|Will New Trials Renew Enthusiasm In La Jolla Pharma?|
|By Brian Wilson|
|Wednesday, 09 July 2014 07:44|
La Jolla Pharma (LJPC) is a small pharmaceutical company that focuses on galectin inhibition, iron absorption deficiencies, and on hypotension.
Earlier this year, the market was primarily interested in this company for its galectin inhibitor GCS-100 - a therapy that specifically targets galectin-3. Although the mechanism is not fully understood, galectin-3 has been implicated in liver disease, kidney disease, and certain types of cancers.
After Phase I results established the safety of GCS-100 investors eagerly awaited the results of the Phase II trial, which was designed to demonstrated efficacy against chronic kidney disease through a primary efficacy endpoint based on the estimated glomerular filtration rate (eGFR) in each patient. eGFR is a very straightforward measurement that is positively correlated with kidney function.
When top line results from this trial was released in March 2014, the market couldn't figure out what to think when the high-dose arm (30 mg/m^2) had inferior results to the low-dose arm (1.5 mg/m^2) when both were compared to the placebo arm. eGFR measures for the high-dose and low-dose arm were (+.17, p=0.92) and (+9.6, p=0.03) respectively.
Although this was weird to see, CEO George Tidmarsh blamed it on a "feedback mechanism" that interfered with the efficacy of the high-dose arm. The market was (at first) happy with this explanation, and sent LJPC to a 52-week high of $19.50 per share.
But why didn't the market keep La Jolla elevated if the low-dose arm demonstrated statistically significant efficacy in CKD against placebo in a decently large trial?
Well, if you look deeper into the design of the trial, one will notice that La Jolla used 90% statistical power (CI 90%) for this trial. This weakens the results, which may lead to some scrutiny by the FDA when La Jolla holds an end-of-phase-2 meeting.
To address the statistical "weakness" of the Phase II ahead of pivotal trials, La Jolla is now extending the trial and expects to present more results in November 2014. Hopefully (for LJPC longs) this will provide better data that can be leveraged to support the efficacy of GCS-100.
But even if GCS-100 produces ambiguous results again, investors should be shifting more attention to LJPC-501 - a synthetic angiotensin II that is scheduled to start a Phase III trial in early 2015. This drug is now the most advanced candidate in the pipeline, and has the potential to move LJPC's $65 M enterprise valuation quite dramatically with just interim data. La Jolla will also be presenting the first (Phase I) data for LJPC-401 in patients with an overload in iron levels.