A set of conclusive findings from a late-stage clinical trial testing ChemoCentryx Inc.’s experimental vasculitis treatment surprised company executives and investors, who now say they are bullish on the sales and pipeline potential of avacopan.
Shares of ChemoCentryx CCXI, +254.30% jumped 250% in morning trading after the drugmaker said a Phase 3 trial for the biopharmaceutical company’s investigational therapy met both of its primary endpoints—72% of the 331 patients enrolled in the study reported disease remission at 26 weeks, while 65% sustained remission at 52 weeks. It also hit a number of secondary endpoints, including improved quality of life and kidney function.
The drug is being tested as a treatment for anti-neutrophil cytoplasmic antibody (ANCA) vasculitis, a rare disease that can lead to organ damage and failure when blood vessels become inflamed.
The current standard of care is a combination of steroids with Rituxan or cyclophosphamide, both immunosuppressants. But steroids can come with a number of side effects such as trouble sleeping and changes in mood, according to the UNC Kidney Center. The Phase 3 trial evaluated avacopan in combination with Rituxan or cyclophosphamide, setting up a potential shift in the standard of care.
“It is clear that the time of making patients sick with steroid therapy in an attempt to make their acute vasculitis better may at last be over,” ChemoCentryx president and CEO Thomas Schall said in a news release.
Analysts agree with Schall. SVB Leerink analysts wrote in a research note Tuesday morning that “the data suggest that the utility of avacopan in place of steroids does not compromise on efficacy but rather could usher in a new era of [standard of care] where steroids and its associated toxicities may become less of a concern.”
ChemoCentryx plans to submit the drug for approval first to the Food and Drug Administration and then to the European Medicines Agency, both sometime in 2020. It is already building its commercial sales force in the U.S., which will likely include a mix of up to 75 medical science liaisons and sales representatives.
Expectations for the drug put it in blockbuster territory although analysts differ on the sales potential of the drug. J.P. Morgan analysts predict peak sales of $900 million, SVP Leerink expects $1.2 billion in U.S. sales, and Raymond James sees the potential of up to $3 billion in peak sales worldwide, based on an annual gross price of $80,000.
“The key question now is: how big is the opportunity?” wrote Raymond James analysts on Monday. “Avacopan has further potential to be a ‘pipeline in a drug’…but in different indications where C5aR-mediated inflammation is the culprit.” (The C5aR receptor moderates inflammatory response.) That’s a similar position to one taken by SVP Leerink. In late October, analysts there said that assuming positive trial results, “we believe investors may be willing to ascribe an even higher value due to avacopan’s potential as a ‘pipeline-in-a-drug.’”
ChemoCentryx is currently testing avacopan in phase 2 trials for five indications, including C3 glomerulopathy, a kidney condition, and pancreatic cancer.
Shares of ChemoCentryx have rallied 158% year-to-date and 313% over the last three months. The S&P 500 SPX, +0.18% is up 25% year-to-date and the Dow Jones Industrial Average DJIA, +0.16% has gained 20%.