Analysis Focus: WMGI
Wright Medical Group N.V. (WMGI) stock prices climbed +4.46% to $25.78 on the news of its receipt of FDA premarket approval (‘PMA) for Augment. Augment, an injectable bone graft, is a combination product containing human platelet derived growth factor (rhPDGF-BB) and a blend of Type I collagen and Beta tricalcium phosphate. The combination is used as a safe and effective alternative to autograft for use in hindfoot and ankle fusion in an easy to use flowable formulation.
Augment Injectable and Augment Bone Graft are used for the same indication. This is the first injectable protein therapeutic to have prior clinical data to support its safety and efficacy. With the recent FDA clearance it is now ready to enter the U.S, market.
The product already has a sizeable market base and successful run in Australia and Canada. In particular, because of its current availability in Canada a number of U.S. doctors who are already aware of the therapy and its benefits are looking forward to its availability in the U.S. market. The company is now working on logistics and labelling the product in changed clearance scenario to make it commercially available very soon.
The company also stated that based on the FDA approval they are now revising their market scenario for the recent future. The approval allows them further entry into ~$300M bone graft market. In particular the product is projected as a clear development against existing autograft in ankle and/or hindfoot fusion procedures. Most important benefit for the injectible is that it does not require any surgical processes hence much simpler and safer.
However, the company is not dependent on the future prospect of this newly-approved therapy. Apart from its other established candidate, the company recently presented its other orthopaedic innovations in the biologic field. Those include INVISION Total Ankle Revision System and ORTHOLOC 3Di Ankle Fracture Low Profile System. The company also markets PROPHECY Preoperative Navigation. PROPHECY is the first preoperative planning system with patient-specific instrumentation for ankle revision arthroplasty. The system received its first approval in 2012.
Globally orthopaedic devices and reconstructive surgery market is estimated to grow at CAGR 6.1% to reach $61.02B by 2023. Factors like a growing geriatric population and increasing incidence of bone injury and disorders contribute to the continuing expansion of the market. Accordingly it may be concluded that the timing of WMGI’s approval for a new therapy will only consolidate its dominance over this particularly growing sector of orthopaedic market.
In the recent past WMGI has underperformed compared to the industry standard. The stock price movement in the last 1Y is not positive while the sector has clocked a 7.6% growth. However, it must also be noted that since its reporting of the Q1 results in April the stock is making a steady progress. In early May it was hovering around its 52 wk low at $19.31. Since then it has gradually moved northwards. Even if the recent round of news was definitely positive the market has not reacted enthusiastically. It is yet to reach its 52 wk high at this point.
There is little or no uncertainty regarding entry of this new therapy into this particular segment and hence buy is certainly an option. However, as mentioned earlier there may be a little delay before the drug’s labelling change and full commercialization at clinic level is executed. The company will provide updated guidance on August 8 during its Q2 earnings call. So cautious investors may wait till then to see the progress of the new therapy that should hit the clinics in 6 weeks.
Stocks in News: AGN, CRBP
Allergan’s (NYSE:AGN) releases topline data of Bimatoprost SR (Sustained-Release) Phase 3 clinical trial data. The candidate is a intracameral (into the eye cavity) implant. It is targeting patients with open-angle glaucoma or ocular hypertension. The trial data shows a clear treatment benefit. Intraocular pressure (‘IOP) of the patients receiving the candidate is reported to be 30% lower over a 12-week primary efficacy period. H1 2019 will see publication of more topline results, a second Phase 3 trial data, and additional safety data. If those results are favourable for the candidate, it may see the filing of a U.S. marketing application in H2 2019. If this becomes commercialized, this may become available along with the existing form of bimatoprost in an eye drop formulation under the brand name Lumigan.
Ocular hypertension is defined as IOP ≥ 24 mm Hg in either eye. Main source of ocular morbidity and mortality follow from glaucoma. The incidence of glaucomatous damage in ocular hypertensive patients increases with increasing IOP levels. There are more that 50K people in the U.S. who are affected by glaucoma and a multiple of those are suffering from some form of IOP. The implant will target that patient population and has the potential of changing the therapy scenario dramatically by this new drug delivery model.
Discussion: Sustained treatment benefits is found in a Phase 2 clinical trial of Corbus Pharmaceuticals’ (NASDAQ:CRBP) in patients with systemic sclerosis (‘SSc) and dermatomyositis (‘DM). Results included no safety concerns or serious/ sever treatment related adverse events. Common adverse events are upper respiratory tract infection (22%), joint pain, skin ulcer and urinary tract infection (14% each) and diarrhea (11%). Lenabasum is an oral synthetic endocannabinoid-mimetic. The candidate has Orphan Drug and Fast Track status in the U.S. for SSc and Orphan Drug status in Europe for SSc and DM. Phase 3 study with an expected end date of March 2020 is already underway.
Systemic sclerosis is a disease of the connective tissue. Symptoms of the disease include vasomotor disturbances, fibrosis; atrophy of the skin, subcutaneous tissue, muscles, and internal organs. Dermatomyositis is a rare inflammatory disease and is only one of the three known inflammatory myopathies. The disease is usually identified by a distinctive skin rash, muscle weakness, and inflammatory myopathy, or inflamed muscles. Systemic sclerosis is a rare disease that is annually diagnosed in ~67/1M male patients and ~265/1M female patients. Its annual estimated incidence rate is ~2.3-10/1M. On the contrary, incidence of dermatomyositis is ~9.63/1M. Dermatomyositis can occur in people of any age.
In other news:
Clearside Biomedical (NASDAQ:CLSD) enrolled all 460 subjects for its Phase 3 clinical trial of suprachoroidal CLS-TA (triamcinolone acetonide) and Regeneron Pharmaceuticals’ EYLEA (aflibercept) combination in treatment-naive patients with retinal vein occlusion (RVO).
Merck (NYSE:MRK) received FDA approval for its KEYTRUDA (pembrolizumab) for the treatment of pediatric and adult patients with refractory primary mediastinal large B-cell lymphoma (‘PMBCL). Supporting data leading to the approval showed 11% complete response rate for an overall 45% response rate.
Genentech, a Roche (OTCQX:RHHBY) unit received FDA approval for its Avastin (bevacizumab), in combination with chemo then followed by Avastin alone, for the treatment of patients with advanced ovarian cancer following initial surgical resection. Avastin, which was originally approved in 2004 for advanced colorectal cancer, is now being approved for 10 different indications across six other type of cancers.
Seattle Genetics (NASDAQ:SGEN) recently began its Phase 2 clinical trial of 100 subject for its tisotumab vedotin, an antibody-drug conjugate (‘ADC) in patients with recurrent/metastatic cervical cancer who have relapsed/progressed after standard-of-care treatment. The trial is estimated to be completed by December 2019.
Phase 1 trial result of Pulmatrix’s (NASDAQ:PULM) lead candidate PUR0200 in patients with moderate-to-severe chronic obstructive pulmonary disease (COPD) shows similar therapeutic effect of Boehringer Ingelheim’s Spiriva HandiHaler (tiotropium bromide) Inhalation Spray at an 83% lower dose with more than 30% less plasma drug exposure.
Tracon Pharmaceuticals (NASDAQ:TCON) reported positive clinical data from TRC105, Tracon’s endoglin antibody on mice colorectal cancer.
scPharma’s (NASDAQ:SCPH) Furoscix received a CRL regarding it’s marketing application for treatment of fluid overload (edema) in heart failure patients.
Regenxbio’s (NASDAQ:RGNX) RGX-111 gene therapy nvestigational treatment for Mucopolysaccharidosis Type I receives fast track designation.
Merck’s (MRK) Gardasil 9 (human papillomavirus 9-valent vaccine, recombinant) for use in women and men ages 27-45 for the prevention of certain cancers and diseases caused by the nine human papillomavirus (HPV) receives FDA fast track designation. The vaccine is already approved for another age group.
AdCom favorably responded to Cardinal Health’s (NYSE:CAH) INCRAFT AAA Stent Graft System for the treatment of infrarenal aortic aneurysms. The device was CE Mark’d in 2014.
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I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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