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EPIX: Encouraging Initial Clinical Data for EPI-7386…

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By David Bautz, PhD

NASDAQ:EPIX

READ THE FULL EPIX RESEARCH REPORT

Business Update

Encouraging Initial Phase 1 Data for EPI-7386

On February 11, 2021, ESSA Pharma, Inc. (NASDAQ:EPIX) announced encouraging results from the initial 200 mg dose cohort in the multi-center, open label, ascending multiple dose Phase 1 trial of EPI-7386 in patients with metastatic castration-resistant prostate cancer (mCRPC) who had progressed on two or more systemic therapies for mCRPC, including at least one second generation anti-androgen therapy (NCT04421222). The results are being presented during a poster session at the 2021 ASCO GU Cancers Symposium.

The primary objective of the Phase 1 trial is to evaluate the safety and tolerability of EPI-7386, the company’s lead development product that targets the N-terminus of the androgen receptor. Second objectives include determining the maximum tolerated dose of EPI-7386, defining the recommended Phase 2 dose of EPI-7386, evaluating the pharmacokinetics (PK) of EPI-7386, and to assess any potential drug-drug interactions. Planned dose cohorts are at 200, 400, 600, 800, and 1000 mg once daily. The company has completed the 3-month follow up for the 200 mg cohort and the 28-Day safety evaluation for the 400 mg cohort with dosing currently underway in the 600 mg cohort.

The results show that the PK parameters measured for the 200 mg EPI-7386 cohort are right in line with what was predicted through preclinical studies. The following table shows various PK parameters measured on Day 1 and Day 28. The AUC data showing a large increase from Day 1 to Day 28 is indicative of drug accumulation with once daily dosing (steady state was reached after Day 8), and the half-life of approximately 24 hours is supportive of once daily dosing. The average AUC of approximately 147,000 is similar to what was predicted based on preclinical projections (approximately 137,000).

The following graph shows the similarity between the observed AUC data at Day 28 and what was predicted based on preclinical studies. This is very encouraging data for three reasons: 1) the drug is acting as predicted as there were no surprises with absorbance or exposure; 2) the line denoted ‘In vivo efficacy level in mice’ is approximately where the 600 mg dose and above are projected to be, however one of the first three patients dosed at 200 mg showed a PSA decline (discussed below); and 3) assuming the remaining doses have similar PK parameters to what was predicted, even at 1000 mg the exposure should be well below the ‘highest non severe toxic dose in dogs’ level.

Four patients were enrolled into the 200 mg dosing cohort. One of the patients discontinued at Day 22 due to disease progression in the brain, thus three patients were evaluable for dose limiting toxicity (DLT) at Day 28. The patients had received from 2 to 7 prior lines of treatment, including two patients that had received both abiraterone and enzalutamide, with three patients receiving prior chemotherapy. Importantly, there were no DLTs observed and no serious adverse events (SAEs). Possibly drug related adverse events reported are reported in the following table for the four patients from the 200 mg cohort. Importantly, all of them were Grade 1 or Grade 2, indicating they were mild to moderate. The ‘hot flashes’ is a potentially on-target effect of an anti-androgen therapy and the patient with neutropenia came into the study already suffering from Grade 1 neutropenia as a result of prior therapy.

The following chart shows the serum PSA evolution for patient 01-002. Following a radical prostatectomy, the patients’ PSA level has risen steadily even while being treated with enzalutamide, Provenge, and abiraterone. However, following a slight increase after beginning EPI-7386, the patient has experienced a steady decline in PSA level and that patient continues on treatment. This is very encouraging, particularly since this patients’ PSA levels were not affected by other anti-androgen therapies and this dose is less than the target exposure for EPI-7386 based on preclinical models.

In summary, the initial clinical data for EPI-7386 presented by ESSA is very encouraging as the PK parameters for the 200 mg dosing cohort aligned very well with those predicted by preclinical studies, the half-life of approximately 24 hours is compatible with once daily dosing, EPI-7386 was safe and well tolerated, and a serum PSA decrease of >50% was observed in a patient that had failed prior anti-androgen therapy.

Clinical Collaboration with Janssen

In January 2021, ESSA announced a clinical collaboration with Janssen Research & Development, LLC to evaluate EPI-7386 with apalutamide or abiraterone acetate plus prednisone in patients with mCRPC. The agreement allows for Janssen to sponsor and conduct up to two Phase 1/2 trials evaluating the safety, tolerability, and preliminary efficacy of the combination of EPI-7386 with apalutamide or the combination of EPI-7386 with abiraterone acetate plus prednisone in mCRPC patients. The two companies will employ a joint oversight committee for the trials, which should initiate in 2021. Importantly, ESSA retains all right to EPI-7386.

This is an important development for ESSA as the company has previously discussed a desire to conduct combination therapy trials with other prostate cancer treatments, particularly with other androgen receptor antagonists. We look forward to further updates on these trials later in 2021.

Financial Update

On February 11, 2021, ESSA announced financial results for the first quarter of fiscal year 2021 that ended December 31, 2020. The company reported a net loss of $6.5 million, or $0.20 per share, for the first quarter of fiscal year 2021 compared to a net loss $4.6 million, or $0.22 per share, for the first quarter of fiscal year 2020. R&D expenses for the three months ending Dec. 31, 2020 were $4.5 million compared to $2.6 million for the three month period ending Dec. 31, 2019. The increase was primarily due to increased manufacturing costs and clinical costs related to the Phase 1 trial of EPI-7386. G&A expenses for the first quarter of fiscal year 2021 were $2.2 million compared to $2.1 million for the first quarter of 2020. The increase was due to increased professional fees along with higher salaries and benefits.

As of Dec. 31, 2020, ESSA had approximately $74.5 million in cash, cash equivalents, and short-term investments due in part to the $48.9 million financing in July 2020. As of February 10, 2021, the company had approximately 33.8 million shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 48.3 million.

Conclusion

The initial results for the 200 mg EPI-7386 dosing cohort are as good as could have been hoped for as the drug’s PK parameters are matching what was anticipated, the drug is safe and well tolerated, and there is an initial efficacy signal even at a dose below the target exposure. We look forward to additional updates from the company for the higher dosing cohorts in the coming months.

The collaboration with Janssen is an interesting development for the company and we will be very interested to see how EPI-7386 performs in combination with apalutamide as well as with abiraterone acetate plus prednisone. We remind investors that Pfizer took a 6% stake in ESSA in the summer of 2020 and the fact that Janssen is now keen to collaborate with ESSA show’s that Big Pharma is keeping a close eye on the development of EPI-7386.

Based on the initial results for EPI-7386 we have overhauled our model, which includes raising estimated peak worldwide sales to $6 billon, lowering the discount rate, and increasing the probability of approval to 50%. Following these results our valuation now stands at $40 and we would highly encourage risk-tolerant investors to take a close look at ESSA.

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