On December 21, Hepion Pharmaceuticals (NASDAQ:HEPA) announced the FDA Clearance of the IND Application for CRV431 in the Treatment of Liver Cancer. This authorization by the Agency allows CRV431 to go directly to phase 2 for the treatment of hepatocellular carcinoma (HCC).
It is an important milestone for Hepion as it will mean that its portfolio is expanded to 2 different indications: NASH and HCC. It is a logical step that Hepion takes thanks to the excellent properties that CRV431 has shown in different preclinical and clinical trials to treat multiple liver conditions. This expansion of the pipeline will mean a substantial reduction in risk for the company’s investors since from now Hepion does not risk everything to a single card (NASH).
Hepion Pharmaceuticals is currently at a momentous time in its history as the large phase IIb trial is about to begin (2022) in which the efficacy of CRV431 in treating NASH (stop and reverse liver fibrosis and inflammation) will be definitively evaluated.
So far, the limited published data from the earlier phase IIa trial (liver enzyme reduction and Pro-C3 biomarker data) make us very optimistic about the efficacy that CRV431 could show in the next phase IIb trial.
Confirmation of antifibrotic efficacy will mean the definitive setback for the company and a substantial increase in its market capitalization.
Additionally, the company recently announced that it was receiving Fast Track designation from the FDA for CRV431 to treat NASH. This is a push in favor of CRV431, as it implies that the Agency has found sufficient scientific evidence of the good safety and efficacy profile of the candidate drug CRV431.
Hepion currently has a small market capitalization of less than $100 million. This means that in the event that the phase IIB trial, which should be carried out this year, demonstrates antifibrotic and anti-inflammatory activity in the liver, a potential revaluation of the stock price will be significant. And this is because there is currently no approved drug for the treatment of NASH, which is a disease with a very high prevalence, especially in more developed countries. A potential revenue volume of between $10 billion and $30 billion per year is estimated for the first drugs to be approved in this therapeutic field.
The company currently presenting the most advanced trials in this field is Madrigal Pharmaceuticals (NASDAQ:MDGL). Currently, in phase III trials with the candidate drug resmetiron, results are expected by the middle of this year 2022. Resmetiron has shown good liver fat-reducing and anti-inflammatory activity. For its part, CVR431 has presented in the tests carried out so far with excellent antifibrotic activity. Therefore, resmetiron does not compete directly with CRV431.
Madrigal has a market cap of around $1.1 billion, in contrast to Hepion only $77 million. This large difference in both valuations is a good indication of the great upside potential that Hepion presents. The company is about to start the large phase IIb “Ascend-Nash” trial, which due to its large size in terms of the number of patients (250) and duration (1 year), is assimilated to a phase III trial.
Here it is worth mentioning that in the presentation that the company made on January 10 (HC Wainwright Bioconnect Conference), they announced the delay of the start of the Phase IIb trial in Nash for the second half of this year 2022. This delay has surprised me because they have had all of the last year 2021 to do the phase IIa trial and have the IIb trial ready for the first half of this year 2022, so it seems that a delay of 6 months does not make sense. Personally, I think that this delay is not due to any problem with the trial data carried out so far, but rather I think it is a strategic delay to allow sufficient time for the preparation of the large phase IIb trial. In addition, in the same presentation, they announced the start of the other test to test CVR431 in HCC also for the second half of this year 2022. Another possibility is that they need more time to obtain sufficient funds to finance both tests. In the presentation on January 10, funds were published for $98.7 million. These funds would be enough to fund the Phase IIb trial for the entire current year 2022, but they may need to raise more funds to fund the other trial (HCC). A possible public offering or financing by an investment fund in the coming months would not be unreasonable.
In my opinion, the company will finally start both tests before the second half of this year. While delaying deadlines is never pleasant for investors, it does not change my perception of the good results that CRV431 could ultimately achieve.
The poor performance of Hepion’s share price during the past year 2021 can be explained by:
1- Strong downward trend of the entire biotech sector (XBI) throughout the past year 2021 and the beginning of this year 2022.
2- Few published data from the phase IIa trial. Investors expected some data to show CVR431’s antifibrotic activity. The continuous failures in drug trials by various companies to combat NASH so far make the market very skeptical about the efficacy of any drug candidate in this therapeutic field, so we are waiting for reliable evidence of the efficacy of CRV431 (reduction of liver fibrosis).
In conclusion, Hepion is currently at a momentous time, about to begin the phase IIb trial in which the efficacy of CRV431 in the treatment of NASH could be definitively demonstrated. On the other hand, phase II trials to test CVR431 in the treatment of hepatocellular carcinoma (HCC) will begin in a few months.
With a low market cap of less than $100m and XBI probably bottoming out (around 88 I think), it is the ideal time to enter with strong upside potential in the coming quarters in case the trials present promising data.
CRV431 and Hepatocellular carcinoma (HCC)
The wide potential therapeutic range of CRV431 goes well beyond NASH. Thus, various preclinical studies have demonstrated the potential efficacy of cyclophilin inhibitors to treat NASH, hepatocellular carcinoma, hepatitis b and c, Alzheimer’s disease, etc.
On December 21, Hepion announced that the United States Food and Drug Administration (“FDA”) accepted its Investigational New Drug (“IND”) application for CRV431 for the treatment of hepatocellular carcinoma (“HCC”).
In the press release, CEO Dr. Foster stated:
Increased cyclophilin isoform expression has been associated with negative outcomes in HCC. Importantly, CRV431 potently inhibits many of these isoforms in humans. Cyclophilins are enzymes that regulate many molecular and cellular activities that become dysregulated both in NASH and HCC. These dysregulated activities can lead to aberrations in signal transduction pathways, cell proliferation, cell death, extracellular environment including increased fibrosis, energy metabolism, inflammation, and immunity. Therapeutic intervention with CRV431 administration may reduce the pathologic potential associated with heightened cyclophilin activities in NASH and HCC, potentially allowing for a return to a healthier state.
This new step by the company to expand the therapeutic use of CVR431 is based on multiple preclinical studies that suggest the activity of CRV431 as a potent anticancer agent.
The efficacy of CRV431 in reducing the size and number of tumors in mouse models has been demonstrated in a study carried out in 2019:
A pan-cyclophilin inhibitor, CRV431, reduces fibrosis and tumor development in models of chronic liver disease.
Furthermore, CRV431 does not have the typical adverse effects of current antitumor drugs, such as immune suppression or toxicity.
In another interesting study:
A new strategy to increase proteotoxic cell death in hepatocellular carcinoma, we can read that the use of inhibitors of the ubiquitin-proteasome system UPS is claimed to be clinically effective for multiple myeloma, but not for solid cancers such as HCC.
Current clinical studies have been developed seeking to achieve the efficacy of UPS inhibitors in solid cancers by combining pan-histone deacetylase (HDAC) + UPS inhibitors, but it is highly toxic to normal tissues.
Therefore, the combined use of the new pan-cyclophilin inhibitor CRV431 (non-cancer cell non-toxic agent) and a second-generation inhibitor of the ubiquitin-proteasome system (UPS) Takeda’s ixazomib (Ixz) is proposed.
Their preliminary data support the use of CRV + Ixz as a new strategy for the treatment of HCC without causing toxicity to non-cancer cells.
The hypothesis of this proposal is that CRV + Ixz maintenance of high XBP1s and low cyclophilin expression/activity overwhelms pro-survival pathways and forces HCC cells toward apoptotic cell death without harming normal cells. The rationale is that if this new combination kills HCC cells without harming normal cells in preclinical models, the chances for success in clinical settings will increase.
Finally, the company itself has conducted a major preclinical study to test CRV431 in the treatment of HCC. The results were published on November 16. The study tested the efficacy of CRV431 as a single treatment and also as a combination therapy: CRV431 / anti-PD1 antibody combination therapy.
Drug dosing continued for a total of two weeks (Days 14 to 28 post-HCC implant) and the changes in tumor volumes were measured from the initiation of drug treatment to the end of the experiment. Treatment with CRV431 or an anti-PD1 antibody each decreased tumor size by 76%, while the CRV431/anti-PDI antibody combination treatment decreased tumor size by 83%, compared to the vehicle treatment (no drug).
Therefore, several preclinical studies demonstrate the promising role that CRV431 may have in the treatment of HCC.
In the January 10 conference, the company announced the intention to begin phase IIa trials to test CRV431 in HCC patients in the second half of this year 2022.
It will be a trial with a duration of 52 weeks where CRV431 will be tested in patients with advanced-stage HCC in whom first and second-line treatments have failed. Safety and efficacy (disease control rate, etc.) will be analyzed.
I was expecting that the trial to evaluate CRV431 in the treatment of HCC would be carried out in combination therapy of CVR + some other antitumor drug of the anti-PD1 type, but it seems that the company is quite confident in the efficacy of CRV and is going to eventually just use only CRV without the combination of another drug.
As Dr. Foster comments, CRV431 would mean having an effective oral antitumor drug without the unpleasant side effects typical of anticancer drugs:
Another potentially important benefit is the patient experience while taking CRV431. Most cancer drugs are delivered by injection and are associated with significant side effects. In contrast, CRV431 is orally administered and has been shown to be well tolerated in clinical trials to date. We are optimistic that CRV431 may provide significant anti-cancer effects without imposing additional challenges and distress often associated with cancer drugs.
With respect to current treatments, Sorafenib and Lenvatinib remain the most effective single-drug therapies. But the efficacy remains low with very low survival rates:
…. In the PS-matched cohort, median survival was 3 months from the 60-day landmark in sorafenib-treated (n = 223) and 2 months in untreated (n = 223) patients (adjusted hazard ratio, 0.95 [95% confidence interval (CI), 0.78-1.16]).”
Also, sorafenib has a long list of side effects:
blistering, peeling, redness, or swelling of the palms of the hands or bottoms of the feet.
bloating of the abdomen or stomach.
blood in the urine or stools.
coughing up blood.
difficulty with breathing or swallowing.
increased menstrual flow or vaginal bleeding.
In this regard, the bar regarding the efficacy of current drugs is low, so CRV431 will not need to achieve high efficacy (in terms of median survival rate, disease control rate, etc.) to be successful. In addition, in terms of safety and side effects, CRV431 far outperforms the rest of the drugs approved to treat HCC.
Regarding the market potential that CRV431 would have once approved for the treatment of HCC, it is difficult to make a prediction due to market segmentation. As more significant data, we have the annual income generated by Bayer’s Nexavar (sorafenib), the current standard of care: about $800 million.
According to recent studies by GlobalData, the global HCC market could reach $5.3 billion by 2029. Therefore, there is a rich market for Hepion in the future.
We will have to be attentive to the future trials that Hepion will carry out with CRV431 and observe the efficacy rates that they manage to achieve. A good efficacy rate could mean that CRV431 could replace Nexavar as Standard of Care, given the excellent safety profile that CRV431 has already demonstrated in multiple trials.
Like any biotech company, investing in Hepion carries a series of risks that the investor must take into account. Among them I highlight:
1-CRV431 has yet to demonstrate its antifibrotic activity. This will be revealed in the next phase IIB trial during this year 2022. Personally, I am confident, based on all the preclinical and clinical data conducted so far, that this efficacy will finally be demonstrated.
2- Possible offering to raise funds to finance the large phase IIb trial for NASH and to finance the next phase II trial for HCC.
In the presentation on January 10, funds were published for $98.7 million. This could be enough to fund the large phase IIB trial in NASH, but more funding may be needed when phase II trials for HCC begin.
Hepion begins the crucial year 2022, where it will finally be determined whether CRV431 possesses antifibrotic activity in NASH patients. All the preclinical and phase IIA data and trials conducted so far make us very optimistic about this. Assuming the large phase IIb trial starts before the second half of the year, I expect the first interim results to be released in the third quarter of the current year. In the case of positive data (Fibroscan, ELF score, etc.), it would not be strange to see revaluations in the share prices of x3 or even x4.
On the other hand, Hepion is preparing to expand its pipeline with the start of trials in another indication for CRV431: HCC.
Phase IIa trials (both NASH and HCC) will most likely start during the first half of 2022.
With a very low market capitalization of less than $100 million, and the XBI index likely to bottom very soon, the current time offers an excellent opportunity to get into Hepion and look for strong share price appreciations in a few quarters, provided that the results are as expected.