For last few years I tried to describe rationale or investment thesis for this company. However, those who did frequently traded this stock done much better than I did. And I do not blame them. Wish them all success in future.
So, today at the end of this millennium I am desperate to put here type of SPIN and HYPE that majority will laugh or think that I am nuts. At the end (few years from now) and if I am wrong I will confess that am most lousy HYPER at SI. If I am right, I will be so filthy reach that will not mater at all what I wrote today.
So, here is HYPE!
It is all about Axokine, believe it or not!
Few months ago, and before REGN disclose that pts on higher drug doses (from PI/II trials) have HSV reactivation and cold sore as side effects, I placed drug market value at 8X multiple pick sale (which I projected at ~$5-8BB, US only). This is significantly more than today combined AFFX + INCY + MLNM capitalization. Is this enough crazy? Is this possible today, after drug have *serious* problem and P&G give up on drug right. Definitely, YES. Only this time REGN have 100% of drug instead 50%.
I tried to collect more info on Axokine. Because PI/II trial is still ongoing (post treatment phase and follow up) and REGN didn't disclose full results from trial (it will be presented somewhere in 1Q 2000 at medical conference) many questions remain open and crucial data are missing. However, few very useful info from this trial are available.
In preclinical models Axokine (as CNTFr agonist and CNTF mimetic) fired much better than leptin. More importantly drug work well in diet induced obesity model and has *memory* effects. It means that when drug is stooped, animals continue with some *satiety* filling and control weight like drug is still administrated. This is not a case for any drug in any model available today.
Axokine appears to be about 50-100 times more potent than leptin. However, if one count Axokine lower doses (0.5 or 1.0 mc-gr/kg) and leptin higher dose (1mg/kg) which were tested in humans (and results still favor Axokine) than Axokine is ~1000 times more potent than leptin. What is molecular mechanism which can explain this huge difference in drug efficiency? In obesity model where leptin is primary ligand for OR? It is a some signal in hypothalamus, only triggered by activation of the different receptor. In leptin case OR and in Axokine (by what is known about drug) is CNTFr. One hypothesis can be that CNTFr activation increase somehow signal by yet unknown mechanisms and/or have additional effects which is more that synergistic with original leptin signal.
Another Axokine advantage can be drug plasma stability, life-time as well as good penetration in CNS area. If one calculate PK/PD parameters for Axokine at 1 mc-gr/kg dose it will find that (with speculation that only 5-10% drug reach CNS) drug CF conc. is in fraction of pico-M value. That drug is very active and reach CNS area suggest HSV reactivation with single Axokine dose of >12 mc-gr/kg.
Does drug have therapeutic window?
This will be crucial question and REGN will have answer after PII trial. In CNTF ALS trial cold-sore was one-time event regardless that drug was administrated for up to nine months. Mechanisms of the HSV reactivation should be some (maybe related to IL-6 cytokine family proteins, however there were no clear confirmation of this hypothesis), so it isn't irational to expect that HSV reactivation with Axokine will be one-time event. Or, pts may develop tolerance or neutralizing mechanism for this side effects. If this theory survive in clinical trials, problem is half way solved. On another hand, Axokine at lower multiple doses didn't trigger HSV reactivation (dose depended event) still did show trend toward weight loss and positive clinical effects. I believe that this lower systemic Axokine doses will be therapeutically effective. PIII trials and return to all obesity-NIDDM population will be next step, I hope.
This is the first drug which address diet induced obesity/NIDDM (which are ~95% of all obese population, estimated at ~50MM in US or every fifth person), and drug work by basic and fundamental molecular mechanisms. At this point and few years from now Axokine will not have any significant competition (yes, there is NPYx, MC, CRF, receptors....and other neurotransmiter, but not yet candidate which can show the some potency as Axokine did). I see Axokine as drug with *ever times several multiple* (JS measure) market potential.
Is this pure HYPE? Time will tell.
Miljenko
|
