|Receptos CEO Faheem Hasnain|
San Diego-based Receptos is on a roll. After the markets closed on Monday, the biotech ($RCPT) spread the word that its mid-stage trial for lead drug RCP1063 hit its primary endpoint for spurring remissions and clinical responses among patients suffering from ulcerative colitis in the trial. And the results quickly spurred a 37% spike in its share price, which follows a similar surge when the same drug hit its marks in a mid-stage trial for multiple sclerosis back in the summer.
The drug is a sphingosine 1-phosphate 1 receptor--S1P1R--small molecule modulator; essentially a pill designed to prevent circulating lymphocytes from provoking autoimmune diseases. Analysts were particularly cheered by the news because it helps provide solid data that Receptos--which pulled off a stellar IPO in 2013 largely on the promise of this drug--is on the right track for MS, ulcerative colitis as well as Crohn's and other conditions.
Investigators reported that the drug sparked a 16.4% rate of clinical remission among patients in the high-dose arm--well over the 6.2% rate seen in the placebo group. And they also recorded a clinical response rate of 68.2%. Leerink's Joseph Schwartz says those numbers compare well against Humira, Simponi and vedolizumab. And that sets up an attractive partnership or buyout scenario.
"With a potentially best-in-class drug in now two indications, we believe RCPT deserves to receive very substantial fees upfront ($250MM+) and downstream ($1bn+) in a partnership scenario, or a hefty price ($3bn+) in an acquisition scenario," noted Schwartz today. "Interestingly, now that vedolizumab has become the new benchmark for UC drug pricing at around $50k/patient/year, RPC1063 may be able to maximize value in both the UC and MS drug market, where recently launched drugs cost around $60k/patient/year."
The drug is already in Phase III for MS and now heads into another late-stage trial for ulcerative colitis.
"The positive results of the TOUCHSTONE study exceeded our expectations with respect to the treatment effect of RPC1063," said Receptos CEO Faheem Hasnain. "The consistency of the efficacy data across the various endpoints for the high dose, combined with the favorable safety profile, gives us confidence to move forward expeditiously with Phase 3 trials in ulcerative colitis and a Phase 2 trial in Crohn's disease. There is a tremendous unmet need for a novel orally administered therapy in these patient populations. In addition, we believe that RPC1063 may have promise in other therapeutic areas, and we intend to continue to explore other autoimmune indications where RPC1063 may provide utility."