BioXcel BXCL701: Another Step Forward In The Race For An mCRPC Treatment

Alina Lyssenko

BioXcel (NASDAQ:BTAI) has conscionable published apical line-data from nan Phase IIa proceedings of BXCL701 successful operation pinch Merck's (MRK) Keytruda successful patients pinch mini compartment neuroendocrine metastatic castration-resistant prostate crab (SCNC). The results person been very promising, and based connected these results, nan institution intends to proceed Phase IIb tests during nan 2nd half of 2023 to verify nan efficacy of BXCL701 unsocial and successful operation pinch Keytruda.

BXCL701 is an investigational, oral innate immune activator designed to initiate inflammation successful nan tumor microenvironment. Approved and experimental immunotherapies often struggle to reside cancers that look “cold” aliases uninflamed. Therefore, BXCL701 whitethorn render “cold” tumors “hot,” making them much detectable by nan adaptive immune strategy and thereby facilitating nan improvement of a beardown anti-cancer immune response.

Designed to stimulate some nan innate and acquired immune systems, BXCL701 useful by inhibiting dipeptidyl peptidase (DPP) 8/9 and blocking immune evasion by targeting Fibroblast Activation Protein (FAP).

DPP8/9 is progressive successful nan occurrence and improvement of various tumors and plays different roles successful different tumor types and tumor stages. Recent studies person further clarified this constituent of view. It has shown that nan abnormal look and enzymatic activity of DPP8/9 could participate successful nan occurrence and improvement of tumors by affecting compartment proliferation and apoptosis, adhesion and migration, damaged DNA repair, and immune regulation.

BioXcel develops nan immuno-oncology programme done its 100%-owned subsidiary OnkosXcel. This is done to abstracted nan 2 lines of investigation that its pipeline presently presents: neuropsychiatry and oncology.

These bully results obtained by BXCL701 are of awesome value since, until now, nary coagulated results were disposable connected nan efficacy of nan campaigner drug. In fact, to date, nary expert has considered BXCL701 successful BioXcel's valuation models owed to a deficiency of information connected its efficacy and information profile. I person been covering BioXcel for immoderate clip pinch various articles, and person not considered this campaigner supplier successful my institution valuations.

This business has changed since nan publication of nan top-line results from shape IIa.

It is very apt that location will beryllium galore updates successful nan BTAI valuation by finance analysts successful nan adjacent future, pinch consequent revaluations successful their target prices.

Given nan trouble of uncovering an effective curen for this uncommon type of cancer, these results are particularly important. In fact, Merck has conducted galore unsuccessful tests of its blockbuster supplier Keytruda complete nan years, some arsenic monotherapy and successful operation pinch different drugs. Merck has successively canceled respective tests (Keynote 199, 956, etc.) owed to disappointing results.

It is really a situation for Merck to find a supplier that, successful operation pinch Keytruda, shows immoderate efficacy successful this uncommon type of cancer.

It is very apt that Merck will intimately travel nan improvement of BXCL701 trials, and successful nan arena that nan upcoming shape IIb proceedings corroborates nan promising results obtained now, it will not beryllium unusual to spot immoderate activity connected nan portion of Merck successful nan shape of collaboration successful nan pursuing BXCL701 trials, aliases even, later, nan acquisition of BioXcel's OnkosXcel.

And nan champion portion of each this is that if, aft nan upcoming shape IIb and adjacent trials, BXCL701 yet turns retired to beryllium nan supplier that, successful operation pinch Keytruda, is presented arsenic nan past and only replacement for patients pinch advanced-stage resistant prostate cancer, it would unfastened up a wide scope of possibilities for BXCL701 pinch a multitude of different target cancers for which it could beryllium effective (pancreas, liver, brain, etc.).

The gross imaginable of BXCL701, if nan promising results obtained successful nan Phase IIa proceedings are confirmed successful consequent trials, is enormous. As an example, Keytruda (in its various oncology indications) generated adjacent to $20 cardinal for Merck successful 2021.

As a statement of caution, nan results are still successful shape IIa, truthful while they are very promising, we would person to hold longer for shape IIb and past shape III tests to corroborate these data. And particularly wrong nan oncology space, wherever bully results successful shape II are often not substantiated successful consequent shape III trials.

Regarding nan neuropsychiatric branch, pinch nan starring supplier BXCL501, information from 3 shape III tests (Serenity III, Tranquility II and III) are expected successful nan adjacent future, wherever nan efficacy successful nan curen of acute agitation successful patients is evaluated pinch schizophrenia and bipolar syndrome for at-home usage and for Alzheimer's patients.

BioXcel is astatine a pivotal constituent successful its short existence, pinch awesome proceedings results from BXCL501 astir to beryllium published, BXCL701 pinch promising results connected nan oncology side, and IGALMI successful its post-launch shape pinch quarterly gross information coming that will beryllium reported successful nan adjacent Q4 ER 2022 by early March.

This bully infinitesimal that nan institution presents is reflected successful nan beardown upward activity that nan stock value has knowledgeable successful nan past 3 months, and which will astir apt proceed until it reaches overmuch higher levels successful nan coming months.

With a marketplace capitalization of astir $900 cardinal and BXCL501 gross imaginable crossed its aggregate indications of complete $1 billion, and pinch nan BXCL701 programme much consolidated aft nan Phase IIa results, I judge BioXcel is earnestly underrated today.

For each of these reasons, I complaint BTAI astatine this constituent arsenic a beardown buy, arsenic it has a agelong bullish trajectory.

Promising Phase II Results of BXCL701 successful Resistant Prostate Cancer.

BioXcel has reported nan pursuing results from nan Phase IIa trial:

KEY SCNC FINDINGS

• In nan evaluable diligent cohort (n = 28), 7 (25%) patients achieved a composite response, nan superior endpoint of nan trial.
• In patients pinch RECIST 1.1-defined measurable illness (n = 25), partial consequence (PR) was observed successful 5 (20%) patients (4 confirmed PR, 1 unconfirmed PR). The illness power rate, defined arsenic complete consequence + partial consequence + unchangeable disease, was 48% (12 patients).
• The median long of consequence for some composite responses and RECIST 1.1-defined partial responses was 6+ months arsenic of nan information cutoff connected December 19, 2022.
• 6 retired of 34 patients (18%) successful nan information organization knowledgeable superior adverse events (SAEs) perchance related aliases related to BXCL701 aliases pembrolizumab, and 6 (18%) patients discontinued immoderate supplier owed to a treatment-related AE.
• No grounds recovered that BXCL701 potentiates immune-related AEs related to immune checkpoint inhibitors.
• DPP9 overexpression was identified arsenic a imaginable predictive biomarker for BXCL701 response; biomarker information is ongoing and further findings will beryllium presented astatine an upcoming aesculapian meeting.

Source: BioXcel

As tin beryllium seen, nan composite consequence complaint (defined arsenic nonsubjective consequence complaint by RECIST 1.1 criteria and/or PSA50 and/or CTC count conversion) has been 25%.

These information intelligibly show nan bully results obtained successful position of efficacy by nan campaigner drug. As tin beryllium seen, nan creation of ratio is made up of 3 variables: nonsubjective consequence (ORR), PSA 50 and CTC conversion. These 3 parameters are perfectly valid for determining nan grade of consequence of nan tumor to nan drug. It must beryllium taken into relationship that nary of nan tests carried retired truthful acold by Merck pinch Keytruda (monotherapy and successful combination) person managed to transcend nan 16% nonsubjective consequence rate. The aforesaid goes for nan partial consequence rate.

Below I show a array pinch nan ORR information from nan different tests carried retired by Merck pinch Keytruda, and different tests from different companies, pinch promising results successful caller years successful nan section of resistant precocious prostate cancer:

Source: Author

As tin beryllium seen, nan CRR (ORR) obtained by BXCL701 (25%) is successful nan precocious scope of those obtained successful different tests carried retired to date.

Regarding proven safety, 18% presented superior adverse events. This percent is successful nan normal scope wrong oncological trials.

It should beryllium remembered that nan proceedings conducted by BioXcel is simply a shape IIa proceedings pinch a constricted size (27 patients). For this reason, nan proven efficacy complaint cannot yet beryllium taken arsenic definitive. But it does mean, clearly, 1 much measurement successful nan support process for nan early supplier candidate.

BXCL701: A multi-billion dollar opportunity

As we person antecedently commented, BXCL701 is an immune activator that turns a acold tumor into a basking one. Although it is presently being tested for only 1 type of cancer: "resistant precocious prostate cancer", nan imaginable to beryllium effective successful different types of crab is very wide (pancreas, liver, kidney, lung, etc.), truthful The imaginable revenue, If effective, is immense (Merck's blockbuster Keytruda, blockbuster supplier utilized for aggregate types of cancer) brought successful astir $20 cardinal crossed its aggregate indications successful 2021.

Currently, only 2 narcotics (olaparib and rucaparib) person been approved by nan FDA (May 2020) for nan curen of precocious metastatic prostate cancer. Both medicines beryllium to nan alleged group of PARP inhibitors.

They artifact nan activity of a macromolecule known arsenic PARP, which helps cells mend circumstantial types of harm to DNA.

PARP inhibitors aft studies suggested that alterations successful BRCA1 and BRCA2, arsenic good arsenic different genes progressive successful a cell’s expertise to respond to DNA damage, whitethorn beryllium present.

Studies person shown that 20%–30% of men pinch metastatic prostate crab person familial alterations that impair cells’ DNA repair mechanisms.

These 2 narcotics person very constricted usage to only 20% of patients pinch resistant prostate crab since they only activity successful those patients who, aft a humor test, show that these 2 genes are altered.

Therefore, location is still nary approved therapy to dainty nan full diligent organization of resistant precocious prostate cancer.

Market Opportunity

To estimate gross imaginable for nan resistant prostate crab indication, we person nan pursuing data:

In 2022, location were an estimated 268,500 caller prostate crab patients, pinch astir 10,740 patients progressing to SCNC.

It is presently estimated that location are astir 42,970 patients pinch precocious prostate crab successful nan United States.

Price of curen per diligent and year: Being this type of crab a very uncommon type of cancer, nan costs of curen will astir apt beryllium high. We are going to return arsenic a reference nan costs of different types of immunotherapy treatments successful nan section of oncology:

Costs and Types of Immunotherapy

Source: Author

As tin beryllium seen successful nan table, nan costs of immunotherapy curen is usually high, betwixt $100,000 and $500,000 per diligent per year.

Considering that location are presently nary effective treatments for this uncommon type of cancer, if BXCl701 is yet approved, it could scope a precocious % of patients.

Assuming a prudent %penetration of 25%:

25%X42,970=10,742

Annual costs per diligent and year: We estimate a prudent fig of $100,000

Annual highest sales: 10,742X $100,000 = $1.07B

Therefore, we tin estimate that BXCL701, if yet approved for this uncommon type of cancer, could make a highest yearly gross of $1B.

This fig is only an estimate pinch nan information we presently have, but it intelligibly serves to spot nan awesome gross imaginable that BXCl701 has.

In addition, for illustration Keytruda, its usage could beryllium extended to different types of crab since, arsenic we person seen previously, DPP8/9 (BXCL701 inhibits its activity) has been studied to beryllium coming successful galore different types of cancer: Breast cancer, ovary, brain, liver, lungs, etc.

Therefore, though nan shape IIb proceedings has yet to beryllium developed, and nan adjacent pivotal shape III, nan precocious published information makes maine very optimistic astir nan early of BXCL701.

Neuro-psychiatric Program (BXCL501)

Although successful this article I person focused connected BXCL701, I americium going to reappraisal nan existent business regarding nan BXCL501 program.

As is good known, nan FDA approved BXCL501 past April to dainty acute agitation successful patients pinch schizophrenia and bipolar syndrome types I and II, pinch nan only request that patients person to beryllium supervised by a healthcare master aft its application.

Under nan waste and acquisition sanction IGALMI, it has been marketed since past July only successful infirmary settings.

The first gross was reported successful nan Q3 ER pinch a fig of $137,000.

Now nan revenues for nan past 4th of nan past year, 2022 are expected for nan adjacent Q4 ER, which astir apt will beryllium reported successful nan first half of March.

Since BioXcel markets IGALMI only successful nan infirmary settings, gross maturation is expected to beryllium slow, arsenic nan income process is simply a very slow and cumbersome process: Formularies support by nan Purchasing Department of nan Hospital, supplier acquisition magnitude approval, purchase, etc. This full process tin return betwixt 6 and 9 months.

That is why IGALMI's quarterly income maturation will beryllium slower than that of different narcotics sold extracurricular of Hospitals settings.

In this sense, immoderate articles person been written lately successful SA, "BioXcel Therapeutics: IGALMI Is Like A Dud In The Real-World", wherever BioXcel is analyzed exclusively taking into relationship nan gross imaginable of IGALMI, issuing a skeptical sentiment regarding nan imaginable finance opportunity successful BioXcel.

This position falls into superior correction because it wholly omits nan different 3 shape III tests successful which BXCL501 is presently being tested: Serenity II (phase III proceedings for acute agitation successful patients pinch schizophrenia and bipolar syndrome successful at-home use), Tranquility II (phase III proceedings successful acute agitation for patients pinch mean Alzheimer's) and Tranquility III (Phase III proceedings successful acute agitation for patients pinch precocious Alzheimer's).

In fact, it is successful these indications that nan BXCL501 has nan top gross potential. I estimate that of nan full gross that BXCL501 could generate, nan weighting would be:

Total income of BXCL501:

Source: Author

So while IGALMI's upcoming Q4 net information will beryllium important, I don't deliberation it will beryllium nan main facet driving nan banal value successful nan coming months. Rather, nan results of nan Serenity III, Tranquility II and II tests will beryllium really important successful position of BioXcel's early banal price.

In fact, Goldman Sachs expert Corinne Jetkins, successful her latest BioXcel upgrade, commented that it will beryllium nan tests results of Serenity and Tranquility that will thrust nan stock price, not IGALMI's first sales: “…will person a constricted downside connected (IGALMI) gross estimates complete nan adjacent year, pinch minimal stock value effect during first launch.”

Regarding nan shape III trials: Serenity III, Tranquility II and III, results are expected during this 1H (for nan first two) and nan 2H (for nan past one).

The chances of bully results are very precocious since BXCL501 has already been tested successful shape III tests pinch fantabulous results for acute agitation successful patients pinch schizophrenia and BS successful nan Hospital setting; therefore, successful nan “at-home” mounting it is very apt that it will get very bully results. And arsenic for nan Tranquility (Alzheimer's) program, it has already been tested successful a shape II proceedings pinch arsenic fantabulous results (Tranquility I).

The results of these 3 shape III tests will beryllium very important catalysts that should nutrient a beardown effect connected nan stock value during nan twelvemonth 2023.

Risks

As successful immoderate biotech company, location are risks that immoderate investor should return into relationship earlier taking position successful nan company:

• IGALMI's revenues successful nan first 4th aft its motorboat whitethorn beryllium slower than expected. This could create a antagonistic guidance successful nan market. In this sense, this should not beryllium a large problem because, arsenic I person already commented, IGALMI will make a very mini % of nan gross of nan full gross that BXCL501 could perchance make successful each indications.
• The results of nan Phase III tests (Serenity III, Tranquility II and III), though pinch a precocious probability of being very good, location is ever nan anticipation that they will beryllium amazingly worse than expected.
• Cash status: In 04/2022 BioXcel completed a $260 cardinal financing which it pegged arsenic providing it a rate runway into 2025. Assuming that its rate pain continues astatine $31.5 cardinal a quarter, its ~$232 cardinal rate astatine nan adjacent of Q3, 2022 will driblet by $157.5 astatine nan adjacent of Q4 2024. This would time off it rate of ~$74.5 cardinal astatine nan commencement of 2025. Here, I deliberation it could beryllium an offering astatine nan extremity of this twelvemonth 2023 aliases nan opening of 2024 because nan institution is processing aggregate tests (Serenity, Tranquility, Depression, etc.) and is undertaking nan first phases of nan IGALMI motorboat process. All of this requires precocious rate rates, which would lead to an summation successful nan quarterly gross rate rate.

Conclusion

BioXcel has conscionable published top-line information from nan Phase IIa proceedings of BXCL701 for mSCNC pinch very promising results. These results position BXCL701 arsenic a valuable plus for nan first time, arsenic analysts person not antecedently considered it successful BioXcel's valuations. Although these are still nan results of a shape IIa trial, nan information is bully capable to beryllium very optimistic astir nan upcoming shape IIb trial.

It should beryllium noted present that Merck has been testing its blockbuster Keytruda for years, some arsenic monotherapy and successful operation pinch different drugs, to find a curen that offers minimally effective results successful this uncommon type of crab pinch little than optimal results. In fact, it has had to halt almost each nan tests carried retired truthful far. Therefore, it would not beryllium unusual to spot immoderate activity from Merck successful position of immoderate type of collaboration pinch BioXcel successful nan pursuing trials.

With a highest gross imaginable of complete $1 cardinal for this denotation alone, BXCL701 is group to beryllium an breathtaking plus wrong nan BioXcel pipeline.

Regarding nan different branch of nan pipeline (neuro-psychiatric), BioXcel's BXCL501 continues to beryllium tested successful 3 different shape III trials, from which results are expected successful nan existent semester. This is wherever BioXcel has a bully portion of its early astatine stake, and nan outlook is very good. BXCL501 was already approved past April to dainty agitation successful patients pinch Schizophrenia and bipolar syndrome (IGALMI), truthful it is very apt that nan results will beryllium very bully for nan 3 shape III trials.

In nan adjacent Q4 ER, IGALMI gross information will beryllium reported, wherever it will beryllium imaginable to observe nan improvement of nan IGALMI launch. Due to nan truth that IGALMI is marketed exclusively successful nan infirmary setting, it is foreseeable that maturation successful nan first 4th will beryllium slow owed to nan analyzable purchasing process successful nan Hospital Centers (formularies, purchasing committee, etc.). For BioXcel this should not beryllium a problem because, arsenic I person already explained, nan gross imaginable of IGALMI will beryllium a minimum percent of nan full gross imaginable that BXCL501 will beryllium capable to make erstwhile approved successful each nan indications.

With a marketplace headdress of astir $900 cardinal and gross imaginable for BXCL501 of complete $1 cardinal crossed each indications (excluding BXCL701), nan institution is frankly undervalued and is connected a bull tally for nan adjacent months/years.

More than 10 years successful Biotech investment. Fundamental analysis. I americium seeking for undervalued biotech for a +100% reward. Mind/long-term investments.