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Aimmune CFO On Peanut Allergy Candidate Palforzia: 'There Is A Serious Unmet Need'

Aimmune CFO On Peanut Allergy Candidate Palforzia: 'There Is A Serious Unmet Need'

A novel oral immunotherapy developed by Aimmune Therapeutics Inc (NASDAQ: AIMT) to treat peanut allergy is on the cusp of FDA approval after a nearly nine-year-long journey from lab to shelf.

Benzinga spoke to Aimmune Chief Financial Officer Eric Bjerkholt in a freewheeling chat.

It's been a little over a month since the FDA panel issued a positive verdict on Palforzia (formerly referred to as AR101). What's happened since then? How is the commercialization plan coming along?

About 20 medical science liasions are working and meeting with allergists with a focus on the 1,300 allergists we view as ready and willing to prescribe Palforzia, once approved.

An 80-member commercial sales team stands ready to start in early January once the approval comes through. We expect approval by the end of January.

Will the FDA panel's verdict on the need for administering the initial dose and each first dose of the updosing in a certified facility affect patient adherence to the dosing schedule? 

Definitely not. In fact, as part of the [Risk Evaluation and Mitigation Strategy], we have suggested this. In the clinical trials, this was exactly how Palforzia was dosed and adherence and compliance was very good.

Is the mandatory requirement for carrying an epinephrine auto injector scary for parents of peanut-allergic kids? Does that conjure up the specter of increased allergic reactions?

At least In the U.S., it is common practice to carry an epinephrine auto injector. Epinephrine is just the naturally occurring human hormone adrenaline, and allergists recommend using epinephrine early and often. It's unlikely to be a put off.

However, in Europe, the practice is a little different, as it is more common to use epinephrine as a rescue medication. We don't yet know if the European authorities will have a similar requirement to that in the U.S. REMS.

In an October conference presentation, you put the peak sales potential for Palforzia at over $1 billion. In which year do you expect it to realize its full sales potential?

We're very positive on the sales potential. Typically, a drug takes about five to seven years to reach its sales potential. So, a time frame of 2025-2027 is what it could take to reach the full sales potential.

How is the European review coming along? Can you brief us on the interactions with regulators since the submission was made?

Having submitted the marketing authorization application to the European Medicines Agency in June, the company expects to receive 120-day questions soon. At that time, there will be a clock stop while we prepare answers to the questions and information requests. That clock stop typically takes several months.

What's the commercial launch schedule for AR101?

We expect to launch Palforzia in the U.S. in late January or early February, in about one to two weeks following FDA approval.

How are the label expansion studies — especially for the pediatric population of 1-3 years — coming along? What incremental market opportunity you see for that age group? Does the 1.6-million target population in the U.S. include the 1-3 age group?

The clinical trial is proceeding well. The 1.6-million addressable market counts patients in the 4-17 age groups. With the pediatric population, it could be an incremental approximately 500,000 [patient] opportunity.

See also: Gilead Falls On Uninspiring Q3 Print: 3 Analyst Takes

Regarding collaboration with Regeneron, will the combo option eat into the share you envisage for the monotherapy product?

We see it as additional opportunity for Palforzia in patients with severe allergic reactions. One of our goals is to test if the adjunctive use of dupilimab can lead more patients to remission faster.

You Opex has been expanding around 65% in each of the past two years. Is this run rate going to be the same for the current year?

This is something we cannot comment on now; we are amid the preparation of account statements and a budget for 2020. Opex is expected to increase in the next year due to commercialization of Palforzia, although revenues are expected to kick in, mitigating the impact.

Regarding Aimmune's cash position, you have asserted that you have adequate cash reserves to see through the rest of the regulatory pathway and commercialization. How is the cash burn rate going to be through these stages?

The $250-million cash position as of June 30, 2019 is adequate for now, and along with the loan to be available from KKR, we are comfortable with the reserves for taking us through the commercialization in the U.S. and Europe and advancing our pipeline.

In the interim, are you planning a follow-on offering?

As a clinical-stage biotech company, we cannot rule out incremental cash needs at any point, but as I said above, we are comfortable with our funding levels.

The pricing range for Palforzia is broad: anywhere between $3,000 and $5,000 to $20,000. Can you be more precise on the pricing for Palforzia when it is ready to be launched?

Most of the analysts who cover us assume the annual cost net price could work out to around $5,000 to $8,000. We cannot give any more guidance than that, as we have not yet decided on a price.

There is likely to be a competing product in the market, although not in the near-term. How is this going to affect you, especially as analysts are drumming up safety concerns regarding Palforzia? Is there a market opportunity for both to exist?

The profiles of the two products are very different, and one product will not meet the needs of every patient and every family. Therefore, there is room for more than one product. Palforzia's efficacy is superior to DBV TECHNOLOGIE/S ADR (NASDAQ: DBVT)'s.

Against the threefold improvement for Viaskin patch, ours has shown a 100 times improvement in the median tolerated dose.

DBV could not meet the primary endpoint; there is no question regarding the superiority. Ingestion could introduce some risk in the form of allergic reactions, so there is a trade-off. However, only about 10% of patients on Palfozia discontinued treatment due to side effects.

Can you shed some light on the rest of your pipeline?

The egg allergy program ARC002 is in a Phase 2 efficacy and safety study, and the multinut allergy investigational asset is at a pre-clinical stage, although we have no definitive data for data readouts.

How important is AR101 for the community?

There is a serious unmet need, and there are no approved therapies for peanut allergy. The fact that all our trials were overenrolled is a testimony to the pressing need for a treatment option.

How has been the feedback from allergists based on your survey?

Allergists have been surveyed by both us and the analyst community. Most allergists are positive about the product and are waiting for approval to come through to start offering oral immunotherapy to their patients.

Does Aimmune have any plan for diversifying out of food allergy products down the line?

The unmet need in food allergy is tremendous. Between our peanut, egg and tree nut programs, we have our hands full for the foreseeable future. Milk is another unmet need we are considering.

How about insurance coverage?

As of October, we have had talks with commercial insurers of over 80% of commercial lives in the U.S. We are hopeful of coverage. Thing will become clear once the pricing is fixed. The product has to be included in the formularies, and that often takes some time.

Since October, the stock has been seeing some bounce. Is there any reason behind the recent surge in interest in the stock?

Investors have come to the realize the promising potential of the product.

Do you have a message to the investment community about the company, product and stock?

We have a promising product in Palfozia, and it is on the cusp of realizing its potential should we get FDA approval. We have an attractive pipeline of follow-on opportunities. We also have the management team and financial resources to execute on our plans.

Related Link: Biotech Stock On The Radar: Immunomedics' Long Wait For Redemption


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