The Friday Biotech Perspective #38
Strong clinical performances still rise in Trump II bear market
Biotech Currents stock selections seek out situations where robust clinical data or regulatory decisions should catalyze a boost in a company’s stock, whether the overall market is running hot or cold. Over the past eight years, the principle has held up … most of the time. During the 2021-2022 post-Covid19 decline, nearly all biopharma companies were punished regardless of performance because of previous capital saturation.
The first 60 days of the second Trump administration created abundant market uncertainty, driving all indexes, and biopharma, down by approximately 10%. Yet strong clinical data this month from two Biotech Currents’ selections – Mineralys Therapeutics, Inc. (NASDAQ:MLYS) and Protagonist Therapeutics (NASDAQ:PTGX) – triggered stock price spikes during the Trump II bear run.
Mineralys shot up March 10 by ~53% in pre-market trading after the company reported positive topline results from two trials testing lorundrostat to treat uncontrolled or resistant hypertension. The two trials were the phase III Launch-HTN and phase II Advance-HTN. Hypertension forces the heart to work harder, eventually leading to higher incidences of coronary artery disease, heart attacks or strokes. Four major classes of anti-hypertensive drugs aim to treat 115 million people in the US but more than 30 million do not achieve their blood pressure goals. Mineralys, known as Catalys SC1 until May 2020, licensed lorundrostat from Mitsubishi Tanabe.
Mineralys advanced lorundrostat to complement current anti-hypertensive drug regimens, seeking out the 30 million who fall short of their goals. Over the past 10 years, researchers learned more than 25% of all patients on anti-hypertensive drugs had elevated levels of aldosterone production. Lorundrostat was designed to reduce aldosterone levels by inhibiting the enzyme CYP11B2. Mineralys reasoned lorundrostat at least could be an add-on to current regimens.
The company hit the data jackpot on Monday when it disclosed the double-blind, placebo-controlled phase III Launch-HTN trial met its primary endpoint of the placebo-adjusted reduction from baseline in systolic blood pressure at week 12 (p<0.0001). Nearly 1,100 patients were enrolled in the trial and all were taking, and continued to take, between 2-5 anti-hypertensive drugs. Patients with uncontrolled hypertension (uHTN) and resistant hypertension (rHTN) were enrolled in Launch-HTN.
Mineralys said the primary endpoint of placebo-adjusted reduction from baseline in systolic blood pressure was met in the phase II Advance-HTN trial but the company delayed disclosing the data until a March 29, 2025, scientific session.
March has been especially good for Protagonist, as the company reported strong data for rusfertide to treat phlebotomy-dependent polycythemia vera (PV) on March 3 and then on March 10 reported positive topline results for icotrokinra (JNJ-2113) to treat ulcerative colitis. The icotrokinra results send Protagonist’s stock up ~31% at the market open on March 10.
Protagonist can advance drugs to treat conditions ranging from PV and ulcerative colitis because it designs novel peptides for specific diseases from its libraries of peptide scaffolds, computation tools, and protein chemistry. At a certain level, the diversity protects the company against a big plunge experienced by young biopharma company with only one or two viable drug candidates. But Protagonist’s stock took a big hit in April 2022 when the company reported disappointing data from a phase II icotrokinra trial in ulcerative colitis. Icotrokinra originally was discovered at Protagonist and became JNJ-2113 through Protagonist’s 9-year partnership with Johnson & Johnson (JNJ).
Icotrokinra is an oral peptide that selectively blocks the IL-23 receptor. In the recent 252-patient, phase II Anthem UC trial, Protagonist overcame the previous clinical problems of icotrokinra by reporting a 63.5% response rate from patients treated with the highest dose of icotrokinra at week 12 versus 27% for the placebo group (p<0.001).
No other IL-23 competitors to icotrokinra appear to be as advanced as Protagonist’s drug, either in ulcerative colitis, Crohn’s disease or plaque psoriasis. Protagonist believes icotrokinra could treat all three disease, if it or Johnson & Johnson commit to funding future clinical trials. Researchers forecast the ulcerative colitis market to reach $10.8 billion by 2030 and the plaque psoriasis market to reach $68.24 billion by 2033. As a novel entrant into both markets, because of its action as an IL-23 inhibitor, icotrokinra could capture significant market share.
What caused Mineralys and Protagonist to rise above a sinking market? Some common threads: Partnerships with large companies, sizable markets (hypertension for Mineralys and plaque psoriasis for Protagonist), perseverance, and stellar data. To amplify …
Mineralys capitalized on the early work by Mitsubishi Tanabe in hypertension, then proceeded with a phase III trial. Mineralys persevered with the lorundrostat data, delaying the result announcement until the first quarter of 2025 when it originally was planned for the fourth quarter of 2024. Many companies may have rushed the data crunch to meet the fourth quarter deadline, increasing the odds for errors. With the primary endpoint pointing to a lowering of systolic blood pressure at week 12 (p<0.0001), the data speaks for itself.
Protagonist likewise had partnerships with Takeda for PV, as well as Johnson & Johnson. The company persevered through a phase II setback of icotrokinra and then reported a p value of <0.001 for its next phase II trial in ulcerative colitis. Protagonist received a $25 million milestone payment from Takeda for the rusfertide results.
Sometimes data can resist the low tide of a down market, particularly when science and management are structurally sound.