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Inozyme Pharma: Rare Disease Player Merits Revaluation Higher After POC Data

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Rare Disease Day Background. Colorful consciousness ribbon pinch group of group pinch uncommon diseases.

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Shares of Boston-based Inozyme Pharma (NASDAQ:INZY) person fallen by complete 80% since IPO was priced astatine $16 successful July of 2020. During nan past 12 months, they've posted a still dismal -58% performance.

With endeavor worth of conscionable $15M (taking into information $25M first drawdowns from $70M installation inked pinch K2 HealthVentures successful 2022), it would look that nan marketplace is rather skeptical of this mini company's early successful addressing 2 uncommon mineralization disorders wherever nary narcotics are approved. Even much interesting, aggregate marketplace opportunity of up to $1 cardinal contrasts favorably to existent valuation.

With precocious reported information providing nan constituent of derisking that I require for my clinical-stage portfolio holdings, I look guardant to digging deeper and determining pinch readers whether near-term introduction is merited.

Chart

Daily chart

FinViz

Figure 1: INZY regular floor plan (Source: Finviz)

When looking astatine charts, clarity often comes from taking a look astatine chopped clip frames successful bid to find important method levels and get a consciousness for what's going on. In nan regular floor plan above, we tin spot nan stock value return a deed successful July past twelvemonth erstwhile nan institution released first results for INZ-701 for ABCC6 Deficiency. While accelerated PPi increases were observed successful each 3 subjects astatine nan lowest 0.2mg/kg dose level, these results were deemed anemic by Wall Street fixed nan supplier effect waned complete clip (to beryllium fair, these results were very preliminary). From there, successful nan absence of worldly news travel shares knowledgeable further weakness and bottomed retired astatine nan $1 level successful December. So, 2023 connected nan different hand, has gotten disconnected to a swift commencement pinch shares astir tripling from lows connected nan heels of updated results wherever greater curen effect was observed on pinch promising improvements successful patients' value of life. Thus, my first return is that investors willing successful this sanction would do good to found a aviator position successful nan adjacent term.

Overview

Founded successful 2016 pinch office successful Boston (50 employees), Inozyme Pharma presently sports endeavor worth of ~$15M and year-end rate position of $128M providing them operational runway into 1H 2024.

There are ~41M shares outstanding retired of 200M authorized. To explain connected nan aforementioned debt, nan institution drew $5M successful July of 2022 and they drew nan 2nd tranche of $20M successful mid-February for a full of $25M successful debt. Accumulated shortage to day is $196M, which does look connected nan precocious broadside to maine successful opposition to advancement made successful nan session to date.

The institution is processing a imaginable first-in-class therapy for nan 2 uncommon mineralization disorders of ENPP1 Deficiency and ABCC6 Deficiency. These are diseases wherever patients suffer severely pinch up to 50% mortality and nary approved therapeutic options.

Pipeline & MIlestones

Corporate Slides

Figure 2: Pipeline & Milestones (Source: corporate presentation)

INZ-701 is simply a phase-3 fresh plus (ENPP1 pivotal proceedings to commencement by Q3, ABCC6 Deficiency shape 2/3 proceedings to get underway successful 2024). The institution besides could prosecute different diseases of abnormal mineralization later connected (such arsenic calciphylaxis).

On that past note, colour maine skeptical arsenic Sanifit/Vifor's calcification inhibitor SNF472 already is successful shape 3 for calciphylaxis and Daiichi's DS-1211 (alkaline phosphatase inhibitor) is successful shape 2 for pseudoxanthoma elasticum (also known arsenic PXE) and could beryllium moved straight to pivotal phase. Keep nan overlap successful mind and title that could airs arsenic ABCC6 Deficiency presents successful older patients arsenic PXE.

Safety floor plan to day for INZ-701 has been "favorable" (more later connected adverse events of concern) and objective proof-of-concept information is now successful manus (mechanism of action and betterment successful patients' value of life). Addressable marketplace has blockbuster imaginable for ENPP1-deficiency unsocial pinch 500 patients already identified (and database keeps growing). Two existent shape 1/2 tests successful big patients are ongoing pinch objective effects of curen pinch INZ-701 only precocious unveiled (February 16th). Data from exploratory shape 2 information will beryllium released later this twelvemonth pinch extremity of selecting dose for shape 3.

As opposed to riskier areas of supplier improvement for illustration cistron therapy, ERT (enzyme replacement therapy) would look to beryllium much straightforward pinch successful precedent established by specified treatments arsenic Fabrazyme successful Fabry illness (getting adjacent to a $1 cardinal tally rate aft Sanofi's Q3 report). ERT marketplace connected nan full is expected to turn to complete $15 cardinal by 2028, providing a applicable backdrop erstwhile taking a person look astatine prospects for mini Inozyme.

Delving concisely into nan science, familial mutations affecting ENPP1 (critical enzyme successful mineralization pathway) consequence successful debased levels of PPi (pyrophosphate) and AMP (precursor of adenosine). Similarly, familial mutations affecting ABCC6 (critical macromolecule successful nan mineralization pathway) alteration nan readiness of extracellular ATP required for due ENPP1 usability and indirectly leads to debased levels of PPi and AMP. These debased levels of PPi lead to abnormal mineralization and pathological calcification successful areas of nan assemblage wherever that is not desirable (vasculature, soft tissue, organ systems) resulting successful illness (heart, kidney and tegument are particularly vulnerable).

Master Regulator

Corporate Slides

Figure 3: PPi arsenic a maestro regulator of mineralization (Source: firm presentation)

Disease is progressive complete nan patient's life (starting arsenic early arsenic fetal improvement past spanning into adulthood) and leads to precocious mortality and morbidity. ENPP1 Deficiency includes infantile phase, pediatric shape and an big phase. Unfortunately, 45% to 50% of babies pinch nan illness dice wrong nan first six months of commencement and those that past person debased value of life pinch important morbidity. Pediatric shape is characterized by onset of rickets, terrible skeletal deformities, short stature, terrible bony symptom and perchance excess calcification successful joints and ligaments (impaired value of life and expertise to prosecute successful normal puerility activities). Adult shape besides involves important functional and cognitive impairment.

As for prevalence, ENPP1 Deficiency is estimated to hap successful 200,000 births pinch complete 11,000 patients worldwide (3,500 of whom are successful US, EU and different awesome markets). While location are nary approved treatments, retrospective studies person reported therapeutic effect successful infants of first-generation phosphonate etidronate (has been discontinued successful US and associated pinch longer word adverse effects connected skeletal development). Supplemental vitamin D3 and oral phosphate are sometimes utilized to reside nan rickets of ENPP1 Deficiency, but support successful mind nan second could really summation nan consequence of pathological calcification. Third statement patient unpaid study showed that treating PPi Deficiency by adjusting fare was inefficient pinch only a mini fraction of dietary PPi being absorbed.

Moving connected to ABCC6 Deficiency, infants are diagnosed pinch a vascular calcification information called GACI Type II while presenting successful older patients (as mentioned before) arsenic PXE (calcification of soft connective tissues including eyes, cardiovascular strategy and skin). A 2019 study stated that 37% of PXE patients complete nan property of 50 knowledgeable ocular impairment and 15% were legally blind. Other signs caused by mineralization of humor vessels see cramping and symptom during exercise, bleeding successful gastrointestinal tract (13% of PXE patients) and higher incidence of cardiovascular incidents (ischemic stroke, early myocardial infarction, etc). The illness is estimated to afflict 1 per 25,000 to 50,000 individuals aliases much than 67,000 patients worldwide (20,000 of whom reside successful awesome markets). Current curen attack for slowing aliases limiting nan cardiovascular manifestations of PXE is based connected nan simplification of cardiovascular consequence factors done manner changes aliases successful immoderate cases by taking cholesterol-lowering agents (also bypast and angioplasty procedures successful nan arena of terrible vascular disease). Competitors mentioned antecedently are focused connected calciphylaxis (manifestation of chronic kidney disease) which affects 1% to 4% of patients pinch extremity shape renal illness (incidence of 1,800 caller patients per twelvemonth pinch nary approved therapies though usage of sodium thiosulfate reportedly improves coiled treatment and debased phosphate fare is often advised).

Enter INZ-701, which is simply a soluble, recombinant macromolecule containing nan extracellular domain of autochthonal quality ENPP1 fused to nan Fc domain of nan immunoglobulin IgG1. The supplier campaigner is designed to switch nan mislaid enzymatic usability of genetically deficient ENPP1, expanding PPi and adenosine to steady-state concentrations successful nan humor complete clip (potentially allowing for convenient subcutaneous transportation astatine play dosing interval). Preclinical studies successful ENPP1-deficient rodent models resulted successful accrued plasma PPi levels, reductions of ectopic calcium deposits successful a assortment of tissues, prevention of calcification successful nan bosom and improvements successful wide health. Similar effects were achieved successful ABCC6-deficient rodent exemplary and nonclinical toxicology studies showed nary systemic adverse effects astatine doses importantly higher than those utilized successful humans. INZ-701 has already received aggregate designations from nan FDA (orphan drug, accelerated way and uncommon pediatric disease).

Feb. 16 Data

Moving connected to nan caller objective data, guidance touted restoration of PPi to normal levels successful each dose cohorts successful ENPP1 Deficiency patients (sustained passim nan trial).

PPi Leevels

Corporate Slides

Figure 4: PPi levels normalized pinch treatment, champion stableness pinch slightest variety achieved successful precocious dose cohort (Source: firm presentation)

Half life was agelong astatine 126 hours and supplier accumulation suggested imaginable for convenient once-week dosing. Immunogenicity floor plan showed debased titers of non-neutralizing ADAs observed successful 7 of 9 patients.

While information floor plan was favorable connected nan whole, location were mild adverse events successful 3 of 9 patients (injection tract guidance successful 2, instances of decreased appetite and fatigue).

Emerging patient-reported result information - GIC - showed 6 of 8 patients pinch corresponding improvements successful wide wellness from baseline. 5 of 8 patients showed "much improved" aliases "very overmuch improved" (suggesting that beneficial effects of nan supplier campaigner were acold from marginal). Lastly, nary diligent showed deterioration successful wide wellness from baseline.

improvement successful GIC

corporate slides

Figure 5: Improvement successful GIC successful each 3 dose cohort levels, some clinician and patient-reported (Source: firm presentation)

Moving connected to nan shape 1/2 proceedings successful adults pinch ABCC6 deficiency, akin improvements successful PPi levels were observed pinch sustained summation successful nan highest dose cohort arsenic expected (to levels comparable to those observed successful patient volunteers aliases 1002nM to 2169 nM). Playing devil's advocate, I do person immoderate concerns connected information floor plan fixed drug-related events included erythema, fatigue, nighttime sweats, pruritus, and urticaria (one diligent astatine highest dose level withdrew owed to mean AE of erythema/urticaria). I person to wonderment what incidence and severity of specified events will beryllium successful a pivotal study pinch higher number of patients (impossible to soma this retired from specified a mini first trial).

Here are a fewer nuggets from Investor Day presentation:

  • Administration of bisphosphonates (orally aliases via IV) has not led to important betterment successful wide endurance (just a affirmative trend).
  • Increasing consciousness wrong nan aesculapian organization will beryllium a important situation nan institution is taking connected via physician-targeted accusation and different initiatives. Inozyme has besides collaborated pinch Prevention Genetics to supply free familial screening for ENPP1 mutations.
  • Inozyme WILL use for Breakthrough Therapy nickname from nan FDA later this year. They besides intend to (subject to proceedings creation and feedback for pivotal stage) prosecute accelerated approval.
  • Phase 1b open-label ENERGY-1 proceedings will get underway successful Q2 successful babe patients pinch ENPP1 Deficiency and GACI. Trial will pass dosing successful early pivotal study (primary endpoint of information and tolerability, secondary endpoints of PK and PPi). Treatment play will beryllium up to 52 weeks and patients (up to 8) will besides beryllium assessed for survival, growth, development, functional performance, cardiac function, biomarkers related to bony and mineral metabolism and different applicable measures.
  • Outcome measures successful pivotal studies will beryllium tailored according to property group. The commonality is PD marker of PPi levels, while intermediate endpoints and objective result measures alteration arsenic seen below. Playing devil's advocate, nan FDA could easy NOT judge PPi endpoint arsenic superior (or for accelerated approval) arsenic this needs to beryllium linked to definitive result measures (function, survival, etc).
endpoints

Corporate Slides

Figure 6: Roadmap to pivotal tests and endpoints to beryllium utilized according to property group (Source: Investor Day presentation)

  • Immunogenicity floor plan is favorable successful some diseases, pinch debased ADA titers detected successful nan ABCC6 patients (but were not neutralizing pinch nary effect connected PK aliases PPi levels). Titers ranged from little than 40 to 640 pinch nary grounds of narration betwixt dose and ADA titer. ADA titers were overmuch little than those pinch approved enzyme therapies (Strensiq, Aldurazyme, Lumizyme, etc).
  • Estimate $128M of twelvemonth extremity rate +$20M 2nd tranche of task indebtedness equates to $148M full (extends runway into Q4 2024).
  • On Q&A, Chief Medical Officer states (in consequence to whether higher doses will beryllium explored) that successful ABCC6 Deficiency nan 1.8 mg/kg dose demonstrated they tin support PPi successful normal level and person arrived astatine optimal dose (not reasoning they will spell higher but will research erstwhile play dosing). They are looking astatine a ample number of biomarkers and much clarity will beryllium provided connected those successful Q3's interim data. KOL states that a supplier that normalizes phosphate and bony mineralization would show betterment successful 3 to 6 months (can spot that connected modular X-rays). As for improvements successful cardiac function, that could beryllium trickier (take respective months aliases perchance years depending connected what nan issues are). Regarding PXE, location is indirect grounds from proceedings of a different supplier campaigner (PPi analogue) which showed simplification successful calcification of arteries (outcome that tin beryllium measured, not functional).
  • Analyst notes location are coagulated GIC scores successful ENPP1 but not successful ABCC6 (yet). They want to correlate GIC pinch different objective outcomes to found soul validity of GIC and look astatine different PROs (patient-reported outcomes). They don't person GIC information from each 3 cohorts of ABCC6 yet but look guardant to showing erstwhile available. They are overmuch further identifying patients than they were astatine Alexion erstwhile Senior Advisor was astatine Alexion processing Strensiq (did $272M successful Q4 income for AstraZeneca).

Other Information

For nan 3rd 4th of 2022, nan institution reported rate and equivalents of $141.5M (guiding for operational runway into Q2 2024, which was further extended to Q4 2024 pinch caller $20M indebtedness drawdown). Net nonaccomplishment accrued somewhat to $16.4M (from $14.3M anterior year), pinch G&A falling to $4.7M while investigation & improvement expenses roseate by ~25% to $12.2M.

Financials

10Q filing

Figure 7: Quarterly financials uncover controlled disbursal maturation (Source: 10-Q filing)

Moving connected to worldly catalysts, interim objective information for nan shape 1/2 big proceedings successful ENPP1 Deficiency is expected successful Q3 pinch interim information successful ABCC6 Deficiency to travel successful Q4. Initiation of pivotal study successful pediatric ENPP1 patients successful Q3 could besides beryllium a catalyst for valuation description (especially if clarity is obtained from FDA successful position of approvable endpoints and anticipation of pursuing accelerated pathway). Phase 2/3 study successful ABCC6 Deficiency would not commencement until 2024.

As for competition, particularly successful related diseases, nan 10-K mentions a mates large pharma programs specified arsenic Sanifit/Vifor's calcification inhibitor SNF472 successful calciphylaxis (phase 2b study showed nan supplier attenuated nan progression of coronary artery calcification and aortic valve calcification successful patients pinch end-stage kidney disease). Perhaps much relevantly, Daiichi's DS-1211 is successful a phase 2 study for PXE pinch superior completion day of August this twelvemonth according to Clinical Trials website.

As for organization investors of note, signs of clustering present could beryllium a greenish emblem pinch sizable stakes owned by Deep Track Capital (8%), Venrock (9.3%), Rock Springs Capital (7.64%), Adage Capital (7%), and Baker Brothers (5%) to sanction a few. Moving connected to insider activity, it's encouraging to spot respective purchases complete nan past year.

As for applicable activity experience, President and CEO Axel Bolte co-founded nan institution successful 2015 (I for illustration founder-led companies arsenic agelong arsenic nan execution is there). Senior Advisor Henric Bjarke served anterior arsenic VP Global Metabolic Disorders astatine Alexion (very applicable experience). SVP and Chief Scientific Officer Yves Sabbagh has applicable acquisition (20 years) successful uncommon familial disorders and mineral metabolism including astatine Sanofi Genzyme successful renal and uncommon bony diseases.

Moving connected to executive compensation, rate information of net is connected nan mean to precocious broadside for a institution this size (but not excessive) while action awards are astatine an acceptable level.

Compensation table

Proxy Filing

Figure 8: Executive Compensation array (Source: 10-Q filing)

Moving connected to IP, guidance claims to person patent protection successful each denotation until astatine slightest 2036. They obtained exclusive worldwide licence to foundational IP authorities from Yale successful 2017 and successful 2020 entered into IP plus acquisition statement pinch Alexion Pharmaceuticals for authorities related to ENPP1. Specifically, they ain 20 issued US patents on pinch complete 100 pending US and overseas patent applications. Patent family includes 7 issued US patents relating to reducing and/or preventing progression of pathological calcification, ectopic calcification of soft tissue, pathological ossification and pathological calcification of vascular insubstantial successful a quality taxable having reduced ENPP1 activity aliases a nonaccomplishment of usability mutation successful nan cistron encoding ENPP1. All specified methods of curen patents expire 2034. Patent family covering compositions that incorporate ENPP1 including INZ-701 expire successful 2036.

Final Thoughts

To conclude, astatine endeavor worth of conscionable $15M, Inozyme looks attractively priced for risk-tolerant investors consenting to clasp for worth creation done upcoming information sets successful nan 2nd half of nan year. Blockbuster opportunity successful ENPP1 Deficiency (37k patients successful cardinal addressable markets) coupled pinch proven area of supplier improvement (enzyme replacement therapies) and first POC information merit continued attraction arsenic nan communicative continues to make progress.

For readers who are willing successful nan institution and person done their owed diligence, INZY is simply a Buy and I propose initiating a aviator position successful nan adjacent term. A prudent strategy could beryllium to accumulate half of desired vulnerability presently and from location hold until Q3 information (derisking event) earlier taking further action.

For nan purposes of my clinical-stage portfolio, I'm apt to enactment connected nan sidelines until regulatory clarity is obtained aliases pivotal studies are initiated and good underway. While I could alteration my mind fixed nan information updates coming 2H 23, I'm besides much partial to names pinch deeper pipelines (multiple shots connected extremity for further objective momentum) aliases a unsocial level technology. Lastly, that diligent discontinuation astatine nan precocious dose owed to erythema/urticaria does springiness maine region (wonder if much cases will show up pinch higher number of patients).

As for risks, contempt nan ample rate position together pinch reasonable pain complaint I would still expect further dilution (financing) by year-end 2023. There's nary PRO (patient reported outcome) information for ABCC6 patients, and information sets to day are not robust (low number of patients) pinch insufficient follow-up to gauge longer word effects arsenic good arsenic information profile. Regulatory consequence is simply a cardinal area of interest to support an oculus connected (which endpoints nan FDA will judge arsenic approvable and whether accelerated pathway is unfastened for nan company). Competition is simply a consequence facet arsenic well, including from large pharma specified arsenic Daiichi successful PXE.

Aeglea BioTherapeutics (AGLE), down 84% complete nan past year, serves arsenic a cautionary communicative successful nan enzyme replacement abstraction aft nan institution received Refuse to File letter from nan FDA for pegzilarginase for nan curen of Arginase 1 Deficiency. In essence, nan company's pivotal proceedings easily met nan superior endpoint of achieving normal plasma arginine levels and moreover showed affirmative inclination successful gross centrifugal usability (improvement by 4.2 units connected GMFM-E people versus worsening of 0.4 units successful placebo arm). However, it was backmost to nan drafting committee arsenic nan FDA requested further information to support effectiveness and clinically meaningful outcomes.

AGLE Weekly chart

FinViz

Figure 9: AGLE play floor plan (Source: Finviz)

Author's Note: I greatly admit you taking nan clip to publication my activity and dream you recovered it useful. While I station investigation connected galore companies that liking me, successful ROTY (clinical stage) and Core Biotech (commercial stage) portfolios I ain conscionable 15 aliases less names successful bid to attraction connected stories that are highest condemnation for me.

Editor: Naga



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