Adventrx Pharmaceuticals Pivotal Phase III Initiated

Adventrx (ANX) has initiated patient recruitment in its pivotal Phase III study (EPIC) of ANX-188 in sickle cell disease, a significant achievement that puts the drug well ahead of its competitors. The trial design had previously been disclosed, which from an operational and statistical perspective appears to give the product an excellent chance of demonstrating a reduction in the duration of painful ‘crisis’ episodes. The rate of trial enrolment and patient dosing could have a bearing on Adventrx’s ability to secure a strategic partner and/or fresh finance required to complete the two-year study. We maintain our recently upgraded valuation of $137m or $2.50 per share.


Well thought out
We recently reviewed (Neat design for ANX-188) the design of the EPIC (Evaluation of Purified 188 In Crisis) study for ANX-188 (purified poloxamer 188) that plays to the product’s strengths and addresses the inherent challenges in conducting clinical trials in sickle cell patients. The key takeaways are: a distinct patient population (children aged 8-17 years), a well-defined primary endpoint (duration of crisis is defined as the time from randomisation to the time of the last dose of parenteral opioid analgesic prior to hospital discharge), the selection of a clinically meaningful treatment benefit (16-hour reduction in crisis duration between ANX-188 and placebo), and sufficient power (388 patients with 90% power to detect a difference).

Increasingly attractive asset
ANX-188 is the only new molecular entity in Phase III for vaso-occlusive crisis in sickle cell disease and has the potential to become the first FDA-approved product in this setting for 15 years. The drug has orphan drug status (seven years market exclusivity in the US) and fast track designation (accelerated regulatory processes). It may also be entitled to earn a priority review voucher (applicable to rare paediatric diseases) which could then be sold on for a potentially significant amount of money. With estimated end-2012 cash of $35m unlikely to be sufficient to complete the EPIC study to results in H115 (clinical studies are also planned for ANX-188 in an additional indication), we view the start of EPIC and trial progress (recruitment/dosing) as determining factors in Adventrx securing a strategic partner(s) and/or fresh finance.

Valuation: Maintained at $137m or $2.50 per share
We maintain our recently upgraded valuation of Adventrx at $137m or $2.50 per share, which includes a US peak sales estimate of $85m and a 70% probability of success. Adventrx’s estimated FY12 net cash of $35m is sufficient for 18 months, covering EPIC and planned additional clinical studies of ANX-188. Securing a strategic partner and/or fresh finance for ANX-188 is the next potential major catalyst.

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