Stifel PT $57
QURE shares are under some pressure on the ValRox CRL, which reflects FDA does care about durability for Hemophilia gene therapies. But in our opinion, the durability story for AMT-061 will likely be materially cleaner by the time of filing: (1) BMRN changed its manufacturing from the ph1/2 to ph3; QURE didn't, (2) yes, QURE is using 5-year AMT-060 data [different transgene] as durability support, but this is under the same IND, (3) QURE will have >2 year data for the 3 ph2b patients for AMT-061 by the time of filing and (4) QURE is filing with 12 month ABR data for all AMT-061 ph3 patients, and, as the first patient in the ph3 was dosed in January 2019, longer-term durability should be available for a subset. Things can always change at FDA, but the regulatory base case for QURE is to file on its full ph3--not an interim cut.
Baird PT $78
We are buyers on weakness driven by ValRox CRL. This morning, BioMarin Pharmaceutical (BMRN; covered by Baird analyst Mike Ulz) announced receipt of a complete response letter (CRL) for its BLA filing for their Factor VIII (FVIII) adeno-associated virus gene therapy (AAV GT) valoctocogene roxaparvovec (ValRox) for hemophilia A (hemA). While investors will likely read-across this rejection to uniQure's (QURE) Factor IX (FIX) AAV GT AMT-061 for hemophilia B (hemB), we believe read-across should be minimal and would be buyers on QURE share weakness this morning. We reiterate our QURE Outperform rating and $57 price target.
Several key factors distinguish ValRox from AMT-061, extinguishing negative read-across from the CRL. We understand investors' initial reaction that the rejection of ValRox under the premise of shifting the FVIII AAV GT's Phase 3 primary endpoint to annualized bleeding rate (ABR) at 2 years would be a negative signal for AMT-061, for which FIX activity at 26 weeks is supposed to be the accelerated approval endpoint. However, having spoken with QURE management, we would raise several points that we think substantially mitigate bear read-across:
No FDA feedback on changing the HOPE-B approval endpoints. According to QURE management, they have not received any communications from regulators asking them to change the primary endpoint of the Phase 3 HOPE-B trial or that FIX activity at 26 weeks would no longer be sufficient to support accelerated approval.
Substantial ABR data will be available by the time of a potential BLA filing. Assuming top-line success for HOPE-B by YE20 to support a BLA submission in 1H21, the regulatory package would include both 12-month ABR data from the HOPE-B cohort and 2-year ABR data from the three patients in the Phase 2b trial of AMT-061, along with 5-year ABR data from the Phase 1/2 trial of earlier-generation FIX AAV GT drug AMT-060, all of which speaks to FIX durability and its impact on ABR specifically.
ValRox durability and Phase 1/2 vs Phase 3 variability concerns are likely specific to BMRN's hemA program. We remind investors that there was a substantial decline in FVIII activity for ValRox in the interim readout of the ongoing Phase 3 trial compared to the Phase 1/2 cohort at a similar timeframe and dose. Moreover, as investors are well aware, there is an apparent decline in FVIII activity over time with ValRox in the Phase 1/2 trial. Taken together, it is reasonable these issues would give regulators pause regarding early approval of the hemA GT. In contrast, data from multiple FIX AAV GT trials have shown no decline in FIX activity and if anything improvements in ABR over a multi-year period (as discussed in our December 9 note).
Taken as a whole, we remain bullish on AMT-061 as a potential dominant drug in the hemB AAV GT space and would be buyers on weakness today driven by ValRox read-across.