Memorandum

Adocia 4Q18 – Delays across pipeline as Lilly arbitration decisions loom in 2019; Closed loop trial with Beta Bionics for BC Lispro to begin in 1Q19; Finishes year with $45 million – March 13, 2019

Executive Highlights

  • Adocia just gave its 4Q18 and 2018 update via press release and accompanying slide deck. The company finished the year with $45 million (~€40 million) in cash and cash equivalents, a slight dip from the $51 million (~€44 million) it held at the close of 3Q18 but up from $41 million (~€35 million) at the end of 2017. The steady cash position was attributed to the receipt of a $50 million up-front payment for its April 2018 partnership with Tonghua Dongbao (THDB).

  • Every molecule in the pipeline was slightly delayed, likely due to uncertainties around legal disputes with Lilly over BioChaperone Lispro (a modified biosimilar of Lilly’s Humalog). After courts ruled in favor of Adocia on the first arbitration, the company’s additional damages claim of ~$1.3 billion and Lilly’s counterclaim of ~$188 million are set for a 2019 decisions.

  • Adocia announced a phase 1 trial of BC Lispro in a closed-loop system (Beta Bionics’ iLet pump and algorithm + Dexcom CGM) to begin in 1Q19. The company’s 3Q18 slides hinted at this possibility, stating that ultra-rapid insulin with a fast-on, fast-off profile is a key element needed to “close the loop,” and we’re thrilled to see the company following through on this idea (slide 16).

Adocia just gave its 4Q18 and 2018 update via press release and accompanying slide deck.

Heading into 2019, legal disputes with Lilly over BioChaperone Lispro (a modified biosimilar of Lilly’s Humalog) loom large. Courts ruled in favor of Adocia on the first arbitration, conferring an $11.6 million damages payment from Lilly. Currently outstanding in the second arbitration, set for a 2019 decision, are Adocia’s additional damages claim of ~$1.3 billion (that’s a pretty big delta) and Lilly’s counterclaim of ~$188 million. Doubtless, these proceedings are contributing to the short delays across every molecule in the pipeline.

See our top four highlights below.

Top Four Highlights

1. Ultra-Rapid BioChaperone Lispro: Bridging Study to Begin 2Q19, Phase 3 Filing (US/EU) 4Q19; Partner Tonghua Dongbao to Begin Phase 3 in China in 2019

A phase 2 bridging study of ultra-rapid-acting BioChaperone Lispro is expected to begin in 2Q19; the trial will set the stage for phase 3 filing (US/EU) in 4Q19. This likely represents a slight delay from timing announced in 3Q18, when Adocia slated the beginning of phase 3 trials for in 2019. To our understanding, the bridging study is necessary to assure the manufacturing quality of partner Tonghua Dongbao (THDB), which assumed responsibility for biosimilar insulin glargine and lispro APIs (active pharmaceutical ingredients) from Adocia as part of the two companies’ 2018 alliance. Notably, THDB does not have to complete a bridging study and will enter phase 3 in China in 2019. With this API source secured, Adocia has “sharply broadened” its potential partners pool for BC Lispro in the US, EU, Japan, and other regions. It remains to be seen whether this partnership will come before or after phase 3. An API source and strengthened cash position from the partnership ($50 million up-front + up to $85 in milestones for BC Lispro and Combo) suggest that Adocia could be more confident in its ability to go solo; previously, we’ve shared our expectation that Adocia would ink a dedicated partnership prior to phase 3.

  • Notably, Adocia announced a phase 1 trial of BC Lispro in a closed-loop system (Beta Bionics’ iLet pump and algorithm + Dexcom CGM) to begin in 1Q19. The company’s 3Q18 slides hinted at this possibility, stating that ultra-rapid insulin with a fast-on, fast-off profile is a key element needed to “close the loop,” and we’re thrilled to see the company following through on this idea (slide 16).

  • THDB plans to bring BC Combo (75/25 basal insulin glargine/prandial insulin lispro) through a bridging study in China during 2019, which will enable use of data from previous BC Combo development. The candidate currently sits in phase 1/2, with five positive trials under its belt (slide 18). Adocia is actively searching for partners in other markets. The company has valued the market in China, where premix insulin purportedly makes up 65% of the overall insulin market, at $5 billion (slide 18) and mentions Mexico as another premix-heavy geography (slide 19).

2. BioChaperone Pramlintide Insulin: Second Phase 1/2 Trial Pushed Slightly Back to 2Q19 Following Positive Phase 1 Results

Following positive PD and safety results in phase 1, Adocia plans to initiate a second, repeated administration trial for BC Pramlintide Insulin (7.5 U human insulin/45 µg pramlintide) in 2Q19 – slightly back from the 1Q19 projection given in 3Q18. At the time of writing, nothing had been posted on ClinicalTrials.gov. We’re particularly curious if the study may include BC Pramlintide Insulin in a pump, as Adocia emphasized the combination’s long-term stability in pumps and on the shelf in a presentation at ADA – patients would be very excited about this since pramlintide is more physiologic. Notably, in Adocia’s press release for its previous phase 1 trial, it was also stated that the pharmacokinetic profiles of BC Pramlintide Insulin and simultaneous injections of pramlintide and human insulin will be compared in a separate publication, which we’re eager to see. Importantly, this study marked the first clinical demonstration of feasibility for a fixed-ratio co-formulation of pramlintide and human insulin, indicating that the known synergistic effects of the two when administered separately are maintained in a co-formulation. In our view, fixed combinations of insulin and amylin analogs have significant potential as an innovative approach to improving postprandial glycemic control. To date, commercial traction for the only marketed amylin analog (AZ’s Symlin) has been slow, in part due to injection burden and difficulty in adjusting insulin dose when adding the analog; a co-formulation could make pramlintide significantly easier to use. As with most of its other candidates, Adocia is currently looking for global partners for BC Pramlintide Insulin.

3. BioChaperone Glucagon: Final Phase 1/2 Initiation Pushed from 1Q19 to 2H19

The final phase 1/2 trial for BC Glucagon has been delayed again from 1Q19 to a 2H19 start. Given that the company is touting the finality of this phase, Adocia will presumably file for phase 3 initiation immediately following readout. The trial follows expanded phase 1 results presented at ADA 2018, and the product is under development both as a severe hypoglycemia rescue treatment and for use in dual hormone closed loop systems. For context, BC Glucagon is part of a fairly robust next-gen glucagon landscape led by Xeris’ Glucagon Rescue Pen (FDA PDUFA date June 10, 2019), Lilly’s nasal glucagon (filed with FDA and EMA in 2Q18), and Zealand’s dasiglucagon (FDA filing expected 2H19). That being said, we see more than enough room for multiple next-gen products to expand the glucagon market (long in need of innovation) and garner commercial success. Indeed, we’ve heard evaluations of the potential US market for glucagon at anywhere from $400 million (Adocia) to $2 billion (Xeris). The company is looking to partner globally for BC Glucagon.

4. No Updates to Obesity Pipeline; First Clinical Study of BC Glucagon GLP-1 Now in 2H19

Adocia’s first foray into obesity R&D – BC Glucagon GLP-1, a glucagon/GLP-1 dual agonist announced in January 2018 – is now set to enter phase 1 in 2H19 (originally 1H19). Notably, Adocia continued to label its candidate “BC Glucagon GLP-1” rather than the former “BC Glucagon Exenatide.” While we maintain our suspicion that this is for clarity and efficiency, we continue to wonder whether the company might be considering other GLP-1 molecules for development in obesity; to our understanding, exenatide is likely the most accessible GLP-1 in terms of patent expiration. No other updates were given on BC Glucagon GLP-1, which joins a competitive landscape led by OPKO Health’s phase 2b (currently recruiting) OPK88003, and AZ’s MEDI0382, which demonstrated ~7.4 pounds of weight loss and an additional 25% time-in-range over seven weeks (that’s big) in a phase 2a study presented at EASD 2018

Adocia Diabetes/Obesity Pipeline Summary

The table below reflects the latest status, as far as we are aware, of Adocia’s diabetes/obesity-related pipeline products. Items highlighted in yellow indicate notable changes to the pipeline in recent months.

Product

Indication

Status

Timeline/Notes

BioChaperone Lispro (ultra-rapid-acting insulin)

Type 1 and type 2 diabetes

Phase 3-ready

  • Phase 2 bridging study to begin in 2Q19; phase 3 filing (US/EU) planned for 4Q19; Phase 3 initiation in China expected in 2019

  • Closed-loop trial to begin 1Q19

  • Secured Tonghua Dongbao as development and commercialization partner in China, retained rights to US, EU, Japan

  • Positive topline phase 1b results released in December 2017; Candidate showed significantly faster offset vs. Novo Nordisk’s Fiasp in first-ever head-to-head comparison of ultra-rapid-acting insulins

HinsBet (rapid-acting human insulin)

Type 1 and type 2 diabetes

Phase 3-ready

  • Adocia plans to license to a “regional player” in emerging markets for phase 3

  • Preclinical U500 formulation in development

  • Positive phase 2a results reported in 4Q16

BioChaperone Pramlintide Insulin (pramlintide/human insulin)

Type 1 diabetes

Phase 1/2

  • Second Phase 1/2 trial scheduled to begin in 2Q19

  • Positive phase 1 results released in September 2018; Candidate conferred significant 97% reduction in postprandial excursions compared to Humalog

BioChaperone Combo (75/25 insulin glargine/insulin lispro premix)

Type 1 and type 2 diabetes

Phase 1

BioChaperone Glucagon (liquid-stable glucagon)

Ready-to-inject hypoglycemia rescue treatment (type 1 and type 2 diabetes); also in development for dual hormone AP (type 1 diabetes)

Phase 1

  • Final phase 1/2 trial initiation delayed to 2H19

  • Positive topline phase 1 results reported in 4Q17

BioChaperone Insulin Lispro/Pramlintide

Type 1 diabetes

Preclinical

  • Apparently de-prioritized in favor of human insulin/pramlintide combo

  • Phase 1 initiation delayed from “end of 2017” timeline

  • Added to pipeline in January 2017

BioChaperone Insulin Lispro/Exenatide

Type 2 diabetes

Preclinical

BioChaperone Insulin Glargine/Liraglutide

Type 2 diabetes

Preclinical

BioChaperone Insulin Glargine/Dulaglutide

Type 2 diabetes

Preclinical

BioChaperone Glucagon GLP-1

Obesity

Preclinical

  • Phase 1 trials delayed to 2H19; adjacent with GLP-2 agonist teduglutide for SBS

  • Added to pipeline in January 2018 as one of Adocia’s first non-diabetes candidates

 

--by Peter Rentzepis, Ann Carracher, and Kelly Close