It's been a day of mutiple distractions and I've still got to read a whole host of posts here, so sorry if I double up on anything already said.
The Author(s)
Although Christian Lamarco is named on the Culper research website as the founder of the company, and the writer of the report uses the first person plural - “We think…” “We estimate…”, no one is identified as the author(s) of the report.
An analysis without a named analyst. To me, this speaks volumes.
The Disclaimer
Page 1 of the Culper report contains a disclaimer. A very long and detailed disclaimer.
Amongst other things, it is stated that the anonymous author(s) can’t and don’t vouch for the accuracy of any of the information contained within the report. It is made clear that any quoting of any expert in the report isn’t complete and doesn’t contain all information provided, including positive comments and experiences. It is also made clear that the unnamed “experts” were typically paid for their commentary and that this could act as an incentive to provide the anonymous author(s) with inaccurate, incomplete, or otherwise prejudiced information.
In other words, “Take everything you read herein with a salt mine full of salt”.
The Language
Allegedly, the Daybue launch was a “total flop”, parents, caregivers, physicians, and insurers - they “have all soured on the drug”, there have been “horror stories” about Daybue, the adverse event profile is “horrific”, the discontinuation rates are “horrible”…….
In my opinion, any self-respecting professional analyst would never use emotive language like this in a report.
I’m sure you don’t need me to tell you why the anonymous author(s) might have chosen to use emotive language like this.
The “Flop” Daybue Launch
The anonymous author(s) hold the belief that Acadia’s launch of Daybue “has been a total flop”. Note the past tense.
As noted by Neuren management today, Daybue net sales of US$67 m and US$23 m were reported for Q3 2023 (the first full quarter) and Q2 2023 respectively. In addition,Acadia reiterated guidance for net sales of Daybue in Q4 2023 of US$80 million to $87.5 million.
The “flop launch” assessment certainly wasn’t shared by other analysts, as indicated by the headline last July Acadia's Newest Drug Just Obliterated Sales Expectations; Shares Hit Two-Year High. Analysts had been expecting just $2.5 million in sales in the first quarter (versus US$23 m actual).
Here in Australia, Wilsons was forecasting just $US35 m in Daybue net sales in 2023 (whereas it is looking likely to be ~US$170m), with an estimate for peak sales of around $US350 million.
Of course, there can be no guarantee of what future sales will be, but to express the opinion that the Daybue launch has been a total flop is simply egregious.
The FDA Adverse Event Reporting System (FAERS) is a database that contains information on adverse event and medication error reports submitted to FDA. Anyone can submit an adverse event report. Incomplete reports are accepted and providing contact details isn’t mandatory.
The FDA makes clear that the existence of an adverse event report doesn’t establish causation. There is no certainty that the listed drug caused the event and the event may have been related to the underlying disease being treated, or caused by some other drug being taken concurrently, or occurred for other reasons. The information isn’t verified – it only reflects the reporter's observations and opinions. The incidence or prevalence of an event cannot be determined as there can be both underreporting and multiple reporting of an event.
It is claimed that 1,115 Daybue-affiliated adverse events were reported on FAERS through to 31/12/23. This, by the way, is factually incorrect. 971 adverse events were reported through to 31/12/23.Not much difference you might say, but getting facts right should matter to proper analysts, in my opinion.
I think it’s important to note that just 29 of the adverse event reports were made by health professionals.
The “Daybue-affiliated” adverse events
As the FDA makes clear, there is no certainty that the reported adverse event was caused by the listed drug. This certainly needs to be kept in mind when the reported adverse events include events such as scratches, dry lips, foot operation, croup, Covid-19, limb injury, broken femur, dark circles under eyes, adenotonsillectomy, road traffic accident, dental caries, sneezing, hunger, seasonal allergies, spinal fusion surgery, Rett syndrome, staring….
The most reported adverse event was diarrhoea (850). No surprise there.
The second highest reported adverse event was “underdose” (494). An adverse event?
Third was vomiting (294), at roughly a third the rate of diarrhoea. Similar to that seen in the pivotal trial.
Fourth was “dose omission issue” (163). Missing a dose is an adverse event?
Fifth was constipation (159). As we know, the typical rate of constipation in untreated Rett individuals is ~80%.
Sixth was seizure (150). Rett individuals have a seizure rate of 60-80%.
Seventh was “product use complaint” (117). Unclear. Could be, don’t like the taste.
Eighth was flatulence (110). What percentage of the population has at least one incidence of flatulence in a day?
Ninth was weight decrease (108). 40% of untreated Rett patients struggle with weight gain.
Tenth was appetite decrease (106). But hunger was also reported.
There were 108 reports of hospitalizations. Remember, as events can remain unreported or be reported more than once, one cannot conclude that there were 108 hospitalizations. Nor can it be concluded that the hospitalization was due to Daybue. For example, the road accident and spinal fusion surgery reported probably led to hospitalization, but while the patients might have been on Daybue and were even experiencing diarrhoea from the medication, this doesn’t necessarily mean that either Daybue or diarrhoea was the cause of the hospitalization.
In the report, a 9.5% hospitalization rate is estimated by the anonymous author(s). All due to Daybue? 9.5% of all patients on Daybue? How does this compare with the hospitalization rate of Rett individuals not on Daybue?
Now I don’t want to trivialise the fact that there are undeniably adverse events associated with Daybue. But from the information available on FAERS, and with all the caveats that apply to the data reported there, the general picture I see drawn is that diarrhoea is frequent and has been the predominant adverse event, the vomiting rate is roughly a third of the diarrhoea rate – exactly as seen in the pivotal trial and as disclosed on the labelling. Also, “underdosing” is frequent and some omit to take their dose. No surprises there either.
According to the report, gene therapy clinical trials are going to disrupt Daybue patient growth and retention “as patients must discontinue Daybue in order to participate in new trials.”
Most Neuren investors will be aware of gene therapy trials in Rett syndrome commenced by Neurogene and Taysha Therapeutics.
Neurogene commenced a Phase 1/2 trial in 4-10 year olds last year, which is anticipated to complete in 2029. It is aiming to enrol just 5 patients. To be eligible, patients must not have been on trofinetide. However, according to the clinical trials website, following (single) dosing, Daybue may be initiated after a specified time period.
Taysha also commenced an adult Phase 1/2 study last year. The study is anticipated to complete in 2032. They are seeking to recruit 18 patients. The trial is happening in Canada.
A paediatric Phase 1 study has also just recently commenced (completion 2031). It seeks to recruit just 6 patients.
Whether these few patients can take Daybue at any stage is unclear. It is not listed as an exclusion criterium on the clinical trial website.
I agree that this is an issue to watch and already raised the matter in posts last year. Payer pushback with high priced drugs is well-known to be something that both drug manufacturers and patient families have to contend with.
I’ll just finish by pointing out that, while Acadia is the subject of this short attack, aka Culper Report, any half-intelligent person would realise that this would hit the Neuren stock price.
It can’t be dismissed that that this might be someone’s plan and if not plan, opportunity.
NEU Price at posting:
$19.78 Sentiment: Hold Disclosure: Held
(20min delay)