RA Pharma slides after data as analyst voices competitive concerns

Ra Pharmaceuticals (RARX) announced that its RA101495 SC for the treatment of paroxysmal nocturnal hemoglobinuria met the primary endpoint in the Eculizumab native cohort in a clinical trial.

However, Piper Jaffray analyst Christopher Raymond argued that the data “underwhelms on efficacy” in comparison to Alexion’s (ALNX) Soliris.

TRIAL RESULTS

Ra Pharmaceuticals has announced interim results from the company’s ongoing, global Phase 2 clinical program evaluating RA101495 SC for the treatment of paroxysmal nocturnal hemoglobinuria.

RA101495 SC met the primary endpoint in eculizumab naive patients. In these patients, a rapid, robust, and sustained reduction in lactate dehydrogenase levels from baseline to the mean of Weeks 6-12 and near-complete suppression of complement activity were observed.

Interim results from the ongoing switch cohort demonstrate near complete, sustained, and uninterrupted inhibition of complement activity during and after eculizumab washout. In the U.S.-based cohort of inadequate responders to eculizumab, who have a history of elevated LDH, 3 patients have been enrolled.

LDH stabilization and relief of side effects associated with eculizumab intolerance have been observed in the first patient enrolled in this cohort. Across all cohorts, no meaningful safety or tolerability concerns have been identified after more than 300 patient weeks of cumulative exposure, the company reported.

DATA ‘UNDERWHELMS’ COMPARED TO SOLIRIS

Piper Jaffray‘s Raymond told investors that he believes the paroxysmal nocturnal hemoglobinuria data from RA Pharmaceuticals “underwhelms on efficacy” in comparison to Alexion’s Soliris “and for that matter” ALXN1210.

Noting that inferior efficacy to Soliris on its own should put the threat from Ra Pharmaceuticals to bed, he reminded investors nonetheless that ALXN1210 should raise the bar from a convenience standpoint.

The analyst added that he sees “little reason to fret” at this point over the competitive threat to Alexion from RA101495, and reiterated an Overweight rating and $170 price target on Alexion’s shares.

RA PRICE TARGET UPPED

Meanwhile, his peer at BMO Capital raised his price target for RA Pharmaceuticals to $34 from $31, while reiterating an Outperform rating, after its RA101495 demonstrated clinical benefit in all three cohorts in the ongoing Phase 2 trial.

Analyst M. Ian Somaiya told investors in a research note of his own that he believes the phase 3 design is rational and likely to succeed.

Commenting on the potential impact on Alexion, the analyst noted that positive ‘1495 data supports his view that ALXN1210 Phase 3 results need to maintain if not raise the high efficacy and safety bar set by Soliris.

Data from Phase 1/2 trials in the first half of 2018 of Roche (RHHBY)/Chugai’s C5 antibody, with a similar profile to ALXN1210, represents the biggest competitive threat to Alexion, he contended.

PRICE ACTION

In Monday afternoon trading, shares of Ra Pharmaceuticals have dropped almost 40% to $8.80, while Alexion’s stock has gained about 3% to $112.37.

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