- Reata Pharmaceuticals' shares traded relatively flat Tuesday morning in spite of a Phase 3 trial victory, suggesting investors are still trying to make sense of the much anticipated clinical results.
- On Monday afternoon, Reata reported its drug bardoxolone methyl, or bard for short, met the primary endpoint of a study titled CARDINAL, which is testing it in patients with a rare kidney disease known as Alport syndrome. After 48 weeks, the study found kidney function significantly improved in bard-treated patients compared to placebo-treated patients.
- The magnitude of those improvements, however, was lower than what researchers had seen in a Phase 2, open-label portion of CARDINAL. The study also evaluated kidney function after patients were taken off treatment, and found that it declined in patients treated with bard, albeit at a significantly slower rate than those on placebo.
Patients with Alport syndrome lose the ability to filter waste from their blood. As the disease progresses, they develop end-stage kidney failure, prompting the need for chronic dialysis or a kidney transplant. Currently, there are no Food and Drug Administration-approved treatments for Alport syndrome.
The Reata team thinks it can change that, announcing Monday plans to move forward with an approval application based on data from CARDINAL.
Investors, however, appear less bullish. Reata's share price was down about 4% by noon Tuesday, with shares trading at a little over $204 apiece. Even with that drop, Reata stock is up an impressive 266% on the year, perhaps limiting the potential upside for shares on CARDINAL's success.
SVB Leerink analyst Joseph Schwartz and Jefferies analyst Maury Raycroft wrote in separate notes that some investors may be unnerved by the declining kidney function seen when bard-treated patients stopped receiving the drug.
After 48 weeks on treatment and four weeks off, patients in the bard arm experienced a decline from baseline of 0.96 mL/min/1.73 square meters on a kidney function measure called mean retained eGFR, or estimated glomerular filtration rate. Patients in the placebo arm, meanwhile, experienced a drop of 6.11 mL/min/1.73 square meters. The comparison between bard and placebo after 52 weeks, which was statistically meaningful, was the study's secondary endpoint.
Reata described the decline in the bard arm as "nonsignificant," which sell-side analysts were quick to tout. Schwartz wrote too how retained benefit is a "very high bar" to meet in clinical testing, while Raycroft highlighted a recent conversation between SVB Leerink and a kidney doctor who said he wasn't interested in a retained benefit effect after four weeks of treatment wash-out, calling that measure more of an academic exercise.
While there aren't any approved Alport syndrome drugs for which to draw parallels, Schwartz notes that Otsuka Pharmaceutical forecasted around $430 million in sales for Jynarque, a drug approved last year in the U.S. for a different chronic kidney illness known as Autosomal Dominant Polycystic Kidney Disease.
"As one may surmise," Schwartz wrote, referring to Jynarque's early commercial success, "even a modest benefit (i.e., slowing the decline on eGFR from baseline rather than providing any retained benefit) can be highly desirable for [patients] living without alternatives."
On CARDINAL's primary endpoint, bard-treated patients showed a mean eGFR increase of 4.72 mL/min/1.73 square meters after 48 weeks, whereas the placebo-treated patients showed a mean eGFR decrease of 4.78 mL/min/1.73 square meters.
In the Phase 2 portion of CARDINAL, bard increased eGFR to a higher degree. Among the 30 patients treated, eGFR rose 13.4 mL/min/1.73m2 after 12 weeks of treatment.