Several posters, journalists and perhaps the market have over-reacted to last Friday’s announcement of a CRL. The CRL has been mischaracterised by some as not an ‘approval’ and therefore a ‘rejection’ of Rem-L and in more extreme cases portrayed as a death knell or ‘the end’ for MSB (moment of ‘sink or swim’). However, this simplistic view is both over-dramatic and erroneous. FDA have not rejected Rem-L at all, they have simply asked for more data. I’d like to balance some of the negative statements with a counter-view on the quite positive position that MSB is in when viewed from a wider / holistic perspective.
Progress has been made on CMC and potency assay issues, and this is vital
Last Friday’s announcement confirmed the FDA have not raised issues with manufacturing and, critically, that they have acknowledged improvements to the potency assay.Development of potency assays have been a vexing and a time-consuming issue for MSB. In a period where supply chains for potency assay kits have been disrupted, it has taken time for MSB to develop, consult and verify these assays. However, the progress made on this may have significantly improved (optimised) MSB’s product.
In February 2023, Joanne Kurtzberg presented a paper to the Tandem meeting of ASTCT and CIBMTR, which identified and justified that a new potency assay (% IL-2Rα inhibition) correlates in vitro and in vivo bioactivity in inhibiting T-cell activation. Further to this, she presented data that showed quite significant enhancement in performance particularly in severe cases:
Stratifying patients in MSB-GVHD001 (n=54) by treatment with Rem-L product lots with in vitro activity of mean % IL-2Rα inhibition > median or ≤ median showed a positive association between % IL-2Rα inhibition and D180 survival (85% vs. 54%, p=0.01). This was preceded by a greater duration of the D28 OR among responders who received product with higher %IL-2Rα inhibition. The relationship between greater survival and mean % IL-2Rα inhibition > median vs ≤ median was most evident in patients with the most severe form of the disease and at highest risk for death: Minnesota high risk (D180 OS 89% vs 50%, p=0.01), MAP >0.29 (D180 OS 100% vs. 17%, p=0.003) or Grade D disease (D180 OS 91% vs. 50%, p=0.03).
https://tandem.confex.com/tandem/2023/meetingapp.cgi/Paper/22428
This is a significant breakthrough for MSB to enhance the efficacy of Rem-L as it can now measure and select the most potent batches for trials. In the short-term, this may bode well for trials. In the longer term, this might also bode well for optimising manufacturing and dose levels, which could reduce costs of goods sold.
Those who reviewed the ODAC interactions in 2020 would recall that MSB made the case to FDA that the most recent trial (MSB-GVHD001) used ‘optimised’ batches of Rem-L and that this is the reason for improved performance compared to previous trials which did not show efficacy. In my perception, this concept of ‘optimisation’ was met with some skepticism from the FDA.
My suspicion is that that whilst the FDA have now accepted in principle that there appears to be a reasonable potency assay, but remain concerned that this has been based on post-hoc analysis and that this is the underlying reason for their request for further confirmatory data.
Has the FDA acted incompetently / corruptly?
In my view, no. The FDA is acting cautiously, and this caution is reasonable and appropriate given that this is a first in class technology and given the prevalence of other entities attempting to market unapproved stem-call products (and giving false hope).Some have pointed out the FDA is acting inconsistently, particularly noting that other products have been approved on single-arm trials and with products that appear to have questionable efficacy or duration of efficacy.
Whilst it appears prima facie that there are inconsistencies, I don’t think that simplistic comparisons can reasonably be made between different classes of therapy. I also think the key issue here is that MSB are basing their case for approval on the proposition of an optimised product and relying on one trial to do so.
Has SI acted incompetently or belligerently by having not yet run another trial?
In my view, no. In the conference call, SI intimated that the resolution on potency assays was an important precedent to confirming trial protocols. It is a rational decision to conserve capital and wait to receive formal FDA feedback or else run the risk of a failed trial. MSB now have the FDA feedback, an ability to optimise the potency of product, an understanding of a target population, an established network of hospitals in which to run trials and some fairly compelling data to incentivise enrolment in the next trial. All of these factors will contribute towards an efficient and prompt trial in adults.
So how long might a further trial take?
Firstly, when asked in the conference call how long this will take and if it will be 18months-2 years, SI answered that it would be significantly less than this.
The actual time taken will obviously depend on several factors, but the following presents some back-of-the-envelope calculations propose when a trial might be completed by.
Firstly, we might attempt to estimate the rate of enrolment:
Incidence of BMT = 30,000pa.
Incidence of AGVHD @ 50% = 15,000pa
Incidence of sR AGvHD @ 40% = 6,000pa
Incidents of adult sr AGvHD @ 800% =4,800pa = 400 per month.
Incidents of grade 3/4 sr AGvHD, say 50% = 200 per month
We learned MSB had planned a staged roll-out to ~15 major centres, which might account for 50% of all cases. Let’s take a scenario, where trials are run in 5 centres (say 16% of total cases) and we might reasonably assume that 10% of total cases are actually enrolled. This leads to enrolment of 20 patients per month.
Next, lets consider the primary endpoint. MSB’s announcement on Friday cited that existing therapy has not improved outcomes and 90-day survival remains as low as 20-30%.
Given that durability of response has been demonstrated to 4 years in paediatric aGVHD, it is possible that 90-day survival could be selected as a primary end point. I don't think it will be less than this as Rux performance remains high at 28 days (although deteriorates thereafter).
Noting that the paediatric trial (predominantly grade C/D) achieved 63% overall survival at 1 year, and also that MSB can optimise its potency, it might be reasonable to power a trial on the basis that a similar response rate of 63% occur in the treatment arm.
If a trial n=60 were performed with underlying survival rates of ~25% in control and ~63% treatment arms, a Chi-square analysis suggests this would yield a p-value <0.01. Thus, a trial size of n = 60 is probably in the ball park. (I realise Chi-square may not be the statistical analysis used, but it is a convenient guide to roughly assessing a trial sample size).
(As a side note, it would not be surprising to see a trial design 1:1:1 control:treatment:treatment with 2 treatment arms of varying IL-2Rα inhibition).
Thus, a plausible scenario could be:
• trial commencement 1 Oct 23 (soon after meeting with FDA in 45 days)
• enrolment complete 1 Jan 24 (60 patients @ 20 patients / month = 3 months)
• primary end-points reached and data unblinded 1 Apr 24 (90 day survival)
From there, estimates of time depend on the statistical analysis and FDA feedback which will obviously depend on the results. If the results are overwhelmingly positive (which is possible based on a potent product), there might be enough data to quickly support paediatric approval.
But is there enough capital and will shareholder value be diluted?
I do think it is likely that there may be another capital raise for MSB at some point, at least to support product launch, but I would also make the following observations:
• positive announcements at the milestones above (particularly headline results on trial data) may suddenly impact upon the share price lifting the price significantly from where it is now and reducing the dilutive affect of capital raisings
• the prospect of an approval in adult aGVHD quintuples the addressable market compared to paediatric aGVHD and this will attract capital / significantly affect share prices if this trial is successful.
• FDA support for potency assays and trial protocols for Rem-L may also enhance the prospects of external funding. One potential opportunity is funding for ARDS – NIH is one potential funding candidate for Covid ARDS who may be waiting on potency assay validation prior to funding further trials.
• We might also hear about results for Phase 1B/IIA ulcerative colitis later this year, for which there was some promising interim results.
In addition to this, there is also a chance of accelerated approval for paediatric aGVHD being granted at some stage through the discussions / trial commencement / results. SI has stated that MSB would continue to pursue this.
Some conclusions
A binary view in biotech is not useful. We have seen previous examples with MSB where prima facie results appear to be failures (e.g. primary end points not met for CHF and lower back pain), but whereupon further examination, there are major successes and developments (e.g. outstanding results in MACE and pain reduction). Similarly, whilst last Friday’s announcement regarding CRL request for extra data has attracted negative headlines for non-approval, the important development here is that potency assays have progressed. If this had not still not been resolved, I would have a much more negative assessment.
Opportunities remain for patient and sophisticated investors who rationally consider the presented detail with a broader view as opposed to impatiently reacting on simplistic binary views and emotion. There is a lot to look forward to with MSB and major success may still come quite swiftly.
(20min delay)