Swedish biopharma Calliditas Therapeutics AB CALT is making significant strides in addressing rare kidney diseases. In a recent interview with Benzinga, the company’s CEO, Renee Aguiar-Lucander, provided valuable insights on various aspects of its work.
Tarpeyo – A Unique Solution?
Aguiar-Lucander described Tarpeyo, its lead drug, as “beautiful, unique, but pretty simple,” adding that it has received accelerated FDA approval for treating IgA nephropathy, an autoimmune kidney disorder that results from the accumulation of antibodies in the organs. This in turn causes inflammation and kidney damage.
The Gut-Kidney Connection
Although IgA nephropathy is a kidney disease, its origin is in the gut, which houses much of the human immune system. The exact origin is in the portion called the ileum, which has a huge concentration of Peyer's patches, which are like lymphatic tissues. These have beta cells that secrete IgA1, which per se is not harmful.
A trigger, possibly bacterial, dietary, environmental, etc., can cause a sudden overproduction or over-proliferation or even leaking of these IgA antibodies, which then find their way into the blood in large numbers, triggering autoimmune reactions by the body and the release of other antibodies. These large autoimmune complexes won't be cleared by the liver and continue to circulate until they end up in the kidney, causing inflammation, fibrosis, necrosis, etc.
It takes a while for the progressive autoimmune disease to impact the kidney's performance. Ultimately, the affected party has a high risk of ending up with end-stage renal disease, and for some, it might take 10 years or even up to 20 years for a precipitation into end-stage disease. It might leave one who is only 40 years old and otherwise healthy at the mercy of dialysis for a lifetime.
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Tarpeyo's Mode Of Action
With Tarpeyo, Calliditas focuses on the origin of the disease, and the drug is delivered to the gut. The capsule formulation of the drug is coated in such a way that it remains intact until it reaches the ileum. It then releases the active ingredient called budesonide over a very short time of an hour or two.
Budesonide is a locally-acting corticosteroid that is similar to the one used for asthma, which when inhaled, treats the local mucosa in the lungs. Tarpeyo treats the local mucosa in the gut. Aguiar-Lucander stressed that this approach is far safer than administering high doses of systemic steroids.
Source: Calliditas
Flexible Treatment Duration
When discussing the treatment duration, Aguiar-Lucander mentioned that clinical trials usually administered Tarpeyo for nine months. However, in real-world scenarios, the duration varies based on individual patient profiles. She specified that the recommended dosage is a 16-milligram once-daily dose for nine months, followed by observation, with adjustments made as needed to prevent progression to end-stage renal disease.
Differentiated Approach
Calliditas was the first company to have a hugely successful Phase 2b trial and has worked with universities and interest organizations to find a regulatory path forward. The collaboration with all of the stakeholders enabled the company to go to the FDA in early 2017. For the first time, the regulator allowed a company to run a pivotal trial based on the surrogate marker.
"We always thought we had a kind of differentiated way of addressing this disease," said Aguiar-Lucander.
Risk Vs. Return
IgA nephropathy, the disease targeted by Tarpeyo, is rare but it is the most common of the glomerulonephritis diseases. Although there isn't a good actual kind of objective estimate regarding how big the patent population is and the currently available estimates are based on academic research, literature, and a big prevalence study in Europe, etc.
In the U.S., the prevalence is estimated at 130,000-150,000 patients in total, which places Tarpeyo under the Orphan Drug Act. Drugs to treat diseases with 200,000 patients or fewer are known as orphan drugs.
"It is a very significant market opportunity," the CEO said.
Tarpeyo Vs. Competition
Aguiar-Lucander highlighted two key differentiators for Tarpeyo versus other approaches in chronic kidney disease treatment. The drug can stabilize kidney function. The full Phase 3 readout showed a very big difference in terms of kidney function loss amongst the placebo patients versus those patients that have been treated. Tarpeyo's efficacy has been supported by both long- and short-term data, which show that this particular treatment approach does preserve kidney function in the way that it slows the progression toward dialysis or end-stage renal disease.
At this point, no one else has been able to show that data at all, the Calliditas CEO said.
The second differentiator is that Tarpeyo gives the freedom of not necessarily staying on it for the rest of a patient's life. From the patient's perspective, it allows the option of going on an intermittent treatment and kind of customizing it for your needs, lifestyle, and values.
Most of the drugs out there are more symptomatic and are better for one's kidneys but they don't treat the underlying disease.
Aguiar-Lucander also explained away the price premium to a rival offering from Travere Therapeutics, Inc. TVTX. The discount at which Travere's Filspari, which received accelerated approval in February, is priced versus Tarpeyo does not give the full picture, she said. Tarpeyo's pricing is for nine months, while the other drug may have to be taken all the time.
"If you can take our drug every other year, right, there’s a huge pricing benefit actually for our drug versus Traver's drug. So I think it depends on a little bit of how you’re looking at it in terms of kind of pricing," Aguiar-Lucander said.
Tarpeyo Uptake
Despite Tarpeyo’s conditional approval in Europe, its commercial launch has been delayed due to country-by-country price negotiations. Calliditas is partnering with a European entity to facilitate the launch, with price negotiations currently underway.
Aguiar-Lucander addressed the guidance reduction alongside the second-quarter results, citing the challenges of IgAN being a progressive, not acute, disease. Additionally, limited renal therapeutic products and clinical data have contributed to a lack of urgency among physicians in treating this condition, especially during the summer months.
She also highlighted market-access friction, where many nephrologists are unfamiliar with specialty product processes. To overcome this, educating physicians about the disease, its pathophysiology, and the gut-renal connection is crucial.
The executive anticipates full approval, expected later in the year, to boost Tarpeyo’s adoption. The Prescription Drug User Fee Act (PDUFA) date is set for Dec. 20.
Having full approval removes inhibition of some insurance companies, who are not favorably disposed toward drugs having an accelerated approval, Aguiar-Lucander said. The accelerated approval gave the nod to use Tarpeyo for a subgroup of patients, who have a more rapid risk of progression, she said, adding that the full approval will likely be for the full population and not a subgroup.
The labeling will also be different, as the trials have shown that Tarpeyo doesn't just have an impact on the symptom but also the real underlying clinical picture here, the real kind of kidney function.
"So, I think all of those things will kind of, you know, be contributors to the fact that next year should be a significant kind of acceleration from a kind of commercial perspective," Aguiar-Lucander said.
She mentioned analysts’ estimates, suggesting Tarpeyo’s peak sales potential in the U.S. alone could range from $500 million to $1 billion.
Key Imminent Catalysts
- Tarpeyo’s full approval in December
- The regulatory decision for Tarpeyo in China before end-2023
- Full readout from the Phase 2 trial of Setanaxib in head and neck cancer in the first half of 2024
- Phase 2b trial of Setanaxib in primary biliary cholangitis in the first half of 2024
Message To Investors
"We have a very exciting story," said Aguiar-Lucander, adding "We really are pioneering the first approved drug in this very kind of underserved patient population of IgA nephropathy with a drug that we now actually have shown has a long-term benefit in terms of kidney function."
She also said Calliditas is very close to profitability and has a healthy cash balance.
"The fact that we also…have a pipeline of other rare disease indications, as well as a potentially very attractive partnering opportunity, I think makes us feel like we have a lot of different, we have actually quite diversified for being kind of a fairly small biotech company," she added.
Calliditas Stock
The Nasdaq-listed American Depository shares of Calliditas ended Thursday's session at $16.11, down 0.07%, according to Benzinga Pro data. The company went public in June 2020 by offering 4.15 million ADSs, with each ADS representing two underlying common stock. The IPO was priced at $19.50 per ADS.
The stock has fallen 5.2% so far this year. This is in line with the SPDR S&P Biotech ETF XBI, which has clocked a year-to-date loss of 5.1%.
The average analysts' price target for Calliditas’ ADS is $31.62, representing over 96% upside from current levels.
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