Gilead Sciences (NASDAQ:GILD) got all the press last year thanks to its hepatitis C drugs Sovaldi and Harvoni, but despite its 27% return in 2014, Gilead Sciences wasn't the best-performing hepatitis C drug stock this past year. Small-cap biotechnology stock Regulus Therapeutics (NASDAQ:RGLS) put up far more impressive returns, gaining 117%. Since this small-cap biotech stock more than doubled investor's money in 2014, let's learn more about it.
A new approach
Regulus Therapeutics is an emerging biotech company researching treatments that target micro RNAs, which are RNA molecules that play an important role in regulating cell activity.
In 2007, Isis Pharmaceuticals (NASDAQ:IONS) and Alnylam (NASDAQ:ALNY) combined intellectual property and micro RNA research, creating Regulus as a separate company to research the therapeutic opportunity in developing micro RNA medicine.
Although Regulus remains a very early-stage drug developer, with no approved drugs and no therapies in trials beyond phase 1, one of its most promising pipeline candidates is RG-101, a micro RNA targeting hepatitis C drug that the company hopes to advance into phase 2 trials during the second quarter of 2015.
In early-stage trials, one single dose of Regulus' RG-101 resulted in a 4.1 log drop in hepatitis C viral load at 29 days. That knockdown in viral load is similar to existing therapies, including Gilead Sciences Sovaldi.
Regulus also reported that six of the 14 patients participating in the trial had hepatitis C levels that were below the level of quantification at day 29, and that three patients had levels below the level of quantification at day 57. As a result, Regulus is extending the study to follow up with patients for up to six months after the single dose was administered in a bid to determine if there's a possibility for certain patients to achieve viral cure after just one dose of RG-101.
Those results may be even more intriguing given that the 14 patients studied included people with difficult-to-treat genotypes, including six people who had relapsed following treatment with prior peginterferon containing regimens.
Additionally, Regulus reported that combining RG-101 with Johnson & Johnson's (NYSE:JNJ) Olysio, a protease inhibitor, appears to be safe and well-tolerated. That may suggest that RG-101 has a shot at being used as part of a future combination therapy that could deliver both high cure rates and shorter treatment periods.
What does it do?
RG-101 is an inhibitor of MiR-122, a micro RNA that is highly expressed in the liver, where it has been shown to be associated with regulating fatty-acid metabolism in mouse studies. Mir-122 has also been shown to be used by the hepatitis C virus to replicate.
As a result, RG-101 seeks to reduce the expression of MiR-122 and block the ability of the hepatitis C virus to copy itself, in effect cutting off the virus in an approach that differs from existing therapies, including Sovaldi, which inhibits the enzyme HCV NS5B, and Harvoni, which combines Sovaldi with Gilead Sciences ledipasvir, which inhibits HCV NS5A. Since RG-101 inhibits a different target than NS5B and NS5A, which also help hepatitis C replicate, there may be a potential to combine RG-101 with these other approaches to create an even more robust pan-genotype functional cure of the disease.
Regulus RG-101 is an intriguing therapy. It uses technology from Isis and Alnylam, two leaders in RNA drug development, to attack hepatitis C in a new way and so far results have been encouraging. However, investors should remember that RG-101 is a very early-stage drug, and studies were conducted across a very small patient population. As a result, RG-101 could easily fail in large, later-stage trials. Regardless, with 170 million infected with hepatitis C globally, including 3 million in the U.S., there remains a significant need for new therapies, especially if they can cure patients in less time. As a result, Regulus may be a stock to watch in 2015.
Todd Campbell owns shares of Gilead Sciences. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned. The Motley Fool recommends Alnylam Pharmaceuticals, Gilead Sciences, Isis Pharmaceuticals, and Johnson & Johnson. The Motley Fool owns shares of Gilead Sciences and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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