There wasn't much financial activity to report during the second quarter of 2019, but it was still a rough one for AnaptysBio (NASDAQ:ANAB) and its lead candidate, etokimab. Positive midstage clinical trial results that the company announced in early June didn't ignite any fireworks for the stock, but early results from a similar new drug candidate that Regeneron (NASDAQ:REGN) is developing took a heavy toll.
AnaptysBio results: The raw numbers
|Metric||Q2 2019||Q2 2018||Year-Over-Year Change|
|Income from operations||($26.7 million)||($14.4 million)||N/A|
|Earnings per share||($0.89)||($0.57)||N/A|
What happened with AnaptysBio this quarter?
In June, AnaptysBio released results from a 25-patient study with etokimab and patients with severe asthma. Two days after beginning the trial, patients treated with a single infusion of etokimab increased their forced expiration volume scores by 12%, compared with a 4% gain over baseline reported from the placebo group. At Day 64, the placebo group was still at 4% while the etokimab group's improvement relative to baseline rose to 15%.
These results for etokimab, an IL-33 antagonist, weren't bad, but they weren't amazing, either. That's why results from the partners, Sanofi (NASDAQ:SNY) and Regeneron, involving their IL-33 candidate knocked down shares of AnaptysBio.
Dupixent is an IL-4 antagonist from Sanofi and Regeneron that's already approved to treat all three conditions AnaptysBio is pursuing with etokimab. We probably shouldn't compare results from two small trials with different populations, but the competitive landscape in front of IL-33 drugs doesn't look great. Patients receiving REGN3500 didn't exhibit a significant benefit next to the Dupixent group. In other words, it doesn't appear that an infused IL-33 treatment for asthma will be able to stand out in an increasingly crowded field of potential treatment options.
The company continued treating patients with generalized pustular psoriasis and palmoplantar pustulosis with its IL-36 candidate, ANB019. The company also took a few steps toward bringing ANB030, an anti-PD-1 agonist, into clinical-stage testing. ANB030 is essentially the opposite of cancer immunotherapies such as Keytruda, which take the brakes off the immune system so it can continue attacking tumors. The PD-1 pathway that tumors exploit also plays an important role as an emergency shut-down switch that's supposed to stop immune system attacks before they go too far. It will be interesting to see if boosting PD-1 activity can help patients suffering from autoimmune disorders.
AnaptysBio also booked a $5 million milestone payment after Tesaro, now a GlaxoSmithKline (NYSE:GSK) subsidiary, began a phase 3 study with advanced-stage endometrial cancer patients and dostarlimab, an anti-PD-1 candidate formerly known as TSR-042.
What management had to say
Hamza Suria, AnaptysBio's CEO, highlighted recent progress made across a rapidly growing pipeline: "In the first half of 2019, we've made significant progress across our entire clinical and preclinical pipeline toward achieving our mission of bringing novel treatments to patients with severe inflammatory diseases,"
Suria also reminded investors that there's a lot more to look forward to in 2019: "With multiple data readouts from our etokimab and ANB019 clinical trials, and an IND planned for ANB030, the remainder of 2019 is set to be an important period for AnaptysBio."
GlaxoSmithKline has a lot more resources than Tesaro ever did on its own, which means we can expect Glaxo to move Tesaro-partnered new drug candidates through the development process at a much steadier pace. With a bit of luck, milestone payments and royalty revenue from Glaxo could add a big extension to AnaptysBio's cash runway.
AnaptysBio will begin another trial with etokimab and 300 to 400 asthma patients in the fourth quarter of 2019. The Atlas trial with 300 eczema patients should read out in the fourth quarter, and results from another etokimab trial with 100 chronic rhinosinusitis patients should be ready before the end of the year as well. AnaptysBio finished June with a big $467.9 million cash balance that should give its burgeoning early stage pipeline and several partnered candidates a chance to shine if etokimab doesn't make it through these trials with flying colors.