Imminent Catalyst for Idera Pharmacueticals Should Garner Positive Investor Interest

Idera Pharmaceuticals IDRA announced on June 5th that it had initiated enrollment in a phase 2 trial of IMO-8400, one of its lead drug candidates, for patients with mild to severe plaque psoriasis.  The announcement was a bit more significant than many investors were aware of apparently, as there was little share price or volume response with only 127,250 shares changing hands that day.  Buried in the announcement was the phrase announcing “Data from the phase 1 study will be presented at a scientific meeting in June 2013.”  With June rapidly winding down, I believe this imminent phase 1 data could be a significant announcement for the $33 million dollar company.  Promising data from that trial combined with hopeful news over the past few months should help the company begin garnering investor support for the longer term.  With the 50-day average volume for the company’s common shares at just above 200,000 shares, much of this liquidity is due to a May 7^th funding announcement in which Idera garnered $16.5 million from a $0.50 share price offering.  Last week’s trading witnessed an average of 88,010 shares per day trading, very illiquid when considering than an imminent catalyst is approaching.  Moving forward, I believe liquidity and investor interest should increase rapidly.

Idera is focused primarily on the treatment of autoimmune diseases via two candidates, IMO-3100 and IMO-8400.  Although the company is in preclinicals developing candidates as vaccine adjuvants via collaboration with Merck, that part of the pipeline is still in its early stages and beyond the scope of this article.  Idera’s pipeline is attempting to address autoimmune disease by modulating immune response through Toll-like Receptors (TLRs).  TLRs are part of the immune system that utilize pattern recognition (usually protein patterns) to recognize pathogens and damaged tissue.  These TLRs then trigger an immune response against the perceived pathogens or damaged tissue via innate and adaptive responses.  A large part of this immune response is via production of cytokines.  Although effective, these cytokines can often be over-produced, produced unnecessarily, or can even target actual tissue, exacerbating already critical conditions.  Idera is using knowledge that TLRs 3, 7, 8 and 9 are implicated in multiple autoimmune diseases such as lupus, psoriasis and arthritis to develop its two product candidates.  It is employing IMO-8400 and IMO-3100 to inhibit or deactivate these TLRs in an attempt to stifle the autoimmune response.  Success or perceived success in either of these two candidates could provide for much hope in these highly unmet or undermet needs.

Each of Idera’s two clinical candidates is being evaluated initially to treat mild to severe plaque psoriasis.  This autoimmune disease manifests itself via raised, red patches covered with a silvery white buildup of dead skin cells.  The condition is a solid initial target indication as it is the single most prevalent autoimmune disease in the U.S. with about 7.5 million Americans affected according to the National Psoriasis Foundation.  According to a recent article, sales of drugs addressing psoriasis in 2010 alone totaled $3.9 billion with expected growth to $7.4 billion by 2020, just 7 years from now.  On December 19^th, 2012 Idera announced topline data from its phase 2 trial evaluating IMO-3100 to treat moderate-to-severe plaque psoriasis.  Per the trial’s design, 44 patients were randomized to receive IMO-3100 at 0.16 or 0.32 mg/kg or a placebo by subcutaneous injection once weekly for four weeks with four weeks of follow-up evaluation.  The safety profile from the patient set was impressive with both doses being well tolerated with no treatment-related discontinuations.  In terms of efficacy, results were promising with 48% of patients treated with either dose of IMO-3100 (12 of 25 patients) demonstrating improvements of 35% to 90% from baseline Psoriasis Area Severity Index (PASI) scores.  None of the 12 placebo group recipients were able to experience such, with the treatment groups yielding a statistically significant (p<0.005) correlation.  In the only negative bit of data from the trial, the trial achieved reduction in PASI scores at the end of treatment in the 0.16 mg/kg dose cohort with statistical significance (p<0.02) compared to the placebo cohort, but not in the 0.32 mg/kg dose cohort, indicating higher dosages of the drug did not increase the drug’s effectiveness in the short term.  However, at the end of the four-week follow-up period, 25% (3 of 12) of patients treated with 0.16 mg/kg dose and 31% (4 of 13) with 0.32 mg/kg dose achieved PASI 50 or greater, compared to none of the placebo patients.  With solid safety profile on both dosages, both options will be available moving forward as the product is developed further.

With solid apparent success in IMO-3100 for the phase 2 trial, IMO-8400 could generate even better data coming from its ongoing phase 2 trial set to release topline data likely in Q4 2013.  IMO-3100 is an antagonist of TLRs 7 and 9, meaning that any autoimmune response that these two TLRs initiate could possibly be treated effectively.  Meanwhile, IMO-8400 deactivates TLRs 3, 7, 8 and 9.  If IMO-8400 deactivates TLRs 7 and 9 as well as IMO-3100, any additional deactivation of TLRs 3 and 8 should only add to the drug’s efficacy relative to IMO-3100.

While looking forward to the Q4 phase 2 data release for IMO-8400, phase 1 data will be released anytime in the next two weeks.  Although earlier stage data, I believe the event could be significant and possibly indicative of the upcoming phase 2 data.  Phase 1 data for IMO-3100, released on April 4^th, 2011 gives investors an idea of the probable format the IMO-8400 data could be presented in.  Phase 1 IMO-3100 data was presented as “IMO-3100 was well tolerated in both treatment regimens. There were no serious adverse events and no treatment discontinuations. Mild injection site reactions were the most common adverse events.”  In terms of efficacy, the company noted “Suppression of multiple cytokines including IFN- a, IL-6, MIP-1B, and IL-1Ra, mediated through TLR7 and TLR9 was observed in both IMO-3100 groups.”  I believe investors should anticipate a comparable press release for the phase 1 data on IMO-8400 and note that both drugs utilized dosages of 0.32 and 0.64 mg/kg twice per week.  However, Idera is dosing 6 patients on a once-weekly regiment as well according to an April 1^st, 2013 article.  An interesting note in the article, by StreetInsider, caught my eye while performing my research.  The author noted “The Company does not plan to commence this trial until it has reviewed the results from the phase 1 trial of IMO-8400 and obtained the resources to fund the phase 2 trial.”  Apparently, the phase 1 trial data was indeed promising, although not released yet, as Idera announced the phase 2 trial enrollment initiation on June 5^th already, as noted previously.

Idera’s common shares closed the week’s trading on Friday at $0.73, giving it a market capitalization of $32.97 million.  According to the company Q1, 2013 financials, the company has capital sufficient to fund it through year-end 2014.  With phase 1 data release for IMO-8400 an imminent event, phase 2 topline data due in Q4, and additional phase 2 trials for IMO-8400 in “other autoimmune disease indications, including lupus” set to begin enrollment also in Q4, I believe investor interest will be increasing rapidly and soon for this under-the-radar autoimmune company.