"Ototoxicity came to the forefront of clinical attention with the discovery of streptomycin in 1944. Streptomycin was used successfully in the treatment of tuberculosis; however, a substantial number of treated patients were found to develop irreversible cochlear and vestibular dysfunction These findings, coupled with ototoxicity associated with later development of other aminoglycosides, led to a great deal of clinical and basic scientific research into the etiology and mechanisms of ototoxicity. Today, many well-known pharmacologic agents have been shown to have toxic effects to the cochleovestibular system. The list includes aminoglycosides ...
Permanent hearing loss or balance disorders caused by ototoxic drugs may have serious communication, educational, and social consequences. Therefore, the benefits of ototoxic drugs must be weighed against the potential risks, and alternative medications should be considered when appropriate. Management emphasis is on prevention, as most hearing loss is irreversible."
Streptomycin, Tobramycin and Amikacin are aminoglycosides. Delivery via inhalation instead of injection reduces the rate at which hearing damage occurs, but the ability of the lungs to transfer inhaled oxygen into the bloodstream isn't limited to inhaled oxygen.
Arikace will displace Tobi not only because once-daily dosing will result in a far higher level of compliance - helping the FDA and the other member agencies of the Interagency Task Force on Antimicrobial Resistance achieve their objective of the more efficient use of antibiotics - but because the liposomes ensure a negligible amount of aminoglycoside reaches the bloodstream.
Over 100,000 patients each year in the US/Europe are treated for NTM. There are currently no approved therapies. How many of those patients are currently given injected aminoglycosides?
Patients want Arikace. Physicians want Arikace. The FDA and NIH want Arikace.
This Phase III success has massive implications.
The standard antibiotic regimen for Cystic Fibrosis in recent years entailed cycles of four weeks taking inhaled Tobi daily followed by a four-week break. The key factor here is that once pseudomonas has established itself the patient needs an antibiotic regimen for the rest of his/her life.
The reality is that Arikace is likely to be the ONLY antibiotic available to these patients which promises to make any real difference to their quality of life - because no other antibiotic has generated data which promise an improvement in lung function beyond the first three cycles of therapy. An antibiotic which delivers an impressive level of efficacy for only one or two cycles is about as much use to this patient population as a chocolate teapot.
Because Arikace delivered an improvement in lung function throughout a seventy-two week Phase II extension study it will inevitably be installed as the central therapy in the antibiotic regimen. Patients whose lab tests have revealed the presence of strains of bacteria with resistance to amikacin will doubtless be prescribed the most appropriate antibiotic during the Arikace off-therapy periods.
The current sales figures for inhaled antibiotics are of little use in predicting sales of the first antibiotic which promises both sustained efficacy and negligible systemic toxicity. The unique once-daily dosing will promote the optimum level of compliance - essential when an antibiotic is likely to be taken for years on end.
JP Morgan is predicting 2015 revenue for the Vertex Cystic Fibrosis drug of $982 million. Annual revenue of billions of dollars is considered feasible -
"The drug, which was approved for treating patients with an uncommon mutation that accounts for just 4 percent of cystic fibrosis patients, sells for $307,000 a year. However, recent study results suggest a potentially wider patient population can be treated when combining Kalydeco with an experimental Vertex medication, prompting Wall Street to forecast annual Kalydeco sales in the billions of dollars."
When a drug becomes available to the CF patient population which promises to deliver a significant improvement in quality of life the necessary funding will obviously be there. And Arikace would be relatively cheap at $36,000 a year.
Talk of competition from the antibiotics currently available is a Red Herring. A CF patient needs an antibiotic which makes a difference for far longer than an couple of cycles of therapy.
Another potentially life-changing therapy is the Aradigm antibiotic currently in development. The Wiki info below on adverse effects is worth noting.
Hopefully Aradigm's inhaled liposome delivery will solve most of these problem. But one wonders if the association with potentially life-threatening breathing problems might scare some patients.
Adverse effects -
The most frequently reported drug-related events, from clinical trials of all formulations ... of ciprofloxacin therapy, were nausea (2.5%), diarrhea (1.6%), abnormal liver function tests (1.3%), vomiting (1%), and rash (1%).
Black Box warnings -
As of 2011, the FDA has added two black box warnings for this drug in reference to spontaneous tendon ruptures and because ciprofloxacin may cause worsening of myasthenia gravis symptoms, including muscle weakness and potentially life-threatening breathing problems.
More Arikace-treated patients reported adverse events in the study compared to patients treated with TOBI. Eleven Arikace patients reported SEVERE SIDE EFFECTS compared to five patients on TOBI.
Hmm ... whose analysis carries the greater weight for me - yours or Canaccord's?
For me, your analysis is more important. But I fear the vast majority of investors will pay more attention to Canaccord :-(
An extract from the Canaccord note raising their price target -
"We see Arikace as eminently approvable with good safety. While there are optical imbalances in Arikace’s severe adverse events, INSM indicated there is no kidney or ototox signal, our main concern."
No evidence of ototoxicity. The long-term animal toxicity studies are already done and dusted. Where is the risk here?
Number of subjects with treatment-emergent adverse events by seriousness -
Arikace: 26 out of 148
Tobi: 29 out of 146
2. Not serious
Arikace: 125 out of 148
Tobi: 113 out of 146
3. Life Threatening or Disabling
Arikace: 0 out of 148
Tobi: 1 out of 146
The Company's objective is US and EU labels for Arikace supported by the totality of the data from the CF and Non-CF Bronchiectasis Phase II studies, the NTM Expanded Access Program (planned for the second half of this year), the ongoing US NTM Phase II study, and the EMEA CF Phase III study for which preliminary results have just been released.
The FDA has been approving drugs for years now on the basis of data from sufficiently rigorous foreign clinical trials.
From the extraordinary efficacy evidenced by the Tobi arm of the recently completed study one would imagine the FDA will be delighted with the quality of the data. Take a look at the efficacy data on Tobi from the Cayston and Colobreathe studies - would either of those drugs been approved had they been up against the Tobi data from the Arikace study?
It's also well worth noting the FDA's new resolve to expedite the availability of antibiotics to counter the threat to public health posed by bacteria which have evolved resistance. Over the last fourteen years, resistance to Tobi has increased by 88%.
From last year -
Senior FDA officials say the agency is committed to rapidly replacing infeasible requirements for antibiotics with pragmatic standards based on the realities of clinical practice at a pace commensurate with the public health threat posed by rapidly evolving pathogens.
FDA is going to "reboot our effort," said Janet Woodcock, director of the Center for Drug Evaluation and Research (CDER). "It is not going to be on my watch that we fail to develop antibiotics for the next generation of bugs," she told BioCentury.
Rachel Sherman, associate director of CDER's Office of Medical Policy, stressed the public health mandate during an interview on BioCentury This Week television (see BioCentury This Week, Nov. 18).
"The slowdown in development of these products is a public health crisis of the greatest magnitude," she said. "We at the agency are aware of that, and we are on top of it ..."
The current share price of $9.72 equates to a market cap of around $300 million.
Using the average biotech price/sales multiple of 6, and assuming an annual pricing for Arikace of $36,000, a share price of $9.72 is equivalent to 1,388 patients using Arikace.
Form your own estimate of the number of patients likely to be using Arikace in three years time, and it will give you an idea of how much higher than $9.72 the share price is likely to be in three years time.
With this Phase III success it really is now effectively as straightforward as that - assuming a bidding war for the Company doesn't kick off before then.