As the calendar flips over, the new year has seemed to have reignited investors’ passion for the biotech sector. Bioverativ has been acquired, and we’re happy about that, but a timely update on the fortunes of Global Blood Therapeutics is now in order, too.
By Alexander J. Poulos
A look at the performance of the equity markets in general speaks to an investment community that is fine with taking on great risks. The performance of the iShares Nasdaq Biotechnology ETF (IBB) has also been stellar, rising more than 10% since the start of the new year. We can’t complain, and we hope that some of our risk-seeking readers we’re blown away with excitement when Sanofi (SNY) announced that it would purchase one of our favorite biotech ideas, Bioverativ (BIVV). We introduced our readership to Bioverativ in August of last year, “Bioverativ: A Profitable Rare Drug Company.” However, we have other ideas, too!
Global Blood Therapeutics
For starters, a quick overview for those who may not be familiar with the story behind Global Blood Therapeutics (GBT). Global Blood Therapeutics is junior biotech with a promising treatment for sickle cell anemia that is in the final stages of clinical testing. The junior biotech entities, as a general rule, typically have the financial capacity to bring forth one or two molecules through the rigorous of all phases of the clinical trial paradigm.
Initial clinical success, especially for the lead compound, is crucial to sustain funding, as a clinical miss will often torpedo a once promising company as the equity market as a source of funding via secondary offerings will dry up, and investors will flee. It is not unusual for a junior biotech to lose over 50% of its market capitalization upon the release of less-than-supportive clinical data. If the company is what we would term as a “one-trick pony,” the loss can often exceed 80% or more, in some drastic cases.
To say the least, an investment in a junior biotech is a high-risk, potentially high-reward endeavor, with great stress on the high risk. Global Blood Therapeutcis is especially risky as the company is developing a single compound Voxelotor for the treatment of individuals who are afflicted with Sickle Cell Disease (SCD). A couple of notable recent events underscore the volatile nature of such an investment. It is fairly common for a junior biotech to utilize the platform offered by a large medical conference to announce clinical data. In Global’s case, the podium utilized was the 59th annual American Society of Hematology (ASH) conference in December.
Improvements in multiple clinically important endpoints, including hemoglobin levels, daily pain, hospitalizations for vaso-occlusive crisis (VOC), transfusions, depression and overall well-being.
Hemoglobin values rose in all patients, with the increase exceeding 1 g/dL in 5 of 7 patients.
Hospitalizations for VOC, the conventional measure of SCD pain, fell by 67 percent during 24 weeks of voxelotor treatment compared with the 24-week period immediately before treatment was initiated (9 vs 28, respectively), corroborating patient reports of improved well-being and quality of life.
The number of transfusions decreased by 60 percent during 24 weeks of voxelotor treatment compared with the 24-week period immediately before treatment initiation (13 vs 33, respectively). Of the six patients who received transfusions prior to voxelotor, two received no transfusions after treatment.
Improvements in blood oxygenation were observed in all four patients that had low room air oxygen saturations at baseline, and the two patients who were oxygen-dependent prior to treatment initiation no longer required continuous supplemental oxygen during 24 weeks of voxelotor treatment.
Two patients died while receiving voxelotor under compassionate access. Both had multiple co-morbidities and advanced organ injury prior to initiation of treatment (e.g., chronic kidney disease, hepatic dysfunction, iron overload), and the treating physicians concluded that voxelotor did not contribute to either death.
Voxelotor was well tolerated for up to 17 months at a dose of 900 mg with no discontinuations, and no voxelotor-related serious adverse events occurred.
Quote Source: Global Blood Therapeutics
The share price of Global Blood Therapeutics sold off post the data release. We suspect the bullet point detailing two patient deaths raised questions in investors’ minds as to whether or not this would impact the approval of the product. We would like to highlight, however, that Global went to great lengths to point out the patient deaths were due to extensive prior organ damage. The drug was given on compassionate grounds to a patient that was rapidly approaching death as a means for prolonging survival. We are heartened by the trial doctors assessment that Voxelotor did not contribute to the patient’s untimely demise.
The equity price of Global Blood Therapeutics received a large jolt higher in January thanks in large part to the FDA. We are not at all surprised by the Breakthrough Designation bestowed on Global—the key portion of the press release:
Preliminary efficacy and safety data from Part A of the Phase 3 HOPE Study (GBT440-031)
Phase 1/2 study and open-label extension in adults (GBT440-001/024)
Ongoing Phase 2 HOPE-KIDS 1 study in children age 6 to 17 (GBT440-007)
Compassionate Access experience in adults with severe SCD (not eligible for the HOPE Study)
Quote Source: Global Blood Therapeutics
The market-moving excerpt is the first bullet where, based on preliminary efficacy and safety from Part A of the critical phase 3 data, the designation is warranted. We feel the market is reading through this statement as a tacit admission by the FDA that approval of Voxelotor is likely imminent. We would like to caution until a final decision is rendered any attempt to guarantee approval is a speculation. We wanted to get this out to you as Global has nearly doubled since our initial coverage in late-September. We truly hope that you are enjoying our healthcare and biotech coverage greatly!
Related: XBI