Patent Board Does Not Institute PGR Proceeding

The press release is here Concert Pharmaceuticals Announces Patent Trial and Appeal Board Did Not Institute PGR Proceeding.  What this means to Concert Pharma is that, Incyte Corporation may be able at some point in time, challenge the patent of CTP-543. The second setback was that Concert has announced that they will not at this time initiate further clinical trials for other auto-immune indications that CTP-543 may have been useful for. The company continues to proceed with CTP-543 in their phase 2 clinical trial for patients with Alopecia Areata.  In addition the phase 3 clinical trial for AVP-786, which was scheduled to read out in July of 2018, has been pushed back to April of 2019, eliminating a potential catalyst for the company in 2018. The second half of 2019, which should reveal AVP-786's trial success, and phase 2 CTP-543 12mg arm effectiveness for Alopecia Areata patients, should be an important time for the company. Thank you for reading.

Concert Pharmaceuticals - $22.93

Using technical analysis as a tool to track where your stock has been trading, and potentially heading is interesting. A weekly chart of Concert Pharmaceuticals, CNCE is below.

The all-time high for the stock is right at the $25.00 dollar mark, which occurred in 2015. The company has since evolved with a patent victory, and the broadening of the pipeline, which will be announced in early 2018. INCY is a stock we currently do not hold, but are tracking. The company is the owner of the drug Ruxolitinib, commercially known as Jakafi, a Janus Kinase Inhibitor (JAK). A weekly chart is below.

INCY is down around 33% from it's recent high of around $149.00, creating a lower risk entry point in the near future. The relative strength index (RSI) is near the two year low, as confirmation. Lastly, the S&P 500 has been on a tare higher throughout 2017 without any kind of meaningful pullback at all. The S&P 500 is higher around 18% on the year. Notice the RSI on the weekly chart below, is in very overbought territory, the highest reading that it's seen during the last three years.



Bottom Line: Charting stocks and indices can be interesting, and help to create better, lower risk entry points for the stocks that we are interested in. CNCE is approaching the all-time high and a breakthrough of the prior resistance of $25.00 would lead to fresh highs. INCY has been sold off creating a lower risk entry point sometime in the future. The S&P 500 on the weekly chart is as overbought more than anytime during the last three years.  Thank you for reading.

Phase 2 CTP-543 Clinical Hold Lifted

Today Concert Pharmaceuticals announced that the phase 2 clinical trial of CTP-543 for Alopecia Areata will resume by the end of this month after a two month suspension. We initially wrote about this being one of three hurdles to be cleared CNCE: Three Hurdles to Clear.  The small downside is that the company will start the 24 week trial with the doses of only 4mg and 8mg, but with the potential to amend the protocol to explore higher doses. Prior to the suspension of the trial by the FDA, they were planning on using 4,8,12, and 16mg twice daily from the start. The FDA wants to take a measured approach for the development of using JAK inhibitors for various indications is what the company indicated. That coupled with the phase 1 clinical trials of CTP-543 that only lasted for 7 days of testing, makes sense.
The next hurdle to clear will be the pending sale of CTP-656 to Vertex, which is being considered by the FTC, whether it would be anti-competitive. I expect that second hurdle to clear in the next couple of months. Thank you for reading.
 

CNCE: Three Hurdles to Clear

Prior to Concert Pharmaceuticals advancing as a drug development company addressing unmet medical needs, a few hurdles first need to be cleared.

Sale of CTP-656 to Vertex
1. Sale of CTP-656 to Vertex for 160 million upfront and potentially 90 million in future milestones. Closing the transaction will happen after it's determined that the Hart-Scott-Rodino Anti Trust Improvements Act (FTC) clears the way. If the transaction gets blocked due to anti-competitive monopoly concerns, then the company will have to consider a capital raise sometime in 2017, for the advancement of CTP-543 in clinical trials. Should the sale go through, the company will have around $10.00 per share in cash on hand, and runway into 2021.

Suspension of Phase 2 for Alopecia Areata
2. The FDA has put a temporary suspension on CTP-543's phase 2 clinical trial for moderate to severe Alopecia Areata. The company will be forwarding non-clinical toxicology studies, required by the FDA before proceeding. Once the company forward's the studies, the FDA will then have thirty days to respond. The company is expecting to resume the clinical trial around August 1st. The FDA has exhibited zero safety concerns with CTP-543 at this time. This is a low hurdle event, that will just take time to clear prior to resumption of the phase 2 trial.

Ruxolitinib Patent Infringement Claim By Incyte Corporation
3. We first wrote here CTP-543 Patent Challenge By Incyte. Concert has stated on prior conference calls, that they have sought out a third party patent specialist, and believe that they have freedom to operate drug CTP-543 for Alopecia Areata. There will be a response period addressing Incyte's claim of obviousness in the next few months. The height of this hurdle is still undetermined at this time, but more clarity should occur in the next few months.

Bottom Line:
Drug development is never easy, and not for CNCE as noted above. I think #1, should be cleared late summer, and #2 should be cleared around August 1st. #3, is a longer process to determine the outcome. Thank you for reading.

CTP-656 Sold to Vertex Pharmaceuticals for $250 Million

Very nice news from Concert Pharmaceuticals on Monday March 6th.  CTP-656 for cystic fibrosis nets $160 million upfront, and another $90 million in milestones for the sale to Vertex Pharmaceuticals, closing by October 31st.  This deal gives Concert around $250 million (in present terms) cash on hand, with a cash runway into 2021.   The focus will be CTP-543 for Alopecia Areata, and to broaden their future pipeline.  With the upfront $160 million, the company will have around $11.50 per share in cash, zero debt.  Below is a 60 minute chart of CNCE.  The stock has gained 76% this week through Thursday. 



Bottom Line:

A well timed move by management to get the cash without diluting shares at extremely undervalued prices.  The future now is with CTP-543 for the initial indication of unmet need Alopecia Areata, and potentially others to follow. Thank you for reading. 



D-Ivacaftor US Patent 9,181,192 B2

This is a new d-ivacaftor patent listed on Concerts website.  This looks like an add on to the original US patent regarding d-ivacaftor for Cystic Fibrosis, except that it has a section that relates to COPD (chronic obstruction pulmonary disease).  The added section of the patent is below.

15. A method of treating COPD in a subject comprising administering to the subject a compound of Formula I or a pharmaceutical composition comprising a compound of Formula I and a pharmaceutically acceptable carrier, wherein the compound of Formula I has the following structural formula:

Concert is currently assessing the possibility of entering clinical trials for COPD, which would be an extremely large potential market to pursue.  The patent runs to 2032.  Thank you for reading.
 

CTP-543 Phase 1 Initiated

Concert Pharmaceuticals has begun dosing in a phase 1 clinical trial with 80 healthy volunteers to assess safety and pharmacokinetics (PK).  From the company press release below.
“Alopecia Areata is a disease that can have devastating effects on patients but which currently lacks approved and effective therapies. We are pleased to broaden Concert’s pipeline of clinical drug candidates with the advancement of CTP-543 into clinical testing. CTP-543 is another example of how we have applied our novel deuterium platform to create medicines that represent new treatment options,” said Roger Tung, Ph.D., President and Chief Executive Officer of Concert Pharmaceuticals. “Recent advances in our understanding of alopecia areata biology, combined with patient data from several investigator-initiated studies, give us confidence that CTP-543 has potential to be an effective treatment. We hope to move this program quickly through Phase 1 evaluation in order to initiate efficacy studies in patients with alopecia areata next year.”

Aclaris Therapeutics acquired the rights, Aclaris Pipeline of a JAK inhibitor, and this is the patent, WO2013149194A that Columbia University through Vixen Pharmaceuticals, sold the rights to Aclaris Therapeutics.

CTP-543 Patent: 2032
Ruxolitinib Patent: 2028

Thank you for reading. 
 

CTP-656 Multiple Ascending Dose Study

Concert just completed a phase 1, multiple ascending dose study of CTP-656, with placebo.  Some additional value can be found in the following press release from Concert regarding this study. Multiple Ascending Dose Phase 1.

Pharmacokinetics:  "Across all doses, the average plasma half-life of CTP-656 was approximately 18 hours at steady state.  CTP-656 showed a dose-proportional increase in exposure with repeated dosing for the 75 mg and 150 mg doses. The 225 mg dose group showed higher than dose-proportional exposure."

CTP-656 in the previous phase 1 oral solution trial, showed a half-life around 15 hours.  So it looks like an improvement was seen with the solid dosing of CTP-656 over a seven day study, as it pertains to half-life.  CTP-656 was well-tolerated and it's safety profile was comparable to that of Kalydeco. 

Also within the press release "We are pleased to see that full bioavalability of CTP-656 was retained even with a low fat meal," stated Dr. Cassella. 

Additional interest is that the company has announced that they will be participating in 39th European Cystic Fibrosis Conference being held June 8-11, 2016 in Basal Switzerland.  Thank you for reading.

CTP-656 Cystic Fibrosis Market Opportunity

CTP-656 is the deutered version of Vertex drug Kalydeco.  Today, Vertex gave an updated sales forecast for Kalydeco at the JP Morgan Healthcare Conference.  The company expects 2016 revenues in the range of $675 million.  Kalydeco is provided to Cystic Fibrosis patients as mono therapy for the G551D and R117H mutation.  The annual cost of the therapy is approximately $300,000 annually.
Concert Pharmaceuticals plans on seeking regulatory approval for CTP-656 as mono therapy for people with the G551D and other gating mutations.  What could peak revenue look like for this set of patients excluding the more common F508del.  Below is the worldwide patient population for Kalydeco as mono-therapy, excluding any combination therapies for the most common form of CF, the F508del mutation, for which Orkambi is prescribed for.

• G551D ages 6+ (US) 
• G551D ages 6+ (EU, AUS & CAN)  
• Gating, R117H & Ages 2-5
• 4,000 eligible patients (Vertex Pharmaceuticals 2015 Year End Presentation)

The unique situation Concert finds itself in, if CTP-656 potentially does get FDA approval as mono-therapy, is that the footprint for those 4,000 patients available, have already been established from being prescribed Kalydeco.  The switch to CTP-656 from Kalydeco, could happen seamlessly if the drug is marketed right.
 

Penetration rate of 70% = 2,800 patients
Annual therapy price of $240,000 (20% discounted)
Potential revenue 2,800 patients * $240,000 annual therapy = $672 million

The advantages that CTP-656 offers is a once daily, with less dietary restrictions, that should lead to higher adherence rates. Thank you for reading.

 

CTP-656 & GLPG1837 Drug Comparison

The North American Cystic Fibrosis Conference began yesterday.  Concert presented some new data for CTP-656, and Galapagos released phase 1 data for drug GLPG1837 today. Below is new data for drug GLPG1837, and an early comparison of CTP-656 and GLPG1837.

GLPG 1837

The half life (t 1/2) of 1837 runs between 6 and 15 hours depending on the dosage.  I selected a middle of the range dosage of 500 mg used in the phase 1, for comparison to CTP-656, regarding plasma concentration, and their distinct profiles.  

Plasma concentration 500 mg 12 hours fed around 200 (ng/mL) 
http://www.glpg.com/rd-cystic-fibrosis

 

CTP-656

The half life of CTP-656 is 15 hours with a 150 mg dose.  

plasma concentration 150 mg 12 hours fed 1306 (ng/mL)

Kalydeco

The half life (t 1/2) of Kalydeco is around 11 hours for a 150 mg dose.

plasma concentration 150 mg 12 hours fed 412 (ng/mL)

SAFETY PROFILE

-Concert said CTP-656 was similar to Kalydeco at all dose levels, and well tolerated up to 300 mg.

-Galapagos 500 mg dosed twice daily with six participants, all experienced tiredness, and five experienced headache, in healthy subjects.  Galapagos says final safety data is pending.

Bottom Line:

From the data above, it looks like GLPG1837 will have to be dosed twice daily judging by the half life range of 6-15 hours, and Galapagos did not breakout each individual dose with half life. Two distinct drugs, as plasma levels with CTP-656 150 mg at 12 hours is substantially higher than GLPG1837 500 mg.  Concert believes that QD dosage (once daily) is possible with CTP-656.  The company still has to run a multiple ascending dose phase 1 trial, evaluating CTP-656 against Kalydeco.  Galapagos plans to initiate a phase 2 clinical trial for CF patients by the end of 2015. Thank you for reading.  No positions in Galapagos.  
 

CTP-656 Phase 1 Single Dose Comparison

Just released today at the UK Cystic Fibrosis Trust Conference.  Data looks good, as the half life +34% compared to Kalydeco, and other PK measures by far outperformed.  Data below is a single dose of CTP-656 150 mg, compared to a single dose of Kalydeco 150mg.

C 12hr          +320%
C 24hr         +420%
AUC 24hr   +280%
C max          +100%
T 1/2              +34%

Of note, at steady state, Kalydeco exposure is predominately to less active metabolites compared to CTP-656.  This could potentially have CTP-656 being more efficacious than Kalydeco.

Bottom Line:  This was a good 15 minute presentation that displayed CTP-656 from a comparison, to Vertex drug Kalydeco.  The company reported that "CTP-656 was well-tolerated across all dose groups (75, 150, and 300 mg).  There were no serious adverse events reported in subjects who received CTP-656."  Vertex at present, holds a monopoly drug for CF patients, $300,000 per year therapy.  I think in two to three years, there could potentially be a competing therapy of drugs, lower priced, with a better drug to drug interaction profile, with potential for single daily dosing.  Thank you for reading.

Deuterated Drugs

The September 5th edition of The Economist discusses some interesting facts about deutered drugs, and mentions Auspex and Concert Pharmaceuticals, of which both are the leaders in this area.  The potential for legal battles ensuing between the company applying deuteration, and the original owner of the drug may be overstated.  In Concert's case, they seek to partner with large pharma companies, creating a potential win/win situation, as the original drug owner gets an improved metabolic profile drug, the potential for less dosing and improved efficacy, with a longer patent life. 
In May we linked an article about what is obvious, or non-obvious as it relates to patent infringement here Patent Infrigement: Obvious or Nonobvious.  The placing of deuterium must be a skill or art in itself.  Some drugs could potentially have thousands of options to choose from, and that alone becomes a skill in itself that sets deuterium drugs apart from others.  Thank you for reading.
 

CTP-730: Potential Milestone and Royalty Winner

We originally wrote about CTP-730 here, What is CTP-730.  Today Celgene held it's second quarter conference call this morning.  This is what Scott Smith head of Global Inflammation and Immunology had to say regarding the launch of Otezla, and the future pipeline of indications that Otezla could potentially get approved for.  
Scott Smith President, Global Inflammation and Immunology
"Thank you, Jackie.  Q2 was a great quarter for Celgene I and I.  During the quarter, we saw significant acceleration of prescriptions and revenues for OTEZLA in the U.S. and strong initial uptake in the early launch countries internationally. We also made progress on indication expansion for OTEZLA advancing a global Phase III program in Behcet's Disease and Phase II studies in atopic dermatitis and ulcerative colitis.
Now turning to OTEZLA, were seeing a substantive uptick in revenues and demand in the U.S. Total prescriptions far outpace the recent launch analogs in the I & I space and currently measure over 4,500 TRx' per week based on the latest data. Revenues for the quarter grew to $90 million worldwide and we're tracking well in line with internal plans. We're very encouraged at the progress we're seeing outside of the U.S., both in Canada and in early launch countries in the EU.  After only five months, we're outpacing all recent launches in Germany.  Still very early in the launch, but this initial success helps reinforce the global value proposition of OTEZLA and the need for novel approaches to the treatment of I & I disease.
The trends in the U.S. are supported by positive launch metrics.  While the PSA launch continues to make strong and steady progress, the launch of psoriasis indication has fueled much of the recent acceleration.
Access to new therapies is a critical component of success in the market.  And it's important to note that over 70% of OTEZLA prescriptions in pre-biologic patients are being approved on first pass. Total U.S. patient share for OTEZLA in psoriasis surpassed ALLERA some months ago and passed ENBREL's overall patient share in June.  The source of business in psoriasis continues to be heavily weghted towards the pre-biologic sector with 75% of patients coming to OTEZLA from topical therapy or no therapy at all over the past 12 months".

Bottom Line:  CTP-730 is Concert Pharmaceutical's deutered enhanced Otezla, that just finished a phase 1 clinical trial.  CTP-730 has been licensed to Celgene, with future milestone, and royalty payment potential for Concert.  Otezla has had a very strong launch, and could expand into Behcet's Disease, atopic dermatitis, and ulcerative colitis. Thank you for reading.
 

Concert Pharmaceuticals: ($16.91)

Quick technical look at Concert Pharmaceuticals with a daily chart below. Everyday the stock closes higher, a new all-time closing high is achieved.

The out performance is evident when shown on a chart that has the XBI Small Cap Biotechnology Fund, and the S&P 500 below over a five day period.  

Bottom Line:  Funds are adding shares, as they see future value at these prices.
Thank you for reading.

What is a 505(b)(2) New Drug Application

A 505(b)(2) application differs from a typical new drug application, in that the process to approval could potentially be quicker with less expense.  The 505(b)(2) process takes drugs that have already been approved and makes small modifications to them. Typically a company will perform a phase 1 bridging study to compare the systemic levels of the proposed drug product and the reference product.  A bridging study also allows a company to reference the safety and efficacy information that is known for the original drug.
There are three advantages for a company that pursues a 505(b)(2) application.
1.  It is a relatively lower risk process because the original drug may have already been proven to be safe.
2.  The entire process is lower cost.
3.  The pathway to approval can be quicker because of the fewer studies required.
Companies such as Auspex, and Concert Pharmaceuticals, who attempt to improve the metabolic, safety, or efficacy profile with the use of deuteration, could benefit greatly by following the pathway of a 505(b)(2) submission application to get to market quicker, with less expense.  As those drugs get approved quicker, with less expense, the benefit should fall to the patient in need, and our medical healthcare system that provides insurance coverage.  Thank you for reading.

Patent Infrigement: Obvious or Nonobvious

As companies file for new chemical entity patents, the question of infringement on an existing drug becomes either obvious or nonobvious.  This link to an article titled Deuterated Drugs: Unexpectedly Nonobvious? is a nice paper by Ms. Kristen Buteau on what constitutes obvious from nonobvious inventions, and how it relates to drug companies such as Auspex, and Concert Pharmaceuticals.  The company that is applying for a new patent must present an unexpected difference between the claimed structures and the prior art. That difference may be the new drugs unexpected metabolism rate, other pharmacokinetic advantages, or a reduced dosing regimen compared to the prior drug.  But any unexpected difference must not be obvious, must be a skill or art in itself, such as the placing of deuterium on a drug that could have many options to choose from, potentially thousands, as the drug Cymbalta has.

Concert Pharmaceuticals is currently in a phase 1 trial to test d-Ivacaftor, which is the deuterated version of Ivacaftor, a drug that is currently approved for the treatment of Cystic Fibrosis.  Not only was the deuterated drug (d-Ivacaftor) patent filed before any mention of deuterium from Vertex Pharmaceutical, but the unexpected differences in pre-clinical studies suggest, that the deutered Ivacaftor version from Concert, improved pharmacokinetics to a high degree, both in-vitro and in-vivo, and may have the convenience of single 24 hour dosing compared to twice daily.  This phase 1 trial will show how (deuterated) d-Ivacaftor does in it's first in human clinical trial on safety, tolerability, and PK, versus the placebo Ivacaftor, and demonstrate whether some of the pre-clinical results are equally impressive in healthy human subjects. Thank you for reading.

Contact:  586-431-8000

Deuterated Drugs For Hematologic Diseases

Concert Pharmaceutical is actively pursuing patent applications for deuterated drugs for hematologic diseases.  The company has run a pre-clinical drug trial for the deutered lenalidomide (Concert drug named CTP-221), and is pursuing patents related to Rigosertib, a drug that is used by Onconova (ONTX) in clinical trials. Each drug is primarily directed toward some form of  Myelodysplastic Syndrome (MDS) or AML.
Lenalidomide was approved in 2005 for low to intermediate-1 risk MDS with deletion 5-q chromosomol abnormality.
Rigosertib has been used in several clinical trials as both monotherapy and as co-therapy, intravenously and orally, primarily for intermediate-2 to higher risk MDS, and for patients who have failed prior therapies. For some of these patients who have failed previous therapy (refractory MDS), the prognosis is less than 12 months survival, and the drug side effect profile is quite adverse.  
I really like the direction CNCE is taking in pursuing patents for hematological indications such as intermediate-2 to higher risk MDS, where there remains an un-met need for longer and better tolerated drug therapies.  I am looking one to two years out into the future direction of the company, and believe Concert may be able to get both of these deutered hematological drugs into clinical trials for different MDS patients in 2016, after all patents have been secured.  At this time we do not know if CTP-221 will ever make clinical trials due to competing patent issues.  Thank you for reading.

Concert Pharmaceuticals: JZP-386

JZP-386 is the deutered enhanced version of sodium oxybate or commercial drug known as Xyrem, which is manufactured by Jazz Pharmaceuticals.  The drug was approved in 2002 for cataplexy in narcolepsy, and 2005 for excessive daytime sleepiness (EDS) in narcolepsy.  The patents run from 2019 through 2024 at the latest.  Xyrem is administered twice daily as a liquid dose, once before bed and again after about four hours of sleep. Xyrem has a side effect profile that includes headaches, dizziness, nausea, and potentially more serious side effects in higher doses such as convulsions, respiratory depression, coma and death, according to Xyrem prescribing information.   Concert is currently in a phase 1 trial to evaluate the deutered Xyrem version called JZP-386, compared to Xyrem, with a readout on the trial any day now.  The goal of the deutered version JZP-386, could be once daily dosing, lower dosing, or a reduction in side effects that currently exists with Xyrem. Concert would have a chance to receive royalties that run from mid single digits to low double digits, not to exceed 20% on a country-by-country basis, and licensed product-by-licensed product basis. The patent for JZP-386 runs from 2030 to 2032, U.S. EU, and Japan. Thank you for reading.

What is CTP-221

CTP-221 is the deutered enhanced drug for lenalidomide, or commercial drug known as Revlimid, which is manufactued by Celgene.  The drug targets indications in Myelodysplastic Syndrome (MDS) and Multiple Myeloma amongst others, and is expected to produce revenue up to seven billion annually for the company. This is the second Celgene drug after CTP-730 that Concert may consider for clinical trials. The patent for Revlimid runs through 2026. CTP-221 has shown to be approximately 5-6 fold greater potency in animal models with similar antitumor effects.  Thank you for reading.
 

What is CTP-730

CTP-730 is the deutered enhanced version of Otezla (Apremilast), that is manufactured by Celgene.  The drug was approved in March of 2014 for psoriatic arthiritis, and again in September of 2014 for moderate to severe plaque psoriasis. The patent for Otezla runs until 2024 US and EU.  The drug is forecasted to bring in around $2 billion in revenue by 2020. The typical dose is 30 mg twice daily, and the drug is known to exhibit side effects such as diarrhea, nausea, and headache. A deuterated version could potentially reduce the dosage to once daily, improve the efficacy, and side effect profile.
Concert is currently in phase 1 testing to explore the safety and pharmacokinetics profile compared to placebo with a full readout around September 2015.  Once the trial is complete a one time $8 million milestone will be awarded to Concert from Celgene. More importantly, will be the trial results....the first in human trials for CTP-730.  The relevance for increased efficacy, or safety with a once a day tablet, would be valuable to Celgene, not to mention the increased patent life that the D-Apremilast version would have, to 2030. Thank you for reading.