Thoughts on the Upcoming ARDX PDUFA in CKD
Amp provides this deep dive into the following April 2021 spotlight catalyst, In order to assist subscribers in assessing this catalyst*:
What is the readout? FDA approval decision deadline date (PDUFA) for tenapanor, a novel product candidate to control serum phosphorus in adult patients with CKD on dialysis
Timing (estimate) of readout:
PDUFA date (FDA target deadline date) April 29, 2021
What is success?
Approval by the FDA
What is our overall position on this PDUFA:
We're staying on the sidelines for this one. There is a very good chance of approval on this first FDA review for serum phosphorus control, although with FDA delays recently, there is less certainty that the FDA will hit the April 29, 2021 target date. Furthermore, the effect of approval on the stock is hard to predict: Our Big-Mover analysis indicates that the market thinks it is likely that this stock will move at least 20% up or down. However, the stock has already gained more than 20% from its late March lows and current volatility may be reflecting that. Whether ARDX can quickly ramp revenue to over the $100M/annual level, seems unlikely given the pandemic and the challenge of launching into a market without an established sales force, and with lots of relatively low price options. Of course, the hard-to-predict wild card here is a possible acquisition of ARDX, especially by a company that already has a sales force that calls on nephrologists. The timing and likelihood of acquisition are hard to predict, and thus we don't buy a stock on the possibility of an acquisition.
See below for our detailed bull/bear comment:
BEAR THESIS
• Revenue predictions for this drug are complicated:
○ Tenapanor, if approved will be competing with an established assortment of phosphate binders, some of which are available at very low cost1
○ There is the complex question of whether it will be included in the Medicare dialysis payment bundle5 which would likely significantly reduce the price paid for tenapanor, but might increase the volume significantly2;
○ The phase 3 trials for approval, are not sufficient to effectively market tenapanor, and thus even if approved, ARDX could struggle to convince physicians to prescribe Tenapanor2;
○ ARDX will be launching into a pandemic, which has proven difficult for many if not most small biopharma companies3
• 39% of patients in the Phase 3 BLOCK study, and 43% in the combo tenapanor + binder AMPLIFY study, reported diarrhea, which could be a major deterrent in physicians prescribing tenapanor, or patients staying on drug4;
• The FDA approved tenapanor in 2019 for IBS-C with similar expectations of $500M+ revenue, but the stock price fell upon approval6 and the company has failed to execute any commercialization plan or find a commercialization partner for IBS-C in the U.S.
• For 2021 and probably well into 2022, any prescriptions will require prior authorization and there are choices of different binders that insurance companies could require before authorizing a tenapanor prescription2
• A significant number of patients taking this drug post-approval will receive it without any payment to ARDX2
BULL THESIS
• Tenapanor met its primary endpoint in all 3 phase 3 trials for hyperphosphatemia4 and the FDA did NOT call an AdComm for this approval decision, thus the FDA is likely not going to have safety or efficacy concerns, especially considering tenapanor's approval in IBS-C with similar diarrhea issues7;
• Tenapanor is already approved for another indication (IBS-C), and thus has lower risk of non approval for manufacturing or quality control issues (lower CMC risk)7
• Thus, the combination of the 2 points above, give a high likelihood that tenapanor will be approved by the FDA in this cycle, although whether or not the FDA hits its PDUFA target is less certain given some FDA delays since the pandemic hit8
• There should be revenue in 2021, and ARDX believes that 70% of the large hyperphosphatemia market (550,000 dialysis patients) is addressable on launch9
• Patients will be covered by insurers, although there will be a prior authorization requirement, at least in 20212
• Diarrhea resulted in only 3 out of 116 patients discontinuing in the AMPLIFY phase 3 study of tenapanor in combination with binders4, and phosphate binders have a high rate of GI issues too10
• 2 times more patients achieved goal of <5.5 mg/dL of serum phosphorus in the tenapanor + binder group, than the binder control group in the AMPLIFY study4
• ARDX and its Japanese partner, have performed some phase 4 studies to help to convince physicians to prescribe tenapanor to their patients11
• Unlike IBS-C, ARDX is prepared to commercialize tenapanor for hyperphosphatemia in the U.S. itself2
1) GoodRx Phosphate binders page
2) CEO comments at 10th Annual SVB Leerink Global Healthcare Conference
3) See e.g. AMRN Vascepa and ESPR Nexletol and Nexlizet 2020 revenue and CEO comments on quarterly calls
4) See slides 11 and 12 of the ARDX Feb 2021 corporate slide deck, and see Block, GA, et al.. "Efficacy and Safety of Tenapanor in Patients with Hyperphosphatemia Receiving Maintenance Hemodialysis: A Randomized Phase 3 Trial." J Am Soc Nephrol 30: 641-652, 2019
5) See "End Stage Renal Disease Prospective Payment System (PPS)"
6) See Benzinga headline shortly after tenapanor approval for IBS-C
7) Tenapanor label for IBS-C
8) See for example, ATXI and FBIO's recent announcement that the FDA missed their PDUFA deadline for their drug candidate earlier this month
9) See slide 15 of ARDX Feb 2021 corporate slide deck;
10) Ther Clin Risk Manag. 2008 Oct; 4(5): 887–893: "For lanthanum vs. standard of care study: "The most common adverse events were gastrointestinal. The incidences of events in the lanthanum and standard therapy groups were nausea, 37% vs 29%; vomiting, 27% vs 22%, and diarrhea (24% in each group)."
11) Results of Phase 4 NORMALIZE study to be presented at the ISN World Congress of Nephrology 2021
#ARDX #tenapanor #CKD #PDUFA