Celyad
Also on June 28, Celyad SA (ADR) (NASDAQ:CYAD) announced the results from a European Phase III trial of its lead cardiovascular drug, C-CURE. Alongside the data, the company announced the drug had unfortunately missed its primary endpoint.
The Science
This one is a stem cell candidate – a space that has grown pretty steadily over the past five years, but as regulatory pressures ease, should speed up across the next ten years. Unfortunately for Celyad, it looks as though its C-CURE drug won’t be the candidate that it carries forward into the next decade. The drug targets heart failure, and the science behind its MOA isn’t all that complicated. Essentially, Celyad removes some of the patient’s bone marrow cells and mixes them with a combination of cytokines and growth factors. The mixture is then introduced by injection directly into the heart, and left to grow. The two factors work on the bone marrow cells to effectively convert them to heart cells, and the treatment as a whole is designed to strengthen the ability of heart cells to repair and reproduce naturally.
The Data
The primary endpoint of the trial was a composite of a number of different data points, including mortality, morbidity, quality of life, the Six Minute Walk Test, and left ventricular structure and function at nine-months post-procedure. The patient population totaled 271 patients across 12 countries in Europe and Israel. While the company reported a positive trend, there wasn’t a statistically significant improvement in these composite of factors between the active arm and placebo.
Essentially, the treatment seemed to have some positive impact on patients, but not any level of impact that can be considered worthy of an NDA submission as things stand. There was one subgroup of patients, however, that demonstrated just such an improvement, and Celyad is going to be focusing on this group and regroup. This group includes those categorized by a particular baseline of what’s called the End Diastolic Volume (EDV) at inclusion.
The Market
The market for a treatment like this is potentially huge, with cardiovascular disease being so prevalent across all global regions and demographics. In the US alone, around 600,000 people die of heart disease, and 735,000 people have heart attacks annually. Analysts put the 2015 market valuation at $140 billion, and expect this to grow at a CAGR of circa 2% going forward across the next 5 years.
Market Reaction and Trading Strategy
Celyad is down more than 40% on the data, and this isn’t really that surprising. There’s a chance that this fall could increase beyond these levels as trading picks up towards the end of the week. Markets are very much risk off at the moment, and the chances of an investor putting in a bid for a development stage biotech with what is essentially a failed lead candidate are slim. There might be an opportunity, however, to take advantage of the pullback longer term. As we mentioned a little earlier, the treatment met its endpoint in a subset of patients, and Celyad management has stated it intends to use this data to set up a second Phase III, this time in the US, in the same indication.
The assumption here is that the company will set out using the subset as a primary endpoint ahead of the ones used in the European trial, and as such, may yield some improved results when topline hits. It’s speculative, but far from impossible. Investors interested in bottom picking can afford to wait on this one until the Phase III takes shape. The company still has plenty of money so there is room financially for another Phase III.
Note: This article is written by David Rich and originally published at Market Exclusive.
