Kempen 29 mei 2016
PSA preview: do you wanna know if this feeling flows
Price Target €112.00
Closing price (28 May 2018) €86.56
Date 29 May 2018, 07:54
While the big reveal with 3 phase III FINCH trials is scheduled for the
second half of the year, the readout of the phase II EQUATOR trial in
psoriatic arthritis (PSA) in the coming weeks could expand the range
of filgotinib indications and have a positive read-through for RA trials.
We believe the recently approved tofacitinib derisks the program and
sets an attainable benchmark that could be exceeded both on safety
and efficacy. PSA contributes €1/share to our valuation and we see
€3/share upside if the program progresses to phase III.
RA and PSA: a readthrough loop
While PSA on its own can be a meaningful addition to filgotinib's peak
sales (we estimate €500m in PSA), in our view, the near-term impact on
the share price would be largely driven by the readthrough to the phase
III RA trials. PSA and RA have a distinct pathogenesis, but the overlap
in signaling cascades (e.g. TNF-a, IL-2, IL-18, IL-22, IFNy, Coates et al.,
2016), which are all mediated or modulated by JAK, provides the rationale
for the back and forth translation of activity between indications. While our
optimism for the EQUATOR results is based on tofa's results in PSA and
higher efficacy of filgotinib over tofa in phase II RA trials, higher ACR20 in
PSA compared to tofa should further strengthen filgotinib positioning within
the JAK class and add comfort to the phase III RA readouts, especially
FINCH 1 and FINCH 3 trials (MTX IR and MTX-naive patients).
EQUATOR trial should report any week
The double-blind, placebo-controlled, phase II EQUATOR trial recruited
131 patients with moderate to severe psoriatic arthritis who have
inadequate control with cDMARDS, randomized 1:1 to filgotinib 200mg
QD or placebo on top of concurrent cDMARDs. The primary endpoint is
ACR20 on 16w (regulatory endpoint for approval), the secondary include
both rheumatoid endpoints (ACR50/70, HAQ-DI) as well psoriasis (PASI).
The trial was completed in Mar'18, and the data is expected any week now.
Tofacitinib approval sets a low bar, looking for ACR20>17%
Tofacitinib 5mg BID was recently approved in PSA despite not
demonstrating superiority to Humira, and in our view sets a low bar of
placebo adj. ACR20 of 17% to move ahead. Looking at the biologics in
PSA, (see Figure 1 below), the placebo adj. ACR20 of >25% combined with
clean safety and the convenience of oral administration should demand a
meaningful market share and position filgotinib ahead of biologics.
Safety: comforting statements
Considering a relatively small number of patients and a short duration
of the trial, we don’t expect comprehensive evidence on thromboembolic
events (tofa 5mg had 0/342, (Mease et al., 2017), background rate in PSA
is 0.32-0.38), but we expect lower rates of severe infections and herpes
zoster with filgotinib (tofa was 1%/1% at 3 months or 1.57/1.96 100PY) as
well as a beneficial impact on lipids levels as suggested by RA trials.