PAH, Bile Duct Cancer and the FDAThe biotech market in the US,...

PAH, Bile Duct Cancer and the FDA

The biotech market in the US, in particular the NBI Index fired up this week with the announcement Merck received approval for their cardiovascular drug Winrevair. The drug has been developed to treat PAH, a condition the beckershospitalreview.com describes as one in which small blood vessels in the lungs become thickened and narrowed, raising blood pressure in the lungs and causing the heart to work harder. In the U.S., around 500 to 1,000 new cases are diagnosed each year. Merck's new drug is an injection given once every three weeks.

Patients with PAH often experience shortness of breath, dizziness and chest pressure. Eventually, the right side of the heart fails, Merck’s Chief Medical Officer Eliav Barr said this week, following the FDA Approval. According to an article posted on investors.com yesterday Winrevair is the first drug that treats the underlying cause of PAH, Barr said in a March interview with IBD. Standard drugs help relax the blood vessels which thicken as the disease progresses. Winrevair, instead, rebalances the signals in the body that tell the blood vessels to narrow.

"It allows for a very significant change in the way in which the blood moves through the lungs," Barr said in the article. This allows the blood to become properly oxygenated and travel throughout the body.

Allison Gatlin notes in writing the investors.com article that the effectiveness of drugs like Winrevair are often measured in what's known as the six-minute walking test. This test examines how far patients can walk over that time period. Patients who took the Merck drug on top of standard treatments added 41 meters to their six-minute walking distance, said Trung Huynh, a UBS analyst who estimates the drug is set to earn close to $650 million dollars US this year.

Gatlin highlights the fact that eight out of nine secondary metrics also showed statistically significant improvements. Patients who received Winrevair had an 84% lower risk of clinical worsening events or death over 24 weeks compared to the placebo recipients. This is "impressive given the short 24-week duration of the study" and should help drive uptake, Huynh said. "We think reduction in clinical visits translates to a major quality of life benefit," he said.

In a similar vein Merck’s Barr called the test results for Winrevair “groundbreaking."

What I guess is of interest to Imugene holders is that despite the potential Winrevair has to treat further diseases in the cardiovascular space, PAH as a condition only has a current market size of between 500 to 1,000 patients each year. And Winrevair isn’t the only drug in this space. Johnson & Johnson's (JNJ) new PAH treatment, Opsynvi, gained approval last week to treat the condition. Yet it is worth mentioning that despite the limited market size, Mercks share price rose 7% this week, off the back of the FDA Approval. That’s a figure that equates to around $23 Billion USD or over $35 billion AUD. So I guess it begs the question how many patients are diagnosed with bile duct cancer each year, the condition Imugene’s Vaxinia was recently granted FDA Fast Track Designation status for? The answer is 8,000 patients each year, or close to 12 times that of PAH diagnosis. And having answered that question what impact would, if granted, an eventual FDA Approval for Vaxinia to treat bile duct cancer have on the IMU share price. I’ll leave it for you to do the math on that.

What astounds me is the ASX’s failure to take market comparisons such as these into consideration. Maybe it’s symptomatic of the fact Australia is far removed from the US. Or maybe its simply a result of the fact investment managers are not really too involved with biotechs on the ASX, unlike Big Pharma players such as Merck. Or maybe its just that the world waits for the final FDA Approval before they sit up and take notice. But that analogy would appear a bit strange to the naked eye, given that over 6 out of 10 drugs approved by the FDA have recently progressed through the expedited pathway route Vaxinia is now taking (see then table herein).

I guess one could say Imugene is not on the radar of many investors for up until now it has no FDA Approvals under its belt, it has no revenue, and it is not listed on a major bourse such as the Nasdaq. But if it were listed on the Nasdaq, I’m quite sure investors would not be too perturbed by the fact Imugene currently has no FDA Approvals or revenue, they’d be looking at the market size, as they did when reviewing Winrevair’s potential. When Winrevair was approved Barr went onto to say to Investor’s Business Daily "All of these people have some medicines they can take, but they still have huge unmet medical needs. These drugs will address a tremendous amount of medical need, and that's what makes this area attractive to us,” he said. Sound familiar?

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