Arbutus Reports Positive Hepatitis B Data, And Other News: The Good, Bad And Ugly Of Biopharma (NASDAQ:ABUS)

Arbutus reports positive data for AB-729 for chronic hepatitis B

Arbutus Biopharma Corporation (ABUS) announced continued positive data from a continuing Phase 1a/1b clinical trial of AB-729. The new data showed that a single subcutaneous injection of 90 mg of AB-729 leads to a mean HBsAg decline of 1.23 log10 IU/mL at week 12 in patients with chronic HBV.

AB-729-001 is an ongoing first-in-human clinical trial. It consists of three main parts. The Part 1 consisted of three cohorts of healthy subjects. These subjects were randomized on a 4:2 basis and were administered single doses of AB-729 or placebo. William Collier, President and CEO of Arbutus said:

The 90 mg single-dose 12-week data coupled with our previously disclosed 60 mg single-dose 12-week data mean that we now have two doses which have demonstrated meaningful reductions in HBsAg with a favorable safety and tolerability profile.”

Part 2 of the trial has non-cirrhotic, HBeAg positive or negative, chronic HBV subjects. These participants have a background of ucleos(t)ide therapy with HBV DNA below the limit of quantitation. They were given single doses of 60 mg to 180 mg of AB-729. Another cohort in Part 2 consisted of HBV DNA positive chronic HBV subjects and was given 90 mg single-dose of AB-729.

Part 3 consisted of chronic HBV subjects, HBV DNA negative first, and HBV DNA positive later. These subjects are being given multi-doses of AB-729 for up to six months. The data showed that the mean HBsAg decrease reported in the 90 mg single-dose cohort is in line with that reported in previous single-dose cohorts. The data also demonstrates the consistent efficacy of the drug candidate as well as corroborating its favorable safety profile at the intermediate dosage. The company is using this data for continued assessment of the 90 mg dosage in its multi-dose portion of ongoing clinical trial.

AB-729 is an RNA interference (RNAi) therapeutic. It uses Arbutus’s novel covalently conjugated N-acetylgalactosamine (GalNAc) delivery technology to target hepatocytes. The use of its delivery technology allows for subcutaneous administration. The drug candidate works by inhibiting viral replication and reducing all HBV antigens such as hepatitis B surface antigen in preclinical models. It is widely believed that the reduction in hepatitis B surface antigen may be a key factor in reviving the immune system of a patient. In its current single- and multi-dose Phase 1a/1b clinical trial, the drug candidate has shown the ability to bring a meaningful decline in hepatitis B surface antigen.

Arbutus Biopharma is a biopharmaceutical company and is mainly engaged in discovering, developing, and commercializing treatment for chronic hepatitis B virus (HBV) infection. The company is currently working on multiple drug candidate which may be used as combination therapy for such infections. It is also working on a potential treatment candidate for COVID-19.

Investment Thesis: Arbutus stock managed to retain its levels during the pandemic outbreak. The company has provided solid returns to its investors and is expected to retain the trend. While Arbutus has not reported profits in past 12 months, it has shown robust revenue growth.

Marinus Pharmaceuticals hits primary endpoint in Genetic Epilepsy trial

Marinus Pharmaceuticals Inc. (MRNS) announced positive topline data for its Marigold study, a Phase 3 clinical trial. The company reported that the drug candidate was able to meet its primary endpoint for the trial. Marinus is now looking to submit a New Drug Application for ganaxolone in the treatment of CDD by mid-2021.

The data showed that the participants administered with ganaxolone demonstrated a significant 32.2 percent median decline in 28-day major motor seizure frequency. For placebo group, the metric stood at 4 percent reduction. Scott Braunstein, M.D., Chief Executive Officer of Marinus Pharmaceuticals said:

The Marigold Study has two important firsts. It’s the first double-blind placebo-controlled study providing evidence of efficacy specific to CDD and the first Phase 3 trial to examine three times a day dosing of ganaxolone in pediatric patients.”

While the drug candidate was able to demonstrate favorable numerical trends for several predefined secondary endpoints, it failed to show statistically significance. However, Ganaxolone was able to show statistical significance in exploratory secondary endpoints. The company plans to develop the drug candidate for other indications as well.

Phase 3 trial is a global, double-blind, placebo-controlled study. It enrolled 101 patients consisting of children and young adults aged 2 to 21 with a confirmed, disease-related CDKL5 gene variant. The patients were randomized and administered either oral ganaxolone (up to 1,800 mg/day) or placebo for 17 weeks, on top of their current anti-seizure treatment. The patients had to undergo a 6-week baseline period first. They were eligible for receiving ganaxolone in an open-label extension after the double-blind phase.

In the fourth quarter, Marinus plans to launch an Expanded Access Program. Under this initiative, the patients who were not able to take part in clinical trial may begin to receive the drug candidate under a treatment protocol.

Investment Thesis: Marinus has shown strong growth in the recent past. With its recent rally, it is advisable to wait for a meaningful pullback. However, the stock still looks good for long-term investment backed by its upcoming milestones.

Novus Therapeutics on upswing on Anelixis acquisition

Novus Therapeutics Inc. (NVUS) announced the acquisition of Anelixis Therapeutics Inc., a privately held clinical stage biotechnology company. Anelixis is mainly engaged in the development of cutting edge anti-CD40 Ligand antibody. It may have the potential to treat organ and cellular transplantation, autoimmune diseases, and neurodegenerative diseases.

However, Novus also reported inking another capital raising deal as well. The company has signed a definitive agreement for selling $108 million worth of non-voting convertible preferred stock. This private placement has been done with a consortium of institutional accredited investors. The acquisition deal has been structured as a stock for stock transaction.

Novus plans to use the proceeds for funding its operations. One of the main projects likely to be funded by the proceeds is advance Phase 2 clinical trials of AT-1501. It is a humanized IgG1 anti-CD40L antibody with high affinity for CD40L. Keith A. Katkin, Chairman of Novus said:

We are excited about AT-1501 and the potential to develop and commercialize the next generation anti-CD40L antibody, a well-validated target with broad therapeutic possibilities.”

The company had recently reported the data from its exploratory trial with OP0201 from 110 6-to-24-month-old children with confirmed acute otitis media. The trial failed to meet one of its two possible efficacy endpoints but fulfilled the safety endpoint. The negative results of the trial resulted in the company seeking strategic options.

Risks: Novus is a microcap so inherently risky. Its failed trial also does not produce confidence. The failure of the trial had nearly destroyed the company. The capital raise may look good on paper but can create dilution for investors in future. Considering all that, NVUS is an extremely risky stock.

Investment Thesis: This microcap stock is a strong investment prospects for investors with high risk appetite. While the acquisition will likely provide the company with a stronger future direction, its recent trial debacle is likely to have a negative impact.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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