Jefferies over de NEJM publicatie
Spark Therapeutics (ONCE): NEJM editorial speaks highly of Factor IX program partnered with Pfizer
Rating BUY
Price Target $95.00
Price $69.71
Bloomberg NASDAQ: ONCE
Key Takeaway
Recent uncertainty around ONCE hemophilia programs although much of it seems to be sentiment-driven rather than any fundamental changes. NEJM editorial talks about "renaissance" in gene therapy...
NEJM published the positive Phase I/II SPK-9001 Factor IX hemophilia B study which has shown remarkable and positive efficacy and safety with follow-up of around 1 year. While the data has been previously presented at ASH 2016 and an update is coming at ASH 2017 this month, we believe the overall positive editorial speaks to the notable good things going on in gene therapy hemophilia ("important milestone for community of pts with HemB"). As a reminder, Spark SPK-9001 is starting Phase III with Pfizer (PFE, Hold) in 2018 and we believe the SPK-8011 HemA program will continue to dose more patients in 2018 and move forward to Phase III by 2019.
Near-term we appreciate there is some investor nervousness on Spark but we think many of these issues seem overblown and are not fundamentally problematic to the programs: (1) whether manufacturing issues for Luxturna (co comments point to no issues here and FDA review on track), (2) why the ASH investor was announced only 6 days before the data at ASH (scheduling issue only), (3) the upcoming separate Phase I/II HemA (Factor VIII) data for SPK-8011 coming at ASH this month - mostly because of somewhat high expectations (generally Street knows the drug works) and whether the limited follow-up on Cohort 2 and Cohort 3 are sufficient to paint a full picture of the three cohorts showing clear dose response and higher efficacy and clean safety. Specifically, there will be 5 patients presented on and only 3 of the patients we have data on including 2 at Cohort 1 (~12% efficacy) and 1 at Cohort 2 (trending at double the Cohort 1 implying heading towards 20-25%). But we do not know the other two patients - only that Spark has gone up to a 3rd cohort. Bottom line - (1) there is limited follow-up on the Cohort 3 so the patient may have variability as they increase and get followed, but with a trend hopefully at 50-100% of Cohort 2 and tracking towards 40%. There is also some concern on neutralizing antibodies as a competitor has talked up their broader market opportunity vs Spark but the assays used by the two companies are apples and oranges as they use different cutoffs for determining (+) or (-) for neutralizing antibodies.
In the NEJM editorial, the author notes very positive aspects of the SPK-9001 program including (1) absence of serious adverse events and "striking" efficacy achieved of mean clotting activity of 33.7%; (2) almost complete elimination of need to deliver IV factor IX during the study period, (3) median savings of $200,000 per year, (4) smart engineering with 3 notable improvements in the drug (high tropism for liver, blocking immune response with steroid if necessary, using Padua variant to give high factor IX expression than normal).
On the risks side - the editor noted (1) relatively short follow-up of 52 weeks (from July 2017 data cut off of publication) with more data coming at ASH 2017, (2) potential for AAV genome to integrate or cause cancer (controversial) and thus longer-term safety needed to determine risks, (3) fraction of patients excluded due to neutralizing antibody, (4) need to broaden applicability including in children, use in patients with antibodies, and reducing costs as most patients around the world cannot afford high costs.