Back in August I published my deep dive report “Bellus – David vs. Goliath, Can BLU Deliver A Better Chronic Cough Drug Than Merck?” (Link) with a bull thesis stating that Bellus Health (TSX: BLU.TO) (OTC: BLUSF) have a good chance to pass the first true hurdle and achieve positive results from their clinical trial with BLU-5937 in chronic cough, lowering significantly the adverse events (AEs) that has been seen in the competitor drug MK-7264 from Merck (MRK), and the chance to become the Best-in-Class drug for chronic cough patients who do not respond to current therapies, a multibillion Dollar market opportunity, and could unlock significant shareholder value.
In the latest press release on November, 14th (Link) Bellus informed the investors that they expects to report the top-line results of the clinical Phase 1 study for BLU-5937 by the end of November 2018. But they released the data earlier on November 19th after the market close (Link), revealing a great success “No taste loss at the anticipated therapeutic doses” where it was MRK’s drug main problem.
The results were overwhelming, as BLU-5937 is a highly selective drug, and as we expected came with a very clean profile and with much lower AEs than MRK’s drug. The Phase 1 top-line data demonstrated that BLU-5937 has a good safety and tolerability profile, as well as a PK profile supporting twice-a-day (BID) dosing. At the anticipated therapeutic doses of 50-100 mg, BLU-5937 did not cause any loss of taste perception versus 24% in MRK’s study. And only 1 out of 24 subjects (4.2%) reported transient taste alteration versus 84% in MRK’s study. Based on these data, the company intends to advance BLU-5937 into a clinical Phase 2 study in chronic cough patients beginning in mid-2019.
To get more info about the study and what are the company’s plans with the P2X3 asset, we approached Bellus Health for an interview with Mr. Roberto Bellini, president and CEO.
Joe: First, congrats on your Phase 1 chronic cough clinical trial positive data, can you please explain to us the way you determined the therapeutic dose 50-100 mg and how do you compare it to Merck’s therapeutic dose of 50mg?
Roberto Bellini: The predicted therapeutic doses for BLU-5937 were established at 50-100 mg based on drug systemic exposure in healthy subjects that is equivalent to:
1) the drug exposure showing maximum efficacy in preclinical cough studies after correcting for differences in PK characteristics between human and preclinical species (e.g. free plasma fraction and potency for P2X3 receptors), and
2) to the drug exposure reported with gefapixant at the efficacious dose of 50 mg in chronic cough patient, after correcting for differences between the molecule characteristics (e,g, free plasma fraction, molecular weight and potency for hP2X3 receptors).
Joe: How long it usually takes for the taste side effect to shows up, is it from first day, or after a week of use or even longer?
Roberto Bellini: In our Phase 1, subject that had taste effect in the first day of drug administration could had the same side effect again in like day 4 or day 6, but, any subject that had “no taste effect” in the first day of drug administration, he never had later on any taste effect during the 7 days of the study. So, subjects that had more than once taste side effects always had a taste effect on their first dose, in general within 1-hour post-dose.
Joe: Your study was for only 7 days, what would guarantee that the taste alteration won’t show up after few weeks of use?
Roberto Bellini: We do not think that the incidence of taste side effects will be significantly different in a longer-term study since all the taste effects with BLU-5937 occurred after the first dose in our 7-day Phase 1 study; no subjects reported their first taste effect after the first day. Similarly, most of the taste side effects with gefapixant were reported after the first doses according to some clinicians involved in gefapixant phase 2 studies that we have talked to. This is supported by the gefapixant Phase 2b data showing constant incidence of taste side effects throughout the 12-week study duration.
Joe: Is it fair to compare your 7 days Phase 1 data to Merck’s 12 week taste effect data?
Roberto Bellini: We believe it’s fair because we do not believe that the overall taste effect profile of BLU-5937 will change significantly. Overall, the datasets available are not perfectly comparable but there is a consistent, clear and important difference between BLU-5937 and MK-7264. In a more comparable exposure duration, our Phase 1 data of BLU-5937 at 200-400mg vs a single dose of MK-7264 at 100mg, the difference in taste side effect is also very important, 21% vs at least 75%. In this comparison, our taste effects are also mild, sporadic and transient while MK-7264 has 30-50% complete taste loss.
Joe: With BLU-5937 you started seeing taste alteration at the higher doses indicating it is dose dependent. Is it possible that at an efficacious dose will occur at a higher rate but perhaps still lower than Merck? Notice from 200-1200mg, 13 of 48 had taste alterations. So, I think we’ll have to see where efficacy and toxicity meet.
Maybe BLU-5937 higher dose where the AE showed up is the equivalent to MRK’s dose & in Ph2 the lower dose will not show efficacy?
Roberto Bellini: Based on our preclinical cough and taste studies as well as the data generated by Afferent/Merck in their clinical studies, the anti-cough effects of BLU-5937 is driven through inhibition of P2X3 homotrimeric receptors, while the taste effects are mediated through inhibition of P2X2/3 receptors. Therefore, given the high selectivity of BLU-5937 for the P2X3 receptors, we anticipate seeing the maximum efficacy at the therapeutic doses of 50 to 100 mg with no to limited taste effects. At higher doses, the incidence of taste effects would rise as even our highly selective antagonist begins to inhibit the P2X2/3 receptors.
We are quite confident that our estimated therapeutic dose will be 50-100mg however it is possible that it may be lower or higher than this estimation, 25-200 mg. It is good to note that the 200mg dose also showed very clean taste effect profile (0% taste effect).
Joe: Can you elaborate about the mild liver enzyme elevation at the 400mg dose, even though it normalized at follow up; and no concomitant increase in bilirubin.
Roberto Bellini: We are not concerned by this case at this point considering that: 1) the increase in ALT was not associated with a concomitant elevation in bilirubin or any clinical symptoms of liver injury 2) no other patients showed an elevation and there were no trends of elevation at any dose, 3) the elevation was mild and returned to normal on follow up. In the case of the numbness AE, this is likely a P2X3 effect. This subject may be particularly sensitive and could also be explained by the high dose (4-8X the expected therapeutic dose).
Joe: From your last earnings report, Bellus have only $18.1M cash by End of Q3, can you tell us the anticipated cost of running your Phase 2 study & for how long, and if the current cash position is enough to take you through this period or another cash raise is needed?
Roberto Bellini: Our Phase 2 study is expected to cost C$7M (US$5.3M). Based on this cost and our relatively low fixed cost base, our current cash position can fund us through the Phase 2 study.
Joe: With the Phase 2 chronic cough results in mid-2020, what can investors look for to drive value in 2019?
Roberto Bellini: We believe there are a number of internal and external milestones that can drive value for Bellus in 2019. Internally, these include operational milestones like filing the IND to start the Phase 2 in Q1 and starting the study by mid-year. We will also be presenting detailed results of the Phase 1 study at one or several of the respiratory conferences in 2019. Externally, data from our competitors Merck and Bayer may have important read-through value for Bellus investors. Merck is expected to read out on two additional P2X3 indications (acute cough in 1H 2019 and endometriosis in 2H 2019) that could multiply the market potential for the entire P2X3 class of drugs. Bayer should also have data from both their phase 1 and phase 2 studies using their selective P2X3 antagonist in 2019.
Joe: As we know that the chronic cough is a huge market opportunity, are you planning to look for a big pharma partner to help you go through the clinical trials and marketing if approved, or the looking for a partner or more for an exit strategy, and if you decided to sell the asset, what is the target after your almost no taste adverse events?
Roberto Bellini: We think post Phase 2 is an ideal time to find a big pharma partner or to get acquired. The best comparable for exit value at that time is the Afferent acquisition by Merck with US$500M upfront plus US$750M in milestone payments. Following our Phase 1 data, we will start discussions with potential big pharma partners to better educate them about our program. If these discussions lead to a strong offer for partnership or acquisition, we will of course consider it seriously.
Joe: BLU is mostly trading in the main TSX (Toronto Stock Exchange), any plans to up-list in the U.S. from the OTCQC to the NASDAQ?
Roberto Bellini: Our plans are to list on the NASDAQ at the right time. Without committing to a specific timeline, we believe the window to list on the NASDAQ opens once the Phase 2 chronic cough study has started.
Disclosure: The author is long BLUSF
