. RIGL believes the blood pressure signal is due to an off-target effect on VEGFR2.