In the next instalment of an irregular series, here are two more stocks from the long list of Australia’s potential biotech stars; both are companies working through the long process of clinical trial validation, regulatory approval and eventual commercialisation.
It is a pathway fraught with slips, but both of these stocks are, at this point, showing excellent progress. This is a field in which investors have to be patient, and resilient, but a field in which very strong returns can be earned; along with the satisfaction, if these drugs reach the clinic, of having played a role in improving the lives of people suffering from severe diseases.
PYC Therapeutics (PYC, 18 cents)
Market capitalisation: $840 million
12-month total return: 193.8%
3-year total return: 10.5% a year
Analysts’ consensus target price: 29.5 cents (Stock Doctor/Refinitiv, four analysts)
Perth-based PYC Therapeutics is a drug developer that is working to develop first-in-class drugs in rare genetic diseases, bringing RNA therapeutics candidates out of its proprietary library of naturally derived cell-penetrating peptides. PYC targets diseases with no current treatment option for patients: this provides the potential for regulatory approval following two clinical trials (not three), resulting in a faster path to providing potentially life-changing treatments to patients. The diseases that PYC targets are “orphan” (that is, rare) diseases with markets of about $1 billion a year, potentially providing attractive shareholder returns.
PYC reached the “clinical” stage late last year, when it kicked-off in-human Phase 1 trials in the US of its investigational drug candidate, known as VP-001, which is intended to treat the blinding childhood eye disease Retinitis Pigmentosa type 11 (RP11). There are no existing treatments for RP11, so, in August 2023, the US Food and Drug Administration (FDA) designated VP-011 as a “Fast Track” development program. The purpose of the Fast Track designation is described by the FDA as being “to get important new drugs to the patient earlier.” VP-001 is the first drug candidate to progress to human clinical trials for RP11.
RP11 is a blinding eye disease that begins in childhood and ultimately leads to legal blindness in middle age. The disease affects about one in every 100,000 people and is caused by insufficient expression of the PRPF31 gene in the retina. Not only are there currently no treatment options available for patients with RP11, there are none in clinical development, anywhere. PYC reckons a treatment for RP11 could open up an addressable market of $1 billion a year, based on a target patient population of 7,500 people in the western world.
VP-001 is a precision therapy that aims to restore the expression of the PRPF31 gene back to levels required for the normal function of the retina. VP-001 uses PYC’s proprietary drug delivery technology to overcome the major challenge for RNA drugs, by ensuring that sufficient drug reaches its target inside the cells affected by RP11. The current clinical trials are designed to establish a “proof of concept” for VP-001 to progress to a registrational study in 2025.
The second of the company’s drug candidates is PYC-001, a first-in-class drug candidate for patients with a blinding eye disease called Autosomal Dominant Optic Atrophy (ADOA). ADOA is a disease that begins in childhood and ultimately leads to legal blindness in middle age in most patients; the disease, which is caused by insufficient expression of the OPA1 gene in the retina, affects about one in every 35,000 people. There are currently no treatment options available for patients with ADOA, which represents an estimated addressable market of more than $2 billion a year.
The FDA has granted PYC Rare Paediatric Disease (RPD) designation for OPA1-associated vision loss; the RPD program aims to incentivise drug development for serious and rare diseases affecting children. PYC’s drug has been successfully tested in samples derived from humans, and positive results have also been achieved in non-human primates; this quarter, dosing of patients in a Phase study began in Australia.
The third program targets Autosomal Dominant Polycystic Kidney Disease (ADPKD), which is caused by a genetic fault that disrupts the normal development of some of the cells in the kidneys and causes cysts to grow. Faults in one of two different genes are known to cause ADPKD. The chronic disease affects about one in every 1,000 people; it leads to renal failure and the need for organ transplantation in the majority of patients. PYC expects its drug candidate, PYC-003, to begin clinical trials in early 2025, with human safety and efficacy data anticipated in 2025 and 2026.
The fourth program will feature PYC’s drug candidate PYC-002 against Phelan McDermid Syndrome, a severe neurodevelopmental disorder affecting children – it affects one in every 10,000 people. There are no medications, drugs, or therapies specifically for Phelan McDermid Syndrome, which has an overwhelming unmet medical need. PYC will initiate Investigational New Drug (IND)-enabling studies in both PYC-002 and PYC-003 in 2025, to facilitate progression into human trials. (Neuren Pharmaceuticals [NEU] also has a drug candidate working against Phelan McDermid Syndrome, in Phase 2 trials.)
PYC is now on a pathway of regular news flow from its various trials. The stock has performed very well over the last 12 months, but the analysts who follow it think there is still good scope for share price growth.
PYC – last 12 months
Amplia Therapeutics (ATX, 15.5 cents)
Market capitalisation: $43 million
12-month total return: 101.9%
3-year total return: –6.9% a year
Analysts’ consensus target price: 29.5 cents (Stock Doctor/Refinitiv, four analysts)
Amplia is working on a pipeline of therapies that “switch off” the particular protein, known as focal adhesion kinase (FAK), that controls the formation of the protective fibrotic layer around cancer cells, and thus inhibits the penetration of chemotherapy drugs. Pancreatic cancer is well-known for having this fibrotic “shield,” but Amplia’s lead drug candidate, known as AMP945 (or narmafotinib), targets the FAK protein, potentially enabling the drug to treat and prevent fibrotic diseases, as well as allow doctors to treat cancers that previously resisted chemotherapy. AMP945 is particularly focused on difficult-to-treat cancers, such as pancreatic and ovarian cancer, as well as chronic fibrotic diseases such as idiopathic pulmonary fibrosis (IPF).
The drug came out of a collaboration under the Cancer Therapeutics Co-operative Research Centre, involving scientists from the nation’s top universities, the Peter MacCallum Cancer Centre, the Walter & Eliza Hall Institute of Medical Research and Cancer Council Victoria.
Amplia is developing two potent, orally-available FAK inhibitors, targeting resources on fibrotic cancers, of which pancreatic cancer is one of the most deadly. By targeting FAK, Amplia has the potential to disrupt the fibrotic and immune-suppressive pathways and slow the progression of cancer. Additionally, FAK inhibitors have shown promise in treating other fibrotic diseases, such as idiopathic pulmonary fibrosis (IPF), which opens up an alternate area of therapeutic potential for Amplia’s pipeline drugs.
A Phase 1 clinical trial of AMP945 in healthy volunteers was successfully completed in 2021, and Amplia currently has AMP945 in a Phase 1b/2a trial in patients with advanced pancreatic cancer (the ACCENT trial) across seven clinical sites in Melbourne, Sydney, Brisbane and South Korea. The first patient was dosed in early August 2022. The first stage (Phase 1b) is a dose-range finding stage where increasing doses of AMP945 are tested in cohorts of three patients to assess safety, tolerability and PK/PD (pharmacokinetics and pharmacodynamics) effects; the second stage (Phase 2a) is directed towards testing the best dose identified from the Phase 1b portion in up to 50 patients and assessing for signs of clinical efficacy.
The ACCENT trial is investigating the activity of AMP945 in combination with standard-of-care chemotherapy. Earlier this month, Amplia announced that six patients in the Company’s ACCENT trial in pancreatic cancer have now achieved a “confirmed partial response,” defined as at least a 30% decrease in the overall size of their tumour lesions, with no new tumour lesions, sustained over a two-month period: this represents a significant therapeutic response in this aggressive disease. It means the ACCENT trial can now proceed to recruit the next cohort of 24 patients, giving a total of 50 patients on study. Recruitment of the second cohort of patients is expected to be completed by end of Q1 2025.
Amplia also announced this month that the FDA has granted Fast Track designation to AMP495 for the treatment of advanced pancreatic cancer; the FDA has also granted clearance of the company’s Investigational New Drug (IND) application, allowing it to undertake a clinical trial of AMP945 in the US. This planned trial will combine the drug with a different standard-of-care therapy, called FOLFIRINOX, widely used in the US and parts of Europe. The US trial of AMP945 is in advanced planning stages, and Amplia has convened a Clinical Advisory Board comprised of renowned pancreatic cancer experts from North America and Australia to assist in its development.
FDA fast-track status and the excellent progress in the ACCENT trial saw ATX post a 42% share price rise in September, and more positive news could have a similar effect. But potential investors do have to watch the cash balance, which stood at $4.8 million at the end of the June quarter. Amplia is consuming about $2.5 million a quarter, and at some stage, the company will have to raise additional capital to keep its clinical development program humming along. In that regard, the positive trial results should certainly help.
Amplia is not widely covered, which is not an unfamiliar situation for Australian biotechs. Financial information site Wallmine gives an analysts’ consensus 12-month price target of $1.00 for ATX, but does not give the number of analysts that contributed to that figure.
Amplia (ATX) – last 12 months
Source: nabtrade
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