Annexon, Inc. (NASDAQ:ANNX) was able to achieve positive results from its phase 3 study for the treatment of patients with Guillain-Barré syndrome [GBS]. Matter of fact, it noted that a lower dose of its drug, 30 mg/kg ANX005, was able to meet on the primary endpoint of this late-stage study with statistical significance.
If this is the case, then what further upside can investors expect in the coming months? Well, there are three other milestones, which, I believe, can boost shareholder value even further. The first of which to note is that the full data set from this phase 3 study, which was done in the Philippines and Bangladesh, will be presented at the upcoming 2024 Peripheral Nerve Society Annual Meeting on June 25th.
The truth is that this phase 3 study won’t be enough to obtain FDA approval of ANX005 for the treatment of these GBS patients. The good news is that it had already gained alignment with the FDA that a real-world evidence [RWE] protocol using an International Guillain-Barré syndrome Outcomes Study [IGOS] would be enough for a BLA filing.
Having said that, this phase 3 IGOS trial is expected to have data released in the 1st half of 2025. Should the primary endpoint also be met here as well, then a BLA filing of ANX005 for GBS patients will be done during the same time period.
These are two other catalysts that investors should keep their eye on. The premise of this biotech is not just on the advancement of ANX005 for the treatment of patients with GBS. This is just one part of its pipeline using Cq1 complement inhibition, which seems to have established proof-of-concept in GBS.
Another promising program utilizing this technology would be the development of ANX007, which is expected to soon be advanced in two phase 3 studies for the treatment of patients with Geographic Atrophy [GA]. Both of such late-stage trials are expected to begin in the 2nd half of 2024, which could also possibly boost shareholder value.
ANX005 Could Be A Huge Game Changer for Guillain-Barré syndrome Patients In the United States
As I stated above, Annexon was able to report positive results from its phase 3 study for the treatment of patients with Guillain-Barré syndrome [GBS] using ANX005. Again, this was a study that was done in patients in the Philippines and Bangladesh. While this is not an ideal location in terms of initially gunning for FDA approval right off the bat, I can see an argument that it was the right thing to do in terms of compassion. GBS is far more prevalent in these two geographical patient populations, for starters.
Secondly, these countries don’t have access to adequate care. How so? Well, consider that both of these countries have limited access to standard of care [SOC] intravenous immunoglobulin [IVIg]. Therefore, from a moral standpoint, it was the right thing to do. Regardless, the FDA and Annexon have already come to an agreement that a real-world evidence [RWE] protocol study, IGOS, would be enough to obtain FDA approval upon successful completion of it. Guillain-Barre Syndrome [GBS] is a type of disorder where the immune system attacks a person’s nerves. Such an attack though is brought upon either by a bacterial or viral infection.
The thing is that this disorder affects multiple aspects of a persons’ body such as muscle movement control, pain signals, temperature and much more. In terms of movement problems, it can lead to paralysis in severe cases. I believe that the most crucial point of all to make would be, that there are no FDA approved drugs either for GBS patients.
To truly see whether ANX005 was capable of being able to treat these patients with GBS, it ran the phase 3 randomized, double-blind, placebo-controlled study. This trial randomized 241 patients 1:1:1 to receive one of the following doses:
- 30 mg/kg ANX005 – 80 patients
- 70 mg/kg ANX005 – 80 patients
- Placebo comparator – 80 patients.
The primary efficacy outcome measure was the GBS-DS scale score at Week 8 of drug versus placebo comparator. What is this scale, and why is it important? Well, the goal of this scale is to measure the ability for patients to move freely. That is, to see how much of a disability they have in terms of muscle movement. Thus, the goal was to evaluate patients in terms of specific aspects of mobility, such as: Good state of health [normal and can run], disabled [walk with assistance and walk without assistance], severely disabled/death [bedridden, ventilated and death].
This primary endpoint was achieved with statistical significance when patients were given the lower 30 mg/kg dose of ANX005. That is, this dose of drug showed that versus placebo, it was able to deliver a 2.4 fold-improvement in GBS-DS at week 8. This difference of drug versus placebo, regarding the primary endpoint, was statistically significant with a p-value of p=0.0058. One possible confusion in clinical trials is why a higher dose wouldn’t do better than a lower dose. I can see the conflict here, but there is an explanation. The C1q inhibition achieved based from the 30 mg/kg ANX005 over a 1-week period, did better than 70 mg/kg ANX005 over a 2-3 week period.
The premise here is that C1q inhibition in the early phase of disease, when damage has just occurred, allows the drug to work quicker during this phase [1-week]. Whereas, the longer period doesn’t result in adequate C1q inhibition. There are three catalysts rapidly approaching for this program. They are full data to be presented at the medical conference, final results from the RWW IGOS study program of ANX-005 for GBS, plus the possibility of a BLA filing. The former is expected during this year, while the latter two are not anticipated until the 1st half of 2025.
I feel as though this biotech is on to good things in terms of C1q inhibition of the complement cascade system as part of its technology. Also, for which this tech is also being used to target other disorders in its pipeline like Geographic Atrophy [GA]. The reason to be excited here is that the company has found a way to block the entire complement cascade and not just a portion of it. What do I mean by this exactly? Well, there are drugs out there that only target a certain aspect of the complement cascade, like C5 or C3. With Annexon targeting Cq1, it takes out all cascades at the source.
Consider the premise that the complement cascade system starts off at C1q and then goes downstream to C4, C2, C3, C5 and C9. By taking on an indication of disease at the source, it could adequately help patients. Speaking of targeting Geographic atrophy, the goal of this company is to start two late-stage studies during this year, using ANX007 to treat these patients. One of the phase 3 studies to be initiated is known as ARCHER II in mid-2024, which is using this drug versus sham control.
The other late-stage trial, known as ARROW, is going to test this drug against Syfovre [already approved to treat GA patients], which will be a head-to-head comparison study. One last potential milestone to consider regarding ANX007 for GA would be an R&D day being held in mid-2024.
Financials
According to the 10-Q SEC Filing, Annexon had cash, cash equivalents and short-term investments of $264.9 million as of March 31, 2024. This company has been able to finance itself over the years by either selling shares of its common stock or issuing shares under an at-the-market [ATM] agreement. It believes that its cash on hand is enough to fund its operations into mid-2026.
As you can see, it still has plenty of cash runway for the foreseeable future. However, if management ever deems it necessary, then it could decide to raise cash through the use of an ATM agreement it has in place. This would be regarding an ATM offering agreement made with TD Cowen back in March 2024, where it could occasionally sell shares of its commons stock up to an aggregate maximum offering price of $100 million. As of March 31, 2024, no sales had been made under this 2024 ATM agreement. Its cash burn is $28 million per quarter.
Risks To Business
There are several risks that investors should be aware of before investing in Annexon. The first risk to consider would be regarding the positive results that were just reported from the phase 3 Bangladesh and Philippines study, using ANX005 for the treatment of patients with GBS. That’s because this was only a study to establish proof-of-concept that C1q inhibition works in treating these patients. To file a BLA of ANX005 with the FDA, it will have to prove that this phase 3 study is comparable to the RWS IGOS protocol that was established for U.S. marketing approval. There is no assurance that functional improvement of this other phase 3 study will be achieved with statistical significance. Nor, that which was achieved with the Bangladesh/Philippines populations, will also be observed in the Western population.
The second risk to consider would be regarding the targeting of patients with Geographic Atrophy [GA] using ANX007. Even though C1q inhibition worked well in treating patients with GBS, there is no guarantee that a similar or superior efficacy outcome will be observed in this other indication. On the flip side, there is one thing that this drug has going for itself in that it is slightly different compared to that of ANX005. How so? Well, consider that ANX007 is an antigen-binding fragment [FAB] antibody, while ANX005 is a monoclonal antibody. Thus, this difference could be a factor in terms of what type of efficacy is produced in the outcome.
The third and final risk to consider would be regarding competition in the complement inhibitor space. As I stated above, one possible competitor in terms of targeting GA would be Apellis Pharmaceuticals (APLS) with Syfovre. This drug, which had been approved to treat these patients, is a C3 inhibitor of the complement cascade system.
There have been several other complement inhibitors approved over the years to treat patients with various disorders. For example, Soliris was the first complement inhibitor drug to be approved and was achieved in 2007 for paroxysmal nocturnal hemoglobinuria [PNH]. From there, it led to the ability to use complement inhibition against other rare disorders with no approved drugs such as atypical hemolytic uremic syndrome [aHUS], generalized Myasthenia Gravis [gMG] and much more.
The thing is that Annexon can counter such a risk if it can prove that its C1q inhibition, which occurs at the source of the complement cascade system, prevents downstream inflammation. If this is proven in other disorders, then it could possibly have a competitive advantage over all other Complement inhibitors approved or in clinical development.
Conclusion
Annexon has been able to develop a good type of technology regarding targeting the complement cascade system. Instead of targeting other factors downstream that cause inflammation, it was able to go straight to the source by targeting C1q. Whether it can prove this mechanism of action [MOA] to work in terms of targeting other disorders remains to be seen, but the potential is there.
One of the main reasons why I wanted to bring up Annexon, Inc., despite already having achieved positive results from its phase 3 Bangladesh and Philippines study using ANX005 for the treatment of patients with GBS, is because of the several milestones which are expected in the near-term. One of these milestones is expected to happen in 2024, and this will be the release of full data from this phase 3 study that was just reported. From there, you have the other RWS IGOS trial data and BLA filing anticipated in 2025. With proof-of-concept of C1q inhibition established in a few indications like GBS and GA, plus several milestones still on the way, I believe that investors could benefit with any potential gains made.
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