SanaCurrents on FDA decision for IVERIC’s (ISEE) fast follower to treat a leading cause of blindness

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Iveric bio, Inc. (NASDAQ:ISEE) Probability Sentiment

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SUMMARY

In February 2023, the FDA approved Apellis Pharmaceuticals, Inc.’s (NASDAQ:APLS) SYFOVRE (pegcetacoplan injection) as the first treatment for Geographic Atrophy (GA), a leading cause of blindness for patients with advanced dry age-related macular degeneration (AMD).  SYFOVRE works by targeting a specific protein in the complement cascade, part of the body’s immune system. Until SYFOVRE, there were no prescribed treatments specifically for GA, a disease that afflicts an estimated 1 to 1.6 million people in the US.

IVERIC bio, Inc.’s (NASDAQ:ISEE) avacincaptad pegol works in the same pathway as SYFOVRE. The  phase III results from avacincaptad pegol appear to be more compelling than the Apellis drug.  Both SYFOVRE and avacincaptad pegol have demonstrated they can reduce the rate of vision loss in GA, an endpoint the agency appears to support as GA can lead to irreversible vision loss. Recent research indicates GA lesions may start to impact central vision in only 2.5 years. In February 2023, the FDA granted a priority review to IVERIC’s avacincaptad pegol and assigned a PDUFA date of August 19, 2023. SanaCurrents assigns a pivotal probability the FDA will sign off on the PDUFA decision for avacincaptad pegol to treat GA. 

The immune system’s complement cascade enhances the ability of antibodies and phagocytic cells to clear microbes and damaged cells. It also promotes inflammation and attacks an invading pathogen’s cell membrane. When internal complement regulation becomes defective, it can damage host cells, as it does in GA. Localized inflammation mediated, or poorly mediated, by the complement system is considered an important element in the retinal scarring and vision loss as AMD and GA advance.

In 2021, Apellis first gained FDA approval for pegcetacoplan injection, branded as Empaveli, to treat paroxysmal nocturnal hemoglobinuria (PNH), a chronic, debilitating blood disorder. Apellis designed pegcetacoplan injection to act on the complement cascade at the level of C3, a more upstream level than C5. A key consideration for Apellis to treat PNH was its drug was being tested head-to-head against Soliris (eculizumab), AstraZeneca, plc‘s (NASDAQ:AZN) blockbuster PNH standard of care. Notably, both eculizumab and avacincaptad pegol inhibit proteins at the more downstream C5 level.

All three drugs work to correct deficiencies in the complement cascade. IVERIC claims inhibition of C5 proteins slows inflammation and cell death associated with development and progression of GA. At the same time, IVERIC expects its drug also potentially preserves the anti-inflammatory properties provided by C3a, a sub-category of C3. The results of two, phase III trials support IVERIC’s claims.

THE EDGE

Both of IVERIC’s Gather1 and Gather2 phase III trials met the pre-specified, 12-month primary endpoint to treat GA. The company asserts this significance of because Apellis likewise conducted two trials in GA but only one of the Apellis’ trials initially met the primary endpoint. The FDA then approved the Apellis drug based on supplementary supporting data.

In one phase III trial, Apellis’ pegcetacoplan met the primary endpoint of significant reduction in GA lesion growth at 22% (p=0.0003) in monthly administration.

In Gather1 IVERIC’s avacincaptad pegol demonstrated a 27.4% reduction in GA lesion growth versus the sham control arm (p=0.0072) when administered monthly. In Gather2, the final data was a 14.3% reduction in GA lesion growth versus the sham control arm (p=0.0064).

Significantly, the FDA made the decision to award Breakthrough Therapy designation to avacincaptad pegol, the first time the agency made a designation for GA secondary to AMD. The FDA, however, previously awarded Apellis’ pegcetacoplan injection Breakthrough Therapy designation to treat PNH.

To answer the need for new GA treatments, the FDA first approved SYFOVRE. IVERIC’s drug, also teed up for approval in 2023, likely will be next given the similar mechanism of actions by both drugs and the standard of eculizumab working effectively at C5 inhibition.

Evaluate Pharma forecast $2.6 billion in sales for SYFOVRE by 2028. The first mover advantage owned by SYFOVRE always is strong but as a fast follower in a nascent market, IVERIC’s drug should do very well once approved.

General Guidelines for SanaCurrents Strategy

Based on SanaCurrents’ analytical model, Superior and Pivotal sentiments reflect a probability score of at least 60% that the company will announce a positive result to the specified catalyst. In our experience, a positive result typically increases the company’s share price. An Advantageous sentiment reflects a score of less than 60%.

In most situations, SanaCurrents partners take a position in a stock (or buy shares) shortly after a report on a catalyst is published. This is particularly true if the catalyst is within 90 days of the published report. For catalysts with horizons of 6-9 months, or longer, SanaCurrents anticipates the biopharma and device stocks from which it selects catalysts can rise or fall 20-30% in the months following the date of the published report. While buying at a dip, naturally, is preferred, SanaCurrents does not forecast or model in swings in share price prior to the catalyst. SanaCurrents’ analytics score models the probability a compelling catalyst will be positive. SanaCurrents expects a positive announcement regarding a catalyst will drive a company’s stock to higher level than the price on the date of the report, based on the company’s value and capital structure when the report was published.  That said, subscribers should exercise their preferred, individual discipline when timing trades, buy or sell, regarding the catalyst forecast.

PROBABILITY SENTIMENT

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KEY CATALYSTS

• PDUFA decision for avacincaptad pegol to treat geographic atrophy (GA) secondary to Age-Related Macular Degeneration (AMD)

KEY CATALYST DATES

• August 19, 2023

PROFILE

INSIDER & INSTITUTIONAL HOLDINGS

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